Ep 5: Greetings From the Post-Covid World

Speaker 0 (2m 7s): Hi, I suspected as much and I’ll let you know, your neighboring state, New York is having a nice March fall at the moment. I think spring is, is about to arrive, but it’s good to know you’re on the move or at least you’re you’re traveling again or, or are you

Speaker 2 (2m 25s): Well, it’s interesting because the only place I’ve been is down here. As you know, each year, I typically put about 360,000 miles on flying around the world to visit different organizations. I think in 2019, I went to 16 different countries last year in 2020, I’ve been to 35 different countries like over twice as many and not moved one millimeter. And that’s all about COVID right. It’s all about, we’ve suddenly learned that we’ve got to work remotely, that we’re using web tools to communicate better.

And it’s been, intriguingly interesting, what it’s meant in terms of conversations that we’ve had with CFOs and HR managers in this new world.

Speaker 0 (3m 13s): We just ask, when it comes to business travel one suspects, it’s not going to return to what it wants was what would validate the expense of jumping on a plane has changed? What do you,

Speaker 2 (3m 30s): I think you’re right. I think there’ll be considerably less business travel. I suspect there’ll be a blip once we were allowed to travel. I think there’ll be a bunch of it for sort of eight months. And then I think it’s going to go back to a lesser form of what it was before. Part of what we’ve seen is we’ve had far wider access to countries and people that we wouldn’t normally we’ve done a bunch of work in Saudi, you know, Saudi has draconian travel barriers, but they can’t stop the internet. So we’ve been helping all sorts of companies in Saudi that we couldn’t do before or Oman, which is not a particularly rich organization country and so on.

So I think that access to North American thinking is going to be much bigger. I think a new thought leadership will travel around the globe much faster, but I still think, as you said, face-to-face still has some role to play going forward. Meanwhile,

Speaker 0 (4m 27s): I, I would think that the conference industry is ripe for a return somewhat because there’s gotta be such pent up demand for those of us looking to network again and socialize and build relationships in person.

Speaker 2 (4m 46s): Ironically, I’ve got three of the largest conference providers as clients. And so I won’t tell you the top secret information, you know, less, they draw on quarter me, but yeah, there’s a meme that says knowledge is created socially. So the only way to, for us to learn isn’t that social environment and a lot has been written about zoom and teams and you know, all those other web meetings on the fatigue and the stress, it puts on us and it blocks many of the interpersonal idiosyncrasies that allow us to learn and understand.

And so we still do need that face-to-face meeting and, and maybe you should interview some CFOs about that zoom fatigue. Cause that would be another fun topic to, to explore. But therefore I agree with you. We need a way that we can actually have a more normal, holistic learning experience in conferences and that’s not going to happen through virtual conferences in the longer term

Speaker 0 (5m 49s): Fatigue. I like that. That would definitely be a great, great topic. Of course. Now, now you got me questioning your motives with your, your conference mentioned no seriously. What I thought I’d do this week is share with you three short clips. I’m not going to separate them. I’m just going to play each one consecutively from a different CFO, trying to explain how they believe the world has changed or will change post COVID.

This discussion is happening now in a lot of boardrooms. And the three CFOs will be Tom Berquist of Tipco software, Terry of BioDelivery sciences and Kevin Ingram of FM global. And I’m just going to play the clips and then we’ll come back and you can reflect on what was shared. And we begin with CFO, Tom Berquist.

Speaker 1 (6m 51s): I think the big thing, other than the integration, which you mentioned already is we have to figure out what our work environment will be like kind of post pandemic. We have offices all over the world. We have people all over the world. Everyone is moved home. We spent a lot of time and attention this year, getting them online and productive from home. Many of them want to stay there. A lot of them have moved away from big offices in central city. So they want to continue to work for us remotely. So that’s the big challenge for us is what will the work environment look like? Where will people be located? How will they get access to, you know, systems and such that they need?

How will we keep them trained, engaged with the company? You know, how do we think about compensation in this new world? How do we think about offices? What our offices look like. So we have a whole kind of working model. We put it together on that front and that’s really going to be, I think the, the big thing that happens for us as the year progresses.

Speaker 3 (7m 45s): Yeah. I mean, you know, just to go back and it is exactly, I guess today, a year ago that we started working remotely and I give my, my team and the entire business, you know, a lot of credit for being able to transition very smoothly and actually, you know, being publicly traded, we, we didn’t have much time to even file our first. You had to file first quarter and we’re a very small and lean team. So I think for sure, we have a, and we continue to be remote, I should say. So I think we have demonstrated our ability to work very effectively in a remote environment.

And for me, I can say I had, I had a key opening. I actually brought somebody as a, as a contractor initially to do some work. But then I had a very important opening come up. This individual, our headquarters are in North Carolina, this individual’s in Texas, but he was the right person for the role. And I’ve hired him and I’m not expecting him to have to relocate because you know, we’ve shown that it can work now, does that mean the entire business should be remote forever? I’m not, I’m not convinced of that.

Actually myself and the CEO were just talking about that recently. There’s, there’s still a lot of benefit meeting with people face to face. We use zoom all day long and you know, any technology we can to stay connected, but I think there’s still a benefit to bring people together. And as we’re thinking about it as a business, we’re looking, you know, I think we’re going to say that there’s certain roles that it’s probably okay. If they’re not there every day that they can come in as needed or we, we make sure there’s a certain cadence when we’re still thinking through that, what it’s going to look like.

But it’s definitely a change from where we would have been a year ago. I think change, like you said, this has been going on for a year. When we, when we went virtual buy off the shuts on the first day we shut down was March 17th was the first day we were closed in 2020. So, so next week it will, it will be a year. And I thought, huh, maybe we gone for a couple of weeks. We’d be back in the office. And then a year later we’ve already made the announcement that we are not going to reopen the office. You know, mandatorily mandatory, required people to come back in before labor day.

So we said, we may reopen it earlier, depending on how the vaccine rollout goes, we may make it voluntary, but we are not going to make people come back to the office before labor day. And so you’re telling me 18 months is how long this thing has, has happened. And a lot has changed what we know, what, what the impact on our business, but also how our, you know, how our employees are able to do what they need to do. You know, we now have people that we know that they can work virtually. We didn’t think we think work virtually before we had, just before the pandemic hit. We had just gone to a, a work from home option where we allowed people to work from home up to two days a week.

And that’s still our policy today, even though everyone’s working virtually, but it’s something we’re looking at, what’s longer term, what’s it going to be? Where are we going to get to? It’s real interesting. I mean, it’s, it’s just, you know, every day you look at something there’s new information coming out and you try to read it and digest it and understand how that’s gonna impact your business so you can do it.

Speaker 0 (10m 59s): All right. So again, that was a, we just last her, that was Kevin Ingram of FM global. Before that it was Terry Terry, if I’m mispronouncing your last name, I apologize. And it was Tom Berquist who kicked things off with Tipco software. Both I should mention Terry and Kevin will be featured on the CFO thought leader in April. So you can hear their complete episodes. Both were, were interesting.

You won’t want to miss, let me plug that Brett, and then ask you for your thoughts as to what was just shared. I guess there’s some serious thought being given here clearly to how it won’t be going back to business as usual in certain ways, what were your takeaways? Well, certainly main takeaways

Speaker 2 (11m 54s): Were just that, you know, obviously this work from home is going to stay around in one way, shape or form or another. And therefore there are several things that opportunities in threats, right? A threat is about engagement and how we keep people connected when we don’t see each other opportunities are things like Terry talked about, you know, the idea that we can now begin getting human capital from a wider catchment group, right? So you’re talking about hiring someone from many miles away from corporate headquarters that could not have happened a year or two ago, but now she’s got that great resource that allows her to move the organization further, faster.

All of us have competitors, but they might not be in the same city or country that we’re in all of a sudden we can get those better resources. And so that’s sort of a new opening that has made itself available to every organization. Kevin, his perspective was interesting because of course he’s made it clear that it’s going to be 18 months, at least before they’re back in the office. And many of our clients are saying it might be even longer than that. And that they’d already been thinking about this two day a week work from home option.

So people had been touring with this, but they’ve been forced into making it work. When we take a look at the human capital stats, we never saw a dip literally from the week after COVID lockdown to began happening. We saw a surge in productivity and that surge happened for a number of reasons that we could go into later, but it’s maintained itself. It’s dipped and dived a bit, but people have not worn out from this experience.

And we’ve seen net more output per unit of human capital than we saw when we were working back in the office.

Speaker 0 (13m 49s): Yes. And I wanted us to maybe step away from the office environment for the moment and surprise. I have another clip and this is about the restaurant business, which as we all can appreciate and understand the impact that the pandemics had on, on restaurants a while back, we had the opportunity to interview Robert Linder, who is CFO of lazy dog restaurant in bar it’s in seven different States today, I believe.

And I just had mentioned up front here. One of the very interesting anecdotes he shared lazy dog had apparently come out in reformulate it, what it called a TV dinner. And w what many of us might think of as TV dinners. This really ain’t that it’s, he described it so wonderfully during the podcast. You just want it to go run out and buy one. But interestingly enough, it was something the restaurants formulated before COVID that customers could buy them as they exited the restaurant and have one in the, in the fridge for the, for the weekend, or what have you, during the course of the week, maybe in any case, Robert also opened up by sharing his menu items and just sort of teasing us and reminding us how wonderful it is to dine outside and what the cost of not being able to do that this past year, the dining experience is something we all so much enjoy in any case, Brett, I did want to play this clip for you.

And he kind of goes back in time and shares what had to happen. And I think we forget we’re, we’re focused so much on the office environment. Sometimes here’s a, here’s another environment altogether. This is Robert Lindor, CFO of lazy dog restaurant and bar.

Speaker 4 (15m 58s): No, it’s hard not to point at something that’s happened in the last year, given all of the things that we’ve been through in the last year in finance. Right? And so if I, if I really think about the last year and in the moment that really stuck with me about, about, I think, significant moment of change, about how I thought about things was, was really our decisions at the beginning of COVID California was impacted pretty significantly pretty fast when it came to the restaurants and having to shut down. And we were looking at what was happening and we saw this quickly spreading across, you know, across the nation now, but we were kind of impacted a little earlier.

And for me, it was looking at the business and saying, you know, we’re, this is going to be a very difficult position for us, right? We’re going to be in a significant cash burn rate really, really fast. And, and how can we reduce our costs as fast as possible to basically survive and get to the other side. And so it was an awareness of the magnitude of the decisions that were ahead of us. And, and one of those decisions in the most critical one was what do we do about our people, right?

And we’re going to have to lay off a significant portion of our company and, and how do we, how do we do that? Who are we through this, this time period? And when we go to do this and how do we make this decision, right? And, and one strategy we looked at was like, okay, well, if it, you know, we can, we can do wave one. And then if it lasts this long, we’ll do wave two. And if it lasts this long, we’ll do wave three. And, and, you know, we sat with that decision. This stuff happened, I mean, 48 hours, basically from the first shutdown to us announcing, you know, the changes in operations was 48 hours.

So this was a 48 hour moment. And, and we realized, and we just thought, I, I sat there with our CEO and our head of, you know, chief people officer. And we’re just like, wow, you know, what is that going to feel like if, if you know, you’re in wave one, but then you’re still there. And you’re like, you know, there’s wave two, but you don’t even know if you’re going to lose your job. And what is that feeling like? And we realized, you know, the thing that was the most kind, and I use the word kind, because I think that’s what it was the word that was the most kind for us, for us to make the hardest decisions, to make sure that everybody had a job and got to, we got to the other side.

So the thing that in a lot of ways would have probably felt like the most call it cold, harder. The most unjust was actually the most kind, because if I postpone making hard decisions, it meant fewer people would come. It might come back because it, cause this might not make it to the other side because we continue to burn more cash than we had for a longer period of time. And so what we decided was, you know, what the most kind thing to do was to completely go as far as we possibly could just keep the business afloat with a minimum amount of people.

So knowing that we could then, you know, get the ship to the other side, get the people to the other side and, and, and get things back opened. And so we pivoted, right. And we made the decision to, to rather than going through this like phase approach, it, we would actually go all the way to step three all the way to phase three, because that was the most kind thing to do for our people. It was, felt the hardest for us individually, but it was the, that was the best thing to do to make sure the company got to the other side. And it was one of the best decisions we made because from that moment forward, all we did was deliver good news to our people.

So rather than subsequently doling out more bad news, we subsequently said, you know what, folks, we’re bringing some people back, we’re bringing your compensation back. You know, it was a bigger reduction. We’re reducing some of the reduction, we’re bringing back some of these other benefits. And then through that time period, and one of the things we were able to do by going more aggressively as we pay people’s health insurance, right. And people was really, that was something that they really valued during that time period. So by going more aggressive, as far as our headcount reductions and our salary reductions, we’re able to offer some more benefits for those that were impacted.

And for me, that was like this aha moment that I can’t run away from a hard decision as a finance leader, because I ultimately that’s actually like, that was me being weak and not doing something that was actually the best thing for the people. And so there was a situation where actually doing what felt like a yeah, aggressive, you know, thing was actually like one of the most kind things to do for our people. And so that was a big finance aha moment for me, it was really not to run away from the hard decisions as I look forward the next 12 months, the priorities for us are getting our growth and really maintaining the flatness of the organization that we now have.

We had a major transformation and how we communicate within the organization. And we really got rid of a lot of our call, it levels of communication and transfer. And we want to maintain that as much as possible as we move forward, because we’ve seen how fast we can move these things that we thought would take a year to roll out or taking weeks. And now we realize, and, you know, we have a daily standup with the leadership group and I have, you know, stand-ups with my team now, like the level of communication and keeping that flatness of the organization will help us execute on our growth trajectory over the next 12 months.

And we are just so bullish about what the future brings that we just, we just can’t wait and super excited.

Speaker 1 (21m 34s): What do you make of what Roberts

Speaker 2 (21m 36s): Shared with us? Well, certainly, you know, we all sympathize with the trauma that many industries have been through, but none, so much as a restaurant industry. And it, you know, it begs the question that we were talking about before. Like, you know, what’s it going to look like some sometime in the future, but I think Robert had some just fascinating things to say things that I haven’t heard anyone else say. And certainly the way that he said it, that I really liked, I had to have a chuckle when he said we had a 48 hour moment, but that’s what it felt like, right?

Like, as things were cavitating and COVID began happening, what happens in any industry when events occur is time compresses. If I used to have a monthly meeting, I didn’t have a weekly meeting. If we used to have a weekly meeting, I now have a daily meeting. Like it’s like an accordion, everything just collapses. And so that moment that took 48 hours felt like a moment, right? You’ve got this avalanche of things happening. And so I thought that was an interesting term. What was more interesting is the strategy that they chose to take, right? He described this idea of having wave one, wave two, wave three of layoffs, depending on how long it lasted and made the decision that the most kindest cut would be a deep cut that we went in and took everyone out.

So that were the bare minimum possible operating level. And he made two awesome points from that. The first point was that from that point on, it was only good news. Now, the reason I liked that is I’ve seen many mergers and acquisitions where leadership thinks they’re doing a favor by not releasing much news about it, but it traumatizes everyone involved because they have no idea about what their future job is and so forth. And so people are forced into this crier, genic, frozen position waiting.

And so at least in this case, they made it clear. But what was super awesome about that awful thing you had to do was the good news that came out of it. The good news was they could pay people’s benefits and here in this state, that’s super important. And so people know they did, their job has gone. They’ve been furloughed or whatever the fancy word is, and maybe they get it back. But what they do know for sure is they don’t have to worry about healthcare and that’s the highest stress for anyone in this country. Now I can focus as one of those laid off employees on what I need to do to cut back on my costs and make it through with my savings and any other money I can make.

So I thought that was a brilliant strategy. What, what did you think?

Speaker 0 (24m 5s): No, I thought it was the right path. And, you know, I think it’s easy for us to sit here now and, and say in certain respects it was the obvious path, but it, wasn’t not at that place in time. And I should have explained earlier the, the concept of the TV dinner, which was born before, COVID just, you know, gain traction during COVID for obvious reasons people, they could sell them and they didn’t have to sit down in the, in the restaurant.

And I should mention the price point was something like $10. Anyway, it’s interesting. That was already in place.

Speaker 2 (24m 44s): Well, you know, what’s interesting is there’s this common theme across all of these, these four interviews. And that is what I call the Forrest Gump effect. Like just, you are working hard at business. You’re being creative, you’re being innovative without any specific goal in mind and an event like this happens. And all of a sudden that innovation just falls right in place. So in Terry’s case, she happened to have a contractor that was from Texas and figured out how to work with that contractor remotely. Now, all of a sudden she could bring them on full-time with Kevin.

His whole story was we’d started working on this two days, working at home option. All of a sudden that comes into focus. And this case they’ve been playing with this takeout, dinner, TV, dinner idea, and all of a sudden it becomes this brilliant idea. So Edward de bono says, true. Creativity is logical in hindsight, but you can’t get there through logic. Here are a bunch of cases where you don’t get there through logic. You just happen to be incredibly creative, continually innovating. And every once in a while, your innovation and the stars aligned to create huge success.

Now, what did that do for him? Not only did it allow him to capture a bunch of market, but also he becomes far more agile. And he mentioned this in the part of the interview that you did share that because it’s a flatter organization because they aren’t encumbered with what I’m going to call anchors. Things that are, are restricting their opportunities. They can do things like move into this TV, dinner idea, full force at that. And that probably takes a different set of human capital. It takes different hours, it takes different processes, but they have that flexibility now.

And so I thought that was, you know, a common theme that many times organizations kill new product ideas because they don’t see an immediate market for it. What if instead, we just put it in inventory. We left it there and waited for this fluky moment that comes along, and then you can just whip it out of inventory and put it in production. Okay. I want to do

Speaker 0 (26m 44s): A bread. I want to put you on the spot in a, you know, I’ll put myself on the spot as well among the functional areas that have needed to adapt in the, because of the pandemic in the COVID environment, what functional area perhaps has actually made the journey has actually evolved, has adapted most fully. And I, I’m going to point to ready. I’m going to point to sales.

I think salesmen have, you know, just because of the demands of the numbers, they have to meet, have looked to adapt, to use whether it’s zoom to understand better, how to sell across a virtual environment, to understand how their touch points have changed. They can’t jump on a plane. They had to do this differently. Anyway, that’s my functional area that I draw attention to. What, what would be yours? Or how would you, you can rephrase the question if you like, you usually do.

I should say

Speaker 2 (27m 50s): Absolutely right. Selling is definitely different. Although I don’t think it’s that much different. What I’ve noticed is people with personalities thrive in zone. So if you’ve got this effervescent personality, you need that to step through that computer screen and captivate the audience and salespeople typically have that trick up their sleeve, not all of them, but typically that’s one of their core. And so it’s just a matter of learning how to accentuate the appropriate parts of that behavior in zoom. Other parts are inappropriate things you could do in person that don’t come across while in zone.

I think, I think the big surprise is, and the big trauma is how we manage the business. So executives before you know that, that Tom Peter’s model of managing by wandering around while there is no wandering around. So leaders are concerned that they asked their human capita or peop their people to go do things. And they’ve got no idea whether I’m shooting into a black room or if people are actually listening and doing it. Right. So there’s that, that connection from the top down is missing.

Now the opposite is the same problem. Employees are wondering what the heck they should be doing. Normally the boss drops by and tells me what I should be doing, or sees what I’m doing and gives me some guidance that’s missing. So now I have the top down is not effective and the bottom up, and we know that employees need that sense of purpose. They need to know what they’re supposed to be doing. And without those clear instructions, we have a problem. And so I think the bigger learning that’s gone on is management now has to behave completely different than how they behave before.

And we see that, for example, in Robert’s quote, he talks about all of a sudden, we are more agile. All of a sudden we’re having these daily. Stand-ups where the daily stand-up didn’t happen before, because I’d managed by wandering around. Now, I need to formally get together every day from till nine 30 and kind of rattle around things, right? So he, and he’s talked about how the flat is now a flat organization. So, so much has changed in management. That to me is where the seismic event has occurred. And many organizations have not figured that out.

And those are the organizations that we’re seeing getting hit by this first wall of bankruptcies, right. They haven’t been able to give instructions. There are people there, people haven’t been doing the right things, and that’s where we’re running into some difficulties now.

Speaker 0 (30m 11s): Okay. So interesting. So it’s not necessarily a functional group or a part of the company that hasn’t adapted properly, but the fear could be that it’s the management and leadership that hasn’t been able to evolve under the circumstances. I’m like, how am I doing? Am I close to H how would you wrap this up for us?

Speaker 2 (30m 34s): Well, I think there’s two core elements that bear repeating thing. One is the cadence of business as much faster than it used to be. So most of our clients last year reset their strategy five or six times during the course of the year, I have one strategy in February of last year, a completely different strategy at the end of March, a different strategy in April. Once I figured out how to do the work from home thing, a different strategy in June, once things begin to unlock. And so before I used to do a strategy once a year, I mean, GEs do it once every five years.

So now we’re down to at least once a quarter, maybe even more frequently when you hit different tripwires. So I think that’s the first thing that’s important. I think the second part is a large portion of our social lives. I hate to say comes from work and that’s been taken away from us. So now we do need an instrument, a structure to put that back in play, whether that’s a traveling road show or something else, that’s the dilemma of what we need to work through.

And that’s part of what I was saying of management’s been hit hardest and hasn’t really come up with that solution yet. How is it we can take advantage of working from home and getting access to wider people like Terry talked to us about, but at the same time, help people feel better connected with that organization, even though we’re physically never there. And the other part of it is, I don’t know the right way to say this, but protect people from their families. The problem is when you’re sitting at home and you’re Omni available, that it’s hard to get clear focused thought on work, because you’re constantly getting interrupted by stimuli that you’re not used to, you know, the kids coming home or the FedEx guy or the Amazon person showing up.

There’s a whole bunch of different things that we don’t have work structures to solve.

Speaker 0 (32m 25s): Well, then we’re going to have to come back Pret into another episode because I’m afraid we’re out of time. Hey, thank you everyone for listening. And thanks of course, to our resident thought leader, Brett Knowles, our favorite spring breaker, Brett, thank you. Have yourself a good weekend

Speaker 5 (32m 42s): Workplace Champions is a CFO thought leader production until next time this is Jack Sweeney.