CEO perspectives on the impact of COVID-19

The COVID-19 pandemic has upended the world as we know it, creating an unprecedented challenge for business. At Phoenix, we asked the CEOs of some of our portfolio companies to describe what they had learned from the crisis so far and what they think their businesses and the world at large would look like once the pandemic recedes. We present their thoughts below.

What have you learned from the crisis so far?

Resilience

While the pandemic has presented unprecedented obstacles for businesses of all sizes and across industries, the way many of them have adapted has been remarkable. The speed at which the crisis escalated, especially in its early stages, prompted an equally fast response from Phoenix’s portfolio companies.

Bruce McKendrick, CEO, Forest Holidays:

"This is probably more a case of being reminded than learnt, but it’s how much you can achieve in a short space of time when you are dealing with the immediate aftermath of a crisis. We took a number of steps, including having to close down 600 cabins across ten locations; established our contact centre to work from home, and started work on our digital upgrade project.

Frankly, we would not have achieved anything like that during normal times, so the learning is what can we capture from this and redesign back into our business processes to improve our efficiency?

We did it with trust, teamwork, clear delegation, short meetings and not delaying decision-making."

David Brennan, CEO, Nexus:

"As we entered the crisis with huge uncertainty, we recognised the need for calm measured thinking as to the potential scenarios and business changes required - and then a rapid execution of a mitigation plan to protect the business in all ways possible. We also saw the need for increased proactive communication at all levels of the business to ensure a common understanding and a positive attitude to fixing all issues as they arose."

David Johnson, CEO, Just Childcare:

"Our service is not one that can be delivered from home. We are very much a people business and it’s with admiration and a huge thank you to all our staff that we have been able to continue to keep almost half our nurseries open to provide childcare to keyworkers and vulnerable children. The resilience and commitment of our nursery staff has enabled us to keep those nurseries open during the lockdown. Our strategy of building up clusters of nurseries across the north and south west has enabled us to create “hubs” and continue to provide a service across those regions when many nurseries have simply closed their doors."

Innovation

As the saying has it, necessity is the mother of invention, and that has never been truer than today. As well as embracing technology, the COVID-19 pandemic has forced businesses to rethink many aspects of their operations; this new found creativity has spurred alternative ways of doing things, and in some cases, prompted a rethink of the very way they carry out their core activities.

Peter Jones, CEO, Nineteen Group:

"The past few weeks have forced us to reflect on what’s so special about Nineteen and refine our offering, what we really are all about (strong brands, excellent data, and a great team). We’ve used this to improve our offering to our community by launching CONNECT+, a new service that will help us work more closely with our customer base and provide a closer and more intimate awareness of the community we serve."

Mike Davison, CEO, 1000Heads:

"I have been amazed at the resilience, determination and agility of the team in being able to quickly adjust to a completely different mode of working. It does challenge certain perceptions of how you run a business and what fundamental things you actually need to be able to do so. Entrepreneurial thinking and ideas have really come through at every level - to help pivot projects and client deliverables around a changing market reality."

Team Culture

Adversity can prove the ultimate test of any business – and a strong team culture is undoubtedly one of the key factors leading to success. Strong leadership is required to ensure that colleagues at all levels remain positive, motivated and able to pull together to deal with a crisis. This pandemic is unprecedented in modern times but our CEOs have found it has brought the best out of their people.

Neil Cotty, CEO, GFS:

"Our teams have come closer together during the crisis due to investment in time and money in protecting and positively supporting our employees. We have learned that our team culture is keeping us together during difficult times and it will certainly be one of our key priorities to keep that going and build upon it after the end of this crisis."

Tim Clover, CEO, Rayner:

"Flexibility has become incredibly important through this situation - produce scenarios but don’t be controlled by them. We have found that weekly leadership team and board meetings enable quicker and better decision making through a crisis. It has also become clear how important face to face meetings are for creativity, motivation and bonding."

David Brennan, CEO, Nexus:

"An appreciation that we are all in a different place (as families and employees) in dealing with the practical issues we face and so a need to demonstrate care for all colleagues. Don’t assume everyone sees the world as the CEO does and our leadership role is to provide hope for all."

What will change in the future?

Technology and communications

Tech and telecoms providers have been espousing the virtues of video conferencing software for years to a sceptical business audience that has preferred traditional ways of holding meetings. The rapid take-up of online video conferencing services such as Zoom is unlikely to be rolled back when we begin to approach normality; indeed, it is likely to accelerate the enhanced role digital services will play in our professional and personal lives.

Mike Davison, CEO, 1000Heads:

"COVID-19 has been a wake-up call for businesses who have been slow to adapt. We'll likely see a revisitation of goals and priorities leading to an increased digital / social focus - both to realise new opportunities but also to futureproof and protect. Social tech has also been the only way for families to come together across multiple generations. Parents and grandparents are now power users of tools they'd never have embraced otherwise. The period has pushed people out of their comfort zone."

David Brennan, CEO, Nexus:

"The potential use and rapid adoption of technology can improve the way we work, as we are already seeing through Teams / Zoom / live chat, etc. Adoption of these has speeded up rapidly. For Nexus, the acceleration of the online, ‘virtual’ business model has probably moved five years ahead in only three months, and customers seem very happy with the online model for the moment."

How we do business

It quickly became obvious that companies would need to find new ways to carry out what had been prior to the crisis even the most straightforward of tasks, such as team meetings. In some cases, such as the exhibitions and events industry, a wholesale rethink of how the sector can operate has been needed. This has been no small task, given the scale of the crisis and the sheer volume of challenges that our management teams have had to overcome.

Mike Davison, CEO, 1000Heads:

"What's come out of the crisis is a sense of shared experience and prompted increased responsibility and care for each other. In marketing terms, brands who have come out on top during this period have led with a greater sense of purpose. The balance between responsibility, reputation and revenue has shifted."

Peter Jones, CEO, Nineteen Group:

"Exhibitions are going to change significantly. We have realised we can still bring buyers together with sellers outside of a big hall by understanding more about what each does, and bespoke matching them. We can apply this model to our big shows and remove some of the randomness of opening the shutters on the day and expecting the best. Removing some of the ‘chance’ factor on the day will allow us to extend our engagement with our customer base throughout the year, rather than just when the exhibition opens."

Tim Clover, CEO, Rayner:

"There will be significantly enhanced work on ensuring the integrity of the supply chain. We think there will be a need to consider more vertical integration to become self-sufficient, so removing the reliance on third-party providers. We are already starting to see this, to ensure continuity of supply."

David Brennan, CEO, Nexus:

"The need for more and more office space is gone. We can work flexibly from home and continue to deliver a great service."

Societal change

However quickly the pandemic recedes, the crisis will have a profound lasting impact on the way we function as a society. Behaviours will shift as we all adapt to the new reality of maintaining social distance. Some of our CEOs also expect it to lead to greater government involvement going forward.

Tim Clover, CEO, Rayner:

"We are likely to see an increase in the role of the state. This will manifest itself in the form of greater regulation, higher taxes and, possibly, a nationalistic procurement policy."

Neil Cotty, CEO, GFS:

"We expect to see a sustained uplift in e-commerce following lockdown restrictions as more people who would not normally buy online, or as much online, become more comfortable with internet shopping. I would expect there to be a car crash for the next nine to 12 months on the high street, on landlords, and in terms of revenue to local authorities. Delivery companies will also likely start to increase their prices as capacity becomes limited and at a premium."

Bruce McKendrick, CEO, Forest Holidays:

"The world has been reminded of the importance and impact of measures like personal hygiene, cleaning and social distancing (particularly if you are carrying any form of virus) to protect others. I think we have become rather blasé about such things that back in the day would kill many people. I believe attitudes and practices around this will change, at least in the medium term. A little like ESG, businesses will have to consider these issues carefully in their operating plans."

David Johnson, CEO, Just Childcare:

"When all sites are able to fully open again, it will be in a changed environment and likely with differing parental expectations and needs. The larger nursery groups have been more able to keep their service open and this should demonstrate an advantage over single site operations at the time when parents make their childcare choices. In addition, we expect that in the short to medium term the use of relatives such as grandparents will be less as families want to shield them from risk."