This is not a drill: A Covid stress-test for management
Capitain Bernard Stamm managing a storm in the Poujoulat boat, Vendée Globe
“The strongest and most fruitful social bonds are those based on reciprocal trust. Conversely, mistrust has a sterilizing effect ”
Frédéric Coirier had just turned 31 in 2005 when he became CEO of Poujoulat, a French manufacturer of metal chimneys that employed 1,000 people at the time. Through acquisitions in Europe and diversification into sustainable activities, he quadrupled annual revenue to a quarter of a billion euros. But then COVID hit, and Coirier’s managerial prowess was tested as never before. Suddenly his mission shifted from higher profits to just keeping the venerated family business he had taken over from his father alive.
Coirier shared with us some of the lessons learned from that crucible, and the wisdom gleaned from the hundreds of other CEOs he talks to as co-chairman of France’s main association for medium-size businesses – known as ‘ETIs’ in French – that bring in 50 million to 1.5 billion euros per year.
1 - ETIs represent 50% of the French industry and employ three million people spread over 5,500 companies. How have they coped with the COVID shock ?
No one expected such a abrupt stop to industrial activities across France. It has never happened before. Within a couple of weeks, stores and business went from being open to lock-down. A monitoring system of 800 companies showed a downturn in activity [REVENUE?] of 60% in mid-April 2020.
Half of the CEO’s were looking at a critical cash situation within weeks. They had three main challenges to tackle simultaneously:
Ensuring employee health security – The vast majority of companies found their way quickly by closely following government guidelines. It was essential that management deliver crystal clear messaging and rules
Managing uncertainty - Most mid-sized companies switched from quarterly or monthly reporting & planning to week-by-week, a form of pragmatic adaptation. Government guidelines, business and client needs all dictated organizational changes.
Supply shortages from Asia – This was a huge challenge. In June 2020, factories or businesses were operating, on average, at 20% below the previous year’s levels [UNIT OF MEASURE? REVENUE? For the year as a whole, business dropped by nearly that much for the year as a whole. [GIVEN THE HEADING, SHOULD HAVE SOMETHING MORE SPECIFIC ABOUT SUPPLY CHAINS FROM ASIA]
2 - What lessons have they taken away from this crisis and how are they preparing for the future?
“It’s all about managing expectations — with employees, stakeholders and clients (or users). I confronted the challenges head-on and communicated about them:”
I observed three encouraging trends that helped companies and the individuals who run them build resilience.
Spontaneous generosity at a local level reinforced a sense of purpose and cohesion. Companies shared their knowhow and human resources, without prompting and without charge. Dozens started to produce hydroalcoholic gel and masks, especially for hospitals, and some gave away equipment. Companies were proud to help.
Collaboration and pooling of resources among companies within and across regions in France created a sense of solidarity. It gave rise to a kind of collective intelligence for problem solving, whether for buying masks or sourcing parts. [I ADDED THE BIT ABOUT ‘SOURCING PARTS’, NEEDED AN EXAMPLE HERE BESIDE MASKS.]
Efficiency in decision making improved under the pressure of a crisis, forcing a focus on concrete short-term goals and emergency responses. Some companies launched e-commerce solutions in a few weeks that would have taken months or years under normal circumstances. The Covid crisis exposed inefficiencies in decision making processes diluted by too many meetings and unclear lines of authority.
3 - Of the solutions you put in place at Poujoulat, what worked and what could you have done better ?
At Poujoulat, 60% of our 1,600 employees were furloughed within a month. We work based on orders and our distributors, such as DIY stores, had shut down. I had to stop four factories out of 10 right away. It was the very first time anything like this had happened in the 70-year history of the group.
Retrospectively, I broke many of the conventions and rules by which we had operated. for generations. I felt that I had no choice. I wasn’t going to let our family business collapse under my watch. Here are some of the measures I put in place.
Planning by the week – In the face of such high levels of uncertainty, I applied the week-by-week, emergency management.
Greater density in internal communications – To compensate for the lack of face-to-face meetings we quickly set up or encouraged alternate channels of communications, including: regular videos from management or HR to all employees; the use of SMS as a compliment to email and internal chat; and near-constant lateral, two-way communications between teams. The golden rule was ‘the truth and nothing by the truth.’
Innovations in client communications – Staying connected with clients was essential, and we kept of client and sales support services in full operation. We organized webinars and trained our employees to use new tools and the adapt. Calling also reached out to clients by phone or video-conferencing – we had to let them know no one would be let down or left behind.
Quicker decision making – We reorganized our decision-making processes with high-intensity meetings and more empowerment at every level. I ran daily meetings to validate the numerous propositions made by site managers, HR, security, etc. Top-level decision-making was restricted to five people to boost the velocity of project execution.
Decentralization of responsibility – We gave considerably more autonomy and responsibility to factory managers. Because the situation at each site was different – depending on factory size, country, legislation – each manager adapted their response. Some regions maintained a 90% level of activity while factories in France were operating at only 10% capacity. What had been centralized continuity management plans became guidelines.
Accelerated reinvention – As did others, we took the opportunity to accelerate changes already in the works around digitalization, notably for our procurement process. This put us in a better position to restart production quickly when conditions permitted, more quickly that thought at first.
Business Case – Navigating a business in a Covid fog without a compass
Risk & Impact:: people disconnect from each other; company structure damaged
Solution : clear and constant communication of priorities
In the my bi-monthly videos in English and French to employees, the messaging was structured around key three points:
a/ Explain and acknowledge the depth of the crisis drawing from hard facts and numbers; detail the actual impact on the organization and why efforts are required by everyone
b/ Share future expectations and hopes to get ready for a restart, which could happen on short notice; highlight immediate priorities and get people focused and motivated to it : client focus and security
c/ Remind everyone about mandatory health measures (masks, distancing, hand-washing or gel use, etc.); Thanking everyone.
4-How do you give to others ?
I have been deeply involved in the French association for medium-sized companies (METI) for the past two years. METI is a CEO-level membership which helps develop the ecosystem within which our companies operate, and our collective influence. There are 5,500 member companies in France, compared to 13,000 in Germany. France has amazing strengths, and we need to leverage them. What motivates me are the exchanges and the nurturing we do on a regular basis. My goal is create business value rooted in human values [PLEASE CHECK AGAINST ORIGINAL ON MEANING]. I also strive to help optimize the legal and fiscal system to boost employment make France more business friendly.
5- What do you do to give to others outside of your work and family time ?
As a teacher, I share my experience in a Masters program in marketing. Transmitting what I have learned to others is a driving value for me. Teaching also forces me to stay up-to-date with new approaches to marketing and helps me consolidate my knowledge. This is extremely valuable as we rarely have the time to reflect. Setting aside time from work to discuss and exchange with students is like a sanctuary for me. I also love being in contact with students to see the evolution from one generation to the next. And there’s network building too.
Some data in this interview is drawn from: https://annualreport.guamvisitorsbureau.com/
6- What is your favorite quote and why ?
“The strongest and most fruitful social bonds are those based on reciprocal trust. Conversely, mistrust has a sterilizing effect.” (“Le lien social le plus fort et le plus fécond est celui qui repose sur la confiance réciproque, tandis qu'à l'inverse, la défiance stérilise.”) Alain Peyrefitte, a 20th century French politician, author and confidant of Charles de Gaulle
I like this quote in particular because it is such an important truth. We could never have put in place the durable and decentralized operational structures as we did during the Covid crisis without a high level of trust within and among members of different teams and the company.
