A Conversation with a Carpenter
I first met Steve 20 or so years ago. A superb guy – a carpenter by trade but very versatile and multi skilled. He has superb talent and experience and can turn his hand to most things (not a fan of plumbing though which is fine as we have Craig). Trustworthy, honest and capable.
We very much get on. Steve oozes experience and when I am not around makes the right judgement calls and deals with issues for me. After 20 years we are now very loyal friends. Over the years there have been occasions when we have needed the other and have unconditionally supported each other. We have an unwritten code that I pay him immediately he does work and he does the same with his suppliers. If I need him urgently he makes it happen. In the past I have travelled a lot and it was made easier by knowing that if there were an issue Steve and his transit van would be there within an hour.
And so why am I telling you this? We are living through terrible times. Death and illness have brought huge pain and distress for many families. People have found containment hard (albeit our family have adapted much better than I thought they would). Financially most have found things tough. To add to this misery the media are predicting we will be entering a worldwide depression. I like many are trying to make sense of things. I have talked to a lot of people and will continue to do so to figure things out but some of the most common sense observations came from a conversation with my carpenter, Steve:
1 A Financial Depression?
The truth is that we are living in unprecedented times. No one knows what things will be like when we come out of containment. The media certainly don’t and dare I say it in the absence of non Covid-19 news and activity, a lot of airtime is being filled with speculation sometimes replacing facts. In big picture terms lots of people have put things on hold – they have not been cancelled. I repeat things have not been cancelled. There is lots of pent up demand and it is growing (especially in the Legal IT space where people now desperately want to modernise having seen tech show its value). Steve (who admittedly has never advertised) too has a long list of client demand waiting for him. We too have clients waiting to push the button on projects as well as clients who now want to transform themselves. Salespeople are desperate to sell and this country will have 67 million people waiting to get out and do things and spend money as soon as they are allowed. What will be will be but let’s not talk ourselves into a depression or recession. There will be work to be had and money to be spent.
2 A New Normal
Without doubt when we leave containment the world will be different. Unfortunately we don’t know what this new normal will look like yet. Globally we do not know whether any countries will have gained economic dominance over others. There are several responses to this uncertainty and change. Some are hunkering down, others have taken a body blow but are now getting up on their feet – there is a third group though who absolutely see an opportunity. They recognise the need to change and are preparing for this now. They are doing the thinking even if they have not pressed the button on spending. We are helping some of these businesses. There will be winners and losers (I am not sure for example that I would want to be in the airline or cruise business) but great businesses and people will thrive. Like my carpenter says where there is change there is opportunity. Law firms too do not need a thriving economy to make money – they just need change to be happening.
3 The Rush to Furlough
Furloughing has proved to be an essential move for people, their employers and the economy, though many people had never heard the word until a few weeks ago. It was intended to be an alternative to people losing their jobs in these dire times and many will benefit in this way. Have we got it totally right though? First, are some businesses being a little trigger happy? We have seen examples of busy people with full project portfolios being furloughed with all the work being given to the remaining 20%. Some organisations have completely furloughed their people – can you put an organisation and its people on ice? Also legally furloughed people cannot work – if the Government is funding this can’t they work on R&D projects to help power the UK out of whatever recession we may be in? As Steve points out the taxpayer will have to bear the burden of this strategy for years to come. It is valid and needed but needs to be used with as much scarcity we can muster. For Hyperscale’s part we are fully operational, our people are thankfully in good health and we are not furloughing our people. Any space capability will be donated to clients in soft deals, will go into R&D and in driving training, excellence and efficiency. We intend to come out of this horrid time better and stronger with a team at the top of their game. I would urge others to do the same if they can even if it means some brave judgement calls.
4 The Return of Old School Business
During the containment it is sad to say we have heard about some challenging behaviours from a selection of businesses. Some businesses have simply stopped paying people. Others have used the opportunity to request 20% reductions in bills. Projects too have been cancelled or deferred. I am not saying this has not been without good reason in some cases but this has not been the case in all – in some situations life has gone on for these businesses but their suppliers have been left to struggle or fold. Don’t we all have a responsibility to run our businesses ethically and look after our supply chain and colleagues in other businesses we work with? We have seen people being furloughed from businesses when their people are busy but who can’t go on as they are not being paid for work done. Steve and I believe in old school and paying our suppliers swiftly and both do this. There is nothing charitable about this – it is just honest and ethical (albeit it is in our interests as our supply chain is vital to us all). We need the world to perhaps return to old school and boring. In big picture terms when this is over there will be a day of reckoning. Modern day businesses espouse values and ethics. Those who have chosen to exhibit different behaviours without cause will be judged and at some point it will bite them.
5 Bringing things into Clearer Focus
Some modern day business practices are excellent and bring real benefit but equally has this situation exposed the shortcomings? On cash reserves I grew up in a firm which was so conservative in its financial planning that third parties would not quite believe it. I have tried to do the same with Hyperscale Group. I am not talking about everyone having millions in the bank, but Steve and I have both noticed some businesses and people seem to have very little by way of financial buffer. This is understandable when your earnings are low or you are just starting out but is this right from people or businesses earning significant sums? Are they living above their means? Should law firms be paying out profits every year? Also Lean and Six Sigma and just in time delivery is great but what about when things go wrong? Do companies and countries need to focus more on retaining essential capabilities? From a UK perspective should we be so reliant on importing PPE, Testing Equipment and Ventilators? When the fog has cleared we need to stand back more and perhaps recalibrate our view of the world and how business operates. Building capabilities for our clients is a big theme of how we work but we too will approach this with a renewed sense of importance.
Some are already questioning the loss of capability within certain countries and this will need to be rectified: https://www.forbes.com/sites/danielaraya/2020/03/31/the-revolution-after-the-crisis/
6 Experience and Talent Shines Through
In life sometimes people attribute other people’s success to luck or timing. Sometimes this is true but, in my experience, talented and experienced people have an uncanny knack of repeating success and making the right judgement calls time and time again. Sometimes they get things right so much that others assume it is easy and try to take over what they do and then find out things are more difficult. My point is simple. I am lucky to know many great experienced and talented people. As terrible as these times are, I know they will navigate their way through them and will lead their businesses to success – I am seeing this. They are making a real difference already. If you are struggling my advice is to search these people out. Ask them and talk to those who have lived through things and the battle scarred. Steve can tell you the measurements and quickest way of fitting a cupboard with just a look – a great CEO I know likewise with the savviest moves to take – I thank him for his proactive and valued advice.
On a global basis the benefit of experience is being becoming evident too: https://www.technologyreview.com/2020/04/14/999239/how-to-manage-a-pandemic-covid-asia-vs-west/
And so to close, this is a time of change, a time of responsibility (to others and ourselves) and a time to think in larger dimensions than just our own. Steve asked me a question – in years to come if your grandchildren or children asked you what you did in these terrible times what will your answer be? Just looking from a business perspective I for one want to be able to say that I helped, supported and led my clients, my people and suppliers through these terrible times and did my best to keep them safe in every aspect of the word. I want to have been part of the solution, to have taken advice from experienced and savvy people and to have helped accelerate the world out of this situation and to ensure the business is in a better and not worst place because of it. My answer absolutely will not be I did not pay my suppliers, I neglected my people, I stopped all R&D and did not help my clients whilst allowing the world to spiral into recession. I am probably working harder than ever but that is fine as these times are harder too and we have a mission.
Finally I was honoured to meet Jamil Qureshi a few years back – a superb speaker and he said some key words which you need to ask yourself when dealing with difficult things: “If you were the best in the world what would you do now?” – these words have helped me a lot over the years and are very much in our minds now. We recommend the same to you and hope you stay safe. We also thank our contacts and clients who have supported and continue to support us – we are hugely grateful and won’t forget this.
Hyperscale Group deliver a range of services in relation to Innovation, Digital, Futures, Strategy, Operational Excellence and more. They work for corporates, in house legal teams, software companies, venture capitalists, SMEs, start-ups, law firms and other professional services businesses.