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Calm in a crisis

Date: 10.08.18 |Categories: Uncategorised |Tags:

Blog author, June O'Sullivan

We’re pleased to share some insight from another of the speakers at our seminar in conjunction with Happy on 20th September. This time, read on for more from June O’Sullivan…

It’s a very lucky business that doesn’t hit a crisis. One in three businesses go bust but the two surviving will have almost certainly have faced a tough crisis. The statistics for social enterprises is even more challenging. The ones who survive are not lucky, but have a set of values and action that combine to make a great turnaround plan.

We recently had a tough time. We managed it and came out fighting, but it would be foolish not to reflect on the whole experience. A business challenge is like a good story, it has a beginning, middle and end but, unlike a good story, you really don’t want to repeat it.

The beginning can begin with, “I had a funny feeling. Something doesn’t add up, things are not making sense.” I suggest you drill into this feeling. Don’t underestimate the power of intuition. If you think something doesn’t feel right, you are probably correct, so check it out factually and objectively. The middle is what you do about the problem and the end is how it finishes. Hopefully, that means surviving and getting stronger.

Last year we faced a huge problem in the form of a sector wide recruitment crisis due to ill‑considered Government policy. It squeezed the business, as staff are 77% of our overall costs. We are a regulated sector and have to abide to strict statutory child to adult ratios. We therefore had to employ a lot of agency staff and we lost control of our agency costs. The result was spiralling costs and insufficient controls. Our projected profit disappeared and we ended up with a huge deficit. We had to do something that would stem the flow.

The result was a very live action plan with the central focus to reduce staff costs while remaining safe and legal, and ensuring the quality of teaching for the children remained of a high standard. It was a real juggle, as so many factors were interwoven. A written plan is only a small part of the solution. The crucial factor was getting the staff engaged and willing to go the extra mile to change the way we were operating. We created a flatter management system and involved many more staff. We held a weekly team meeting to keep them fully appraised of what was happening, but also to collect the relevant information against the key business metrics and the action plan.

It was a balance between keeping staff informed but not so much it freaked them out, while finding many and different ways to inspire them to pull together through the difficulty. The key actions that merit a mention were:

  • Positive, kind and motivational leadership
  • Honest communication and lots of updates
  • Refreshed operations procedures
  • Clarity of action and communication
  • Weekly shared meeting
  • Clear decision making
  • Forensic oversight
  • Correct factual data
  • Team buy in and lots of listening and reassuring
  • Personal and team resilience
  • Bravery and grit
  • Thank you and celebration

The year was rough but we pulled together. We came out stronger at every level of the business. We learned that when a crisis comes to call, the values you have embedded, the loyalty of staff and the strength of the organisational purpose are the three strongest elements in the survival toolkit.