All companies need to innovate and adapt in the current COVID-19 circumstances. The external context in which all enterprises operate has changed because of a sub-microscopic virus called SARS-COV-2 and business innovation is no longer an option but a requirement for survival.
The situation
“… the world we knew is gone – finished. The conditions which framed and taught us our standards have gone with it. Our needs are now different, and our aims must be different. … With the old pattern broken, we have no to find out what mode of life is best suited to the new. We have not simply to start building again; we have to start thinking again – which is much more difficult.”
-John Wyndham, Day of the Triffids – 1951
Some companies are already properly “anti-fragile”, they had built up and rehearsed excellent contingency plans to enable business continuity even during a pandemic. They had built up their resilience, created a flexible and adaptable infrastructure, and deployed a fully equipped and trained workforce to cope with substantial disruption. Those companies will continue to operate, albeit at a slightly reduced efficiency and effectiveness, throughout the next 3 to 4 months of immediate crisis and for the foreseeable 18 months to 2 years horizon on which they had planned.
Other sectors of the economy are naturally resilient to this sort of shock – distributed consultancies, work from home accountants, market researchers, writers, data scientists, and so on. They are seeing increasing demand, but do not need yet to feel the pressure to innovate or adapt substantially above their current working practices.
Some sectors will see a distinct and rapid increase in demand for their services. We can see this happening to supermarkets, food delivery, medical logistics, teleconferencing services, laptop and tablet sales, and telephone helplines. The ability of them to capitalise on the sudden change in demand depends entirely on their ability to adapt and innovate on very short timetables.
Most other undertakings are facing a dramatic (20% to 90%) drop in demand for their services. Adapting and innovating will determine whether those organisations and enterprises survive at all. Many will not. Even with substantial government support, their businesses may fail before they can implement change.
Substantial government support has been announced. On the evening of Friday 20 March, the Chancellor of the Exchequer Rishi Sunak announced additional measures to help smaller businesses and the self-employed affected by COVID-19. The Government also has said it will announce further measures to support self-employed people over the coming days.
The new measures announced on 20 March are:
- Suspension of the minimum income floor for the self-employed: self-employed people can now access, in full, Universal Credit at a rate equivalent to Statutory Sick Pay for employees
- Taxes – next self-assessment payments deferred to Jan 2021 for the self employed
- The introduction of a new job retention scheme will cover up to 80 per cent of wage costs (details to be confirmed) backdated to 1 March for a period of three months or longer, if needed, for small businesses, charities and not for profit organisations. Grants due to be available to business within weeks.
- The business loans that were previously announced will be available from Monday 23 March and will now be interest free for 12 months (was 6 months)
- Deferring the next quarter of VAT through to the end of June (those payments can now be paid at the end of the financial year)
- Universal Credit – standard allowance to rise over the next 12 months by £1,000
Current measures can be found here:
- https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-scheme-cbils/for-businesses-and-advisors/
- https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/covid-19-support-for-businesses
- https://www.gov.uk/government/news/coronavirus-business-support-to-launch-from-today
- https://www.fsb.org.uk/campaign/covid19.html
- https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/873676/Covid-19_fact_sheet_18_March.pdf
I work with Swoop and other providers to access funding rapidly for businesses that are growing or changing. They just announced:
| The CBIL scheme is now live, so we’re urging our community to ensure their businesses are registered on Swoop and ready to gain access. Launched by the Government in response to the COVID-19 pandemic, the scheme allows companies with a turnover up to £45m per annum to borrow up to £5m with the first 12 months interest free. Loans up to £250k are being offered unsecured, so funds should be accessible quickly for these. With over 40 accredited providers offering the facilities it’s important to ensure you’re matched with the best solution for you, that’s where Swoop will help. For more information on CBIL click here. |
Further measures are likely to be announced over the coming weeks.
All businesses need to assess the health and safety of their employees, customers, and stakeholders. That area of innovation is non-negotiable, and there will be severe and immediate consequences for businesses that do not do so.
- https://www.hse.gov.uk/news/coronavirus.htm
- https://www.gov.uk/government/publications/coronavirus-action-plan
The Immediate Future
It is highly likely that the government will substantially ramp up regulatory and legal measures to protect public health over the next few days. An outline of what is likely to happen can be found here:
These measures will not be short-term. There is no realistic likelihood of a vaccine being deployed within 18 months, and there are no drug treatments or therapeutic protocols currently deployed which will have any measurable effect on public health in the same timeframe. Businesses need to plan for the immediate (one week), medium term (12 weeks), and for the long term (up to 2 years). Only those that innovate and adapt are going to survive. Those that do innovate and adapt will find themselves thriving and growing extremely rapidly. With easy access to finance, rapid failures of competitors, but a huge and highly demanding new market evolving in a population that is effectively under home quarantine for the majority of the next 18 months, those companies that have the resources to innovate, adapt, and launch to service the market may find themselves doing surprisingly well.
The Mid-Term Future
There will be no quick return to the situation of 2019. Even if a vaccine is discovered, or drug treatments are found, or therapies become effective, the entire global population has been traumatised by these events, and the trauma will not improve for many years to come. Behavioural patterns will change, social distancing and isolation will remain major features of human behaviour for several years. In other areas, once there is substantial immunity and vaccination in place, there will be a rapid rebound in some markets as people seek to “break out” of isolation. This will have to be managed extremely carefully by all organisations and businesses. It is very much a benefit and risk that should be planned for now. It may be that international air travel, large hotels, rock concerts, and large nightclubs never recover their original demand in our lifetime. Whether they can depends on a vast number of factors which are extremely difficult to predict.
Whole supply chains will suffer substantial disruption and damage. Most industrial sectors are aware of the shortages of standard size containers, Chinese manufacturing has seen a 17.5% drop, European manufacturing is now entering a pronounced slump. We have not yet seen the impact of the disease on scarce minerals from Africa, Russia, or South America. Alternative raw materials, alternative sources of supply, multiple sources of supply, and agile purchasing policies are likely to be required by those on the receiving end of those supply chains.
Any businesses that require large numbers of people to assemble face-to-face are unlikely to be able to do so in the planning horizon. Alternative methods of work, or extreme protective measures will be required. As the level of immunity in the population rises – and most importantly can be confirmed by reliable genetic essay, serological, or immunological testing – some of this may return ahead of the availability of a virus. Or it may not.
Your Options
Enterprises have a range of options ahead of them:
- ignore the risks and carry on as normal
- wait and see, and hope for the best
- turtle down, conserve cash and assets, and hope to emerge in two years’ time with core operations intact
- close and release their workforce and assets to the ecosystem
- grab market share, while balancing risk to employees and innovating agile and flexible procurement and sales techniques
- rapid innovation, adoption of new business models, and exploration of new markets
Each of these has risks, rewards, and financial impacts. Suddenly, modelling, business planning, and innovation isn’t a game. The very best and most talented leadership will thrive, anybody who is less than excellent will face a severe challenge and will probably fail. If you have any doubts or concerns, now is precisely the time to seek third-party expertise in innovation, financial leadership, and funding strategies. Common sense is no longer a guide, and can be a major handicap, in these “black swan” times.
How I Can Help
I’m devoting all my consulting time, financial expertise, turnaround skills, financial resources, and innovation network to helping SME and small enterprise adapt to face the threats and opportunities. About 50% of that time is now committed to visionary organisations who have reached out to me. I’m now extending the offer to the wider business community.
For the last 30 years, I’ve watched businesses become leaner, sleeker, thinner, and more efficient. I’ve seen rapid reductions in resilience, agility, and innovation despite them having proven values well above their costs. As a generalist, with experience across eight different sectors, 12 countries, public and private sector, start up to government department, I’ve seen the increasing narrowing of expertise, skill sets, and experience. Having worked on over a dozen turnarounds and reconstructions, I’ve seen the reality of financial efficiency borne out in increasing fragility.
I spent 10 years working with some of the best innovation consultants, financial experts, change consultants, and turnaround financiers in Europe as an antidote to that. I’ve created broad-based technology enabled companies that hit $100m in revenue in 30 months, and worked with social movements, to build up the tools and skills to be able to rapidly adapt companies to new situations.
I look forward to working with anybody that sees the opportunities in the threat, and who sees innovation as a pathway to sustainable success.
So much more than an Interim CFO.
An expert in structuring and strategy, I find the pathways and components of unexpected solutions to enable founders, investors, and property owners to fix the hardest of problems. I help them to unblock and accelerate growth; unlock and realise value rapidly; and invest wisely for maximum gain.
For founders and SME owners, I am a well-respected and sought-after mentor and advisor, delivering wise counsel, actionable advice, paths to new finance, and innovation acceleration. Equally happy to help as Interim CEO, Interim CFO, NED, or strategy consultant.
For growth companies that have already overcome the roadblocks, I bring an evidence-based innovation acceleration methodology that can boost the pace of innovation dramatically and lift revenue by over 100% a year. Proven on hundreds of start-ups in Europe, and at Enterprise scale, the Eicorn OPTIMAL methodology is already transforming how companies operate.
For investors, I can reduce investment risk and supercharge investee companies. I am very familiar with UK Private Family Offices (having worked in one), UK and EU Angel investment (multiple due diligence engagements for UK angels), VC financing (I advise 2 funds), PE backed exits, growth capital (I have helped to place around £36m into smaller companies), and business turnaround (with direct turnaround experience for 2 UK funds).
Underpinning all of that is an encyclopaedic knowledge of the operational realities of corporate governance, financial regulation, business law, litigation, insolvency, and funding. Extensive networks of experts in all those areas mean that I can bring in other amazing people in accounting, finance, project management, product development, marketing and technology rapidly.
I’m a generalist, but with a deep skill set. Currently operating in property finance, SaaS, and technology. My historic sectors are business services, video games, animation, film, television and music.
That breadth of skills is based on deep roots: Oxford educated, then a Chartered Accountant with 10+ years at Deloitte (financial services and forensic accounting), then 10+ years’ board experience at Board Director level (CEO & CFO). International experience gained in 12 countries. Participation on the boards of 19 companies including 12 start-ups, 2 turnarounds, 5 company purchases, 3 company sales, and 4 property deals helped me complete my business education.
When I am not working directly to help clients (usually as Interim CFO, Interim CEO, or NED), I can be found lecturing to start-ups on preparing to raise finance, on the finance committee of a major Local Enterprise Partnership, helping charities, or volunteering to help young adults.
How do I work?
I ensure founders and investors set off in the right direction to maximise their chances of reaching personal and corporate objectives. I make sure that they proceed together at pace, without breaking anything or anyone irreplaceable on the way. If they hit a block, I can help them turnaround and refocus with renewed energy.
I can find the best available financial strategies and then get things started and moving fast from a library of proven answers, technologies, methods and a network of top-quality contacts.
Then I work with the executives and investors to ensure the financial support functions at the right level, and that cash is delivered at the right time to balance risk, growth, and returns. That means understanding the exit objective and pathway, as well as the valuation model and scenario plans from both sides (investable and company).
- Delivering financial rewards to founders and investors is always a balancing act, but all parties benefit if the finance function is committed to supporting the same plan.
What’s in the box
A creative, general-purpose problem solver providing “sheer intellectual horsepower” (that’s a client quote). Serious depth of analysis and rigour in following the (quantitative) evidence. Technology savviness and an understanding of what technology can and cannot do. I won’t be the smartest person in the room, but I hope to make everybody else smarter. Some people call it “IT moxie and data foo added to EQ and common sense”. Unlike many accountants, I also have a tiny smattering of creativity. I am broadly and deeply connected in media, finance, politics and technology. With effort I can be presentable at the highest levels of business and government.
Extensive commercial experience and a powerful operational skillset at Chair, CEO and CFO level help me empathise with boards. Board can use my solid theoretical and strategic analysis skills, deep and powerful analytical skills, all underpinned by a pragmatic understanding of professional finance, compliance, regulation and best practice. Good HR and team building skills, based on practical experience of teams and a broad and deep personal network ensure I bring the right people to the right table.
- While the team moves forwards, I help the team navigate around obstacles and open doors. If there is an answer, or a person, or a resource we need? I can normally find it.
Drivers and motivators
Solving complex problems for founders and investors is what gets me out of bed. I enjoy turning potential failure into success and making something out of nothing. Carrying a preference for capital gains over short term rewards means I align with executives and investors quickly. I am a strong believer in creating empowered teams that don’t need (or create their own) leaders and am committed to the values of democracy, inclusion, collaboration, diversity, social impact and ecological sustainability. I remain convinced that companies are more sustainable, more rewarding, and easier to run if they do good rather than evil.
- Wherever possible, I try to give more than I take, and leave things better than I found them.
Can I prove this?
As CFO, took a start-up from £0 to £82m revenue in 30 months. Wealth managers, ultra-wealth individuals and international corporates have used my skills to solve their problems successfully. I took a group of nerds and released a No.1 Computer Game into a tough market. I’ve been interim CFO on a dual listed (AIM/NASDAQ) company, and several VC and PE financed growth companies. On a project basis, I’ve resolved a problem with 3,000 suppliers and 30m invoices that had defeated two previous teams. I’ve helped the World Bank, HSBC, and a Spanish merchant bank, each recover £millions of stolen cash. I probably learned as much from a business that crashed into the ground 4 years after raising £3m and watching a promising technology fail for want of capital. I have a sound professional attitude after 13 years of training at Deloitte helping me put 19 years of business learning into context.
How can you find out more
Well, you could use my AI personal assistant to arrange to phone me to find out, arrange to meet, or read this blog post
Contact details are in the first paragraph. There are three things I can do today to help immediately:
- short telephone call to understand your objectives – free
- discuss what you are limited by – coffee
- set out a plan to move forwards that you can act in in half a day – up to you
davidjwbailey dot com 