In this episode of The 3 Wins Podcast, we’re joined by a special guest, Bill Barbour, the principal at WTB Consulting in Atlanta. And we talk about why NOW is the time to strengthen your company’s value chain - to survive and thrive in this brave new COVID-19 world.
To set the stage:
- By now, many Americans have received federal stimulus checks.
- But the initial stimulus money to fund the PPP - the paycheck protection program loan intended to help small businesses stay afloat and keep their employees on the payroll - dried up. So, Congress recently authorized an additional few hundred billion to replenish that program.
- And most states are mapping out their plans for a phased approach to re-opening their economies. A handful of states, like Georgia, have already started reopening.
So, what exactly is the Value Chain? And why is it important for CEOs and executives to be thinking about their Value Chain - especially right now?
Other topics we cover in this episode:
- How to lead with empathy as your business reopens
- Lessons from the pandemic: Reevaluate your supply chain
- Why every company should do disaster planning
- Disaster preparedness: Lessons from Katrina
- Business continuity planning: Lessons from Y2K.
Below, you can either watch the episode, listen to it, or read the lightly edited transcript from our conversation.
Let us know what you think in the comments!
Episode 3 Transcript:
00:00 Sean Lyden (Host, CEO, Lyden Communications): Today I'm with Russ Clemmer on the executive team at Legacy Advisory Partners, and we have a special guest joining us today, Bill Barbour the principal at WTB consulting in Atlanta. And what we're gonna be talking about in this episode is why now is the time to strengthen your company's value chain to survive and thrive in this brave new COVID-19 world.
But before we dive into our discussion today, let's start by introducing our guest. Bill if you could give us a little bit of background about yourself and your business?
01:25 Bill Barbour (President, WTB Consulting): Well, to start off, when you hear the history behind me, you're gonna try and figure out my age [laughter] and I'm a senior citizen by all accounts according to my wife. But my career spans across the whole gamut, pretty much in corporate America with largely held, publicly held companies that have global brands and have global problems. Spent 15 years in air transportation and ground transportation logistics.
02:01 Bill: With the company called Emery Worldwide, not to be confused with Emory Healthcare. With that, that there was my first introduction into starting in a sales position, working my way up the corporate ladder, and eventually becoming the senior vice president of sales for the $1.2 Billion organization.
02:26 Bill: But along that path, those opportunities in terms of different experiences whether it was in operations, sales, finance, kind of rounded out my professional credentials. Along with that, I ended up going and getting an MBA at Georgia State later in my career. It was one of those things where I thought they'd go easy on individuals like myself that had a full-time job.
02:58 Bill: But that wasn't the case. They put us through the wringer, we got through that element and again, it was just to round out my understanding of business getting my MBA. With that, what you're learning as anyone does going through the year, some things are in your control and some things are out of you control. Well, the company that I was aspiring to become the president of it was taken away because a corporate conglomerate came in and acquired us through a leverage buy-out.
Career at Coke
03:29 Bill: That in turn put me in the open market and of all places, the Coca-Cola company made me an offer. So I came down from Connecticut, an individual that only knew about the product because I was a high consumer of diet Coke but no consumer background.
03:47 Sean: What year was this?
03:48 Bill: This was back in 1989.
03:51 Sean: Okay, so that, was that during Goizueta's...
03:54 Bill: Oh, absolutely.
03:55 Sean: Turn? Okay, gotcha.
03:55 Bill: Yeah, in fact it's interesting when you go through life, you always look towards mentors and people that you learn from.
04:04 Sean: Absolutely.
04:04 Bill: Roberto was one of them. His successor Doug Ivester really became a mentor of mine at the Cola company. And they are, you gotta think about this, an outsider coming into a company who has no background then. He's from the North, he's going in to oversee operations in one of the divisions and so you can imagine sitting on the other side of that desk, people ask themselves why him and not me?
Lessons from Coke
04:40 Bill: But the thing that Goizueta said at that time is that they were getting too myopic in their thinking, everybody was inbred, and therefore they needed outside influence, outside experience to come in and help them in what we call diversity of thought in order to come up with the best ideas, the best solutions and the best movements going forward. So when I first came in, they put me in charge of developing a new business system for the Coca-Cola company based on my logistic background.
05:13 Sean: So you went from a sales background in logistics but when you joined Coca-Cola, you took on more of an operations role but drawing on the logistics background?
05:26 Bill: Operations... Yeah. Yeah. Now, in that climb in the corporate ladder at Emery, they gave me the opportunity because I had a background in sales and marketing that to send me out into the field and run a division.
05:40 Bill: So to get the operational experience to further balance me out coming back to headquarters.
05:46 Bill: So with Coke, what they saw was a Sales and Marketing individual with an operations background as well, and so they put me in charge of this project, we developed a business system that Don Keough who was the individual that was heading up the project, and we ended up turning that over to the bottling Network which they implemented in the state of Florida with the bottlers. Once that was completed, Coke said, "Okay, we're gonna put you in charge of the Southeast," which is the heartland of Coca-Cola.
06:20 Bill: So I took over the Nine States for the Fountain division, and along that road you learn not only are you operating a business within the Coca-Cola company, the one thing that I found very ironic, compare and contrast between Coke and Emery, Emery had very, very tight margins in logistics, which is common, when I came in to Coke, they printed money. It was the most profitable corporation I had ever seen and I experienced personally. So if money could solve a problem, you had no problem garnering the resources. But what they found was, more importantly, they were looking at problems the same way they always looked at problems. And so we would collectively get different people from different organizations inside the Coca-Cola company to go forward and solve a problem. And we did that with the Olympics that were coming to Atlanta, and what was gonna be entailed.
Business Continuity Planning: Lessons from Y2K
07:26 Bill: And not only delivering an exceptional experience for all the consumers and all the visitors to Atlanta, but more importantly get an organization's mindset around, "Rising to the occasion." So Coke during that period of time, and this was under Goizueta's leadership, 'cause we spend a lot of time developing what we call, "Leadership Skills," and how to develop high-performance teams. How to respond with individuals within a group setting to tackle whatever comes your way. So from that, they then turn, after we were done with the Olympics, they turned around and gave me the Business model for the entire global operation of their second largest food service customer. And so there, now it's a nuance with me within Coke, not only knowing the domestic end of this in dealing with a food service customer, but dealing with them globally and orchestrating that. So as I'm doing that, at the same time, Y2K is approaching. And Coca-Cola, here again, had the resources to put together the best Engineers, the best IT people. Well, they threw me into the mix, in looking at Y2K and it was not from an IT perspective or anything, it was more from the consumer, the client-base. What is it for them to understand what we're doing? Because again, if you think about Y2K and the problem it was going to present potentially, businesses were gonna collapse.
09:09 Bill: Systems were gonna go down completely.
09:11 Sean: Yeah, I remember.
09:11 Bill: Which raised the question, "What do you do? And so as we were building... I mean just a phenomenal platform globally, because we had so many bottlers to deal with, so many different systems to deal with, and so many clients to deal with, all these were incorporated in this full volume plan, to deal with in the event things go wrong. Well, I was able to take that learning, and again, this was something that Coke always did with their clients. As I took that to the Food Service client, who had their own Y2K group. And what you find there is, is that no one has all the answers. And so they were looking for, "Have we covered things? Are we doing anything differently that Coke, you're not doing?" And one of the things... And I told this to Russ, this story, is it was interesting in sitting around this table with all these people and I raised...
10:14 Sean: When you say, "All these people," who's sitting at that table? Give me that picture of that.
10:19 Bill: Yeah, there was the CEO, the President, the CFO, so the Leadership team...
10:24 Sean: Of the food services company.
10:27 Bill: Yeah, of IT, everybody associated.
10:31 Bill: And I raised a question, I said, "Can your employees make change?" And I got a blank stare, and they said, "Well, well, yeah," and I said, "Well, we've gone out and we've checked a random sample to see if the people behind the counter could take an order and make change without the register."
11:00 Bill: They couldn't. They got confused, they got... So they go, "Oh my God, how do we deal with this?" And I said, "Well, there's a simple way to deal with it." What we did find out is they could handle a big simple calculator. So if I give you a 10 and you owe 5 minus, just had a plus and minus key to it.
11:23 Bill: I said, "They could do it, and they could do it efficiently and fast." And then I said, "Then the other thing you gotta think about is, why are you dealing with pennies? Why change? Roll your figures up, round them out, you'll pay your taxes later on sales tax and like you can figure that out, but the idea here is, put yourself in the place of the people that have gotta go implement your plan."
The Wargaming Process
11:50 Sean: So if I understand correctly, what you were doing in that room as you were war gaming, if for any reason things don't go according to plan in terms of this transition for Y2K, what analog back-up plans do we have in order to keep the business running? Is that accurate?
12:11 Bill: Yeah, absolutely. And again, it gets down to... What I found in Business Continuity and Disaster Planning is a lot of these are done in silos, and what I mean by silos, by functionality within organizations and while they may be very astute and deal with whatever they're planning for, they lack the communication across the functions to determine, "Well, will this work?"
12:44 Bill: And so even in the case of Y2K, fortunately it didn't happen. All the amends and all the hours and everything that were associated with it, didn't have to be implemented, but it finally got people, companies, leaders to start thinking about, "What is Business Continuity? What is a Disaster Recovery Plan?" And it gets back to risk-reward, what is the element of risk that the situation has within the organization, what's it going to cost and how do we mitigate that? So that being said, with Y2K it was a known event, but it showed that collectively companies can deal with anything. As long as you look at it from beginning to end, where your resources are, you're dependent upon all the way back to the early stage of development of your product to the internally into your organization, where do they exist to the end user? And that will get... I'll explain more about the value chain, how that connects.
14:05 Sean: Yeah and I wanna dig deeper, on that in a couple of moments, here, just so I understand in terms of your background. So at that time that you were war gaming with the food services company prior to Y2K, you were still at Coca-Cola company.
14:19 Bill: Absolutely all the way through.
14:21 Sean: This was one of your... Was this food services company, part of your distribution network or what was the relationship at that company in terms of you going in and helping them.
14:31 Bill: They were our customers.
14:32 Sean: Okay.
14:32 Bill: They were our second largest customers so they were a buyer of our products for the Coca-Cola company but what any client if you talk to anyone that deals on a large scale with Coke. Coke goes way beyond just offering you a beverage.
14:48 Sean: It's a partnership.
14:49 Bill: It's a partnership and our learnings are transmitted to our clients on a regular basis, and that's where you build the relationship, you're more an extension of their company and their well-being, because as we at Coke used to view it as without them, we're out of business.
15:09 Sean: Absolutely.
15:11 Bill: And so that's why you have to always put the client on the table and say What value are you delivering? Because if you've got a commodity anybody can price it.
15:25 Sean: Yeah, it's that partnership, I imagine is what makes that commodity company, a much more valuable company.
15:33 Bill: Absolutely. Now, from that in 2000, two former executives of Coke that I knew had asked me to leave the Coca-Cola company, and join them at a publicly traded company here in Atlanta, with the intent of taking the company private. It was publicly traded.
15:57 Sean: Okay.
In Aviation Security When 9/11 Hits
15:57 Bill: And that once it went private I would run it and so I made the move, I knew I was never gonna be president of the Coca-Cola company [chuckle] so, but this was yet a new opportunity. I trusted.
16:14 Sean: What type of industry?
16:16 Bill: This was commercial security and aviation security.
16:21 Bill: So once again, new environment in terms of an industry but.
16:28 Sean: And this was right at the cusp of 9/11 or right after 9/11.
16:33 Bill: Right before it.
16:35 Bill: What we had done was we had built a plan, that it was gonna be a management buy-out and to take the company private and in doing so, because you're publicly traded, you have an obligation to go out to shareholders, and say, "the company is up for sale"
16:51 Bill: And when we did that and there was a market value put on the company, which we were going to purchase it at a British Conglomerate in the same field but had no US operations, got wind of it, and they said, "We'd like to look at, you do the due diligence and if everything works we'd like to buy it". So we threw out a figure it was almost double what the market value was and the response was That sounds reasonable. You get the... We'll go through the due diligence. The only requirement at this was July.
17:31 Sean: July of 2001.
17:31 Bill: 2000 2000. July 2000.
17:35 Sean: Okay 2000.
17:36 Bill: The only requirement we have is that we've got to close by the end of the year for tax reasons.
17:41 Bill: So a very fast turnaround. So we went through the due diligence of everything - the company sold to a company called Securicor PLC in London.
17:54 Bill: They were roughly around 2.4 billion I think at the time we were a $400 million company, they were about 2.4 billion and we would be their entry into the US market for commercial and aviation security. So when that deal took place, they offered me the job to head up the company. So once again, new owners new culture, blending two companies together, and we had roughly around 16000 employees at the time as we're going through this integration period 9/11 happened we were the largest purveyor of Aviation Security in the country.
18:44 Bill: We had operations in Boston, Newark and Dallas, so that turned our world upside down. And literally, I could give you a minute by minute picture of what took place that day, when the first plane hit the towers.
19:05 Sean: Actually, I would love to hear it.
19:07 Bill: And as the day unfolded the phone started ringing. At one point, I had American and United Airlines head of aviation on the line, the FBI on the line.
19:25 Sean: Wow.
19:25 Bill: The CIA on the line, and again everyone trying to figure out what's going on at the same time.
19:35 Sean: And when you say they're trying to figure out what's going on, what is the purview that you have, what are you seeing and how are you able to answer them at that time.
19:45 Bill: They were inquiring as to what terminals are you at? Do you have records of employees that were stationed at that time? All these questions are being asked, even though we don't know. What the ramifications or the implications of what was taking place. It was...
20:06 Sean: And your security product or service was doing what? What was your...
20:10 Bill: Airport screening.
20:12 Sean: Got it, okay.
20:13 Bill: So we were doing airport screening and also baggage screening.
20:18 Sean: Okay, so your product or service would have some way recorded the people that would have...
20:24 Bill: Correct.
20:25 Sean: Got it, okay.
20:27 Bill: So, and again, you gotta remember while we were contracted by the airlines, we were under the purview of the FAA.
20:34 Sean: Makes sense.
20:35 Bill: And there are rules and regulations. So, that day actually came and went. The next six months, I spent time and in basically day-by-day in Washington DC, talking along with other purveyors of aviation security from around the globe.
20:58 Bill: Talking to congressmen, because the McCain Hollings bill was passed, fast-track passed which meant nationalizing the industry. The only way we can...
21:11 Sean: Nationalizing the aviation industry.
21:13 Bill: Yeah. The only way we can defeat it is if we got the House to put up their own bill. And that way we'd go into conference and then a bill would come out. So, for six months, I was a lobbyist, and literally probably met most of the congressmen and most of the senators that were not for federalizing workforce, which is what we know as the TSA. Well, the best laid out plans, we defeated the bill, the Senate bill in the House by two votes.
21:51 Sean: Wow.
21:52 Bill: It goes into conference, Andy Card, who was President Bush's chief of staff, met with us afterwards at a dinner. I won't tell you the steakhouse, but it's a very famous steakhouse in DC, toasting everybody on what a fine job and that President Bush was behind us 100%. Because what we were advocating was a private-public engagement, whereby just as we experienced in our operations overseas, and we were the large purveyors of aviation at Heathrow, at Charles de Gaulle, all the major airports that dealt with threats on a daily basis. We were the contractors, the government was our client.
22:51 Sean: Got it.
22:52 Bill: And so, taking the airlines out of the equation, well, it went into conference and I forget which senator it, was from the Democrat side met with Bush, had a tit to tat on they wanted the screeners to be federal employees. And if Bush wanted to continue the honeymoon, again you remember after 9/11, it was all about bipartisanship...
23:26 Sean: Absolutely.
23:26 Bill: That they wanted those screeners. So, Bush came out in the Rose Garden that morning and a reporter asked him a question, "Well, Oh, President Bush, when is the bill gonna come out of conference?" And he said, "Well, I don't know what the hold-up is, but whatever comes out, I'll sign it," which went diametrically opposed to what he had told...
23:49 Sean: What he had said, yeah.
23:50 Bill: Through Andy Card to us.
23:53 Bill: So, long story short, TSA came...
23:56 Sean: You lost your client.
23:58 Bill: We lost the client.
24:00 Bill: TSA came in, the formation of that. The obligation then was given to us, as the current providers, to orchestrate a transition over to government control.
24:13 Bill: And they thought it could be done in 30 days.
24:18 Bill: It took, so it would be seamless, two-and-a-half years to finally integrate the TSA as it's known today throughout the airports.
24:30 Sean: So, what happened to your company? Did it have to unwind? Did you pivot?
24:35 Bill: We got restitution, because it was nationalized, $1 for a $400 million company. And we ended up selling whatever assets we had at the time. And then I said, "I'm retired."
24:54 Bill: At that point in time to... And I love the company, Secure Corp, but I just said, "I've done enough."
25:00 Sean: And what year was that, 2004, when you finally left?
25:04 Bill: Yeah, 2004. And then I thought, "Okay, I'm going to enjoy retirement a little bit with my family and friends." And I got introduced to an individual here in Atlanta that was forming a company to deal with emergency preparedness. So he was kind of intrigued by my background and what I experienced. And he asked me to join his advisory board, which I did. And six months later, he said, "Bill, why don't you just come on board with me and let's figure this out."
25:34 Sean: Awesome.
Disaster Preparedness: Lessons from Katrina
25:35 Bill: So at that point, I came out of retirement, joined a company we called Go2Gear, and it dealt in emergency preparedness at the workforce level. In other words, when an event takes place, what do your employees do? And it became even more evident that this was applicable across all industries.
26:00 Sean: Yeah, I was gonna ask you if there was a specific industry you worked with.
26:03 Bill: Oh. The seminal moment was Katrina. When Katrina came through New Orleans, no one understood the magnitude and the devastation that that hurricane created.
26:18 Sean: Absolutely.
26:20 Bill: One of our clients, which is a telecommunications company that had a network throughout the South, asked us to come in and do a post-evaluation, because two things happened. Their way of communicating with their employees vanished and in their preparedness plan. And regarding their preparedness plan, no one seemed to know in the field what that was.
26:51 Sean: Yeah.
26:53 Bill: So again, when you start looking at things objectively, one of the things, and they had a very elaborate plan. The plan one of the minor fixes that could have solved a lot of problems is when their communication towers went down their IT people knew this, but the operations people didn't, that BlackBerry still worked through a ping process.
27:18 Sean: Gotcha.
27:19 Bill: So had that been part of the plan, a backup plan to... if you don't have communication with your towers those possessing Blackberries which at the time pretty much all management and supervision had them. You could communicate. And then the second part was... And it's fundamental in a lot of plans these days is that the employees didn't know what to do, so they lost all contact for some hours to 72 hours, they didn't know if people were alive or dead, it was that era of... Oh my God, what's happening up here? So what you find in the planning process is a lot of plans have a lot of energy and a lot built in, but if they're not communicated to the workforce for those to say, "Okay this is what my role is now in the event that happens", then you're still a little lost, So that gave us even further evidence that more companies need to know one, how to plan and then how to execute those plans.
28:37 Bill: And so our business started to grow. Well, then as it was growing, we found out because it was two-fold, we were introducing products in Europe preparedness.
28:50 Bill: But we were also educating the workforce on what to do, and we decided at that point in time that we needed to make this application scalable, and we could do that if we turned the product into a software platform.
29:13 Bill: Now mind you at the time, this is four individuals so [chuckle] as we're kinda figuring this out from a software application, well, any time you have a software application, you go get someone to program it.
29:32 Bill: Someone to ensure that it works.
29:34 Sean: And debug it.
29:35 Bill: And debug it and before you can go to your client base and say, "Here you go",
29:41 Bill: So we changed the name to Prepare Us.
29:47 Bill: We went to a learning platform that was now just starting to gain momentum, in the training industry, whereby it used to be videos that they would send you or read a manual well now they were starting to accept online training.
30:06 Bill: Where you could get groups of people just logging in on the computer and going through a learning process that way, and coming out with the end result, which is an educated individual.
30:18 Bill: Understanding the plan, understanding what the roles and responsibilities where so, that donned that aspect. So now we've gone from a products and a let's call it consulting training role to a software platform to now, Okay what industries, what clients would this apply to? .
Why Every Company Should Do Disaster Planning
30:43 Bill: And with situations create opportunities right at that point in time, a healthcare organization in Atlanta MajorOne called us and said, "Tell us if we're prepared for a pandemic." How appropriate.
31:03 Sean: And what... What year was this?
31:05 Bill: It was 2009.
31:07 Bill: This was the swine flu. So with that we were able to go in and one evaluate their plan, which from a healthcare perspective, was pretty elaborate and it was very good in terms of what we call triaging, as hospitals do in understanding urgencies, people that need the most care versus the groups that need the least care.
31:36 Bill: And then how do you deal with those? Working with the emergency management systems of the state they did testing mock ideas of where we'll do immunization, for vaccines, how will we get the product to there? So all these things are covered in a very nice way. The Swine Flu didn't evolve to the planning stage, that were currently existing today with Covid-19 but during that period of time and working with the hospital, not only were we able to test their communication plan, but also elevate it so that it encompassed more of the entities that they controlled including an entire university they were responsible for. So you start to expand your thinking, you start to expand your risk reward. And what that is going to cost. And the reality today with Covid-19 is one totally unprecedented as to what this has had an impact on you personally and professionally.
The Value Chain
32:54 Bill: I don't think any plan would have gone to the extent of understanding what a complete shut-down, not only of your region, but of your country and of a globe. So today, what individuals hopefully as leaders of their organizations, are plowing through where were we before Covid 19? Where is my organization today? What are the implications of what's taking place going back through that value chain all the way from start to finish, because if there's anything broken along that line, you've got to solve it in order to get back to what you claim as your normal...
33:43 Sean: Now, when you say that line you're referring to the value chain correct?
33:47 Bill: Yes.
33:48 Sean: Let's go ahead and unpack that. Define what you mean by the value chain. Are you referring to a... 'cause I know it's commonly from Michael Porter, coined that phrase, but from your perspective, what is the value chain, if you can define that for us.
34:08 Bill: The value chain encompasses everything from where you source whatever you're sourcing to bring into your organization, to the organization itself you can think of it as a process. Your input, the process, your output.
34:28 Sean: Okay. When you say sourcing what do you mean?
34:31 Bill: Sourcing it can be everything from your vendors.
34:35 Sean: Okay.
34:37 Bill: And very few people even think about that. The vendor's vendors and you're seeing it right now Sean in how complicated things are getting in that farmers have produced material, they can't get to market.
35:01 Sean: Because of the restaurants.
35:02 Bill: Right. And if I'm a restauranteur, if I wanna be open during this time, if I'm allowed to be open, do I still have that throughput?
35:14 Sean: Okay.
35:14 Bill: And the reality here is is that most companies just figure out, Okay, all I need is a consumer or whoever buys my product. Are they still in place? Well, if you don't have the where-with-all the ability to, as you're worth 2 half months ago, and bringing that material to the forefront then you've gotta do some problem solving, and when you look at a value chain, you look at first are you still gonna be able to produce value out of this entity to whoever is gonna purchase you.
35:51 Sean: So that first link is what is that the supply chain to ensure that you can source.
35:58 Bill: Absolutely.
36:00 Sean: The product?
Value Chain Link #1: Your Supply Chain
36:00 Bill: I would look at it It's an entirety. I would go and look in the rears, in terms of who do I rely on for material.
36:10 Bill: Whatever it is, and it can be intellectual, it could be hard goods, It can be anything. The question you have to ask yourself Even during this period of time, one are they still in business? Because they've gotta be having the same problem as I've got in understanding two, are there issues that are going to impair their ability to provide me with what I need and if that's the case, is there other sourcing that I can do? Now, what adds complexity to this, is that we're coming back in phases as a country in getting back to work, getting back to a normalcy. Where's the location of your vendors, if you've got vendors up in the Northeast, they're gonna be much more restrictive coming back into play than any part of the other country because they were impacted the worst and their governors, have taken a very hard-line when they're gonna allow things to come back versus South Dakota they never went out of business, They never closed their doors they never closed their restaurant.
37:36 Bill: So you've got to start analyzing and this is where a leader if you're one of 10 people in a company trying to figure this out or you've got Divisional heads you've got to collectively start communicating what it is we need to do. And so, what I keep thinking along the lines 'cause a number of companies like E&Y, McKenzie, Price Waterhouse, they've all come out with these schematics. And here's what you need to be thinking about, Well, the reality is the leader is always in the middle always the focal point. Are you doing these things? And E&Y captured the most... It's about communication and invoking trust, trust in whoever you do business with.
38:35 Sean: That makes sense. And so, just so I'm understanding, and can picture the value chain so that first link is your you're sourcing your supply chain to ensure that you can provide or supply what you intend to sell to the customer. What is the second link in the...
Value Chain Link #2: Your People
38:55 Bill: Second link is the company itself, your operations.
39:01 Bill: And again, this gets back to your workforce. Is everybody still intact, is everybody ready to come back to work? Can they do it virtually or do they have to be in brick and mortar? What are the things that are need to be done? And the thing that I find most intriguing through this process, is the differences of scare value people have about this virus and returning to work. You've got some that are itching to do it. "I'll be there tomorrow. Tell me when and where." You've got others that say, "I wanna be a little cautious, are you gonna have all the protective gear that I need?" And then there's others that say, "Man, I don't wanna go in but I can't afford not to go in." And then you got some that are just saying, "Hey, I'm just not going in." So a leader's gotta empathize with the situation right now, but they've gotta seek to understand before being understood because you gotta make decisions and just like we all do.
40:16 Sean: Russ you had some thoughts, sir.
40:18 Russ: Yeah. Bill, we've been talking to several folks this the last two weeks. And even though it'll run out sometime over the summer, a lot of folks are making more than if they came back to work. People are trying to open up and they say, "Wait with the unemployment plus the unemployment stimulus from federal government. I'm making 30% more just to stay home," and so there's developing... We're sensing a developing of a tension between employers who are working hard to stay open.
40:55 Sean: Seem as well.
40:55 Russ: To not let anybody go or to try to begin pulling people back to get things going again. And the workers are, not all of them, but some of them have started to say, "Well, for me and mine in the short term, this is a better situation for me just to stay home." And that is a hurdle to get over from a loyalty perspective I think.
41:19 Bill: No question. And again, you can't fault them for thinking about that way. It's like, "I'm gonna make more." Well the reality of when you pass a $2.7 trillion bill and you set up these loans or grants, they're grants if you employ your people, show you employ them versus letting them off on unemployment, that money has gotta be paid back if you can't prove it at the end of the day. So it even now sets a dilemma for owners. They will, "I got the loan, I'm approved but my employees don't wanna come back to work. So I've got all the right intentions, but they don't wanna come back to work." So it's gonna be interesting. And again, this is a fluid situation whereby the government's changing the rules as we move along.
42:17 Bill: But I think this is where an owner, a leader, a manager has to be honest with their employees. It's about, "I understand your concern, but in order for us to maintain our viability long-term, we've gotta get back to work and by doing so, here's what I'm doing for you to ease your pain in terms of concerns." Where leaders are gonna go awry is if they demand their people to come back. "I don't wanna hear it, get back here," because everything communicates. So going through this, it's a delicate balance. It's an openness by leadership to show transparency, but also show the optimism. What's the end result here? We wanna get back to where we were three months ago where everybody was employed, we had great clients, we had a future to look forward to. That's our vision now.
43:28 Bill: You need to come back and share it. And again, rules are gonna change. You're gonna go... Some people through this process, they are gonna learn, "Man, people can operate from home." And so that'll be embedded in their business model. They'll figure out, some people through Zoom can conveniently gather collectively and act as a team. So it's all about changing with the times, adapting with them. But more importantly understand, and this is where we've found the real gap between business continuity and disaster planning is your systems can be up and running through business continuity, but if there's no one there to run it, they're not going anywhere.
44:16 Sean: That's right. That's where the people come into play.
44:20 Bill: The people are the asset to any organization. So therefore internally you've gotta look at what's going on in their minds right now, "How am I preparing to come back even in phases as the government allows me to go further down that line of full employment, what's that going to take in the planning?" This isn't one to say, "Oh God, let's go look at our old plan, look at where we failed on all these things." It's dealing with the situation now, the now and the present, go deal with it. And I think that's where you're seeing now companies trying to figure out what is that solution gonna look like. Now, a problem that one has, and I'll give you the restaurant business in particularly because I know a lot about that, is that in an in dining experience, a restaurant owner maximizes the floor space for seating capacity. If you go to social distancing and all of a sudden now you've lost 50% of that flooring.
45:35 Bill: Well, 50% of your revenue just went out the door too. So, how does that now affect your finances? Because you're still paying for the rent of that facility, you're still paying for everything associated with your overhead, and yet 50% of your revenue is now gone. So this is what companies are grappling with right now. Some are getting creative, they're looking at take out as really in fine dining, believe it or not, as being a good percentage of their business going forward, which before it wasn't.
Value Chain Link #3: The Customer
46:18 Sean: And I'm curious here Bill, is what you're transitioning to now, is that the third link in the value chain?
46:26 Bill: Third-link is, "Who's your consumer? Who's the end user of what you have?"
46:32 Bill: Do they still want it?
46:35 Bill: Can they afford it?
46:37 Bill: This whole idea of bending and being more flexible, the complications it has now is a rippling effect because the economy came to a standstill.
46:56 Bill: Now, hopefully with the infusion of the $2.7 trillion dollars, this isn't like the depression, we just didn't go out and print money. This is money that goes immediately back into the system. So, that's why I'm more optimistic in July and August for a rebound, an economic rebound that'll take place in this country because most of the restrictions will be reduced, most companies will have adapted, money will start to exchange hands and we will build off of that.
47:35 Bill: The other thing that I've experienced through disaster recovery plans and like is that there's an old saying, "This too will pass." The American society, we have a tendency of not looking back, but always looking forward.
47:50 Bill: And we forget. And while this is a major concern in the hearts and minds of a lot of people and we've experienced a rapid virus that had a devastating compass, the devastation that took place in the desks, the reality of this is is that, and people forget this, anywhere between 30 and 60,000 people die annually from the flu, in this country. Did we ever stop businesses like we've done today, to deal with the flu?
48:35 Bill: No. So my belief is, there will be a vaccine, there will be as was noted this morning, some very good progress in coming up with a cure to treat people with the virus.
48:52 Bill: Once confidence comes back, once the fear factor is out, organizations will come back, there will still be individuals out there, Russ, they wanna stay on the corporate, the government dough.
49:06 Bill: Okay, that's inevitable.
49:09 Sean: But that ends in July.
49:10 Bill: Yeah, but the majority of the people, the majority of this country is built on going to work, providing for your family, building a future for yourself, and that will be back on all cylinders, I think by the end of the summer.
Value Chain Link #4: Communications
49:28 Sean: Now before we close out, I wanna make sure for our audience, we've captured the key links of the value chain. So you talked about number one, vendors, essentially your supply chain, number two, your people, link number three, is your client, your end-users. What is... You said there was a fourth link, correct? For the value chain?
49:52 Bill: Yeah, the fourth link underneath all that is communication. And it is, to give you a perfect example in today's environment, as an organization as a leader of your company, have you taken this time to reach out? Throughout that entire value chain, to get a clear and succinct understanding of where your company lies.
50:19 Bill: And with that, if there is a break in any of it, then the individual, the leader or his team, or the organization has to problem solve and figure out, "How do we shore up that break in the linkage and go forward?"
50:39 Sean: Yeah, to some listening to you today it would seem that communication is actually what brings those links together, because...
50:48 Bill: Absolutely.
50:49 Sean: That seems to be the issue when things fall apart.
50:53 Bill: Very much so, Sean.
50:54 Sean: Okay. Anything we haven't talked about today and this goes for both you Bill and Russ, that you think would be important for our audience to be thinking about during this time, as they... As they are getting through the impacts from COVID-19.
51:15 Bill: As I was telling Russ, it's very easy to think about where you were three months ago, before the crisis, how was your life, how was your business? If your life was on track with what your expectations were, you can get back to that.
51:35 Bill: If it wasn't on track or your business wasn't on track, if you had a failing business model before all this happened, that model doesn't change unless you change it. And so, this gives you time to think, re-gather your thoughts and then start executing because any plan that you put on a piece of paper, is only as good as the execution.
52:02 Bill: And then answering the end question, did it solve... Did it produce the results you expected? And everybody's going through this with their personal finances, with 401 [k] s, with everything associated with what happened, it was totally out of your control. Now it is, as I tell people, focus what's in your control. And deal with that, spend your time on that, not worrying about what you can't.
52:35 Sean: Absolutely. Russ, anything you wanna add?
As Your Business Reopens, Lead with Empathy
52:37 Russ: Yeah, Bill, this has been a great information, and Sean, thank you for guiding the conversation today. I think the main message we're getting out to our institutional clients, is that there's a big... As big as any time in recent memory a weight upon them to be empathetic with their employees, right, because up until this point, your employees are what make things happen.
53:11 Russ: Right, you can get the right vendor, you can get them but the employees are what keeps the wheels turning, so make sure that you're taking good care of them. And, they may have some folks who don't make a decision, that they feel is as loyal as it should be. But in this moment, empathy is required.
53:35 Russ: And being able to understand not what I need and not what I want to be able to do my job well and what we think is getting the company back on track, but making sure that you know, hey for the majority of the people who are out of work, it was before this, it was a day-to-day situation for them, it was a paycheck-to-paycheck situation for them. And so when they do have a moment where whether you like it or not, they're flushed with a little bit of extra money for an extra couple of months and say...
54:03 Russ: "You know what, I'm taking a little bit of a paid vacation."
54:06 Russ: It's empathy which allows you to be able to say, "Here's what I know, we will ultimately need to get back to, here's what some other people have on their minds, how do we make sure that everybody is coming together and winning in this system that we've put back together and to Bill's point, we up until starting to feel in Georgia, at least. Not Michigan, where they're still tight as a clam, but in Georgia things are opening up a little bit, you can kind of get out and go to... You can go to sit down and have somebody serve you at a restaurant and do different things, but you are starting to feel okay, here's the water level has been up to here in my nose, maybe in my eyebrows for the last several weeks.
54:51 Russ: Most of the weeks. And so now, if I've been able to hold on, then now I'm ready to begin to say, what's my new path forward. I can't go back to the way it was, because that will never be... That will never be the same. I'll never have that exact thing again, it may look like that, it may feel like that, it may get close to resembling what it used to be, but it's going to always be a new normal... What's the best response? And, I think unlike your example of the restaurant situation, if you're sitting there and the food could be great and just that whole experience of going to be waited on and all, you don't have to do the dishes, you don't have all that other stuff. But, if you wanna really spend time with someone and have a quiet time, a restaurant is not that. Everybody's around, everybody's doing what they're doing. You get some take-out and you go and do what you wanna do, it's a great experience.
55:52 Russ: I think this is gonna force people into what I think will be an excellent anthropological study for those PhDs that are gonna get into this and say alright how did our culture change, how did the world change, this is gonna be a fascinating anthropological study for folks. It's gonna be a great academic study, gonna be a great business and financial study. And, there's gonna be some scars, there's gonna be some scars, there's gonna be some things that you can't just wash off with a business loan, there's gonna be some issues.
56:27 Russ: But at the end of the day, I agree full heart with Bill that the spirit of what's going on and the reason the market had highs and everything was the way it was is as 'cause people wanted to succeed, people wanted to get after it to succeed, and the hope is that people will stay on that track. They'll stay on that track, they'll remember, Okay, we just did it, we just accomplished it. And now we're gonna come together and find out the shortest distance to get back to as close to what we were experienced to as possible, so...
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About the Author: Russell Clemmer is president of Legacy Advisory Partners, an Atlanta, Georgia-based firm that helps companies across the nation to build strong leadership teams—and keep them.