How Does a Business Owner Do “Whatever it Takes” in Times of Crisis? This story of Gianfranco, an entrepreneur from Italy, who was my classmate at Harvard, is an illustrative and inspiring one.
Gianfranco runs a business with over 120 staff, all based in the province of Cuneo, close to the northwestern border of Italy, adjoining France. A core activity of the business is sales, and much of it is face-to-face. Given the current situation in Italy due to the COVID-19 pandemic, life is totally upside down, not to mention businesses. The country is virtually at a standstill. Stock markets have crashed. Consumer confidence is at an all-time low.
How does the CEO respond to this situation?
Gianfranco says: I am following the 3 vectors of “whatever it takes”:
- Do whatever it takes to protect the people.
- Do whatever it takes to protect the clients.
- Do whatever it takes to protect the volumes.
Gianfranco personally focused his attention on the first: DO WHATEVER IT TAKES TO PROTECT THE PEOPLE. He believed his people would do the rest.
The first action he took on March 2nd, 2020, was to ask 95% of his staff to stay home and safe. He then shot a video of himself that made the most reassuring announcement his employees could hope to hear: Each and every one of them will be paid full salary as long as the crisis persists.
The salespeople had a large portion of their pay in commission tied to their sales achieved. They were naturally worried about losing that part of their pay because sales would inevitably be down. He confirmed that they would receive the same salary and commission as the average of past three months, independent of their performance, as long as the crisis would go on.
What was the effect of his actions?
“I received many phone calls from employees crying (with) gratitude,” he says. But something even more interesting started happening. Because of the trust he placed in his team, every staff member started to work much harder than before! Yes, they worked from home with kids, had little material and “not a very digital attitude”.
The results were outstanding. In numbers, last week, when Italy was in a full lockout, his salespeople managed to close 70% of the usual number of contracts.
The staff managed to bill 100% of the clients on time and collected the money. The company serves over ten thousand clients. It produces thousands of invoices monthly. Not an easy job to complete from your dining table. “Support staff are taking dozens of phone calls from their kitchen, with their kids around (remember that schools are closed and nannies must stay at their home),” he adds.
Beaming with pride, Gianfranco says, “I dare say we are 100% operational. In conclusion, some of you might be sizing the opportunity to reduce the staff. Consider that the opposite option, to secure the staff, can give you a very strong competitive advantage for today and for the future. We will see how this works out.”
A week later, here is another note from Gianfranco: Thank you Vikas. The employees are now working 200%. Since they are at home, they realized that the amount of work is the only KPI. I have electricians and installers making hundreds of phone calls to help sales. Marketing boys writing support document on how to use Skype. Trust turned employee into entrepreneurs. While competitors are reducing, we are expanding. If I have to go down, I’ll down my way!!! Stay safe.
Every business has its own unique challenges. What works for one business may not work for the other. However, Gianfranco’s story does strike a chord, doesn’t it? What does it take to lead in times of crisis? What do you think? Curious to hear your thoughts.