Pete Smyth – We have a crisis. Here are 10 ways to help navigate it

It’s at times like this I wish I was a doctor, a nurse or somebody on the frontline fighting this virus. As I am not qualified for the front line, I am trying to fight it in other ways.

At Broadlake, we have spent the last three to four weeks working with our six Broadlake companies to help the leaders and our 2,500 staff respond to the challenges. I have also been in contact with many entrepreneurs, some whom I mentor and others where our paths have crossed in the past to check in with them and see how they are doing.

It’s such a difficult and uncertain time for all of them. Over these past two weeks, I have gained many insights into myself, my colleagues, our companies, the challenges entrepreneurs are facing and some solutions they are working on.

As I am unable to save lives on the front line, I’ll try to do my bit by sharing these insights that might help entrepreneurs, business leaders and managers cope with some of the stresses they are faced with. It’s not an exhaustive list, but it’s practical and maybe one or two things will work for you.

Protecting and educating your people

As the details of the mutations, impacts and the spread of the virus become better known by the day, the one fact we need to acknowledge is that Covid-19 is serious, and it kills.  Don’t get lured into thinking it only affects the old.

Make sure you protect your people in work by adapting your business processes to minimise the risk of contracting the virus and the contagion impact of spreading it. If done successfully, you will be educating your people and increasing awareness on best practice. This education will remain with them well beyond this virus and hopefully reduce the impact of the next one.

Staff will also carry this awareness into their homes, families, social networks etc. which will have a multiplier effect.  As employers, we are in a position of responsibility, just like teachers and their pupils, to have a profound impact on our people if we create the right environment and do things right.

Communicate frequently and clearly

People just want to know where they stand. A lot of managers can be slow to communicate with staff while they are trying to figure it out and come up with a plan.

My recommendation would be to communicate with them while you are planning, so they know you are working on things, with a date when you hope to have greater clarity. I have seen people in strong businesses with what I see as very good job security be unnecessarily concerned because friends and family members are being laid off in other businesses or sectors.

From Monday, March 9, we held daily conference calls where all our leaders share their day’s learning and the responses they are taking. As a family of companies, it is great for our leaders to learn from each other and to know they are in this together.

We have communication logs where we record staff, customer & supplier communications to ensure nobody is being left in the dark.  We are keeping communications short, clear and frequent to ensure maximum impact. We want to ensure what’s being said is what’s being heard.

One should assume people are very distracted with the stresses, uncertainty, fears and anxiety they are feeling at present. Ensure two-way communications to confirm their understanding of key messages.

Lean into your principles

Most companies will have principles that they work to or want to work to. Sometimes, they are clearly publicly defined like the All Blacks’ 15 principles (worth googling) and other times they are just part of the culture or a team and go undocumented. Sometimes they are so clear they are just part of the DNA of an organisation and everybody lives them. Other times some people will, and some won’t adhere to them.

Now is a time for teamwork, alignment, collaboration and a focus on the collective over the individual. We are seeing this occur at a national and local level as we fight this virus. If you don’t have principles, talk with your team and agree collectively what principles you are going to agree to operate to.

A leader alone can’t define the principles. To get your team’s understanding, buy-in and ownership for anything, they need to be involved and empowered to own it fully.  The list doesn’t have to be perfect and it can evolve over time, but it’s useful to have a starting point documented on a page.

By buying into principles, you are committing to live by them. An individual’s commitment to everybody in the organisation is far greater than their commitment to a line manager or a team. They are far more powerful in aligning than any plans, actions or tasks.

About 18 months ago, we gathered our top 30 leaders across our family of companies for a day and collectively agreed our 12 Broadlake Group Principles. This was a transformational day and everything we do now centres around our principles.

To give you an example of some of our principles:

  • Trust and respect (for each other every day);
  • Openness and honesty (nothing goes unsaid, feedback is personal but we don’t take it personally);
  • Know each other (to truly work as a team we need to know each other well and what makes each of us tick);
  • RFM (respect for money – pennies make pounds); and
  • IROAR (individual radical ownership and responsibility – we own our position on the pitch).

Great principles can be applied to everything you do.

Form a new thesis for a new world

The first three points above talk about the “Why” and a little about the “How” to respond. Now I want to focus on the “What”.

We live in a new world and this is evolving day by day. As I write, estimates for the impact of this on European GDP in 2020 vary widely from Standard & Poor’s estimates of -1 per cent to Goldman Sachs estimates of -9 per cent. In essence, nobody knows the true impact yet, so we have to take it one day at a time.

My advice is to form a new thesis or budget for your business that accounts for the facts as you see them today. Don’t be overly optimistic or overly pessimistic but be cautious of going against the facts.

Take a very practical look at your business and break down all the component parts to identify risks associated with Covid-19. Once you have all the risks on the table, put them in order of scale of impact starting with the greatest. This will help you form your “thesis”.

The thesis might be a 10 per cent drop in Q1 sales, 30 per cent drop in Q2 sales, 20 per cent drop in Q3 and 10 per cent  in Q4. The facts behind this will be customer-, product-, service-, country-specific. This thesis says 17 per cent drop in 2020 turnover with falls reducing towards the end of the year and flat sales in 2021.

Quickly take your costs and put them in three buckets: fixed, variable and semi-variable. This will give you a sense of how flexible you are in responding to these changes. This will also show you the profit impact of the declining sales, which is called operational gearing (discussed further below).

Form a thesis quickly of the changes in costs you need to make to respond. This will be based on the above 17 per cent reduction in our example. Ask yourself regularly: have my assumptions changed? Only change your thesis if there is new information or if your assumptions change.

Keep a simple log which captures and dates any changes in assumptions. This is important because, as people get sick and the pain around us increases, we will get more emotional, worried and anxious. All might lead us to consider changing our thesis without any of the assumptions actually changing.

A solid thesis based on facts will take the emotion out of it. If assumptions do change that change your thesis, then have a new plan which is up to date, giving you the confidence you are on top of this.

How flexible is your business?

You don’t know until you stretch.  Forming different hypotheses or theses of sales’ relationship with profit will determine how flexible you are. What is my operational gearing?

Operational gearing is a simple concept but that doesn’t make it easy to understand.  Ironically, when most Irish people talk about gearing in a business context, they are referring to their leverage levels.

Operational gearing is a far more important gearing because without knowing it, you never really understand your actual flexibility and true exposure to leverage. Coming on the back of five to 10 years of strong growth (depending on the sector), we forget that operational gearing works in reverse.

On the way up, a 10 per cent increase in sales can sometimes lead to a far greater increase in profits. Businesses with a lot of fixed overheads can experience an increase of more than 30 per cent in profits by growing sales by just 10 per cent. Unfortunately, the same applies on the way down.

By understanding this relationship, you can then decide if you need to make additional changes to increase your flexibility and better position your business to respond to slowdowns or market shocks.

There is no “right” level of operational gearing – you just need to find a safe level for you and be conscious of your level vs your competitors’ as this will impact on your relative ability to respond to both growing and declining sales.

Understanding operational gearing is key to understanding the fundamental risks you are taking in your business. Unfortunately, it often takes a recession for people to become aware of their actual exposure levels.

Avoid death by a thousand cuts

When you establish your new thesis and the corresponding operational gearing, you will sense the quantum of changes you need to make. Then make a list of everything you can practically do to minimise or respond to each risk to get your required outcome.

Speed is of the essence and I am a fan of simple 10-point plans – not over-complicated, long-form documents in which the main facts get lost. The right actions to take will range from business to business.

Be very practical in assessing the impact. Be brave and back yourself, you are leading for a reason and you need to trust your gut. At times like this, the paralysis of thinking and doing nothing, doing too little or reacting slowly are the greatest risks.

To protect your business, you will have to make some unpopular decisions. Experience has taught me that the people who respond quickly and decisively are usually best placed.  By communicating quickly and openly with staff, you are being fair to both the ones who are staying and those who unfortunately must go.

If your people trust you, they know it is tough on you and they just need to know what you are thinking. If you need to downsize, you need to do it quickly because it’s in the best interest of the business and the remaining staff.

Try avoiding death by a thousand cuts. If you must cut deep, do it as quickly as you can and ideally make all cuts together. By doing this, you can minimise the impact on the remaining staff who are feeling for their colleagues losing their jobs and trying to cope with their own fears.

I have seen companies who get into a rhythm of “every Friday cuts” and it kills morale. Don’t be the leader who cuts on a Friday and runs away for the weekend. When you do make cuts, that’s the time when you need to be there for your people.

Cash is always king

While making the changes to your profit and loss, don’t leave cash to be an afterthought – regardless of how much of it you have. You need your business to be right-sized for the new world post Covid-19.

Sometimes companies can delay making the tough decisions because they have cash reserves to ride out the storm. Sometimes, this means they retain a business shaped for the old world. Just because you have cash doesn’t mean you can delay making the right changes.

Utilise emergency government supports which cover proportions of staff salaries or allow you to extend your tax payment dates as much as you can. But be conscious that while these schemes will help you, they are often kicking the can down the road. You still owe the money. Don’t delay inevitable changes you know you need to make as a result of having them.

Be wary of bad debts. Particularly where you have bank debt, put extra efforts on cash collection. If you have invoice discounting in place, realise the cash draw that bad debts will place on you as you have already drawn down payment against these debtors.

Talk to your banks frequently and be very open and honest with what you are seeing and doing to respond. We see banks as partners and as such communicate regularly with them. We share not just the spreadsheet but our response plans, staff communications, principles etc. These give banks a real feel for you. Spreadsheets alone can be sterile.

Banks are responding positively but, like the hospitals, will have a volume of cases to deal with. By making their life easier with speed and quality of information, they can make your life easier.

Cash is always king as it’s the fuel you need to reinvest in future growth, whether that be organic or through acquisitions. When the storm passes, we will get back on the growth path and will need cash to grow, so try and protect it as best you can.

Build confidence by winning the daily battles

We all get tired. Covid-19 is an ever-present word at the moment. Everywhere we look we see signs of its impact, in every conversation we have with family and friends we discuss it, TV and radio are dominated by it. It’s draining and the eye of the storm is still ahead of us.

For the last few weeks, we have been asking leaders to take it one day at a time. By focusing on the daily battles people, are getting a sense of achievement day to day. Once the new thesis is built for your business, you can shift your focus to controlling the controllables and making necessary changes.

Winning daily battles is vital when the scale and extent of the war is still unknown. It minimises your leaders and their teams becoming overwhelmed by uncertainty.

Be sure to acknowledge progress more than ever before. Confidence has been damaged and it’s one of the most important intangible assets we have in our businesses. We need to protect it and build it.

We also need to let our leaders lead. A natural reaction is to micromanage in a crisis, but now is the time to provide clarity, trust, empowerment and support to your people. This is a once-in-a-lifetime learning experience for our leaders and managers – let’s make sure we don’t take this away from them.

I strongly believe that good managers should function like good sports coaches. Now is the time to come up with a good plan with your team, give them confidence, support them and stay off the pitch and let them play.

Be open to the learnings

I have always found that wonderful ideas and changes often come as a result of a crisis. People unite, backed into a corner, egos left aside. They look at the world differently and come out fighting.

Be conscious that some of the wonderful ideas that will emerge as a result of this coronavirus will remain with us long afterwards. I hear leaders speak of many early learnings from the Corona Crisis: the improved communications, better clarity from managers, increased focus, increasing team spirit, speed of diversification, embracing of technology, making home working work – these are among a few.

Embrace the learning and be sure your people understand the positives of a crisis. I often say to people: if good things can come from crisis, how can we create our own mini-crisis from time to time to unlock some of this thinking?

The crisis is here, you should use it to unlock people’s minds. In the iconic words of Apple, let your people “think different”, encourage collaboration and come up with new ideas for your business.  Use this experience to encourage a culture of learning and reinforcing its importance on business evolution.

Seek out the opportunities

Once you have formed a thesis of the new world ahead of you and the imminent changes you need to make to respond to this world, it is important to spend a little more time on what opportunities the new world might present for you.

To do this, you need to make sure you have stabilised the business with a base case thesis. Once you are stable and have made most of the significant changes, look up and look out. There is still a world out there that will present new opportunities as a result of Covid-19: New products, new services, new delivery models, maybe fewer competitors, market consolidation opportunities, market diversification opportunities, greater potential for home working, online selling, etc.

The world will still have almost 8 billion people at the end of this. Opportunities will remain, opportunities will emerge, and opportunities will expire.

The world will go on and reward the brave.

If you have any questions or I can be of any help to assist you through these tough times drop me an email

O’Donovan brothers will stop at nothing to reach the pinnacle – Sunday Business Post

By: Pete Smyth

The champion Cork rowers are so much more than the good-natured entertainers we watched at the 2016 Olympics – they possess all the key ingredients for success in business and sport.

I have always believed in the parallels that exist between high performance in business and sport.  The more high performing sportsmen and women I speak to the clearer this belief has become.  One difference I have observed is that high performing sports people have a far greater insight into the key components of winning than their successful businesses counterparts.  This was reaffirmed when I interviewed Ireland’s Olympic rowing silver medallists Paul and Gary O’Donovan at the 2018 CorkBIC Entrepreneur Experience held in Ballymaloe House last week.   The Entrepreneur Experience is a 24-hour event which brings 24 of Ireland’s leading entrepreneurs together with 24 of the country’s brightest up and coming Entrepreneurs for 24 hours of intense mentoring and learning.  This annual event has helped over 200 emerging entrepreneurs achieve their potential over the past 8 years.   My interest in interviewing the O’Donovan Brothers at the event was selfish.  I wanted to learn from their journey and understand the true parallels between their high-performance approach in sport and what the audience and I were looking to achieve in business.  It wasn’t designed to be a serious conversation but as I posed some early questions it was clear to me we were going to see a very thoughtful and serious side of them.  Their public persona of being entertainers or even messers, having the craic, “pulling like dogs” and “living on steak and spuds” was nowhere to be seen.  They knew we wanted insights more than selfies, and insights they delivered.  Their insights had clear relevance to business and here’s a glimpse into some of the ones that resonated with me.

Dream Early & Dream Big

The O’Donovan brothers were born into rowing and they had the dream of rowing in the Olympics since they were seven.   In their boat club in Skibbereen they had witnessed older club mates training hard, travelling wide and far to compete and returning to their small club with stories.  Like the great explorers returning home with stories of the new parts of the world they had found, the brothers were inspired by their achievements and stories.   In Paul’s words “It was cool, and we wanted it”.  Even at the tender age of seven, the great honour of being part of the exclusive group of people to have represented your country at an Olympic games was not going to be enough for this pair. They wanted medals.  Gary talked fondly about the faith the established rowers have always had in the youngsters coming into Skibbereen Boat Club. “We have belief in the youngsters and if they have an Olympic Dream, nobody would ever doubt them”.  This environment supported Big Dreams regardless of your age or starting point.

Fear and a lack of self-belief are big obstacles in business and sport.  If you have people around you that believe in you and allow you to dream big, you have a huge advantage.  Fear of failure kills most dreams.  Whether in business or in sport, ask yourself the question does your environment support your own big dreams and does it support the big dreams of the people around you.

The Right Environment

Rowing is a sport with deep heritage.  The Irish Amateur Rowing Association was established in 1883 as an umbrella organisation for Irish rowing clubs looking to align the sports activities and rules.   There were 23 founding member clubs of the association with the oldest being the Pembroke Club in Dublin with a history dating back to 1836.   Established in 1970, Skibbereen Rowing Club started well behind the competition –  in fact over 130 years behind them.  Skibbereen is a small rural town 80km south west of Cork City with a population of just over 2,000 people.  Despite being outside the Top 100 towns by size in Ireland, it is the most successful town in the country in producing international rowers.  To date Skibbereen Rowing Club’s members have 163 National Rowing Championships Wins to their name. This is more than any other club in the country.   The magic appears to be the supportive culture of the Club and the work ethic and self-belief that it instils in members from a very young age.  Skibbereen boat club is clearly a high-performance environment.

Entrepreneurs and business leaders need to be conscious of two environments they operate in: the internal one they develop in their organisations, and the external environment where they gain personal inspiration, confidence, ideas and perspective.  Sitting at the top of organisations can be a lonely place and by mixing with other people in similar situations (either formally or informally) you can learn a lot.  By being around people who are world class in their disciplines you become aware of not only what they do to achieve success but more importantly how they think and what makes them tick.  In both business and sport, success starts with self-belief and a developing a winning mindset.

Success is built on solid foundations

A builder digs and pours foundations relative to the size of the building he wants to build.  The stronger the foundations, the higher you can go up.  From a very early age the brothers were consciously and subconsciously putting in place strong foundations which would provide the base for them rising all the way to the peak of their sport.   They were competitive kids, full of energy, always up to mischief and fighting with each other.  Rowing provided them with an ideal outlet to channel these energies without hurting each other.  They put in the “hard yards”, learning the technical skills early.  Despite being technically different rowers their differences in style and personality seems to be something that they have developed into a strength.  These solid foundations were built while having fun and developing lifelong friendships.  They fondly talk of their club mates, team mates and best mates Mark O’Donovan and Shane O’Driscoll who won Gold medals in the European and World Championships in 2017.  While speaking to them it is clear they love what they do.  Gary mentions the importance of having the first 70-80% right and that without that you are wasting your time focusing on the little things.  These are the foundations for success, the important things.  For the O’Donovans, the foundations include big words of ambition, openness, honesty, commitment, self-awareness, focus, hunger, sacrifice and team work in addition to the physical and technical aspects of the sport.

The lessons for us in business is to get the foundations or the basics right before we start to hone in on the 1%’s that will make us world class.  I have seen a lot of companies over the years get distracted by what they see as the 1% changes that will make them world class while neglecting the basics.  For me get the big things right early: Right Dream, Right People, Right Mindset, Right Culture, Right Plan & Collective Alignment and Commitment.  Despite the basics sometimes feeling “too basic” to spend quality time on, ignore them at your peril.

Work with what you have

“Control the Controllables” focusing on using what you have and not lamenting what you don’t have.  The O’Donovans made a decision in 2015 to leave the National Rowing Centre in Farran Woods and return to Skibbereen to train with their original coach Dominic Casey.  It was a brave move supported by Rowing Ireland.  Dominic was a part-time Skibbereen coach who had coached the brothers since they were in their teens.   Paul and Gary speak of him with admiration and genuine respect.  “He always believed in us and we always believed in him”. “He was learning, and we were learning”. “He was willing to put everything in like we were”.  The facilities in their small club in Skibbereen were not in the league of the National Rowing Centre but they had what they needed.  They worked with what they had.  They knew working hard in the right environment was the cornerstone of their Olympic campaign.  As a basic they established that all international rowing medallists were doing at least 8,000 km a season or the equivalent of rowing around Ireland seven times.  Distance was important, but the quality of these kilometres was more important.  They focused on the quality.  In 2016 the year they won Olympic silver medals it was no coincidence they clocked up 8,300 km of rowing, many of these completed on the picturesque River Ilen in Skibbereen.

So many entrepreneurs get caught in the trap of “if only” I had more money or resource I could do more.  The O’Donovans, like great Entrepreneurs and Business Leaders, focus on making the most out of what they have.  They realise there could always be more but that cannot be used as an excuse.  No Excuses.

Simplify Complexity

Does it make the boat go faster? This question is the North Star for Paul and Gary O’Donovan and everything they do centres around this simple question.  They keep it simple, focusing on a plan that can be measured with no room for subjectivity.  No noise, confusion, ambiguity. Either it does, or it doesn’t make the boat go faster.    Everything they do is judged against this simple question.  This level of focus results in a “No Excuses” approach to their rowing.  They operate with what they have and still believe they can win.  Could the facilities be better? Yes.  Would hotter climate training be better? Yes. Do they have to borrow boats at training camps sometimes? Yes.  But the main question is will any of these prohibit them winning medals or stand in their way? The answer is No.  They focus on the priorities: training hard, having their bodies in peak condition and raising the sponsorship to attend vital International regattas.  When I met Paul and Gary in 2015 before they had qualified for the Olympics I was taken by the simple, almost monastic lives they lived.  At the time they were living with their granny, with what little money they had going into subsistence and training.   Despite winning Olympic medals, resources are still scarce and what funds they have are now used to attend key international competitions.  To this end they are working closely with David McHugh founder of high profile agency Line Up Sports to help them with the commercial aspects of funding their 2020 campaign.

Businesses can get distracted and sometimes lose focus on the things that truly drive performance.  In business, we often struggle to distil success down to its main component parts with the level of honesty and awareness that elite athletes do.  Simplification sounds easy, but it requires a lot of effort to simplify or distil something down successfully.  Once you have simplified it, it becomes far easier to communicate it, align people to it, stay focused on it, measure it and benchmark it.  Clarity is key.

See the World to see World Class

You can’t expect to win on a world stage without benchmarking yourself against the best in class globally. In 2015 after qualifying for the 2016 Olympics with an 11th at the Rowing World Championships in France, the brothers attended a training camp in Spain.  It happened to be in the same location as the German pair who had come 6th in the World Championships, five places higher than the Irish duo.  The German crew had also won the under 23 World Championships twice.  The O’Donovans learned more from watching the Germans than from any conversations they had with them.  For three weeks they saw the German crew eat the same as them, sleep the same as them and row daily on the same stretch of water as them.  The significant difference was the Irish team was clocking up more kilometres every day which gave Paul and Gary the confidence that they were going to make gradual gains on them over time.  Simple observations but psychologically very important.

Having returned from Australia and New Zealand recently with team mates Mark and Shane they further demystified the approach and strategies of a number of the highly successful southern hemisphere teams.   Having become friendly with both teams coaches, the brothers had the opportunity to train with both nations.  New Zealand rowing has a world class reputation similar to New Zealand rugby’s All Blacks.   Spending time in New Zealand demystified the Kiwis success for the O’Donovans.  Paul said, “we came away realising they are not doing anything we are not doing, and we actually have better water to train on because there is less disturbance by speedboats, wakeboards and jet skis”.  This trip reinforced the view that there is no reason why the brothers can’t beat the best in the world.

Entrepreneurs and business leaders need to travel abroad, knock on doors and talk to people to truly understand what is happening in their sectors globally.  It’s hard to become world class if you don’t know what the world looks like.  Jump on planes, visit new markets and don’t be shy in seeking to meet world leaders in your discipline.  If you don’t ask you don’t get.   It’s good to talk.

Ask Questions

It is clear that both of the O’Donovans love to learn and they never miss an opportunity to ask questions and increase their knowledge bank.  Whether it’s asking starving rowers in the line for the weigh in what they are eating once they get off the scales or picking the brains of successful Irish rowers who have gone before them like Niall O’Toole or Sam Lynch, they are hungry for knowledge.  The layman sees rowing as a sport involving a stretch of water, two men, a boat and two oars with little changes in the sport occurring year to year.  The O’Donovans see it as a constantly evolving sport with advancements occurring in all aspects of the inputs which need to be assessed and embraced to maximise the speed of the boat.  They are interested in everything that could make the boat go faster: training, nutrition, physiology, psychology, physiotherapy, biomechanics and more.  The more questions they ask, the more they learn, the more they can craft their talents and gain greater confidence.

Great leaders are great learners and usually great listeners with a desire to do things differently and better.    In most circumstance in business a leader delivering a great question can have a greater impact than one with a great answer.  Listening is an art.  A question for all of us: Do you spend more time talking or listening?

Continuously Change

In summary the O’Donovans don’t rest on their laurels. Yesterday’s win is history.  They look forward realising the importance of change to achieve continuous improvement.  Having reached the top of their sport they are now constantly focused on the small gains.  They embrace change and seek it out in a world where so many people fear it.

It is clear that Paul and Gary are going for gold in Tokyo 2020.  Having been exposed to the inner working of their minds and their approaches I have full faith in their ability to deliver.  With recent PBs (personal bests) to their names they are getting better and better and I wouldn’t bet against them.  In business and life we all need to embrace change because the world is changing fast.  Embrace it, enjoy it and keep getting better and better at whatever it is that is important to you.

Pete Smyth is the founder of Investment Company Broadlake and Captain of the Entrepreneur Experience