Cosmic Conference 2020 - Session 2: How Remote Work Impacts the Top and Bottom Line of a Business
The second session of the Cosmic Conference explored the impact of remote work on the top and bottom line of a business. As companies struggle to stay afloat in the dire economic circumstances of the post-pandemic world, business leaders are seeking new ways to rationalize their costs and explore new revenue streams. Remote work seems like a natural solution but we also know that disengaged employees can have an offsetting effect on the top line. This discussion evaluated the effects of remote work on a company’s profitability and how we can create a healthy balance.
You can watch the full session on our YouTube channel
About the Speakers
Jean Luc Ferraton has been the Managing Director at Intrum France since March of 2020, after being the CHRO of the Group. Jean Luc also served as the head of HR at Jtekt which is part of the Toyota Group and held positions at HR firm The Adecco Group and Elior. Jean Luc has an Executive MBA from INSEAD.
Mikkel Seidelin is a Director at Teekay London. Mikkel has been in the shipping industry for almost 17 years working for Teekay Tankers in commercial roles spanning from Operations, Chartering, and Pool Management in London, Vancouver, Houston, and Singapore. He is currently leading the Suezmax segment for Teekay Tankers, while also heading up Teekay London. He too holds an Executive MBA from INSEAD.
Also on the panel was Rushdi Ali, the Commercial Finance Director for GE Power in the Middle East, North Africa & South Asia. He has been with GE for 13 years in the Finance function with varied roles across multiple businesses and geographies. In his role, Rushdi supports a regional team of ~100 people with deal structuring, internal underwriting, and negotiations from new Power plant bids to after-market services. In the COVID-19 era, this has meant real-time adjustment of deal strategies on profitability and cash while continuing to navigate the challenges faced by the end customer and internal own supply chain.
Cross-sector impact
The global pandemic left no sector untouched as it shook industries and rattled economies around the world. The panelists of our second session shared a little bit about how their organizations were impacted. “Our B2B business saw the first hit,” said Jean Luc Ferraton, Managing Director of Intrum France. “The volume of credit cases saw a 30-40% decrease, affecting both our top and bottom line.” The organization adapted quickly, rationalizing the new intangible asset gains by making savings on fixed costs.
“During this period, we learned that we were capable of finding innovative solutions. We saw the value of trust and we won a lot in terms of team spirit, and discipline. It was a huge transformation for the company.”
Despite being ‘critical infrastructure,’ GE Power’s already complex supply chain saw further challenges as a result of the global pandemic. Sharing more, Regional CFO of (MENASA) Rushdi Ali said, “Topline impact was limited, but it passed onto the bottom line quickly and we had to get creative with new revenue streams, offer remote support that saw an uptick in software and service.”
Speaking about the freight, logistics, and shipping sector, Mikkel Siedelin of Teekay London said “Topline revenue has been a real rollercoaster... the market was challenging which made for a difficult period but then it downsized. We benefited from the lockdown from a top-line perspective and on the cost side, we saved a fair bit in travel and entertainment expenditures.”
When asked whether they saved on travel, office rent, and utility, Jean Luc explained that “these savings were offset with the investment needed in equipment or in time to manage people remotely.”
Cashflow Management & The Topline
One attendee posed a very poignant question to Rushdi about the top line of a business and how SMEs can manage cash flow during times of crises. “Look for the available cash inflows and outflows...Cash is the lifeblood. Review this daily, check the commitments from customers and milestones you can leverage to claim the cash. We learned that our customers are looking for reliable service and equipment providers who could stand by them. They supported us in ensuring payments would be made in exchange for the service and product. Reliability really matters.
We also introduced financing schemes. As a large multi-national company, we have access to financial institutions and can pass on the benefits of those guarantees.” Diligent management and meticulous record-keeping was just as important for monitoring the outflows of cash, “we looked at every invoice that needed to be paid, and we had some companies that gave us packages or relief openings that helped. We rely on SMEs for business continuity, and we want to make sure we are not asking for unreasonable payment terms to allow them to maintain that continuity.” he continued.
Productivity & The Bottom Line
As far as the impact of remote work on productivity, all panelists agreed that working from home generally improved productivity. “One thing we have gained is efficiency,” said Jean Luc, “we start and finish things on time - finally!”
For the panelists, measuring productivity meant using the same tried and tested metrics of success, “Billing hours, product costs, these indicators feed our input on the costing side,” said Rushdi. Echoing this, Mikkel said, “Many of our previous KPI’s can be applied today, but it is the customer-facing time I am worried about.” Rushdi was also concerned about certain aspects of the team’s productivity, particularly for on-site employees. “Due to the pandemic, we could not do multiple shifts, we also saw customers who were quarantined which is a severe punitive measure for us.”
The real value of human capital
Our panelists each shared remarkable stories of resilience and community from their organizations. It is this power of the people that carries organizations forward in trying times. Reflecting on this and his transition from HR to general management, Jean Luc said
“I became the voice of the people.They are our value. We adjusted where needed, we went from hierarchical to a more sales-driven team. To a culture of service.”
In navigating the changes brought on by the pandemic, Teekay sent around a survey to their employees to hear their opinions on the situation. This prioritization of people’s needs is what Mikkel believes is the key to effective change management. “If you bring people along your journey, you learn even more about your people. We will adjust as we go.”
The Future of Work Is…
Here’s what our panelists had to say when asked about their outlook for work:
“The future of work is agile”, said Mikkel. “It can be a competitive advantage”
For Jean Luc, the future of work is rooted in trust, particularly in the service industry,
Similarly, Rushdi felt the future of work is resilient, and that organizations need resilience to reboot operating models quickly and effectively.
Want to learn more?
Check out all other sessions from the Cosmic Conference 2020.
Session 1: Digital Transformation & COVID-19 - Watch the panel on our YouTube Channel or read the key insights here.
Session 2: How Remote Work Impacts the Top and Bottom Line of a Business. Watch the panel on our YouTube Channel or read the key insights here.
Session 3: Remote Work, Recruitment, Education & Entrepreneurship. Watch the panel on our YouTube Channel or read the key insights here.
Session 4: Workspaces of the Future: The impact of the remote work movement on commercial real estate in the UAE. Watch the panel on our YouTube Channel or read the key insights here.
Session 5: Company Culture, Employee Engagement & Wellness. Watch the panel on our YouTube Channel or read the key insights here.
Session 6: Cosmic Conference 2020 - Closing Debate: To Remote, Or Not To Remote? Watch the debate on our YouTube Channel or read the key insights here.