The Enlightenment, Emplify, Qantas, Virgin & Pivoting companies
4th April 2020 Evolution Partners Newsletter
“You’ll have bad times, but they’ll only wake you up to the good times you weren’t paying attention to.” Dr. Sean Maguire (Robyn Williams in Good Will Hunting)
Hope you’re Thriving!
It’s been my observation that in the past week or so that the general mood has changed from one of shock and awe to one of accepting the situation, to facing the reality, or certainly where I live. For me, this past week has been quite busy with three consecutive full days of strategic planning via video conference, and quite a bit of coaching and planning.
In my book Made to Thrive, I identified that great leaders create 5 tangible results in the organisations they lead that others do not, those results being – Higher percentage of top performers, Higher retention, Higher productivity, Consistent growth and Consistent results. Today the leaders that have been elected are being tested perhaps more than any leaders in living memory, and the price communities are paying for electing leaders who are not great, or not even good is severe. If a city, state or nation has elected an incompetent leader, the price will be paid in a higher percentage of lives lost, higher percentage of businesses closing and higher GDP drop.
Most western nations were founded on the principles of The Enlightenment, including the scientific method, reason, toleration and the separation of church and state (among others). Over the past decade, however, with the advent of the internet and specifically unlimited interpersonal global communication over the internet, these principles have been absent. Western societies were formally structured around these principles and this was a key reason for the centuries of success that followed. But without these formal structures in place throughout the forming of internet-based communities, we’ve seen the rise of anti-science movements such as Anti-Vaxers, Genetically Modified Organism protesters and climate change denialists, amongst many others. The internet, which ironically was founded by scientists, was not founded and structured on the principles of the enlightenment in the same way Western democracies were, and today the more a city, state or nation has deviated away from the principles of The Enlightenment, the higher the price they will pay. Or perhaps put another way, the more a public leader has publicly refuted the scientific method in any area, and the less they have prioritised STEM, then the more likely it is that they have underfunded science and medical facilities and therefore, the more their society will suffer.
In the 1990’s Eric Yuan heard Bill Gates talk about the internet from his home in China and he was so inspired that it prompted his dream to move to Silicon Valley to work on the internet. He applied for a US visa and was rejected. Unperturbed, he applied another 8 times to US authorities before he was accepted, where he moved to the US and landed a job with video conferencing company WebEx, working there until 2011, when he left and started his own company, Zoom. Yuan’s stake in Zoom is now worth $7 Billion and Zoom daily users have gone from 10 million in December 2019 to 200 million in March 2020. Read the 5-minute story about the founder of Zoom here.
With an almost complete closure of their industry, in Australia, there has been a lot of talk about the airlines Qantas and Virgin in the past week. Two interesting discussions were about Wesfarmers potentially acquiring Qantas, and Virgin asking for a Government bailout. I think there is no doubt that the airline industry will be very different after the pandemic, for the simple fact that the fixed costs to maintain the company without any real revenue will eventually equal the available cash. There are two interesting questions about this. Firstly, what will happen to frequent flyer programs points that you hold? If you ‘own’ 500,000 frequent flyer points, and the company runs out of cash, what will happen to your points? They will most likely be lost through any restructuring.
Second, Virgin is asking for $1.4 Billion from the Government, with a market cap of $726 million. So they are asking the Government to give them twice the total value of shares in the company. At this point, it seems the Government aren’t interested in gifting or running an airline.
Speaking of potential sales, here is an interesting article I read this week from Todd Grover, a partner at BDO in Australia which discusses the challenge of quality, cash strapped businesses in the Coronavirus epidemic, and the opportunities that are present to acquire them, as well as the perspectives that potential business buyers are taking.
Read the 5-minute article below.
Price is what you pay, value is what you get
Last of all, I wanted to provide the link again to the comprehensive summary of Australian grants from Arowana. I provided it last week, but it has been updated on Friday 3rd April to reflect the new stimulus measures from all Governments in Australia over the past week. I encourage all business leaders to check it to ensure you are obtaining all the help you can get.
A tool I found useful
Through the Coronavirus pandemic, many employees have been significantly affected on a personal, physical and psychological level. This simple, free tool from Emplify will enable you to assess the well-being, remote readiness, and specific needs of your teams during the COVID-19 outbreak while preserving individual anonymity.
What I’m interested in
Pivoting company examples
As Charles Darwin allegedly said “It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is most adaptable to change”. Right now people are working harder than they ever have in their lives to adapt to change. And others are treating this as leisure time, or are bored. For me, I’ve had to pivot my entire business in coaching and strategic planning workshops from in-person, face to face, to 100% online while at the same time working to help save, pivot and build the right plans for the clients I work with. More than ever right now businesses need a strategic plan, the right plan to stay open, survive and thrive after the pandemic and associated recession. I’ve included below a few examples of businesses who have pivoted in this crisis.
Timberlane, a window shutter manufacturer from Pennsylvania have pivoted from shutters to medical supplies making face shields and intubation shields.
Various micro-breweries have pivoted from making beer to hand sanitiser.
Dyson, most famous for Vacuum cleaners, have created a medical ventilator machine using their efficient engine after a call from Prime Minister Boris Johnson and are manufacturing 10,000 units.
accuRx a provider of SMS messaging between doctors and patients pivoted 2 weeks ago to become a video consultation platform for doctors and patients, with 100,000 GP video consults in the past week.
Guerrilla Tacos a Los Angeles food truck turned restaurant has pivoted to offer emergency kits such as the $30 2.8 litres cold coffee and milk kit, and the $155 emergency taco kit, which includes 2.3kgs roast chicken, half a kg of salsa, onions, 30 eggs and one roll of toilet paper!
Signature Brew has pivoted to bring the pub to you with its Pub In A Box, a selection of beers, with glassware, snacks, a music quiz and playlists curated by music journalists and delivered by out of work musicians.
Netflix, who is probably booming right now, is offering a new product called Netflix Party, a way to synchronise viewing and movie nights with friends and chat together.
Inksmith who make tech tools for kids have pivoted to make face shields and are hiring 100 people in the process
1Rebel fitness clubs have pivoted to offer live online classes each day to members and has announced that it is willing to offer its gym spaces to the NHS for extra beds during the coronavirus pandemic. 1Rebel co-founder James Balfour has said that he believes the gyms have space for up to 400 beds.
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