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Managing the Covid-19 crisis: The ongoing impact

Businesses are beginning to see a way out of the Covid-19 crisis, according to the results of the latest Eden McCallum Covid-19 survey of business sentiment. This survey, which launched as Pfizer-BioNTech and Moderna made their vaccine announcements, is the sixth in a series that began in April and it shows that business leaders have a guardedly optimistic view of their future prospects. But they are also keenly aware of the difficulties that disrupted working patterns have caused.

Over 200 UK and international business leaders responded to a series of questions in the first half of November. The survey reveals that:

Optimism about a recovery in performance has picked up quite sharply. While 62% of respondents in September thought that a return to “normal” trading was still over a year away, that has now dropped to 40%. Similarly, while in September 48% of businesses expected a fall in 2020 revenue of over 20%, now only 37% hold that view.

60% of businesses expect that recent announcements about forthcoming vaccines will have a positive impact on performance in 2021, while almost 40% do not expect any significant change.

Prospects for redundancies have also improved: 56% of respondents have already or plan to make staff redundant, a decrease since September, when the equivalent figure was 70%.

But while business leaders seem to be more hopeful about the next few months, they have had to recognise that remote working has had a big impact on their colleagues.

The majority of business leaders report that remote working has had a negative impact on their colleagues’ well-being/mental health, morale, motivation, and collaboration. Only on the questions of work-life balance and productivity do respondents find a positive impact of widespread working from home. Interestingly, bosses are more positive about the impact of remote working on themselves personally, but believe the new conditions have been tougher for their colleagues.

The deterioration in perceptions about remote working from May to November is stark.  According to respondents, the impact on communication and collaboration has moved from a net positive figure in May (24% and 12%, respectively) to net negative in November (-11% and -35%, respectively). What is more, the impact on motivation and morale has become significantly more negative between May (-5% and   -16%, respectively) and November (-39% and -53%, respectively). The one consistent benefit over this period has been the impact on work-life balance (virtually unchanged at 35% and 37% net positive).

There is also a significant gender split in the findings. Women are much more positive about the impact of remote working than men, with some of the biggest differences being displayed in areas such as decision making and communication.

Travel to work times reveal a divide as well. Those who previously had a long commute (over 60 minutes) have enjoyed the benefits of having more control over their time, and are more positive on every dimension, particularly productivity.

Lastly, respondents living with young children have reported a much more positive impact on productivity and work-life balance since May, as schools have reopened.

Sara Ghazi-Tabatabai, an Associate Partner at Eden McCallum, says: “It is encouraging to see some light appearing at the end of the Covid-19 tunnel. Some of the most negative trends – such as expectations about redundancies, revenue decline and time to return to ‘normal’ – are improving after months of decline.”

Dena McCallum, co-founder of Eden McCallum added “what is really striking though is the deterioration in views about remote working over the past six months, which will lead business leaders to revisit the role of the office before they tear up their leases.  Also striking are the findings that women are much more positive about remote working on all dimensions than men, but particularly in terms of decision making and communication. These findings should raise fundamental questions about the workplace and its impact on gender equality.”

To view the full results, please click here and follow us to remain updated.

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CB Insights recognises Eden McCallum as an innovative disruptor of management consulting

CB Insights, a leading industry research platform, recently issued an interesting report on the disruption of management consulting. We are pleased to be recognised as an innovative disruptor in this space.

The report disaggregates consulting into four components: information, expertise, insight and execution. Eden McCallum is positioned as a player in execution, creating high calibre teams of independent consultants with strategy and operating experience. As those who have worked with us know, we also have also disrupted access to expertise and insight, creating a more flexible and lower cost way to deliver lasting impact. 

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Managing the Covid-19 crisis: Continuing to navigate through

Businesses are preparing themselves for a longer, but in some cases a less dramatic, decline in activity compared to the early days of the crisis.  This is a central finding from the latest Eden McCallum survey with UK office clients, into business responses to the Covid-19 crisis.

In mid-September, almost 200 businesses shared their views and experience of trading conditions. There has been a significant shift in sentiment since these surveys began five months ago. In April, only 19% of business leaders expected a return to “normal” to take more than a year. Now as many as 61% feel that way, up from 46% in July. This represents a rapid and steep decline in optimism about the recovery.

The gloom is not universal, however, and individual businesses retain some more positive feelings about the future. 40% of respondents still have positive expectations for their company’s performance in the fourth quarter, while 34% are feeling negative. But as far as the wider economy is concerned the mood is much less hopeful. Only 6% feel at all positive about the next three months, with c. 80% believing that the final quarter of 2020 is going to be very tough for their country’s economy overall.

In general, revenue expectations have improved slightly, with just under half (49%) of respondents expecting a fall in more than 20% this year, an improvement on the 58% who expected that kind of fall in revenue in April.

But more redundancies are coming: seven in ten businesses have already or plan to make staff redundant, a figure which has remained stable since July. It is noticeable that PE-backed companies are more likely to be taking action (86% are planning redundancies as against 68% of publicly listed firms).

In terms of working practices, two-thirds of companies were not requiring any employees to return to the office, even before recent announcements in response to the “second wave”. Fewer employees were also returning to the office than expected earlier in the summer: in July, 31% had expected less than 25% of workers to be onsite upon reopening; however, 61% actually had less than 25% of workers in offices in September at any one time.

There is also a divide in terms of ownership and a return to the office. Publicly listed companies had lower numbers of workers returning onsite: 71% had fewer than 25% of workers in offices in September, versus 55% for private companies. Almost half the business leaders surveyed were still working fully remotely, even before recent announcements. Those who had returned to the office said that social interaction and collaboration were the main benefits of being back.

Dena McCallum, co-founder of Eden McCallum, says these latest findings confirm that businesses need to restructure to see their way through the crisis.  “In April, most thought that we would be ‘back to normal’ by the autumn.  Businesses are now adjusting their planning horizons and making more fundamental changes to cope with the extended timelines that are now becoming the reality of this crisis.  Some of the immediate actions – such as pay cuts and payment deferrals – are being reversed.  But most businesses are now significantly transforming their operations.”

Other findings from the latest Eden McCallum survey include:

Companies have been slowly reversing previous cash-preserving workforce and other measures. Just over 40% of those who delayed supplier, rent and tax payments and more than 50% of those who used the furlough scheme and reduced pay are no longer doing so.

Publicly listed companies are the most pessimistic about the timing of eventual recovery. 73% expect “normal” to take over a year to return in contrast to 60% of PE-backed companies and 55% of non-PE backed private companies.

PE-backed companies carried out the most extensive range of workforce and non-workforce measures. While they have been stopping non-workforce measures at a similar rate to publicly listed companies, they have been slower to relax workforce measures, particularly reduced pay (57% who implemented this have stopped as opposed to 78% of publicly listed companies), and use of furlough (44% in PE as against 59% of publicly listed companies).

To view the full results, please click here and follow us to remain updated.

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Eden McCallum turns 20 years old!

20 years ago, we created Eden McCallum with the simple idea that we could make consulting better for clients and better for consultants, by working with a curated network of the best independent professionals. The year was 2000 – before the gig economy and ‘platform’ business models went mainstream.

The firm has continued to innovate and grow over the past two decades, delivering more than 2500 projects for over 500 wonderful clients with 1000+ talented independent consultants.

Thank you to all who have been a part of this fabulous journey and cheers to the next 20 years!

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Managing the Covid-19 crisis: Returning to the office

Difficult judgments and trade-offs will characterise business activity in the coming months, according to the latest Eden McCallum survey, which was carried out in the first few days of July and focused on the re-opening of offices as lockdown eases. The difficulty stems from uncertainty about future prospects and trading conditions – an uncertainty reflected in the latest survey findings.

Around 140 businesses in the UK and beyond responded with their expectations for the coming months. While there is now less gloom about the prospects for revenue than earlier on in the Covid-19 crisis – under half (45%) now expect a fall in revenue of over 20% compared with the 68% who did in April – a return to “normal” trading conditions seems much further off: 46% now feel that “normality” is over a year away, whereas in April only 19% felt that way.

Managing headcount and a return to more normal working practices is a major challenge. Around half of respondents have staff on furlough: of these, three in ten have up to 20% of staff on furlough, while just over one in five (22%) have more than 20% of staff on furlough. Six in ten (62%) have already or expect to make redundancies, a proportion that has not changed since the middle of May.

With the easing of lockdown a formal return to the office is on everyone’s mind. 43% of companies are planning to reopen in September or October, while a similar number are already open or plan to be so in July and August.

But the re-opening of workplaces raises the question of how many people will actually be physically present in the office, and for how long. Once offices are reopened, eight in ten companies expect only half or fewer of their staff to be in at any one time; three in ten are expecting less than a quarter to be present.

Policies to remote vs onsite working vary. Nearly a third (31%) say they will give staff full flexibility on where they choose to work; 19% say they will have specific teams onsite with flexibility for others; 14% will have staff onsite on specific days with flexibility on other days; and a further 14% will split and alternate teams. No-one – zero % – is proposing to return to their pre-lockdown approach.

Several factors influence these choices. Staff safety was considered “very important” by 91% of respondents. Other key factors were staff morale, the need for staff to use public transport to get to work, compliance with legal/regulatory requirements, the challenges of physical changes to the office required for social distancing, and staff’s personal Covid-related responsibilities (e.g. home schooling).

Dena McCallum, co-founder of Eden McCallum, says the range of responses in the latest survey indicates how hard business leaders are thinking about their approach to re-establishing good (and safe) working practices.

“Business leaders are wrestling with a dilemma: the conflicting needs and preferences of staff for home vs onsite working, their own beliefs about productivity and management, and the need above all to ensure staff safety,” she says. “There are concerns about the welfare of staff using public transport and having personal Covid-related responsibilities (e.g, home schooling). Other businesses are more concerned about individual and team productivity, and feel the need to have specific teams working onsite. There is no ‘one right way’ of managing this situation. Leaders will have to weigh up the situation and make their best judgment in the circumstances. This is unchartered territory for everyone,” she adds.

To view the full results, please click here. You can also follow us to remain updated on future research.

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Eden McCallum and Chapter Zero work with non-executive directors to ‘build back better’

Over the past month many business and public sector leaders have added their voices to the call to create a green recovery and put tackling climate change firmly onto the post Covid-19 agenda. Now is the time for Boards to engage with what the transition to a net zero economy means for them, to develop climate change strategies that go hand-in-hand with their business strategies, and to build back better. 


Helping Boards deliver a net zero carbon-aligned strategy

The topic can seem impenetrable and overwhelming, which is why Chapter Zero’s mission is to arm non-executive directors with the resources and tools they need to respond to the climate challenge. Some Chapter Zero members find that “companies can set out an ambition and get climate change onto the Board agenda, but then they often struggle to move to the next stage of defining strategies and making them happen.”

Chapter Zero’s latest offering, Principles and Frameworks for Climate Change Strategy and Action, was developed in partnership with Eden McCallum as a ‘toolkit’ to do just that.  It includes case studies from companies that have already started along the journey like Burberry, innocent, Sainsbury’s, SSE and Unilever.

The toolkit is divided into topics: prioritising climate change on the Board agenda; defining the strategy; and ensuring action.  Each identifies the issues a Board might be grappling with, and provides practical help in the form of principles, good practices, frameworks, resources and examples.

The toolkit is relevant for boards at an early stage in the climate change journey, as well as those who have already started making progress. It recognises that there is no single ‘right’ answer; every company and Board needs to plot its own course, but there are common principles to guide that journey. Non-executive directors might also find it useful to share with their executive colleagues.


“Climate change is moving up the agenda for investors, customers, colleagues, legislators, the media… We had to recognise how much this issue was coming to the fore”
– Sainsbury’s


11 principles to guide climate change strategy

The core learnings have been captured in 11 principles, many of which will be familiar to any leader who has lived through or led a major change programme. A strength of the toolkit is that it urges Boards to look at the transition to net zero as a business issue to resolve, and Eden McCallum has reached into its own kit bag to provide helpful frameworks to do that.  Liann Eden from Eden McCallum argues that “climate change should be treated as a major strategic issue for almost every company.  The risks posed by physical changes and changing regulation, along with the resilience of the company to deal with shocks in customer demand and supply chains, should be boardroom issues. Broader awareness of climate change by customers creates opportunities to access new market sectors too. Climate change is not an add-on to business strategy, it should be embedded in the strategy.”

Julie Baddeley, Chair of the Chapter Zero Steering Group, says, “We are delighted to present this practical guide to tackling the business changes demanded by climate change and the net zero transition, which responds to the demand from our members for practical advice.  This toolkit adds to the Chapter Zero tool-set, following on from the initial guide to assessing where your company is on the journey.”


“This was the only initiative in my 30-year career that united all 29,000 employees behind it”
– Go-Ahead


Designed for sharing and reference to help drive corporate action

Principles and Frameworks for Climate Change Strategy and Action is designed to be ‘dipped into’ as and when needed by non-executive directors or by executive teams. There is a digestible executive summary at the start for the time-pressed; and then a wealth of information to reach into, all hyperlinked for easy access to the elements that are most relevant.

The executive summary and toolkit are publicly available for download here. Please do share.


“No one denigrated us for trying. Sometimes you have to just forge a way.”
– SSE


 

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Helping Nature4Climate define a 5-year strategic plan

The Client

Nature-based solutions (“NBS”) have to date not really featured in mainstream discussions on climate change.  In fact, they make up some 10% of the conversation and 3% of the funding1.  And yet current climate science demonstrates that keeping the increase in global temperatures to well below 2°C requires a holistic response across three principal areas, including NBS – and that NBS can provide around a third of the solution to climate change2

The Nature4Climate (“N4C”) initiative was established in 2017 with a six-year mandate to increase investment in and action on nature-based solutions in support of the 2015 Paris climate agreement.  Founded by US charity The Nature Conservancy (“TNC”), N4C is a collaborative global initiative supported by 16 partner organisations*.

The Challenge

Two years on from launch, N4C had effectively “proved the concept” and the value it adds by filling a gap in the climate architecture as an aggregator for NBS.  But it was unclear whether N4C had the right organisational set up and resources really to fulfil its purpose by the end of 2023.

The Project

The project aimed to help N4C clearly articulate their 5-year plan and build their case to ensure they had the mandate, resources and set up to amplify and accelerate their strategy.  The Eden McCallum team worked with N4C to:

  • Reaffirm N4C’s purpose and outcomes, and create a clear line of sight to funding
  • Define and give clarity to N4C’s future strategy, mandate and governance
  • Design the operating model, quantify the required resourcing and design a measurement framework
  • Build a financial model to support the business case
  • Design a high-level 6-month implementation plan to set N4C up for further success

The Impact

The plan has provided clarity for N4C, helping the initiative to engage its partners and other supporting organisations.  Critical conversations with funders, partners and TNC are now based around the new plan and its clear strategic, operational and financial requirements.

Lucy Almond, Director of N4C, commented:

“Nature4Climate is still a relatively new initiative, albeit one with the support of many large environmental and UN organisations, so this work came a critical time in our development and allowed us to build out a fully-costed operational and financial plan for the near future.”


Source: 1www.Nature4Climate.org;  22017 peer reviewed paper, National Academy of Sciences of USA

*N4C partner organisations:  Nature4Climate (N4C) is an initiative of the United Nations Development Programme (UNDP), UN-REDD, UNEP, the Convention on Biological Diversity (CBD), the International Union for Conservation of Nature (IUCN), Conservation International (CI), The Environmental Defense Fund (EDF), The Nature Conservancy (TNC), Wildlife Conservation Society (WCS), Woods Hole Research Center, World Business Council for Sustainable Development (WBCSD), World Resources Institute (WRI), WWF, We Mean Business, the Food and Land Use Coalition and Youth4Nature.

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Eden McCallum’s socially distanced Race for Life

Race for Life is a longstanding Eden McCallum tradition, and we are doing a ‘social distancing friendly’ version of the race this year, with all participants running/jogging/walking on their own or in their household groups on 19 and 20 June.

Cancer Research is facing a huge challenge this year as donations fall in the wake of Covid-19 and many of its key fundraising events are cancelled or postponed. ‘Let’s Do This’ (letsdothis.com) is kindly organising this virtual Race for Life for free, to help us support Cancer Research UK to that we can keep up the fundraising for this brilliant cause.

We would be absolutely thrilled if you would sponsor us for our 2020 race in aid of Cancer Research UK – http://www.cancerresearchuk.org/about-us

To donate, please click here. Many thanks in advance for any donation you can make.

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Managing the Covid-19 crisis: Changing ways of working

As businesses begin to work their way towards a “new normal,” Eden McCallum’s third Covid-19 survey asked c. 200 business leaders for their views on the impact of the crisis and how they are adapting their operations for the future.

Expectations regarding the duration of disruption from Covid-19 continue to worsen, with 65% of business leaders now anticipating that a return to “normality” will take more than nine months, compared to the 39% who held that view in early April. On the other hand, the expected fall in revenue has stabilised, with 34% anticipating a 30%-plus fall in revenue, similar to the result three weeks ago and lower than six weeks ago (40%).

Despite the severe shock of the Covid-19 crisis, many respondents feel that their businesses have adapted well to remote working. Over half say that 80% or more of their business is working remotely, with perhaps surprisingly beneficial impacts amidst the change:  There was a net positive 35% score* on work-life balance, 24% net positive on collaboration, and 14% net positive on productivity.

However, remote working has taken a toll on motivation (minus 5% net score) and morale (minus 16%).  Interestingly, business leaders are more concerned about the impact on morale for their business and colleagues (minus 16%) than themselves (minus 4%).

Individual circumstances have a big influence on respondents’ personal experience of remote working, with those living with children at home less likely to have experienced a positive impact on productivity or work-life balance and people with commutes <30 minutes less likely to be feeling a positive impact on their levels of motivation, collaboration and morale.  Conversely, those in adult-only households and with longer commutes have found remote working beneficial on every dimension.

There is also a gender divide in remote working, with women saying they are seeing more benefits in terms of work-life balance than men (45% net positive score vs 31%), while men seem to be enjoying a greater boost to productivity than women (34% net positive for men vs 15% for women) and a more positive impact on morale (plus 3% for men vs minus 15% for women).

As lockdown begins to ease, a large majority of businesses will either be encouraging staff to continue working from home (65%) or will allow individuals to choose what approach suits them best (28%). However, most businesses are still putting preparatory measures in place for employees who will return to work onsite, including changing workspace layouts (88%), staggering work times (66%) and providing personal protective equipment (PPE) for staff (57%).

Dena McCallum, founding partner of the firm, says that after the shock of lockdown, businesses are finding their own ways to keep trading and survive. “Our latest survey reflects the adaptability that successful businesses have always had to show,” she says, “and that agility is being displayed in the most testing of circumstances. The encouraging signs are that businesses are shifting their operating models to deal with this new reality,” she adds.

That reality will involve taking some tough decisions. Around 60% of the survey respondents are considering making redundancies once government support ends; that number increases towards 70% for private equity backed companies.

There will undoubtedly be more changes to make and further lessons to learn as businesses steer a path out of the Covid-19 crisis.

To view the full results, please click here.

We will be launching another survey in a few weeks, looking deeper into the permanent changes businesses are making in response to the crisis, so please follow us to remain updated.

 

*net score = total % respondents scoring impact (very) positive minus total % respondents scoring impact (very) negative

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Managing the Covid-19 crisis: Business leaders’ view of the future

Eden McCallum’s second Covid-19 survey with over 250 business leaders across the UK, Europe and North America focused on the impact the crisis is having on their companies and the permanent changes they foresee it bringing about.

The results highlight a change in sentiment about the depth and duration of the impact from Covid-19, with business leaders less pessimistic about the revenue impact in 2020. Some 32% are expecting a revenue fall of over 30% for the year vs. 40% in our first survey in early April. However, respondents now believe that the disruption will last longer, with 56% expecting it to take over 9 months for business to return to ‘normal’, vs. 39% earlier in April.

Unsurprisingly, severe measures continue to be taken. Of the respondents, half have put staff on furlough and 21% have made staff redundant, up from 11% in early April. 53% have shut down or reduced operations, and 79% have reduced or deferred capital expenditure.

Looking ahead, business leaders are enacting and planning radical permanent changes to business practices:

  • 95% are already implementing or planning greater use of remote working on a permanent basis, with 56% enacting / planning reductions in office space
  • 17% have already implemented permanent headcount reductions, with a further 42% planning / considering it
  • 71% are already accelerating digital transformation and a further 19% are planning to
  • 74% are either already implementing or planning greater use of automation

Covid-19 appears to have permanently accelerated the pace of decision-making and change for the majority of businesses, with 65% expecting to implement change faster and 60% expecting to make decisions faster on an ongoing basis.

Sara Ghazi-Tabatabai at Eden McCallum said: “The results of our second survey highlight that the Covid-19 crisis has forced business leaders to act differently and make unprecedented changes at incredible speed. Increasingly agility will be critical to navigating the continued uncertainty of our new reality.”

Among the key concerns for leaders – as nations across Europe begin to tentatively ease lockdown measures – are drops in customer demand (67%), maintaining employee safety (65%) and coping with changing consumer patterns / preferences (50%).

To view the full results, please click here.

We will be launching another survey in a few weeks, looking deeper into the permanent changes businesses are making in response to the crisis, so please follow us to remain updated.