Business in the Americas: exiting the pandemic
Despite the disruption and global uncertainty of the past year, the entrepreneurial spirit of many businesses in North America has shone through the challenges. Here we explore how they have dealt positively with enforced transformation, and face the future with renewed confidence.
Turning a bad situation into good is no mean feat for a small or medium-sized business – never mind a large corporate with the infrastructure to weather even the most difficult of storms. Businesses across all sectors were confronted with a pandemic in 2020 that required cool heads, the implementation of multiple business contingency strategies, and the ability to dig deep and re-set the course of their goals to emerge stronger and more resilient.
For three very different companies that found themselves in the thick of the fallout from Covid-19, it was some smart business decision-making, coupled with an understanding of their staff and wider needs, that gave them the necessary focus for post-pandemic success.
Ashley Freeborn is Co-Founder and CEO of Canadian fashion retailer Smash + Tess, a business that is disrupting the orthodox clothes sector by specializing in comfort/casual fashion for women of all body types.
The onset of Covid-19 was a sharp reality check for someone who “doesn’t do well with the unknown”.
She says: “I was immediately thinking, ‘Please, I hope I don't have to lay anybody off.’ And also if we locked down in Vancouver, BC, where we produce and distribute our clothing, what is that going to mean for me? So I will admit that I was very worried.
“In March, we started to feel this little contraction in the business. And all of a sudden, in April, sales just exploded because I think everyone was stuck at home.” In the end, Smash + Tess recorded 147% year-on-year growth for April alone.
Suri Chawla, the CEO of a Cloud services company in San José, Mexico and Canada, DigitalOnUs, had similar fears about his 350-strong team when reality hit. “A lot of companies started calling us,” he recalls. “There was a time period of a month and a half where I got a stream of emails or calls from company CFOs, and I knew bad news was coming.”
The choices he was faced with were to discount his pricing or dramatically reduce his on-site team as his clients sought to tighten up on their outgoings to remain afloat, while at the same time worrying about his own staff.
For Mexico-based Jaime García Pelayo, founder and president of plastics and paints manufacturers Epoxemex and Allchem, the immediate threat of Covid-19 seemed far away and was not reflected in their sales figures. But he quickly saw a need that his business was in a prime position to fulfil.
Making the pivot
“We are flexible enough to join the fight in whatever’s needed,” says Jaime, “so we turned to making hand sanitizers, gels and surface cleaners.”
In April 2020, Jaime’s sales of sanitizer rose from 40% to 55% of their output, and he pursued an aggressive strategy of cost-cutting to focus spending on the new raw materials needed to keep the business going. The company then switched from its business-to-business model to e-commerce channels, to sell direct-to-client. “We started to manufacture products and packaging for the end users to be able to grow in that field, and employed a big team to undergo the research and development as we were not used to these products. By the end we sold at 95% compared to 2019 sales.”
For Ashley, Smash + Tess didn’t need to pivot so much given the business was well-established with e-commerce channels, but some smart thinking was needed around its remaining physical infrastructure. “We're in about 300 plus stores- in Canada, and a lot of those stores were sadly closing their doors,” she says. “And we were trying to think how to support our retail partners for whom so much of their magic was in their bricks and mortar.
“They were scrambling to put in place an online channel to continue to create revenue for themselves, so we were able to offer drop shipping for a lot of our partners. I'm happy to say that Smash + Tess was a great revenue generator for all of our partners."
Suri suspects a lot of his turnaround came from “good karma”. Deeply concerned about his staff at DigitalOnUs, he wanted to ensure they stuck by him, and so he counter-intuitively awarded them a raise. “I think it took a good three or four months from when it started, to see things turn around. But there was a brief period, that every entrepreneur goes through, right? It's not about saving me, but I don't want to put any hardship on other people. I wanted my staff to think ‘If they took care of us during the bad times, we’re going to be there for the good times.’
“These situations make you stronger.”
Setting an example during difficult times
“We're all in a different stage now where it's been a real grind,” says Ashley. “I've lots of people on my team that have not seen their family at all in over a year. People on our team that thrive in group environments are now stuck in front of the computer all day.
“Sometimes you have to stop and think about where everyone's heads are, and what we can do to surprise and delight our team, whether it's sending everyone a surprise dinner or finding opportunities to stop everything we're doing and do something online, where we're having some kind of a learning experience together.
As a leader, I think it's our time to really step into it, step up to the plate and maintain that strength because the team will feed off your energy.”
Suri feels it is essential that his people feel connected to the company. “It's very important for our line of business, otherwise, there's no connection,” he says. “If you’re sitting at home working all day, you're not visiting client-side, and it's very easy to get distracted. So first thing we did was create a forum called Virtual Connect. Every time a new person joined, and typically we had people joining every week, or every two weeks, we gave them the spotlight to talk about themselves and their life to all 350 staff.”
Suri is also a half-marathon runner, so he formed a work running group where people would virtually run together and track each other’s progress. “This way,” he says, “the pandemic kind of brought everybody together.”
Words of support for other SMEs
For Jaime, the business is wrapped up with the same passion he has for his family – and it’s important to set an example that gives purpose. In plastics, the real challenge is sustainability, but his advice is for all businesses to embrace the change.
“You can only become big and important because of your collaborators, but without your collaborators, you are nothing,” he says. “If you don’t want to change with the times, you will be caught out by changes in the rules that mean you can no longer use your product. Climate change is a big issue for everybody, so we need to think about it and put our house in order for our kids and our grandkids.”
Coming out of the pandemic for Ashley has meant a realization that the e-commerce playing field has levelled out even more. “I think it's kind of shaken up some of these huge retail giants who have been taking a massive hit over the last year,” she argues. “The little guys are now coming up with limited overheads but a great website experience for the customer, and saying ‘Hey, I can also help you’.
“Being an entrepreneur means being tenacious, and right now we have all been tested in ways which we could never have imagined. I would say to others, keep going. There is always a way. It’s about being as resourceful as possible and learning from your mistakes. This past year has taught us a lot about the value of diversification and not keeping your eggs all in one basket.”
That tenacity has also paid off handsomely for Suri, whose business has now been bought out by a larger corporation – a phenomenal turnaround despite such a challenging backdrop. “This whole thing called the digital transformation journey, has just accelerated across every company.”
As these businesses show, even in the middle of a global crisis, there are opportunities for those that can focus on the future and engage their clients, suppliers and employees and for those who can read the mood, spot potential for diversification and respond with agility and speed. As we all start to look ahead with greater optimism, the future for businesses that have demonstrated those skills and built their resilience, is looking bright.
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