When you’ve lived through a storm or two you know how to respond. Peter Williams, who chairs fashion giant Superdry, knows more than most about keeping a business on track, having been finance director, CEO or non-executive of many well known branded companies.
Although they include phenomenally successful firms such as fast fashion house Boohoo.com that he chaired until a year ago when he moved to Superdry, he has also had to steer a number of companies through a set of challenges. These tests have included the global financial crisis, but also the slow-moving crisis affecting the retail sector where he has spent most of his career.
Early on, Williams was finance director and then CEO of department store group Selfridges, chair of retailers Blacks Leisure and Jaeger, and Senior Independent Director (SID) of online fashion group ASOS during its meteoric growth period. Williams was involved in restructurings of several consumer sector companies including Blacks, sports fashion retailer JJB and music industry giant EMI.
But with all that experience he says that “although we’ve been through the financial crisis, some of us have worked in businesses that have got into financial difficulty, and been through restructurings, no one has been in quite this situation.
“It’s extraordinary in the sense that just about everybody is affected by this. It’s not a sector specific thing, the whole world is in a really strange place, so although you might say that people who went through the global financial crisis and have some experience, which they will do, and that will be helpful in some discussion with banks, actually nobody has really been in this situation on this scale. But the fact that everybody is in it, actually in some respect helps, because we’ve all got the same troubles,” he adds.
In the very short term, Williams stresses the need for finance directors and other leaders not to panic, despite the perceived scale of the issue. “There is no point in panicking because you won’t get anywhere. You just have to patiently work your way through these things, taking advice,” says Williams.
“This is a time to listen to people around you, and to make sure you’re tapping into the wider world and what’s happening elsewhere. Public companies are usually well set up for that, because they’ll have professional advisers- brokers, investment banks, corporate PR people signed up and around them.
“Their universe is probably 25 companies they’re dealing with, rather than just yours, says Williams who is also chairman of listed regeneration developer U+I Group and the Turkish and Russian Domino’s pizza business.
He recommends keeping the board and advisers close together, staying in regular contact. “Whereas you’d normally only meet once a month, you’re probably having weekly calls, making sure you’re supportive of the finance team, who are going to be under huge pressure at this particular juncture, making sure you’re accessible. If somebody calls you, you answer the phone back pretty quickly,” he advises.
When it comes to immediate survival mode, when the board is focused on preserving cash and liquidity, its vital to ensure that the key executives are able to drive through vital decisions, says Williams.
“If you’re a public company with executives and non-executives, the non-executives are going to be concerned about governance, quite rightly so. But if you spend too much time trying to analyse decision-making, the executives won’t have the time to deal with the problems.
“As a non-executive you need to be involved – you want to make sure the right things are being done, but you shouldn’t be so over attentive that executives aren’t given any time to get on with it,” he says.
Managing the message
The role of the finance leader and the finance team as a whole is critical in moments like this, so the finance function needs to be given space to perform its duties, says Williams. “As an organisation, you need to let the finance director and their team get on with actions during the day. Board calls should fit around that, in the and not be driving the whole agenda. There’s a whole series of conversations that need to go on, such as regarding cashflows and talking to banks, and you need to let that happen while keeping an eye on progress,” he suggests.
The finance function, especially the finance head, needs to be able to communicate effectively exactly what is happening across the group. “Spending time on the predictability of the cash position, understanding where you are is paramount, so you don’t have any surprises. The finance director needs to be calm and measured in how they communicate. It’s really a moment for them to stand tall and be counted,” says Williams.
Williams says that despite the instinctive impulse to reduce staff numbers, companies need to try and look after staff as best they can in the days and weeks ahead. “Not all organisations are going to be as good in terms of how they do that,” he says. “This whole thing will come to an end at some point, the wheels of commerce will get going again, so there is no benefit whatsoever from having hacked off all your employees. Treat them properly and fairly, and communicate with them regularly,” he says.
In a moment of national crisis its vitally important for corporates to be able to provide a clear and responsible message about how they are conducting themselves, says Williams. “There’s already been one or two infamous individuals who have fallen foul in the media, doing really odd things, who have had to retract them or explain them.
“In any business, especially in a consumer facing business, you do not want a whole twitter storm going on unnecessarily about something you possibly shouldn’t have done, so it’s important to be respectful of how people who don’t have day to day contact with the business view what you do.
“If somebody heard this on the Today programme or evening news, how would they react? It’s important for several reasons, firstly because it’s the right thing to do. It’s also very important for everybody associated with the business, because they don’t want to be pilloried publicly for doing something that was really not right,” says Williams.
He says that long after this crisis has played out there will be greater scrutiny, especially in the behaviour of consumer sector companies, than ever before. “These days it’s quite easy to check back. People used to say don’t worry, that today’s news is tomorrow’s fish and chip wrappings, but its not like that any more. If you hit google you can go back in time and quite quickly rediscover something that wasn’t quite right,” says Williams.
Although its vitally important to keep stakeholders abreast of developments, Williams warns of the dangers of too much messaging. “You shouldn’t over-communicate because not saying very much and too many emails from head office withers on the vine a bit. Keeping important briefings succinct and clear and simple to understand is really important.
“If there’s a lot of stuff coming out from the centre, you’re not necessarily hearing the communication coming back, whereas when things are normal, you have a discussion with a certain number of people on the shop floor, in the warehouse or in the head office,” says Williams.
His message to finance heads and other executives is to keep calm, be measured in your actions and listen to what other people are doing. “This is not a competitive situation, it’s a situation where we all want to survive. There’s no shame in copying somebody else or pinching their ideas,” he adds.