Corporate Performance Management: What I Learned From The Pandemic

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Corporate Performance Management: What I Learned From The Pandemic

Daniel Lasman, CFO, Fish & Richardson

Daniel Lasman, CFO, Fish & Richardson

VUCA is an acronym originated by the US Army to characterize the post-Cold War world. VUCA stands for volatile, uncertain, complex and ambiguous, and it seems like a perfect term to describe the world we inhabit today. The post-pandemic world is a VUCA one, especially considering that COVID still lingers at worryingly-high levels, and a war in Ukraine rages on without an apparent end in sight.

These overlapping events have created supply chain, and outright massive production disruptions sparking higher-than-desirable levels of inflation, and forcing central bankers to reconsider policies they introduced to avoid a prolonged economic collapse as a result of the pandemic. These policy reconsiderations including tightened monetary policy, especially raising interest rates, may tip the major world economies into a recession. This VUCA environment has made the already challenging job of managing corporate performance even more difficult. While the challenges have increased, I believe the pandemic has also confirmed and validated three strategies to help management navigate the period ahead.

Before the pandemic, there was a strong sentiment among senior management of many businesses, including ours, that employees need to be at a desk in their office to effectively perform their jobs. If we couldn’t see our people in action, perhaps they weren’t working, and if they were working, unless we observed them, how could we tell if they were doing their jobs correctly? Like many other firms, we sent our entire workforce home at the end of the second week in March 2020.

We transitioned to a fully remote workforce by the start of the next week. Our systems worked without any major issues, and we quickly established new protocols to check in with people, examine their work product, train them as needed, and keep them informed and engaged. We learned how to conduct effective meetings virtually, and we went on to have one of the most successful years in the firm’s history. More specifically, we:

• Proved the benefit of thoughtful investment and disinvestment choices made almost ten years ago that optimized operational agility.

• We invested in our Minneapolis Administrative Hub. We focused our core business, administrative and legal support operations in a central location that brought in talent from other firm locations, and attracted new talent to our modern and efficient space.The move to the Hub required us to invest in technology that allowed for people to leave their desks and collaborate seamlessly in breakout rooms on the floor. This same technology infrastructure withstood the demands of remote work including enabling our entire workforce to easily leave the Hub, connect remotely and securely, using preloaded software on laptops to communicate within and among teams and with clients and vendors.

• We invested in detailed expense planning and in-year quarterly expense reviews. Our standard financial reporting procedures allowed us to provide timely data, models and analysis to our department leaders and the firm’s management committee that informed important choices, and contributed to our successful year.

• We greatly reduced our investment in real estate by renewing leases with one or two standard sized offices; in a number of locations, shared offices; and efficient and flexible conference spaces. The Hub also contributed to the reduced need for space in other offices. Our reduced real estate expenditure allowed us to make the critical investments cited earlier, maintain a competitive compensation structure, and enhance our profitability.

“Our firm’s culture, nurtured over many years, proved to be the crucial ingredient informing how leadership communicated with the firm’s employees, and proved to be critical in keeping our community aligned and focused on our work"

• Learned that our employees could work remotely very effectively, and deliver the level of client service our internal and external clients demand. The overwhelming majority of our workforce embraced this new autonomy by working harder than ever. One issue I faced was not getting people to do their jobs; but the opposite, insisting that people take a break from their work. The circumstances forced us to trust that our colleagues would behave like adults, take their responsibilities seriously, listen, ask questions and perform at least as well as when they were working from our offices. While the stress of the pandemic was significant for many, there were some compensating reductions in stress from not having to commute, and being available to family and friends more immediately when needed than in pre-pandemic times. We also learned that while people appreciated the flexibility of working remotely, they also wanted to come to the office for coaching, collaborating, and celebrating (the three C’s). When team members were allowed to provide input into the decision about when to come into the office, they felt empowered; the three C’s gave purpose and meaning to being in the office, and our employees embraced our hybrid model.

• Demonstrated the importance of culture for sustaining morale and resiliency during the most trying times. The murder of George Floyd during the early days of the pandemic was a horror that compounded the anxiety our employees felt, challenging them to concentrate on their work, and challenging management to provide moral, motivating, supportive, and relevant leadership. Our firm’s culture, nurtured over many years, proved to be the crucial ingredient informing how leadership communicated with the firm’s employees, and proved to be critical in keeping our community aligned and focused on our work, while at the same time responding to what we were all experiencing and what we all witnessed. Our firm’s CEO began sending a Friday message to the entire firm; I increased the frequency of my town halls from quarterly to bimonthly, and often sent a “Monday Message”. These communications were our way of connecting with our people, sharing our concern for their well-being; reinforcing the belief that we were all in this storm together.

Thoughtful investment choices that promote operational agility, the efficacy of a purpose-driven hybrid work model, and a transcendent firm culture may not seem like the obvious ingredients contributing to corporate performance management. However, what I learned from the Covid-19 pandemic is that, at least for our firm, these elements proved to be critical difference makers for us, creating the conditions for outstanding corporate performance during this VUCA period.

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