David Yarkin, an Entrepreneurs' Organization (EO) member in Washington, D.C., is president of Government Sourcing Solutions, which provides procurement solutions to state and local governments and educational institutions that save taxpayers money while reducing staff resource time. We asked David about the decisions he's making to lead his company through the Covid-19 crisis. Here's what he shared:
The last three months have been a blur of anxiety-provoking headlines. Entrepreneurial companies that disrupted industries and inspired us over the previous decade--Uber, Airbnb, Yelp, Lyft and TripAdvisor--have each laid off more than 1,000 employees. Iconic brands that survived the Great Depression, both World Wars and 9/11, including JC Penny, Hertz and Neiman Marcus, filed for bankruptcy. And last week, America passed the grimmest milestone, with more than 100,000 of our countrymen and women succumbing to Covid-19.
Whether a company survives this crisis is, in part, based on its industry. A lucky handful--the likes of Amazon, Peloton and Netflix--are naturally well-positioned to thrive in a period when the population is spending significantly more time in our homes. Others, particularly those reliant upon revenue from travel and hospitality, face enormous odds.
Caught somewhere between those two extremes are millions of companies like mine whose fate will be determined not by their industry but by the decisions their leaders make and how they choose to lead their teams through the crisis.
We have made mistakes, and we'll make plenty more, but here are five things we've done to help us get through the darkest days of this crisis.
1. Look ahead. We knew from our experience during the Great Recession that when the public health crisis passed, our customers in government procurement would need to find ways to save money quickly--and that we could help. From day one, my goal was to keep my core team intact so that when our friends in government needed us, we'd be there.
2. Get with Finance. Make a plan. Share it. Fast. When it was evident in early April that we would see a marked reduction in revenue in early Q2 and that it would last for months, my controller, Karen Johnson, and I spent most of the next week modeling base and worst-case projections. We kept asking, "How can we avoid a layoff and do the best for our team?" In short order, we developed a plan and shared it with the team.
3. Everyone shares in the sacrifice. Everyone. In order to keep our core team together, the whole team had to take a pay cut. It was the first time we had to take this drastic measure in 15 years, but everyone understood its necessity. While no one would know whether I did or didn't impose the cut on myself, I thought it was only fair to share in the sacrifice, so I took the pay cut, too. It wasn't easy, but it was the right thing to do.
4. Identify new opportunities for your team. My core team is made up of former government and educational purchasing leaders. They are incredibly skilled at working with their former peers to help solve procurement challenges. Over the years, we have worked with 34 states and most large cities, counties and universities. But while the procurement community was (understandably) consumed with finding PPE and other critical supplies for medical professionals, we needed to find different ways we could create value. Rather than calling on governments, our team shifted to calling on suppliers to government, so that we could support their efforts. Our team learned how to demo software and worked with our sister company, a procurement technology platform business. They dug into our Customer Relationship Management system and provided useful analytics to help us better manage. Although the tasks they were asked to do were new and perhaps intimidating, they answered the call and performed brilliantly. And, we were able to create financial incentives for these activities, so that the team could make up some (or all) of their lost salary.
5. Take care of each other. On our weekly team call, a colleague said, "David, we are tired, we are working hard, and we are stressed." I could tell that she and everyone needed a break. Inspired by Google's similar decision, we made the Friday before Memorial Day a mandatory mental health day. Everyone in the company was required to take the day off, including me. No emails. No Slack posts. Nothing. Just an opportunity to unplug, breathe and reset. The team reacted to this so well that we decided to implement a mental health holiday every month for the duration of this crisis. Mental health is as important as physical health, and employers need to treat it that way and take care of their people.
It's easy to feel powerless during this pandemic. Most of us can't create a vaccine, can't treat sick patients, and can't even drive a truckload of PPE to a hospital. Instead of wallowing in powerlessness, take charge of what you can control.
As a CEO, you have the power to do a lot of little things every day to keep your amazing team intact so they can serve vitally important customers.