The COVID-19 epidemic will have a long-term impact not just on our enterprises, but also on our lives. We view the world in a completely different light today than we did a month ago. To adapt to The New Normal, our firms’ strategic goals, work logistics, and future plans have all had to shift.
But… what will the “new normal” look like? How will our clients adapt to it? How will Rydoo adapt to it? To find some answers to these questions, we have interviewed some of our clients around the world and Rydoo’s CEO. We wanted to understand how their businesses and industries are being impacted but also how they see the future because this situation won’t last forever.
Paul Smejkal, Total Tool Supply CFO, is the first guest of our new remote interview series: The New Normal.
How is COVID-19 impacting your business operations?
‘It’s been an interesting 2020 so far, we started off the year incredibly strong. We were on track to be ahead of last year by 15% or more. Everything c hanged on march 16th for us. We saw our sales drop from +25% just overnight. We are not sure where the bottom of that is, yet. We are making a lot of plans to deal with that but I don’t think we have seen the worst of it yet. I would imagine we might see some further decline.
Here in the US it’s a state by state thing, it’s not a national thing. We have states that we do a lot of business in and honestly haven’t changed that much.”
How has Total Tool adapted to working from home?
”All of our sales staff are remote at the moment.
All of our IT staff are remote.
All of our HR staff are remote.
A good portion of our Finance staff is remote.
But the issue we have is that we have to log boxes on the truck and you can’t do that remotely. There is just no other way. We are taking a lot of precautions to keep things clean, to keep distance, not allowing too many customers into our locations at the same time, wearing protective equipment, etc.”
How has the crisis impacted your strategic goals for the next quarters?
”We knew that at some point there would be an economic slowdown, that is the economic cycle. I would never have predicted that this is how that would have happened. But we have structured ourselves in a way that allows us some flexibility from an operating perspective.
Our goals are really simple: We need to stay as a company strong financially so that we can employ our people. That’s it. If we don’t stay strong as a company then we can’t employ people. We’ll have to make changes and that is the last thing we want to do.
We are trying to maintain our full staff, we are trying to maintain all of the support benefit programs that go with that. We structured ourselves in a way that we believe we can do that. We feel confident we are going to be able to continue.”
Which measures have you taken?
”We have certainly restricted all expenses that we considered not essential and that is the primarily thing that we have done. Some of it happened naturally, actually. Outside salespeople who are on the road all the time, you can’t go anywhere. We don’t have the meals, entertainment, lodging, vehicles expenses, etc.
None of that is happening. We didn’t really have to take action, it was put upon us. Our customers don’t want us in their facilities, for a good reason.
In the US, we have overtime hours that are paid at a higher rate. We have none of those hours happening. People are working a standard week, no more.”
Do you have an emergency plan for situations like this one?
”We had contingency planning that if the economy slow down and our sales decreased by 20% to 25%, what could we do to remain financially strong and serving our customers. All of this was part of a plan.”
What do you take away from this situation to foresee risks in the future?
”We are very well structured from a financial standpoint and that is one of my jobs: To make sure we have a good solid capital structure and good relationships with our banks. And we have that, so I feel very confident in that portion of our business.
We need to be better at doing business remotely. Our sales need to learn how to be sales people like this, on a camera, instead of face-to-face. Some of them are pretty good at it. Some of them need to learn more. We can all improve.
I think from an operational perspective, there are roles here at Total Tool that could be done remotely where we set up to be able to do that. In some of the areas, like our payables area, we can do almost everything remotely. In some of other operational areas, there is technology available that we need to integrate into our systems so that we could do things differently.”
What are your thoughts about working remotely?
”I’ll admite I am kind of an old school person. I like to be here. It’s just the way I operate. I am very comfortable with people working for me working remotely but not all people are.
We need to understand how to interact with our people if they are working remotely: How to be the supportive working colleague when you can’t see them.”
How do you think work will change?
”I think the way we interact with our customers is going to change profoundly. The construction industry, in many ways, is a very personal industry. You have to trust the people you are working with. There are safety concerns, a lot of money on the table. People like to know who they are working with and be able to trust them. That is going to change fgor the construction industry, it’s already changing.
I think from an economic perspective, we see this as a temporary pause. We are going to slow down but there is a lot of work to be done, a lot of projects that will still happen. What we are trying to make sure is that , from a strategic perspective as an essential supplier into these industries, we are positioned and proved to our customers just how good we are and how able we are to support them. So, when we turn the corner economically, they know they don’t have to look anywhere else because we will have been with them through this whole ride.”
How will business travel change?
”I think we are going to get used to doing video calls more often. I just think this is the way it is going to be.
It’s one thing to talk through a screen but it’s another thing to see someone. People are going to see that they don’t always need to be in front of you and that is ok.”
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