COVID-19 has helped push companies to balance a profits-centred business with a people-centred organization, the Finning International CEO says
We asked prominent members of the B.C. business community what they’ve learned from the COVID-19 pandemic—and how this crisis will change everything from work to leadership. Scott Thomson is president and CEO of Vancouver-based Finning International, the world’s largest Caterpillar dealer.
For B.C. businesses that have survived COVID-19, what’s the most important thing they can do right now to make themselves more resilient to future disruptions?
COVID-19 has significantly impacted our people, customers and operations. To be more resilient to future disruptions, design a strong variable cost structure that can withstand the highs and lows of incoming revenue. We’ve seen businesses with high fixed costs have difficulty managing through revenue declines and retaining their talent.
What’s the biggest lesson you’ve learned from the pandemic?
The importance of communication, the frequency of communication and that communication is a two-way street. In an environment of uncertainty, even if you don’t have all the answers, your employees want to hear from you and be a part of the decision-making process. Repeat the message and share it in different forums.
At Finning, we held multiple global and regional town halls through Teams Live events, surveyed employees, posted news on our intranet and kept people updated in emails, and held meetings with various levels of managers, who then cascaded the information to their teams and asked for feedback. I can’t stress enough that hearing from direct managers makes a huge impact on employees, and having leaders open to questions, opinions and feedback is equally beneficial.
Is there one aspect of your business, or business in general, that you think has changed for good or that you won’t be going back to doing the old way?
Offering customers and employees the flexibility to do business and work with you. While brick-and-mortar storefronts are still important and part of our business model, COVID accelerated the improvement of our e-commerce and service delivery methods. The same could be said about business travel. Face-to-face meetings are still important but not always necessary. Leveraging technology, we held our AGM, board meetings and many internal and customer-facing meetings remotely.
The second is relying heavily on data to make decisions. Eighty percent of our machines are connected to a combination of smart hardware and software to maximize equipment use for customers. For example, condition monitoring generates recommendations for service and parts, which in turn drives our supply chain decisions. Customers’ operations were impacted by COVID-19, and this data helped us manage their demand for parts maintenance and service. For the customer, the data helps to increase production, to control costs, to improve operator performance and to increase the safety of its operations.
Over the next few years, how do you expect work to change as a result of COVID?
Historically, companies have been driven by profits, and while that is still important, there is an increased emphasis on balancing a profits-centred business with a people-centred organization. Taking care of the health and well-being of your workers is paramount. Moving forward over the next few years, the focus will shift and rebalance itself from purely shareholders to more inclusively include stakeholders.
The second trend we have seen is the shift of office workers to working from home. Finning was well positioned to smoothly transition employees who worked in offices to working from home because of years of preparation and already existing flexible work policies. Ultimately, we are in a relationship business whether that is with our customers or with other colleagues. To build trust and a culture of teamwork, personal interactions are important. And it is part of human nature to want to connect and belong. A key component to successful workplaces will be developing a hybrid model where we leverage the use of technology and physical spaces.
Looking ahead, what leadership qualities will be most in demand?
Emotional intelligence is the first thing that comes to mind. Brilliant minds can come up with strategies and road maps, but without empathy, vulnerability and self-awareness, who are you leading to execute these plans and manage change? Your teams need to be able to trust that you know how your decisions impact them, that you care to understand their situation and that you want to be transparent about changes. Solely focusing on the growth of the business is not enough.