Rebuilding business after the crisis will need new leadership - Rashmi Dube

Sectors like aerospace and automotive are getting tested to the brink of collapse. Rolls Royce has announced 9,000 job cuts.

The chief executive, Warren East, said: ”In this unprecedented period of uncertainty we have rapidly adapted our business to safeguard its future for all of our stakeholders….”

The largest region to be hit by this news is Derbyshire. Rolls Royce managed to secure additional cash in a boost for more liquidity by cancelling the final 2019 shareholder payment, saving an extra £137m and securing an additional £1.5bn credit facility.

By no means will Rolls Royce be the only business to take such steps. But one can’t help thinking have the board really considered all options or simply used an excel spreadsheet to find a way to reduce costs and concluded the easiest way is by headcount, as so often happens.

Having been there, done that and got the T-shirt, the decision isn’t a cold, heartless decision in most cases; it is simply a knee-jerk reaction to saving as much cash as possible and as quickly as possible.

However, given that the furlough scheme can still be used for a period of time, there is an argument to say hold on a little longer and get imaginative about what can be done.

Positions

From an outsiders’ perspective, there is some sympathy with their position. Plane makers such as Boeing and Airbus are cutting production and it has affected several businesses I know in the region. To make a business sustainable, it must turn it around but also adapt and find new sources of income.

The company is already aware this is not a short-term effect but rather recovery in the aerospace is likely to take five years. The issue I have with this line of thought is that there is a strong assumption and belief that things will return to the same demand. The thinking is pure folly.

Businesses, in order to turnaround and grow within the next five years, need to change and adapt to the changing circumstances – not just to the virus but also to people’s attitudes and ways of working. It is highly unlikely for example that as many businesses will be sending their employees abroad for as many meetings. Times have changed and there is no going back.

The concern, of course, is the number of businesses employing large amounts of skilled labour that have their employees in the North and Midlands and often are “propping up” a region.

Jaguar Land Rover is one of these businesses, and is also in a similar situation with a loss of demand and needing a rescue plan up to £1bn. The widespread view seems to be that there has to be support from the Government to ensure that these companies can rebuild and protect jobs.

New guard

The changing of the old guard is an important consideration. Yes, they have experience but now is time for vision at the helm supported by experience, youth and expertise of the technology.

A new management board or key players of the board changing could play a vital and pivotal role in bring about new thought, action and change but very few companies have the foresight or the gumption to do this.

Adapting and changing is never easy but the small and quick wins should also be considered. Rolls Royce has asked the question again as they make the much-needed ventilators – do we as a nation outsource too much?

What can we bring back to the UK? A question all companies should be asking is ‘is there a way we can fill a void in the marketplace,’ because now is the time to act.

Today’s companies that face turnarounds really need to look at the new guard. Bringing in the same old advisers is simply going to get you very similar results.

To breathe life, you need a new set of eyes and to diversify, you need to take a risk. All of us in business know there are times when we need to take a risk; and if we succeed, the biggest winners will be the regions and the skilled labour force.

First and foremost - and rarely have I written down these words with more sincerity - I hope this finds you well.

Almost certainly you are here because you value the quality and the integrity of the journalism produced by The Yorkshire Post’s journalists - almost all of which live alongside you in Yorkshire, spending the wages they earn with Yorkshire businesses - who last year took this title to the industry watchdog’s Most Trusted Newspaper in Britain accolade.

And that is why I must make an urgent request of you: as advertising revenue declines, your support becomes evermore crucial to the maintenance of the journalistic standards expected of The Yorkshire Post. If you can, safely, please buy a paper or take up a subscription. We want to continue to make you proud of Yorkshire’s National Newspaper but we are going to need your help.

Postal subscription copies can be ordered by calling 0330 4030066 or by emailing [email protected]. Vouchers, to be exchanged at retail sales outlets - our newsagents need you, too - can be subscribed to by contacting subscriptions on 0330 1235950 or by visiting www.localsubsplus.co.uk where you should select The Yorkshire Post from the list of titles available.

If you want to help right now, download our tablet app from the App / Play Stores. Every contribution you make helps to provide this county with the best regional journalism in the country.

Sincerely. Thank you.

James Mitchinson

Editor