Coping with a business crisis

Creating Solutions

After the time and investment Ward had placed in his GM, he realised that in order to find the right replacement in a short period of time, as well as give staff confidence and still allow Ward to work more exclusively on Delegait, he had to come up with a completely different solution.

“First, I got myself back to Australia, and with the senior manager who was remaining (but had only been with the business for three weeks) and the other Sydney managers, we got together on the Monday and I said, ‘we’re going to book in time this Friday, we’re going to fly in the other state managers and we need to, in the interim, create a plan’.

“The first part of the plan involved getting out our functionality chart, which outlines what areas of the business need to be covered in order to keep working operationally, to keep sales working, to keep marketing and finance going. We had to redraw our management structure completely.

“Where we had a centralised management structure previously, we then had to decentralise it and drop the responsibility into a state-by-state structure, and then have the states coordinated by either myself or the other senior manager.

“She and I are separating our time between Australia and the Philippines. So alternate months I’ll be in the Philippines and she’ll be in Australia. I’ve hired some additional resources in the Philippines to become our reception, administration and contact with our accounts payable and receivable, and that enabled us to take away that financial responsibility that the national business manager had and put that into a lower-cost resource over there.

“By taking all the leadership and planning and marketing roles that the national business manager had and moving them down to the states, we were able to empower our state managers, so we can now provide them with a mentor who will help them grow. We were also able to put in a five percent bonus incentive, based on targets, because we had retained a cost saving from the loss of the business manager.”

Unfortunately, though, Ward’s IT crisis at Delegait’s staff hosting premises in the Philippines wasn’t so opportunistic for the company, except to deliver them some hard lessons.

With all of Delegait’s employees working for the company’s Australian clients, all of their staff needed to continue working. Occupying a few floors in the building, they were able to share the load of one floor between two, which dramatically reduced internet speed and phone quality, but it only took three days to come back up to 100 percent, thanks to the IT department working round the clock.

“Now we’re aware of it, we’ve got our internet security upgraded, we now have a specialist outsourcer and we have reduced access on our local area network,” explains Ward. Delegait has also taken out some key security measures regarding staff access.

“When you’re a communications or technology company, it’s a bit like the business having a heart attack—your IT is absolutely essential to the running of it. Productivity dropped to at least half because we had to share the resources. We had to reimburse our clients for their downtime. In terms of dollar costs, it would have cost at least $250,000, but in terms of opportunity cost—because there would still have been emails and calls made to us that we’re completely unaware of—the reputation and goodwill lost was the crisis in that situation. That’s immeasurable.”

The situation could have been a lot worse, though, if the company’s network had run across all floors and wasn’t split between them. Ward thanks his business partner’s extensive ICT experience for setting the system up this way, as well as being able to identify so quickly how and where the problem had occurred. “Even though we had a failure and clients couldn’t call us when it immediately happened, when we were able to explain what happened we found people were quite tolerant of crisis situations, especially if they understand it’s a one-off, as opposed to reoccurring.”

Consequently, Ward highly recommends having internal IT knowledge, even if you outsource IT operations.