'We reconfigured the whole business in three days' - June O'Sullivan, London Early Years Foundation
There's no guide to steering a social enterprise through a global pandemic. How do you shore up cash? How do you keep your customers on side? How do you reassure your team, keep everyone healthy, and stay semi-sane yourself? In our new series, we hear from some of those navigating the uncharted waters of Covid-19. This time, the CEO of nursery chain London Early Years Foundation tells us about cash flow, careful communication – and why she'll risk a court case if it means faster decision-making.
“Keeping people safe and managing cash so I can pay staff: that’s been the focus.
From the government announcements last week, but even before that when Ireland closed its nurseries, we began looking at what we could do to protect the staff and the children. We made adjustments to how we would take people in, for example, asking parents not to come into the building and hand their children over at the door.
At the same time, we also started looking at our cash. We have a pay bill of £1.2m a month. If we could pay staff for March and April that would give us breathing space, so I made some radical decisions very quickly around how we would retain cash.
We stopped all agency staff, and put in a new schedule of payments to suppliers to decide who would be paid first and who’d be paid last. And we went to our bank for an overdraft. Any adjustments that would help us retain cash – because if everyone was going off sick, we would have all the sick pay to cover, and no staff to run the service.
We have a generous sick pay policy but I realised we would not be able to afford this if I was trying to plan outwards for three or four months to keep the business afloat. We did a consultation about changes very, very quickly, and we've subsequently done some more adjustments to their contracts, which they've now signed for a temporary period. For example, we relaxed the working time directive rules so if they wanted to do extra essential work (for example stack supermarket shelves), they could.
One step ahead
There was a lot of communication, quite quickly. We’ve about 900 staff. How do you keep them calm? How do you prepare them, get them on board, get them to realise that we would be looking out for them even if we had to make adjustments to their contracts?
We use Facebook Workplace, and lots of emails as well as notices for parents on the webiste. We have also used docu-sign for the staff. No comms goes out unless it's approved by our head of marketing and communication and signed off by me. The tone of communication was very important. We're keeping staff and parents in the loop, but not overwhelming them with information. We’ve been working 14 hours a day, seven days a week, to make sure that we're one step ahead and that there is the right email, the right narrative around things like bills or what places we're going to offer to children. It's worked really well, particularly for parents. They have been really complimentary about the level of communication.
How do you keep 900 staff calm? How do you prepare them, get them on board?
We've asked customers to pay 20% of their fee at least for April. Most people are happy with that. We have had some saying, ‘Well, I don't see why I should pay it at all’. And some have pulled their children out. But we're charging them for the six-week notice period like we would normally under their T&Cs. If I didn't do that, everyone would say, ‘Oh, I'll just restart my place when we're already’.
Well that’s fine, but we want a business to come back to and they will need a nursery to come back to. I cannot do that on fresh air and I will need to have cash to restart the business. Payment holidays are just that – a holiday – and I really want to keep staff in a job. I'd like to be able to pay our creditors, because this is pretty tough for them as well.
As a social enterprise we felt we should see how we might support others, so last weekend, we also reconfigured the whole business so that we could deliver emergency childcare for essential workers’ children and for vulnerable children.
Last weekend, we reconfigured the whole business so that we could deliver emergency childcare. That was a fairly mammoth job
We had to develop criteria and send forms to parents, and do the same for staff to identify who was in the high-risk category, who was self-isolating, who we would be available to work – so we could create a system to reduce the numbers of open nurseries as quickly as possible and provide a limited number of hubs. That was a fairly mammoth job. We now have about 200 staff out there working across two workplace nurseries for essential workers and 19 nursery hubs.
We also fast-tracked our home learning website for parents staying at home with their children. And another member of staff started looking into setting up a home nanny system, especially if that could help our Bank staff [those who'd chosen to work on zero-hour contracts] earn some money.
We did all that within three days. I have to say, the staff were incredible.
How am I feeling? Tired… and deeply grateful to my team and the way they've all automatically taken their responsibility seriously. You have all these clichés about managing in a crisis. To be honest, you appreciate the loyalty you build up way in advance of that and the sense that there was no argument when I said we would open for the emergency cases – I think all of those come from the fact that you've chosen people around you who have the same values. And that's noticeable in a crisis. I've been really heartened by their trust in me – that sounds fantastic, but it’s bloody scary, really! I hope to God I am making good decisions.
It’s bloody scary, really! I hope to God I am making good decisions
I'm much more autocratic now. This is not a time for democratic decision-making, and some decisions might be uncomfortable for others. Because I need to save this place. Even to HR people, who love to push back on everything, I say: ‘Well, here is the option guys. I make a decision now and we can keep going for months or I faff around and we do all your fancy consultations and negotiations and engagement and there’ll be no jobs in two months. How do you want to play it?’ They say they’re trying to protect me, they don’t want me going to court. I’ll take court over losing the livelihoods of all my staff.
The measures announced by the government last week gave a false sense of comfort. Here we are with our 80% for furlough staff, talk of cash loans. But its not straightforward. It's much more complicated and guidance is being designed and agreed on a daily basis but not enough to actually make a decision. Of course I'm going to see if I can use [the job retention scheme] but I can’t use it for all the staff because I am still delivering a service. Are we on it? Absolutely. Is it proving to be very easy to get? Absolutely not.
I said to my team: I don't want knee-jerk responses, let's just get as much information as we can and then give greater clarity to the staff. Right now my staff are going to be paid next week and next month. It's okay. We have a little bit of time to breathe.
Even if we get back into our traditional business model in say, June or July, we're now all on the backfoot, aren't we? It's going to take us a while to build the business, to strengthen it again, to get a bit of reserves going and a bit of a bit of security. I think anyone sensible will be planning outwards for the rest of this year.”
June O'Sullivan was speaking to Anna Patton. Read more about LEYF.
If you'd like to share your own story from the frontline of running a social business through the Covid-19 crisis, email us at firstname.lastname@example.org.