Eazi Access CFO David Chadinha shares his tips on how to thrive during a crisis.
David Chadinha’s goal, from an early age, was to be the CFO of a listed company by the age of 35, a milestone he has achieved.
Throughout his career, he has been on the frontline of turnaround strategies for struggling businesses. This has enabled him to build an extensive skills set, streamlining financial activities to help companies through tough times.
He joined Eazi Access (a solutions-oriented work-at-height and material-handling equipment company) in May 2019, at a time when it had high exposure to the construction industry, had an almost unmanageable debtors’ book, and had recently been restructured and recapitalised, a perfect ground for his specialised skills.
It was a tough year, with confidence in both management and financial forecasts waning. However, by the end of 2019 the team had managed to turn things around. Shareholders were happy, and the company was on a more solid footing with its sights set on growth in 2020.
David says, “Just as things were starting to settle, the Covid-19 pandemic hit, and the effects were felt by the company almost immediately. However, I am of the firm belief that in chaos there is always opportunity.”
Knowing where to focus
Having previously been in situations where cash flow was under tremendous pressure, David knew that the company’s decreasing revenues – a direct result of South Africa’s hard lockdown – would soon land them in difficulty.
David focused on three key areas to preserve and manage cash flow. He started by instructing the team to hold on any unnecessary spend, and then turned his attention to the debtors’ book to collect cash. He also called top creditors and planned smaller repayments, which helped to significantly boost the available cash flow.
To further assist with cash flow and to preserve employees’ job security, the company implemented a sliding scale salary sacrifice. The proposal was that the CEO and exco team would take the largest salary reductions, followed by senior management. The remainder of the employees would then follow.
“Bearing in mind that revenue had dropped by around 50 percent, we linked the salaries to the company’s revenue. As the company recovered, the sacrifice would be reduced, and when it returned to an acceptable level, the salaries in turn returned to normal,” he explained.
He further explains that open and honest communication across the business was important during this time, especially around the salary sacrifice. “I didn’t expect the teams to take the news of the salary sacrifice well at all, but instead there was gratitude for jobs saved,” he notes.
Thanks to these proactive financial management measures, the company did not have to retrench any of its valued employees and could maintain staff morale during this difficult time. “Leading from the front was an important success factor in achieving these, which is why the salary sacrifice started with senior leaders.”
Readying for re-opening
David adds, “During hard lockdown the business began an intensive online training programme to further upskill and prepare teams to re-enter the workplace once restrictions were lifted. We knew that we had to be prepared to go into full operations mode to claw back revenue as soon as the hard lockdown was over.”
While many companies were busy retrenching and dealing with low morale, Eazi Access could get a head start as we were well positioned to execute our recovery plan.” A salary sacrifice had never been executed before, but the entire company was aligned to get revenue back on track.”
He says diversifying revenue streams was a priority, which is why they had previously refocused the business and now have about only 40 percent exposure to the construction industry. The measures taken were sufficient and they had enough cash to weather the storm. By October 2020, they had fully restored salaries to the bulk of their employees, with the CEO and Exco following later in the year.
Transparency with stakeholders across the business
David says his approach to the crisis was twofold: he had to pull the necessary levers to ensure the financial health of the company, but he also had to act as a servant leader who could reassure the team about what lies ahead. He notes that the impact and reach of Covid-19 made leadership crucial.
“There was a lot of uncertainty and people desperately craved clarity. This wasn’t the time to avoid tough conversations,” he explains. “As a leader, you need to be willing to initiate conversations that matter. This gives your team the confidence they need to keep going.
“You have to communicate, be honest about what steps need to be taken and be clear about the tough choices that need to be made. It is also about keeping your word and following through on your promises. People appreciated the transparency.”
Moving forward together
David says the crisis proved how valuable information can be. He notes that many companies have a culture of withholding information, especially when people are faced with uncertain circumstances. This, he feels, is not a productive way to work. “The only way to move forward as a unified team is through sharing information amongst the team. I can’t expect managers to make good decisions without distributing the information I have.”
He says he openly shares the strategy with the team and clearly outlines their goals. He has a monthly meeting with all direct and indirect reports and opens the floor for feedback and questions employees might have. “By sharing information and insights on where the company is going, we are getting stronger.”
David says that technology has allowed him to communicate with a greater number of people within a shorter space of time. “Prior to Covid-19, the effort to have regional meetings was arduous and involved flying to the regions. Once we went virtual, I was able to have meetings with managers and with every single branch. This cascaded to our operations teams and depot managers, who can now explain and understand their numbers. This has given me a far more detailed view of what’s happening on the ground.”
He says that the pandemic motivated them to move to a paperless operation, resulting in more streamlined operations. This became evident during their annual audit, where gathering documentation was a more efficient, painless experience. He notes that the pandemic is here to stay, so from a team perspective they need to balance working from home with being in the branches, especially as the team grows.
“As a business, we have gone through the worst. We have now rebalanced our fleet and are looking at new growth areas. You need to be agile to get through chaos and remember that nothing will be the same as yesterday. At Eazi Access, we took the Covid-19 crisis as an opportunity to fix key areas and align our operations, all as a unified and improved team.”
