Lessons from the storm: Don’t Panic
Client Spotlight on RSD Group of Companies
None of us have seen anything like this pandemic before. The impact on people and businesses has been dramatic and incredibly ruthless for many. However, there are some groups who found reserves in the tank because of different storms they weathered in the past - and applied those lessons to this unprecedented situation. While nothing could quite prepare us for the impact of COVID-19, there are some important insights available from history - if you look for them. When oil prices fell dramatically in 2015, many companies realized they had too many eggs in one basket. One company that has been very open about their challenges is RSD Group of Companies, who at the time had about 90% of their business focused on Oil & Gas - mostly in the Alberta market. As the price of oil continued to decline, the team at RSD knew they were sitting at an important crossroad and they needed to find a new path forward before it was too late.
“Firstly, don’t panic,” says Wilson Xu, Chief Financial Officer of RSD. “Take a step back and find out what you can monetize… and don’t make any quick decisions.” One of the easiest - but often short-sighted - solutions when panic sets in for a company is to let people go to offset revenue losses. However, there are a number of studies that show companies should do everything they can to keep their talent because the cost of replacing talent can be crippling, ranging from 20% annual salary for entry level talent to more than 200% for senior level talent. As Xu explains, “we’ve been around for 25 years, we have a lot of data, we have good clientele, a good reputation and brand image – but the tough times that we went through in 2015 made us understand that none of this means anything if we don’t have good people.” For RSD, it was a critical turning point when they prioritized their people strategy based on the understanding that first and foremost, they are in the people business. “Whether we are doing business with our vendors, our partners or our client, every single employee is the face of our company. Without our people we are nothing,” adds Xu. The next step for RSD was to find their pivot point. Too many companies get stuck in how things used to work and miss the opportunity to be part of whatever is coming next. Having specialized in the assessment of threats that lead to unwanted events in the oil industry for 25 years, the team at RSD realized that the data they had accumulated could actually apply to many other industries. “With that mindset we started to trigger a change to build a new technology to leverage the gold mine of all the information that we had,” says Xu. Diversifying their expertise into new industries and finding a technology to leverage that expertise was the clear pivot point for the company. With the pivot point defined, RSD then decided to redeploy many of them to R&D. Xu believes that this move made a huge impact on the future success of the company. As he puts it, “we could have laid off some of our people, and we might be able to report better numbers; but in our business we needed to be thinking about pushing forward, especially on R&D. When I think about what that would have meant in terms of rehiring, rebuilding the process, and re-entering the market, we would have been at least a year and a half behind.” For RSD, navigating this shift also put the value of Human Resources into the spotlight. Having partnered with VIMY HR, a consulting firm specializing in people strategies that stay focused on the bottom line, the RSD team was able to leverage their expertise to make the best decisions. “Working with a consultant made it possible to find out what worked for us, and then launch and maintain programs that fit our business, like our performance management and goal setting program,” says Xu. A good HR consultant is not just an HR-helpline or mechanical part of the business structure; they are a valued part of the organization because they take the time to understand the business and build relationships with the team. Xu explains, “we’ve found that it is important to partner with the right people who contribute into culture, who understand who we are, and become an extension of us.” Of course when you’re navigating a crisis it can also be a harsh reminder that cash really is king. If you don’t have anything in the reserves, it’s going to be that much harder to keep everything standing. “In the good times, it’s often an oversight. We thought we didn’t need to build cash reserves because our line of credit was our cash reserve. But one phone call from the bank and we didn’t have our line of credit any longer. It was a near-death moment.” From that point forward, RSD committed to build a simple cash reserve fund - contributing whatever they could afford every month and then treating the reserve like it didn’t exist. The final lesson that Xu shares is possibly the most important: be flexible, be future thinking, and don’t be afraid to ask for help. Whether that comes in the form of government programs, grants, or consultants, the ability to recognize where the gaps are - and admit that you need help - is critical to success. “We partnered with BDC early on, and then looked for the government programs that would help like Alberta Innovates, NRC IRAP, and Mitacs. There are still new programs coming out, and there is a lot of information out there if you are willing to spend the time to better utilize them,” says Xu. From crashes in the market to a worldwide pandemic, there are sound strategies that many companies have discovered to help them weather the storm and come out on top. RSD Group of Companies has proved that a few times now - and they show no signs of slowing down. RSD Group of Companies supplies risk management, predictive analytics. and process safety training across many industries. For more insights into their success story of diversification in hard times, watch this feature on CTV News: https://calgary.ctvnews.ca/diversification-key-to-business-survival-survey-1.5137312 VIMY HR is a Calgary based HR consulting company offering small to medium sized businesses sound, cost-effective human resources solutions. We are experts in maximizing your people potential to increase company performance and profits. For more information about VIMY HR go to our website at www.vimyhr.com or contact us at firstname.lastname@example.org