Case analysis: ready for the crisis

Mikk Sillamaa, CEO at Stell Eesti

Although a crisis is a negative state of events by nature, it does not only stand for chaos and destruction. The coronavirus outbreak resulted in a shift in societal norms and expectations and drastically affected the economic prospects of numerous companies. Still, changes can also be good if we can manage them.

The pandemic crisis clearly demonstrated how important a focused but flexible strategy, continuous review and modernisation of various work processes as well as good financial standing achieved in ‘fat years’ are for a company.

Various lines of business have been affected in various ways

The edges and facets of service concepts in the sphere of facility service management have shifted in recent months. One of the areas to have received the greatest attention is, undoubtedly, maintenance service, where there has been a substantial change in clients’ requirements and expectations. Health safety as well as ensuring a safe working environment for clients’ employees and cleaning staff alike are top priorities.

To meet the changed cleanliness standards of society and gain an advantage in the environment of intense competition, a maintenance company must be proactive. It is important to know your clients and be a step ahead of them, finding the best innovative solutions among what global practices can offer and adding them to your company’s competence.  One such example is electrostatic sprayer disinfection, which is a novelty in Estonia, and which was implemented by Stell in the spring in collaboration with Apollo cinemas and Stockmann department store.

The services of business administration, residential estate administration and maintenance were affected by the fact that a number of companies had to close their doors temporarily during the state of emergency, and offices, shopping centres and entertainment facilities were deserted.

As a service provider, we aimed to maintain existing contracts, to be flexible and find solutions suitable for both parties: we have suspended services or temporarily reduced their amount, changed the concept and main focus of a service, and given the clients an opportunity to review and, if necessary, change their contracts on a monthly basis. As the result, we have had few individual contract terminations, and today we can see that the amount of services reduced in the meantime is being restored. The losses we faced during the crisis are not a tragedy but rather an inevitability and a natural course of events.

Streamlined processes help adapt to a crisis quickly

Although the specific nature of crises cannot be predicted, it is important to prepare for various scenarios. It may seem at first that the detailed description of all kinds of work processes is merely annoying paperwork. However, our experience of coping with the coronavirus crisis shows that what helps one respond and find focus quickly in a difficult situation is carefully designed and regularly updated processes.

After the state of emergency was declared, it took us less than 24 hours to have the work processes of the company’s lines of business in place and managed for the crisis period.  Those responsible for finance, personnel and other administrative areas monitored and evaluated what was happening in real time and were in constant contact with one another. This was why the management was always informed about changes in the portfolio, people’s location, and needs as well as opportunities for rerouting resources. As our company had been a long-term member of the international corporation ISS Group, there was nothing new about teleworking and online communication for the team.

During the state of emergency, the processes which ensure the safety of our cleaning personnel and technicians working in the front line were of the greatest importance. We had already had knowledge and strict procedures in place in case a person with a dangerous contagious disease were identified on the client’s site, for example. This is why adapting these processes to the COVID-19 crisis took truly little time.

Adhering to the business strategy you choose

In planning and managing a business, it would be naïve to think there would be no crises. This aspect absolutely must be taken into account in devising your strategy, and the focus must clearly be on development and prevention, not putting out fires.

Judging by the general economic picture, we were swimming upstream during this crisis as we recruited people to new positions and strengthened the company’s capacity and market position outside Tallinn. Our faith in the established goals and the firm belief that the business concept we had created would work, which we had acquired over time, gave us confidence for continuing previously planned investments and company development.

We had deliberately established the goal of providing clients with integrated property management solutions in order to cater for as many needs related to real estate as possible: maintenance, business administration, technical services, residential property management and a variety of support services.  If the client is using more than one of our services, it is easier to find solutions to retain the scope of the contract fully or partially by changing the focus of the services where necessary.

 Less outsourcing ensures flexibility

Monitoring and securing cash flows has been of key importance during the crisis. In the economic situation at hand, one of Stell’s core strategic decisions, namely, providing services ourselves and not building the business on outsourcing, has fully proven its value. The shorter our subcontracting chain, the more flexible we can be as service providers to quickly adjust the content of the services and rearrange resources. For example, when hotels and shopping centres were closed, we could redirect the technicians who had been working there to other sites.

What has proven fatal for a number of companies in the last few months is the absence or insufficiency of financial resources. The coronavirus pandemic has taught businesses that one should be saving money in ‘fat years’, but it is a pity when such knowledge is gained too late. For us, creating financial strength and ensuring stability have always been important goals. The sense of security conveyed by the company owners, pre-existing agreements with banks as well as increased control over clients’ payment behaviour and cash flows have ensured financial security for recovering from the crisis.

New situation in the labour market

 While  labour shortage in the service sector had been a subject of discussions before the coronavirus pandemic, the current situation is quite the contrary: the number of job-seekers has soared, and it may seem to be to our great advantage. Many of the people who have lost their jobs, for example, those with experience in the hospitality industry or other service sector, would indeed qualify for working in the property maintenance sphere. What we must keep in mind though in recruiting new employees is the fact this might be a short-term solution: workers will be flowing in only to move on to other areas or return to their former jobs when tourism economy recovers.

Stell has always focused on valuing and caring for its employees because we operate in the sphere where labour turnover and wage pressure are higher than average. It was also during the state of emergency that we maximised the use of our trained teams, cleaning personnel and technicians, redistributed people among the sites internally and found suitable solutions for them. In doing so, we paid great attention to the health safety of our employees. Reorganisation allowed us to cope on our own without having to ask the state for aid so that we could pay wages.

Without doubt, the importance of internal communication and employee involvement became abundantly clear to employees and the management of businesses alike during this crisis. It is in times like this that the speed of information flow and the availability of information become of key importance for a company like Stell, which has 1500 employees on sites all over the country. The state of emergency prompted us to deploy the new intranet system, which we had been planning for some time, in order to provide our workers with a common information space. In the global atmosphere of sadness, we considered it important to share good news, positive ideas, and professional victories with our employees. And if there is bad news, you still need to bring it to people to keep them informed and involved.

Predicting the future is a thankless job. One thing is certain: crises come and go, and they vary and are always unexpected. The best a company can do in good times is invest in its future by means of creating a long-term strategy, carefully described processes and financial strength. At the same time, it needs to be flexible and adaptable in all these aspects. You can be ready for a crisis, and it just might be the motivation for implementing the decisions and actions you have been planning for a long while sooner.