Why and How SNTech Decided To Go on Furlough

Really: Why you should include your whole team in strategic business decisions

Like many other companies during this time, Covid-19 has negatively impacted our business with reduced sales and business development opportunities, as well as delays in our supply chain. Because of this, as of May 4th, the majority of SafetyNet Technologies (SNTech) has been on furlough with any staff that weren’t able to be furloughed (like new starters and key contractors) running key operations. We intend to be back July 1st to tackle some of the biggest issues facing the fishing industry.

While this wasn’t an easy decision, it was because of the involvement of our whole team that it felt like the right thing to do in these times of uncertainty. The team’s backing and support is why SNTech is able to do this and why we feel confident that we will come out of this even stronger. This is a love letter to our team in disguise with some explanation of why and how we did this to illustrate the benefits to other organisations of including their whole teams in company-wide decision making as well. 

To provide a bit of context, SNTech was legally incorporated by Dan in 2011, but with only 4 of us (co-founders and our senior mechanical engineer) until 2019. Last year we raised investment in order to bring our product, Pisces, to market and built a solid team of product and business experts to do so. We had secured our contract manufacturer to produce our product at scale with the intended market launch to happen at the end of March 2020. Then of course Covid-19 struck the world and with that, delays from our manufacturer, but also delays and cancellations of our planned expo and conference attendances to start publicising Pisces more broadly, and many of our conversations and trials coming to a halt. 

As we were building up our team, what was very important to us was that SNTech represents not only a great place where people want to work, but one where everyone feels like they are contributing to an organisation that is purpose led (in line with some Teal-like principles). As such, we openly shared with our team our cash flows and financial projections and the impact Covid-19 was having on our runway: At worst case scenario with no sales, we would only survive until March 2021. While a scary bit of information to share, we wanted to let the whole team know so that (1) they wouldn’t be surprised closer to that date by being left in the dark and (2) so we could together come up with a plan to avoid this from happening. 

Above is the approach we took:

1. We held a company brainstorming session using Miro over a few days to come up with as many ideas as possible on how to extend our runway and also on what other activities SNTech could do during Covid-19. 
2. We then clustered the wide array of ideas into common themes, presented it back to the team, and allowed for another round of idea generation.
3. Following all ideas being generated, we clustered them in an Impact (low to high) vs Feasibility (easy to hard) matrix, supported by our finance manager to help determine the financial impact that some of the ideas generated.
4. We shared this matrix with the team, who then starred their top 5 favourite ideas.
5. All starred ideas were put in a list, with each team member marking which ones they would tolerate (this was done because a starred item might have been chosen by someone else, but we wanted to check whether each individual would be OK if that idea was chosen). 
6. Ideas that had been starred, and were tolerated by everyone, were taken forward. The directors also had one-on-one conversations with everyone to get their feedback on these final ideas.
7. We then took these final ideas to our advisory board for any advice and our investor board for sign-off to pilot these with an intent to review them periodically. 

The final ideas that the team came up with included:

• Furloughing those who could be furloughed for May and June — this included the directors and all employed staff with the majority of the team choosing not  to have their salary topped up beyond the government support (80% of their salary with a cap of £2500)
• The directors committing to a reduction in salary to £37.5K. We are also open to extending this for at least 4 months beyond furlough, with a monthly review to determine if SNTech finances are back on track.
• Proposing 4 day working weeks for an additional 4 months after furlough for all staff.  While we’re not requiring commitment from our staff for this yet, the majority have stated that they would be open to doing it, with a monthly review in place to determine whether further cost savings are needed.
• A list of expenses we are either able to omit completely or reduce for the next 18 months. This includes travel, advertising/marketing, workspace expenses, no new sales lead until August, no IT consultant, handyman, pausing travel for 6 months where plausible, and a downsized factory visit to China.

In total, these measures could save the company about £195K-208K, which buys us at least 3 months of additional runway to June/July 2021 (in a no sales scenario). This is no small feat and gives us that much more chance to be able to prove ourselves in the market and keep the company alive. While investment doesn’t seem to be an option for now (as the markets are still uncertain), we are also looking for other funding opportunities to further increase those chances. 

Leading up to furlough, our team planned and set up processes that would enable SNTech to continue running during this time and deliver on any required operations with just 5 of our 15 staff remaining: our sales consultant, business analyst, and business researcher to continue business development and ramp us up for opportunities when markets open again; our scientist to determine any protocols needed for trials and future opportunities; and our assembly technician to deliver on any product needed and continue progressing Pisces towards manufacture. They’ve taken on additional roles and stood in for any unexpected business needs during this time — our company is staying alive because of them. 

Perhaps somewhat surprisingly, not only are we managing to stay alive during this time, but we are thriving! The remaining team have made a sale, generated conversations with an abundance of leads, set up systems for streamlining manufacturing and logistics, applied new and different strategies to approaching the market, and planned for the future of SNTech post-furlough. Furloughed staff are tending to their personal development, which ultimately builds skills that will benefit SNTech’s future. In addition, colleagues are taking time off  for much-needed relaxation, pursuing other hobbies, and joining in for social get-togethers from morning taiso to online quiz challenges by other ocean organisations to online escape rooms!

We’ve definitely had some hiccups along the way and we haven’t handled everything perfectly, but we’re learning. Here are some of the things we did that hopefully we won’t repeat in the future:

• Not creating a Covid-19 strategy promptly enough and taking a strong lead in reassuring colleagues that we had a plan — While we decided to start working from home before the government required it, it was because one of our colleagues finally suggested that we take action which then spurred us to start planning. In hindsight, we should have seen it coming as other companies had started responding.
• Using our company Slack to communicate the option of furlough when it was first announced by the Government — We communicated quite informally and wanted to raise it as a discussion point with the team, but by using an informal channel and not providing much context, it gave way to too much speculation and interpretation of what management might have already decided. We also posted this message at 5pm on a Thursday, which didn’t give people much chance to ask questions before ending their work day. This caused a lot of anxiety among some team members. We should have scheduled a face to face call (as we were already in lockdown) with an agenda to reassure the team and having management available to be contacted for any follow up.
• Ensuring we had enough mental health support in place during these times — whether for adjusting to working from home completely, going into furlough, or being one of the few to stay on and taking on more responsibilities. We have talking therapy cover through our private health insurance and one of our staff is a Mental Health First Aider (MHFA), but we should have provided some more reassurance through individual conversations (and should have had another MHFA for our MHFA who was being inundated!)
• Not thinking through all the “what if” scenarios thoroughly enough for process planning — We had made a Furlough Reference document outlining what needed to be wrapped up before furlough and what to do during with general operating procedures, but we didn’t account for the unexpected (like a sale actually happening during this time!). I think besides the business as usual, it would have been good to think of ALL the scenarios possible so that things can still run as smoothly as possible.
• Not regularly checking in with the team after 3 weeks on furlough — While we had ad hoc catch ups with people, we had originally stated we would check in after 3 weeks (the minimal amount of time required for furlough) to assess whether anyone needed to come out of furlough. While we did so on an informal basis (moreso checking in on people’s mental states), we should have done a full team assessment based on any changes to business outlooks, coupled with people’s mental states. This has since been rectified.

Now with the UK government having extended the furlough scheme until October, we are once again going through the process as a team to determine what is best for us to do and how we should respond. I have no doubt that we will make the best decision for the company as we have an amazing group of individuals who also have the company’s best interest at heart. I cannot believe how lucky we are to have such a dedicated team and I’m excited to return to work with them.

While this has been one example of how we’ve engaged our team in a company decision, it is the way forward for us. I hope this has illustrated the benefits and inspires some to approach their teams in a similar way. 

(Written by Nadia Laabs, but reviewed and improved by the SNTech team ;))