For leaders in the events sector, 2020 brought an existential threat to their business. But with business disruptions threatening to become increasingly common, senior executives will need to be adept at assessing the risks ahead and steering their companies on a safe course
Like many in the business of live events, Will Mould’s company XYZ, an experiential marketing marketing agency with clients including Nike and Levis, took a hit in 2020. After a stellar start to the year, things just fell off a cliff. “Huge amounts of work were cancelled by the major bands we work with; we had pretty much no revenue whatsoever for the next six months,” says Mould.
The live events and hospitality industries have been among the hardest hit by the coronavirus crisis. For such businesses, a nationwide ban on people gatherings made the worst-case scenario a reality. Measures to counter the pandemic required the immediate shutdown of all operations, with no indication when they might be able to resume.
For the people at the top of those companies, the last year will have been a rigorous test of their ability to navigate a crisis. It’s an increasingly important quality for senior executives as significant business disruptions are expected to happen more often. The climate crisis, digital transformation and geopolitics are all expected to pose challenges to business in the future.
When it came to disaster planning, Mould and his co-founder had some contingencies in case of a major technical problem or an emergency such as a fire destroying the office. “But those things are temporary and about finding a new space and getting the server up and running so you can deliver your work,” he says. “I don’t know how many people would have planned for what we’ve gone through.”
Like others in his sector, Mould made the decision to move into virtual experiences, to try and generate some revenue for the business by the end of the year. “We took our time to work out how we could do some things that were a bit deeper and more meaningful,” he explains. The result was a new digital hybrid platform blending live elements with a virtual experience, which allowed the company to run two events for clients in the fourth quarter of 2020.
“We played the long game and we’re definitely seeing the benefits of that now. People still need to do pan-European or global events, but they know people can’t travel,” he says.
Taking a long-term view, as opposed to just focusing on getting through the immediate crisis period, is crucial to prepare for any bumps on the road to recovery. “You have to make the assumption that you will have a business coming out of this and at some point the world will return to normal,” says Mike Wroe, former chief financial officer of Just Eat and now non-executive director for businesses such as events company JLLive.
He predicts the events industry will see a flurry of activity in 2022, to make up for the lost trade and with customers ready to spend money. “People forget that risk works both ways; there’s risk on the positive side. There’ll be, potentially, a massive uplift in our industry. We have to be really careful about whether we can deliver that,” says Wroe.
With many supplier businesses to the events sector having folded, and freelance producers and technicians forced to find work elsewhere, there is a risk organisers could struggle to find the skilled people and necessary equipment to run their event.
“I think relationships will be absolutely critical as we come out of this,” says Wroe. “In terms of risk management, relationships are massively underrated; make sure you keep in touch with people.”
Taking a financial risk
According to Claire Fennelow, executive director of industry group the Event and Visual Communication Association (EVCOM), many of those in her sector who have gone out of business in 2020 will have done so due to the bad luck of investing in their growth at the wrong time and being left exposed financially when the crisis hit.
“Companies go bust from lack of cash, not lack of profits or hard work,” Wroe adds. But even though the pandemic has punished those who overstretched themselves, he doesn’t think it’s likely to make much difference to attitudes towards taking on finance. “People tend to have short memories. At the moment, finance is frighteningly available and it’s cheap,” he says.
Fennelow says that of the EVCOM members – businesses in the corporate events sector – that have done well during 2020, many had done so due to the resources at their disposal, both the range of technical expertise among staff and assets such as studio space. In the case of smaller operations, she says, it was sometimes the necessity of pivoting to something else completely.
One thing success stories have in common is quick decision-making. Wroe, who has seen three major economic downturns in his career before COVID-19, says: “Speed is absolutely of the essence in terms of making decisions; make good decisions, communicate them well and get on with them.” This is perhaps the most important attribute for senior executives to cultivate in themselves, for the good times and the bad.
The ground-breaking CEO Genome project, which assessed 17,000 C-suite executives, including more than 2,000 CEOs over the course of a decade, found that among the most important attributes for senior executives were decisiveness and adaptability. The ability to make a decision quickly, even if it turned out to be the wrong one, and communicate it well was a far more reliable indicator of success than, say, academic background. Likewise, the research found senior executives who excel at adapting are 6.7 times more likely to succeed.
For Mould, the setbacks of last year have “opened our minds to what we can do as a business”. XYZ has now started offering more knowledge-based services to its clients, using expertise among the team in design, and reaching specific demographics.
“That is really valuable to brands, but we’ve never thought of using it or selling it as a separate thing,” he says. “It’s certainly increased our capabilities and our offering, which is a positive you wouldn’t have thought would come out of eight months of inactivity as a business.”