What CEOs of LSPs Are Thinking about COVID-19 and Its Effects
Over the last 10 days CSA Research conducted several online group meetings with its various Leadership Councils and LSP research members, mainly CEOs of LSPs of all sizes. This executive brief summarizes and reports the themes, topics, and questions shared by members during these sessions. We arranged their input in four groups: Uncertainty, Business Planning, Operations, and The View Ahead.
We will continue updating as events unfold. This information from our CEO meetings is current as of today’s date.
You may send your comments or feedback to Hélène Pielmeier, Director of CSA Research's LSP Service.
- CEOs are communicating transparently with their staff, vendors, and clients about the crisis and its business impact. But, they themselves are unclear about what will happen next.
- Even the most seasoned CEOs conveyed that this crisis is so different from past viral outbreaks, natural disasters, wars, and economic downturns that their past experience won’t be a great guide to getting through this situation.
- Employees are most worried about the uncertainty of the length of the crisis, the healthcare system, whether they or a loved will get the virus, and whether they’ll still have a job in a week or a month – not necessarily in that order.
- Based on China’s experience over the last few months, several CEOs with operations in China and Asia anticipate the COVID-19 impact to last well into summer – depending on the country and its level of economic and social response.
- Every leader we heard from, regardless of country or region, is very concerned about the lack of political leadership during this crisis. France, Spain, and perhaps even the United Kingdom may help pay wages for a couple of months alleviating the pressure on LSPs’ cash flows.
- CEOs are paying close attention to cash and expenses. They expect clients to conserve cash just as they are.
- Larger LSPs are turning to their lines of credit now, not that they need them yet, but just to have the cash in hand in case demand dries up.
- Every CEO, regardless of the size of their business, mentioned cash management as a vital issue and is developing scenarios on how long and how much they can keep paying staff and other vital expenses.
- Most executives noted that larger translation clients have not shown much slowdown in ordering and payment as of now, while some smaller clients are starting to reduce orders or payments.
- Interpreting-centric vendors are already hurting significantly with the loss of on-site and conference interpreting.
- All in-person services continue to be the most immediately and heavily affected businesses.
- As difficult as the subject may be to deal with, CEOs must think about succession – for example, who would succeed them and other key managers in the worst-case scenario?
- LSPs with an in-person interpreting focus struggle to compete against specialists with a remote focus. Those who have a remote capability are managing to convert more customers to phone or video modalities than they could in the past.
- The move to 100% remote working has been completed by most LSPs we’ve spoken to, but a few LSPs have kept key people on site for operational reasons.
- Employees are working at home but some are overwhelmed with advice from their companies about how to work differently and efficiently. This adjustment raises concerns about productivity, team building, and maintaining employee morale.
- A few LSPs are experiencing a boost in demand in COVID-19 related communications, but they realize the effects on revenue may be temporary.
- The crisis and requirement to do things remotely is helping LSPs sell remote interpreting solutions that clients and prospects were previously skeptical about.
- LSPs are starting to experience issues with cancellation clauses with some clients or clients claiming force majeure or asking for lengthier accounts receivable collection.
- Many providers, including smaller LSPs, have contingency plans in place, although their depth and strength varies.
- Some LSPs are paying contractors on shorter terms to help them while others are delaying payments.
The View Ahead
- Most CEOs expressed concern about the question of mental health – both their own and their employees – in a time of crisis. The combination of uncertainty and changes in their working routines puts additional pressure on CEOs and the management teams that have to keep the businesses running and motivate teams in these new settings.
- A few CEOs mentioned the need to start developing plans for when COVID-19 is behind us, a couple told us they plan to advance initiatives and projects that were on hold, but most are highly focused on managing the crisis at hand.
- Some LSPs have implemented team-driven conversations. One example is a morning coffee open video chat where staff can share how things are going. The goal is to maintain the same community values as they had before the crisis.
- Some leaders see a silver lining in this crisis. Unlike natural disasters, the COVID-19 crisis will end with the infrastructure intact – nothing physical will have been destroyed, the communications systems and roads will be usable, and everyone will have the means to get back to work.
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