Pushing through today’s ‘red-light-green-light’ business jam

Business was great. The economy was humming. Sales were at all-time highs. Then the pandemic hit.

“Our business pretty much dropped 80 percent across the board,” said Dave Anderson, president of Brand RPM, a Charlotte-based company that produces apparel and merchandise for corporations and athletic teams. 

In late March, most of the nation’s governors issued stay-at-home orders, and mandated all businesses deemed “nonessential” to shut down in an attempt to slow the spread of the novel coronavirus, which by early June had already killed more than 110,000 Americans.

The shutdowns and social-distancing protocols arguably saved lives and prevented numerous hospital intensive care units from being overrun with COVID-19 patients. But those measures have come at a steep cost. 

More than 21 million people in the United States were still out of work in early June. The national unemployment rose to about 13 percent by late May, a figure not seen since the Great Depression of the 1930s. The country has been officially in recession – since February – and businesses are struggling. Some may not recover.

While weathering the economic storm, some business leaders have deftly adapted their companies to the new reality, repositioning their organizations for growth and charting new paths for a post-pandemic future. Legatus magazine spoke with two Legates who lead companies, one small and one large, to see how the pandemic has changed those businesses, both in the short-term and over the long haul.

Furloughs, pay cuts, new offerings

 Anderson, the president of Legatus’ Charlotte Chapter, said the first three months of 2020 were “the biggest months” ever for his company of 110 full-time staff employees. But as the pandemic hit the United States in earnest, Anderson knew he had to act quickly.

 “The first thing we did was furlough 10 percent of our staff,” said Anderson, who added that everyone else in the company took a 50-percent pay cut. Those moves helped to prevent layoffs.

 Anderson and his team also examined their cash flow and consulted computer models to see what they could expect with the virus-ravaged economy over the next six to nine months.

 “As a small business, if you don’t have cash, you’re out of business,” Anderson said.

 Brand RPM pivoted from its core apparel and branded merchandise business to becoming a large provider of personal protective equipment – face coverings, hand sanitizers, gloves, and disinfectant wipes – to companies such as Lowe’s, which purchased two million masks in April.

 “Funny enough, we had our largest revenue month in our company’s entire 12-year history in April,” Anderson said. “And probably 90 percent of it, I never touched; I just droppedshipped masks from the suppliers to the customers.” 

Anderson said Brand RPM is looking to be a reliable source of “PPE” for companies as they reopen across the country amid their states’ loosening restrictions. Anderson expects the demand for masks, hand sanitizers, and gloves to be steady over the next year to 18 months.

 “We think our overall numbers for the second half of the year won’t be what they were in the past, but we hope that with the pivot to PPE, it’ll help us make up some of the lost ground,” said Anderson, who has already started to bring back some of the furloughed staff employees full time.

 Working from home … works

 One lasting effect that Anderson expects the pandemic to have will be more companies such as Brand RPM encouraging their employees to work from home.

“We were already doing teleconferencing and videoconferencing,” Anderson said. “I think that will be a more common theme moving forward as more companies see that working from home really works.”

By mid-October, Anderson hopes his company will have regained its equilibrium, though he added that “everything is a moving target.”

In the meantime, he has found a valuable resource in his fellow Legates and other CEOs with whom he can bounce off ideas and ask questions. 

“We’re all in this together,” Anderson said.

 From millions monthly, to zero

Pat Molyneaux grew his fourth-generation family flooring business, Molyneaux, into a thriving enterprise with 12 locations in Pennsylvania. But within a week of his state shutting down from coronavirus, Molyneaux suddenly had to lay off 95 percent of his employees.

“We went from making close to $2 million a month in revenue to zero,” said Molyneaux, a founding member of Legatus’ Pittsburgh Chapter.

“We grew this business in my 30 years here… and overnight it’s taken away,” Molyneaux said.

But that reality sparked a conversion of sorts as Molyneaux began to see that he had made the family business into an idol. Having a strong balance sheet and a successful enterprise had become the most important things in his life.

 For Molyneaux, that epiphany cast the first ten verses of 2 Corinthians 12 into sharper focus. In those verses, St. Paul speaks of being given a thorn in the flesh to keep him humble, and how God’s power is made perfect in someone’s weaknesses.

 “For a co-owner and member of the executive team, that is the verse for these times,” Molyneaux said. “Whether it’s as a pastor, a bishop, or whether it’s as a C-level executive, how can we become both strong and weak?”

 Molyneaux identifies strength as having the capacity for meaningful impact, and weakness as vulnerability.

 Grace makes business stronger

“After I repented and hit that point of deeper conversion,” Molyneaux said, “I feel like the Lord was opening my mind and giving me the grace of more creativity around what we needed to do to use this opportunity to make the business stronger. I feel like that was a grace.” 

Molyneaux said his company has started to change its primary business model from showrooms in brick-and mortar buildings to a “shop from home” approach where a design consultant visits the customer at home. 

“That’s the way the industry is going. People want that convenience. Most of our shopat-home appointments are through the roof this month,” said Molyneaux, who added that in-store appointments were already on the decline but that the pandemic accelerated that trend. 

Molyneaux said this year also provided an opportunity for his company to move into kitchen remodeling. Those changes may not have been possible before quarantines and social distancing forced him to reexamine his approach to business.

“As human beings, idol worship is a real temptation,” Molyneaux said. “I think often our businesses, what we accumulate through our businesses, can become idols. The rhythms and processes of work can become idols. This gave us a chance to expose those idols.”

 BRIAN FRAGA is a Legatus magazine staff writer.