Over the course of the pandemic, treasurers have demonstrated that diligence, patience but above all agility have been fundamental to responding to challenging situations. Andy Ransom, CEO of Rentokil Initial and a keynote speaker at next month’s ACT Annual Conference, tells The Treasurer about the qualities and performance of treasury and the wider workforce that have impressed him over the past year.
What qualities have you observed and admired within the treasury profession and in your own workforce?
I was impressed by the speed with which Rentokil Initial and its treasury function reacted to the rapidly changing environment at the start of the pandemic. The focus was very much on ensuring the organisation had sufficient liquidity to continue to operate under all potential scenarios. The treasury team understood what was required and took decisive action. The revolving credit facility was drawn down in full. As Rentokil Initial did not have a commercial paper programme to enable it to draw on the Bank of England’s Covid Corporate Financing Facility, the treasurer turned that around in a week and Rentokil Initial was one of the first corporates to draw on the facility.
The team also had to ensure that each of our 80-plus countries had sufficient liquidity and set up a 13-week cash-flow forecast to enable us to monitor funding needs. One of the key responsibilities of the treasury function is to manage relationships with our banking partners, advisers and rating agencies. Working on that prior to the pandemic has paid off over the past year. Keeping in close contact with these key relationships meant that we were well supported throughout.
Recent Association of Corporate Treasurers (ACT) research indicates that treasurers are riding high in terms of being recognised as strategic business partners within their organisations. Does that tally with your experience and why do you think that is the case?
I think, since the 2008 financial crisis treasurers have been seen as strategic business partners. Their strategic influence comes to the fore during turbulent times like the current pandemic. The requirement to closely manage the relationships with providers of debt funding has and remains of great importance to the survival of organisations.
Within Rentokil Initial, the treasurer is an important business partner supporting the senior management team on strategic issues, such as our value-creating M&A programme. As CEO, I set the strategy and the CFO will set out the requirement for funding – and it’s the treasurer’s responsibility to provide the best solution for the organisation.
What features or events during the pandemic crisis have stood out to you in Rentokil Initial and why?
I think there were three Cs that stood out as key features of the pandemic: collaboration, communication and culture. And from these came the ability to act decisively.
The need for collaboration was a major feature of the pandemic. Despite disruption from the COVID-19 crisis, we grew revenue, profit and cash this year. This has only been achieved because of a massive collaborative effort from all our colleagues across the group to protect the business during the pandemic.
Clarity of communication was vital to take our stakeholders with us. We introduced a consistent approach based on three phases – managing the crisis phase, the recovery phase, which we entered in the second half of the year, and the strategic opportunities phase, which came from the changes in a post-pandemic world, such as the massive importance now given to hygiene.
Finally, the right culture was an essential enabler to allow us to act at speed. We had to take some very tough decisions during the crisis phase, but because everyone was in this together, we were able to get very high levels of support and commitment. Equally we were able to introduce new disinfection services across 60 countries and train 7,000 colleagues in just four weeks. That agility to roll out at speed generated £225m of additional revenues in 2020.
It’s so important to embrace and confront a crisis – not just to batten down the hatches or simply adjust to the new status quo, but to positively and proactively get on the front foot and to pivot very, very fast.
What has the pandemic made possible, in terms of – for instance – broader, more innovative thinking? What opportunities has it brought your company and the wider business world?
From the start of the crisis phase we undertook two executive board meetings each week – which we extended to bring in a wider range of operational and specialist skills. The first meeting was all about managing the crisis; the second was focused on taking every opportunity.
From this second meeting came the launch and rollout of disinfection services. From offering the service in a small UK-based business, we were able to pivot at speed – sharing best practices across 60 countries, developing training and standard operating procedures, building sales capability and deploying at scale. We were able to support many high-profile customers to protect their people and customers – helping supermarkets to stay open after a case of COVID-19 had been identified in a store through to protecting people on public transport, where in Paris we undertook more than a million disinfection treatments across its network.
More broadly, we see clear opportunities in digital, with the need for more remote monitoring and also the importance of trust. Post pandemic, people will want to associate with brands they trust and which act responsibly.
Finally, of course, the most significant opportunity the pandemic has brought to our company is the change in perception and need for hygiene services – from a relatively low-interest topic, today it is probably one of the most important categories in the world. Initial Hygiene is the world’s leading hygiene services company, so the opportunity is significant. Last year we delivered 17 times the level of hand soap and sanitiser than the prior year, and what we’re seeing now is that organisations from companies to schools and retailers to transport want hygiene everywhere.
As a frontline business, what have been the practical, day-to-day impacts on Rentokil Initial? How has your workforce responded?
Firstly, our colleagues have responded magnificently and our values of service, relationships and teamwork really came to the fore.
Safety is always our first priority – but with the pandemic, clearly we needed to create and implement new operating procedures and for those colleagues working in disinfection to be in PPE from head to toe as they entered a building. Despite this, we had a record year for safety with our Lost Time Accident rate improving by 26%. That’s pretty remarkable and a tribute to how colleagues responded.
At the height of the crisis, in April 2020, around 11% of our customer premises were in temporary lockdown, improving during the year to 1.8% by December. This meant that we changed many roles and moved many colleagues into disinfection services, either full-time or part-time, in addition to existing roles in pest control and hygiene.
Colleagues also used the pandemic to undertake more training. We delivered a 77% increase in training with 3.2 million content views on U+ (our in-house ‘university’) in areas such as new safety protocols and remote working. We also saw a significant increase in colleague retention – now approaching 90% – and an increase of around 80% in visits to our careers portal.
For our colleagues in functional roles, the biggest practical change has been working from home but we were well prepared, as we were already one of the largest users in the world of Google video calling ‘hangouts’. Home-based teams were very effective with, for instance, record levels of cash collection, and for some roles we’re now moving to hybrid contracts.
Overall, our success through the pandemic has been a tribute to our colleagues. The response of our 44,500 colleagues around the world has been nothing short of amazing.
Andy Ransom has been CEO of Rentokil Initial since 2013 and joined the company in 2008. Prior to that he spent 22 years at ICI in roles in the UK, US and Canada
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