Without falling into excessive optimism either, Loida Primo, entrepreneur who owns Laxy mattresses, lecturer, executive mentor and author, is a firm defender of the need to avoid the opposite, defeatism. In a reflection on the psychological aspect of management in the midst of a situation as uncertain as the one caused by the pandemic, he deals with the different keys to take into account.
After a severe economic crisis, the pandemic arrived when some parts of society had not even recovered from the previous blow. In what situation would you say that entrepreneurs were when the Covid crisis broke out?
We were in a process of recovery from the previous crisis and adaptation. At the level of business awareness we were already mired in a kind of uncertainty, with digitization increasingly present. Companies were taking a first step towards digitization by wondering how to tackle it, planning to go step by step, but they weren’t expecting to do it all at once. No businessman or entrepreneur imagined that such an adverse situation was going to paralyze us. I have experienced many types of crisis, but not one that forces you to paralyze your business.
What situation are they in now?
Economically, it is a bleak scenario for some sectors. We are experiencing a palpable and devastating crisis, judging by the unemployment and economic data. There are sectors, such as hospitality or tourism, which are in the throes of a debacle and remain waiting for European funds. However, there are others, such as supermarkets or the pharmacist, who have also caught them offside, but for the opposite reason, because they have seen a strong increase in their sales. There is a growing disparity between broken sectors and booming ones where new opportunities arise.
How to act when almost everything you had planned is going to waste?
I think you have to try to make a difference. Look for business opportunities, start new lines. We are in a moment of change. If the Covid has shown something, it is the need for the boss not only to be a boss, but to evolve into being a leader. Organizations need to be more humanized than ever and listen to their greatest asset, talent, so that, once they have captured it, they can retain it. Employees seek to be heard and recognized for who they are, not just what they are doing.
How do you know if it’s time to throw in the towel and close up?
It depends on each company. In 2008 I had to close part of my business structures and it cost me a lot. It is difficult, especially when there are families at stake and it is an external reason such as that crisis was. I was hoping to get financing and the banks were not giving at that time. I had to close the production part and look for a lateral solution, outsource production with a 70% drop in sales. In large companies, they can afford to wait, but in the case of the small entrepreneur, the sooner the decision is made on the outcome, the better. If your income statement is completely collapsed, do not go into debt until you can breathe, because then the snowball effect is enormous and what is a business closure can become a closure of life.
When did you realize that you had to close?
When I saw that I could endanger my brothers and the family heritage. My father told me to take care of the estate and my brothers, who are not involved in the business. I looked for my solution, but each company must find its own. It is very difficult to live, but you can get out of it. Success is for the most part attitude, it is to get out of the complaint, and not only in professional life, but also in personal life.
Let’s talk about the relationship with the employees. Much has been discussed about the emotional salary and rewards that go beyond money. To what extent can you talk about this if the money wage is low or insufficient?
I do not have data on how many people feel well paid from an economic point of view. A key indicator to know if there is a problem from the point of view of remuneration is absenteeism. If the level is high, you need to see where the problem is. Surely a large percentage of the population would say that they are not satisfied with their salary.
Can an employee be required to commit to the company if the salary is insufficient?
Of course not. If a worker is going to work unsatisfied with his economic remuneration, the employer must address that aspect. If at that point the company really can’t, it should explain and negotiate. A worker dissatisfied with his salary is not going to work 100% in other aspects because he has that gap. I believe that it can be resolved through effective communication in which the leader can explain what is happening and the employee has the confidence to express his dissatisfaction and that if he does not perform better it is because he does not charge enough.
What is the biggest obstacle when undertaking?
The fear. Factor number one is fear of failure. They worry the financial situation, the banking one, the economic one or the taxes. But deep down they are still fears. Entrepreneurship is like being a father or a mother. When is the best time for it? We do not have to be a father or a mother, just as we do not have to undertake. First you have to see if you really want to undertake or if it is an idea that they put us from outside. And then, to verify that this business idea can be viable, that it does not have to be something totally revolutionary, because otherwise we would all be Steve Jobs. If you start looking for all the cons, you will get loads of it. There are decisions that no one can tell you when it is time.
What advice would you give to someone from abroad who wants to start a business in Spain?
It depends on the business you want to drive. You must first assess whether there are opportunities for your business in this country. You not only have to look at the economic situation of the country in general, but the viability of the project in particular. Second, you have to look for the best possible work team, with people who really believe in the project. No business project works without a good team. Committed people are needed who feel valued and heard. The Covid has highlighted this.