Enterprise Times caught up with Jonathan Richards, CEO of Breathe in late 2020. Breathe is now part of the Australian listed company ELMO Software. When Enterprise Times last spoke to Richards, he was looking forward to a 2020 and possible funding growth year.
The first question Enterprise Times asked was why they sold Breathe?
Richards replied: “At the beginning of 2020 before any kind of lockdown, I was talking with our existing investors and just looking where the future was. We’d had another really good year of growth and had started to plan out 21/22 and beyond. We had lots of far-ranging conversations about how we take the business forward and keep the growth going.
“At the same time I was approached by Danny Lessem, the CEO of ELMO saying, ‘We like what you guys are doing, be great to have a chat’. Over the space of a couple of calls, we built a good relationship. I was able to share where we were going. He was able to share where he was going. Just over that period, I came to a strong feeling that they would be a good match. They would help us achieve many of the plans that I’d already been starting to put together for the investors.
“Then, lockdown came and put everything on hold for a little bit. We kept the conversation going, and it felt a very right thing to do. Over two or three months, we managed to find that there was a lot in it for both companies.”
How did Breathe react to COVID?
“We were one of the lucky ones, we are built in the cloud. Everything we do as an organisation was already ready for working from home. We’d introduced flexible working long ago. We decided to do a trial day when we saw that lockdown was on the cards, about a week before the government announced it. We said, right, next Tuesday, everybody will be work from home and let’s see how it goes. Come the end of Tuesday, we picked up on any feedback and decided we were just going to stay at home. We knew it was coming. Then a week later, the lockdown was called.
“We’ve got everybody working from home. Customers are being looked after, new accounts are being signed, and dev work continues. We’ve been very lucky in that perspective. Where does luck begin and hard work end or vice versa? There’s no taking it for granted; there’s a lot of work to do to keep the team together and culturally happy and fit.”
Did you experience any attrition from customers?
“As a SaaS business CEO selling into the SME space, churn is always high on my watch list. We put together a COVID impact plan in that first week. It looked a very real possibility that attrition would go very high. Equally, in that same plan, we planned to build in functionality to help customers with furlough and flexible working. Churn hasn’t increased, although we’ve seen the reasons for churn changing. We’re seeing the types of reasons for churn as heading towards companies not being around, companies downsizing and no longer able to afford systems. For me, that shows just how hard the team have worked to make Breathe relevant and to support customers.”
On being part of ELMO
How different is it being an ELMO-nian rather than a Breathe-r?
“It’s still early days, and we’re still in the integration stage. As we get to know each other, both companies share a lot of cultural values. At Breathe, we’re all about evangelising and living the idea of people first. People first is a term that appears in an ELMO’s way of working and thinking. From that perspective, there’s a lot of shared ground, which really helped with the transition.
“My brief from the board at ELMO is to carry on and accelerate what we’re doing. They’re very appreciative of the model that we’ve created, how we’re going out into the marketplace and the success we’ve had. They are saying: ‘We don’t want you to be a mini ELMO, we want you to be a bigger Breathe.’ That’s a really strong remit for us to carry on doing what we are. There is change because we have become part of a listed company. They are a very agile, a very thoughtful organisation for their size and that’s helped. “
Has your role changed now?
“My role changed the moment we decided that everybody was working from home, that COVID was a big thing and going to affect the world. I moved my role from 50% strategic looking forward to one much more back in the organisation. A much more of a cultural role just to try and successfully move the team to online working. That started to change as the team settled and we got into a good working cadence. Then the takeover came, and yes, my role has changed. I have a strong dua role with a very clear mandate to grow the UK business. I have an equally strong brief to work with the greater company to start taking Breathe out globally.”
On Breathe in Australia
When would you like to launch Breathe in Australia?
“We’re working on dates at the moment. It’s moving very fast. As I said earlier on, ELMO is very agile organisation. I would see Breathe launching into Australia, let’s say, end of Q1 beginning Q2 2021.”
Will you use similar routes to market as in the UK?
“Absolutely. It’s a model that works in the UK, and the Australian market is fundamentally the same. There’s different legislation, there are different cultural norms, but fundamentally, it’s the same.”
Won’t the partner network take some time to build though?
“It took time for us to build up the partner channel. We’re going to operate a direct channel and the partner channel in Aus. The direct channel, as we did here in the UK, will be in the lead. It’s important to build up a reputation with a customer base before you can start really attracting the partners in. But ELMO has a very strong presence in the HR space in Aus, they’ve got good links into the Australian equivalent of the CIPD. We’re going to take what we’ve learned in building the partner base in the UK, and that will enable us to build it faster in Aus.”
On Elmo in the UK
Are you looking to launch any ELMO products in the UK?
“There are two facets to that. We’re looking to bring ELMO products into the Breathe suite. There are ways that we can use existing technology in the ELMO family of products that we can adapt and make fit for purpose into the SME space. That will happen pretty quickly.
“The second facet to that is the different question about are we going to bring the ELMO product, the mid-market product into the UK. That’s a bit of a longer-term plan at the moment. It’s fair to say it will happen, but no real timeframes on that.”
In terms of investment in the UK, has ELMO invested in UK operation to help accelerate growth?
“It’s very early days. We’re just over a month in but yes, absolutely. It’s hampered a little bit by the strange times that we’re in. There is a strong investment in the UK. We’re seeing it at the moment from the extra resource that’s Aus based. There’s a lot more to come with a really strong remit to grow the UK business.”
Breathe announced Rota Management amid the pandemic, what has happened with that product?
“It’s a challenging time to roll out a rota product, with the typical target audience that we’ve gone after being largely furloughed, and, now furloughed again. It’s a very strong product for us and it’s an area that we really want to become strong in. We’re really committed to it.
“We don’t want to use all our firepower too early on that one. So we’re biding our time. We’ve got the resources, but it’s not quite the right time at the moment. We’ve got customers using it who are using it for free. That’s a good place to be, but we’ll decide when to push the button on a big public launch of that.”
What about the wider product roadmap?
“From a brief perspective, we were very strong on people-related tools. We’re looking at all different areas of how we can help companies with their people-related admin. That ranges from how we can make the core HR product even more relevant and useful to fill in some gaps for companies where rotas or scheduling or time and attendance is there, all the way through into payroll? My remit for Breathe is if we can find areas where we believe small businesses need help around people management, then that’s something that we will look to get into.”
What are your challenges?
“Looking after the team. As any business owner who has got a team working from home in the second lockdown, we changed a lot to get everybody working from home at the beginning of the first lockdown. As that lockdown progressed, there was a constant challenge to keep the team healthy and active. Then came the challenge of, how do we get back to the office? It really is focusing on the team and if I can focus my energy on keeping the team happy, then I know they’re working hard to keep the customer happy.”
On mental health during lockdown
Do you think there’s an evolution to business leaders having to be more aware of individuals in their team? Because especially in lockdown, individual circumstances are potentially more important to the decisions made than in an office environment where it is better to treat people equitably.
“I’m a huge believer in the one to one contact, and that has never been more important than it is now. Yes, a team needs to be treated equitably, but they also need to be treated as a group of individuals. With whole companies working remotely, it’s easy for people to be lost or drop out of sight. Maybe the camera is not coming on sometimes or from not attending team meetings, then that’s a massive warning sign that something might not be right. That works at every leader level. I clearly don’t have one-to-ones with everybody in the company. At our team leader level, they have one-to-ones with everybody.
“That’s where the relationship works. You can stare at somebody on a Zoom meeting or a Teams meeting. But you’ve got to see in their eyes, whether they’re looking good. And they’ve got to trust you to be able to say, I need help.
“Personal relationships with everybody in an organisation has always been important, but now it’s essential. There’s a huge amount of press around at the moment. I do strongly believe we’re in, or certainly heading into a mental health crisis. I don’t use the word crisis very often, but it’s something very serious for us as a country, and certainly for us as business leaders to try and get to grips with.”
The book question
What is the latest business book you read?
“I’m just looking at my business bookshelf. Oh, It was Raising the Bar. The story of Clif Bar, the energy snack. A really fascinating story. It’s quite a hard book to get. I had to buy it secondhand in the end.“