Case study july 2012 illustrative script 2 ICAEW

Under ‘Financial performance and bonus complaint’, the candidate begins by summarising LL’s overall revenue improvement and then succinctly identifying the extent of, and reasons for, th

SECOND ILLUSTRATIVE SCRIPT AND EXAMINERS’ COMMENTS

The commentary below follows the order and numbering of the script, with reference to the

topics in the marking key It should be read in conjunction with the review of the First Illustrative Script and full Examiners’ Report for this session

Examiners’ comments – overview

This script failed the exam The candidate has included some promising cameos throughout but has not been able to maintain this quality consistently As a result, (s)he has not achieved

sufficient passing grades under each requirement to earn an overall pass The length of each

section and completeness of the executive summary show that the four hours were well planned – something with which failing candidates often struggle – but, as indicated below, some of this

time could perhaps have been better directed, notably with conclusions and recommendations

at each requirement that were more commercial and more closely derived from the foregoing

commentary

Terms of reference and executive summary

The script opens with appropriate terms of reference and disclaimers This is followed by the

executive summary, which comprises an introduction and a section for each of the three main

requirements

Under ‘Financial performance and bonus complaint’, the candidate begins by summarising LL’s overall revenue improvement and then succinctly identifying the extent of, and reasons for, the

changes in each salon, followed by a summary of recommendations There is then a similar

paragraph on gross profit, a vaguer section on KPD and a closing paragraph concluding on Irina Yu’s grievances Thus the key aspects of Requirement 1 have all been addressed

In connection with the Wallsend fire, the candidate has reproduced the lost profit figure,

accompanied by the comment “This is encouraging as it is in keeping with the terms of the

insurance policy” – a somewhat circular argument In the next paragraph, unlike many

candidates, (s)he has presented a concise section querying the assumptions underlying the

claim and then finally a reasonable précis of the practical staffing and related issues

Lastly, for Requirement 3, the candidate has again brought forward the principal points from the body of the report, with a paragraph each on the strategic, operational and ethical aspects

Overall, the executive summary has distilled the key findings from the main report, albeit that

some of these are misguided An irritating feature is the constant use of “It was concluded ”

and “it was recommended ”, as though the main report is a separate historical document rather than one of which the executive summary forms an integral part! Another distraction is the

preoccupation with LL’s bonus scheme, which was a central area for Requirement 1 but no

more than tangential to the other requirements In addition, in both the summary and the report

as a whole the candidate has confusingly mixed £ and £000 figures in the same sentence

Comparison of salon performance [Requirement 1]

The section begins with a paragraph headed ‘Professional scepticism’, which perpetuates the

error of questioning the basis of LL’s management accounts The examiners have repeatedly

stated in their reports on recent Case Study sessions that such questioning is inappropriate

The candidate goes on to analyse revenue, both overall (linked to industry growth estimates)

and then by salon There are paragraphs for each salon on services and products, making good use of the facts provided in the AI at Exhibit 6 – together with some rather unrealistic ideas,

such as offering homework areas at Gateshead For Wallsend, the candidate makes the

categorical statement that service revenue has fallen because of an increase in male clients

This is not stated anywhere in the case material and it is one of numerous possible reasons for

the decline The candidate makes a series of recommendations for improvements at Wallsend,

failing to recognise that these cannot be implemented until the salon reopens after the fire

Gross profit is similarly analysed first overall and then by salon, with changes in £ and % terms

as well as movements in the gross margin However, the candidate can make only broad

statements here as (s)he has not separately calculated the margins for the two revenue

streams There is again an unworkable recommendation for Wallsend ( “formalise the discount

policy and only offer to the salon’s best 10 customers”)

Under KPD, the discussion – and appendix on which it is based (see below) – is restricted to the data itself (appointment and product numbers), and thus there is no developed analysis in such areas as revenue per stylist or products sold per salon The growth in appointment numbers is

rationalised as being “primarily led by Gateshead’s success through attracting young mothers” –

another speculative comment not backed up by hard evidence

Although providing several paragraphs about the bonus scheme issues, the candidate has not

gone into the detail of the individual adjustments or produced any calculations In addition, some

of the suggestions made ( “the company is looking into the matter and will respond shortly” and

“ask salon managers to submit a proposal of adjustments prior to declaring the bonus”) would

serve only to aggravate the current problem

The candidate reaches a conclusion on overall financial performance, followed by a series of

recommendations which do not really deal with the key issues arising ( “focus on laser hair

removal” is particularly intriguing as it has not been mentioned previously) Here too, the

candidate writes about the future of Wallsend as though blissfully unaware of the fire

In summary, while the headings hierarchy suggests a thorough section, the underlying analysis

is superficial in too many places to earn adequate grades

Evaluation of proposed discount [Requirement 2]

The section starts with an overview containing the loss figure (cross-referenced to the

calculation at Appendix 2 – see below), before going on to query the underlying assumptions –

something that many candidates completely failed to do This covers the discount take-up rate;

length of closure period; and seasonality (It also cleverly raises a possible ambiguity in the

gross profit percentage, but there does not seem to be any link between this and the related

part of the calculation at Appendix 2.) The candidate could have done better still here by

querying other dubious aspects of the data provided, such as the likely product spend; impact

on Wallsend’s business once it does eventually reopen; and level of the discount itself

In discussing staffing issues, the candidate has made some pertinent points about capacity and the willingness of staff to travel to other salons, but has not developed these further to consider

the costs of retaining such staff (or of losing them) or the administration of the discount scheme Instead, the candidate has focused on more peripheral issues such as health & safety and the

bonus scheme In general, the discussion here is too brief to secure enough passing grades

As for Requirement 1, the conclusions and recommendations lack a commercial grounding and

do little more than restate the facts of the case ( “ensure Newcastle and Gateshead are nor

adversely affected by the Wallsend fire”; “makes an urgent claim for business interruption” )

Overall, despite an apparently complete structure, the section is insufficiently broad or deep

Assessment of new salon opportunity [Requirement 3]

The initial identification and analysis of the issues at Requirement 3 is good, but poor grades

were achieved under ‘Applying Judgement’ and ‘Conclusions and Recommendations’ Thus the candidate has not considered the plausibility of the developer’s claims, the intentions of Sullivan

or the suitability of Indigo’s products Instead, the text is characterised by sweeping statements

such as “clients are put off by the big brand connotations” and “in a shopping mall where people are more likely to witness the poor take-up”

In dealing with the operational aspects, the candidate has again become sidetracked by the

bonus scheme, as though this is the key issue facing LL at present and something that keeps all its stylists awake at night The candidate could have instead addressed more germane matters

such as the distance between York and LL’s existing salons or the practicalities of the proposed arrangement with Indigo (eg fitting-out of the salon, precise scope of the IT upgrade) There is

also no broad financial assessment, which could have been done with illustrative figures based

on the expected fall in margins and the normal cost of refurbishing a salon

On ethics, the script covers the two principal issues – proximity to Marie and tanning – and

comes up with a creative solution that links them: team up with Marie to provide the beauty

services However, the candidate does not articulate all relevant points, such as the fact that

any restrictive covenants with Marie would now have lapsed or that there are legal restrictions

on sunbeds Here once more there is a digression away from the main thrust of the case, this

time taking issue with the shopping mall developer’s marketing strategy (“LL would look like a

promoter of a mentally destabilising phenomenon for girls LL should promote the importance of all beauty through a YouTube campaign to edge away from the negative associations”)

The section ends with a vague conclusion from which the reader cannot easily work out what

the candidate is proposing, followed yet again by a set of recommendations that do not go the

heart of the scenario

Thus once more, the candidate has used all the required headings here but without adequate

content under them

Overall paper: Appendices

The candidate has included two Appendices, one each for Requirements 1 and 2

Appendix 1 sets out clearly the movements (both £ and %) in revenue and gross profit A

significant omission is the failure to analyse gross profit by revenue stream In addition,

coverage of the KPD extends only to the data itself (product and appointment numbers), with no developed analysis Similarly, while there is a table of staff salaries, which could have been

used to discuss the bonus scheme in general terms, there is no calculation in relation to the

bonus scheme itself

In Appendix 2, the candidate has set out the calculations for the loss of gross profit, although

these are somewhat muddled (there is a lot of crossing out in the original manuscript), and it is

perhaps more by luck than by judgement that the final figure is within a sensible range In

particular, the candidate has:

 mistakenly applied seasonality factors to both parts of the calculation, not just the second;

 used the 25% discount instead of the net 75% rate;

 used one appointment instead of two when computing follow-on product sales; and

 produced a convoluted working for the gross profit margin rather than taking the percentage indicated by LL’s insurance policy

Overall paper: Report

As highlighted above, the script is well-structured It is also well-written but characterised on

occasion by glaring instances of tactlessness or inappropriate language ( “it could be deemed

that head office forced items such as inventory write-offs to avoid paying the bonus”; “ annoy

staff members at the other salon due to the increased likelihood of it receiving a bonus”.)

ILLUSTRATIVE SCRIPT

DRAFT REPORT

To The Board of Luvlox Limited Report covering a review of Luvlox Ltd’s financial performance

and the strategic options going forward

Prepared by: Baron Young Chartered Accountants (Ashley Franklin)

Date: 25 July 2012

1 TERMS OF REFERENCE

At the request of the Board of Directors of Luvlox Ltd (LL) we have prepared this report

The purpose of this report is to provide:

 Comparison of the performance of all three salons for 30 June 2012 against prior year and comments regarding issues raised

 Evaluation of 25% discount proposal to Wallsend customers during fire affected period, including

staffing commentary and assumptions

 Evaluation of Indigo proposal including strategic, operational and ethical aspects of it and its related

supply arrangements

DISCLAIMERS

This report has been prepared based on the information provided and material made available by LL and

no further due diligence work has been performed

This report has been prepared for the sole purpose and use of LL and we accept no liability for any

reliance placed on this by third parties

EXECUTIVE SUMMARY

Introduction

LL is a brand of three, five star rated (Good Salon Guide) Salons which has historically performed well

despite recessionary economic environment due to its strong brand image and high quality service

Recently, performance has been slightly hampered by the fire at Wallsend and LL are looking to submit a business interruption claim Going forward LL is also considering entering into a proposal with Indigo

Products

Financial performance and bonus complaint

Overall revenue had improved by £78,000 (6.4%) from £1,204k to £1,282k This was encouraging and

primarily due to service revenue improvement at Gateshead (12.5%) and product revenue improvement

at Newcastle (47%) Wallsend was the only cause for concern and it was recommended that LL focus on

this salon as it is already exposed to high local competition Other recommendations included maintaining innovative offerings such as the children’s play area at Wallsend, but overall given the recession the

company outperformed industry forecasts of 2.2%, which was pleasing

Gross profit overall increased by £323k (10.4%) from £3,078k to £3,401k, it was concluded that this is

encouraging but is largely due to a loss staff at Gateshead and improved product cross selling at

Newcastle Given we do not know the long-term impact of the lost staff members, key recommendations

included performing this analysis and maintain product selling training for staff members across the

company

Appointments were up overall through increased footfall at Gateshead and as a result it was

recommended that LL should continue seeking these types of opportunity

In response to the Newcastle manager complaint it was concluded that LL cannot enforce a penalty on

salons through decisions made at head office level eg stock write-off It was also suggested that staff

satisfaction is key to LL and as a result LL should award the bonus if applicable and going forward review the bonus calculation and stock levels at salons

Fire and resultant loss of gross profit

As a result of the fire, it was calculated that an expected loss of £331,000 would be incurred It was

concluded that this is encouraging as it is in keeping with the terms of the insurance policy and also

provides LL with some funds during an uncertain time It was recommended that LL makes an urgent

claim to curb any adverse impact

The calculation was based on a number of assumptions though it was concluded that the most pertinent

was that of the expected take up by Wallsend customers at 5,000 It was also discussed that seasonality

by salon is unknown but it would be appropriate to assume it was similar across the company It was

recommended that LL look into assumptions to avoid making a false insurance claim, when they get to

the point of claiming, as this may be deemed as unethical

There were a number of staff and other issues that arose as a result of the fire In our report we have

analysed the majority of these and concluded that the most pertinent was the inconvenience to Wallsend

staff Further to this the capacity at Newcastle and Gateshead may also be adversely affected It was

recommended that LL pays for taxis and other associated expenses for the Wallsend staff As well as

this, management should send an email to all staff highlighting the process and impact on bonuses

Proposal to open in shopping mall and indigo exclusivity

Overall it was concluded that LL should accept the proposal but on the basis of a few changes These

changes resulted from the review of strategic, operational and ethical implications which we concluded as follows:

Strategically the proposal would allow LL to expand cheaply given Indigo will pay for it as well as the fact

LL wanted to expand anyway, plans hampered by the fire at Wallsend It was concluded that it is not

entirely certain what impact it would have on the LL brand given they have never performed beauty

services before, further to this Indigo is an unknown quantity to the company yet they do operate with

Sullivan It was recommended the terms are adjusted so Indigo supply a different range of products to LL than Sullivan

Operationally it was concluded that the wider staff group will feel disillusioned by the proposal with

regards to growth rates and bonuses As well as this LL may continue stock trouble with Indigo being

overseas It was recommended LL holds an awayday to explain the proposal to staff as well as ask Indigo

to distribute from a UK based distribution centre

Ethical implications were key and the main conclusion stemmed from LL ensuring they are not perceived

to be linked to image consciousness Further to this the Indigo tie up would increase their carbon

footprint It was recommended LL launches a YouTube campaign and places fewer orders to reduce CO2 impact

FINANCIAL PERFORMANCE AND ISSUES REGARDING BONUS

For the benefit of the board we have reviewed the financial performance again the prior year equivalent

period All figures are derived from Appendix 1

Professional scepticism

LL does not employ a qualified accountant (Liz Newby is an experienced bookkeeper) to review the

management accounts There is a risk of potential adjustment or misstatement in the accounts

Revenue

Total revenue has increased by £297,000 (5.4%) from £5,481k to £5,778k in the year

This is encouraging as LL has exceeded the industry expected growth rate of 2.2% This has come as a

result of the individual performance in each salon which we have analysed below

Newcastle

Total service revenue at Newcastle has improved £78,000 (6.4%) from £1,204k to £1,282k in the year

This is as a result of the new stylists that were hired bringing in their own portfolios into the Newcastle

salon helping add to overall revenue The Newcastle salon has benefited from increased talent added

and as a result should look to continue to hire quality staff

Total product revenue has increased by £75,000 (47%) from £158k to £233k This has come as a result

of the upgraded signage as well as Newcastle staff receiving training on cross-selling This is

encouraging as Newcastle staff historically struggled to maintain product sales Going forward, Newcastle should continue training staff and encouraging them to use their expertise to sell products effectively

Gateshead

Total service revenue increased by £212k (12.5%) from £1,695k to £1,907k over the year This is a result

of the introduction of children’s play area attracting mothers This is encouraging as LL is seen to

accommodate customers with logistical difficulties, helping brand image LL should continue to appeal to

a wide range of customers and possibly look to offer homework areas for children with slightly older

children

Total product revenue has increased by £25k (6.3%) from £392k to £417k This is due to the continued

success of stocking well-known brands in the salon Gateshead should continue offering well selling

products and monitor changes in taste/fashion to ensure their range is always up to date

Wallsend

Total service revenue at Wallsend declined by £82,000 (4.6%) from £1,761k to £1,679k This is due to an increasing number of male customers which typically have cheaper haircuts This can be seen as the

numbers of appointments have remained almost static This is disappointing as Wallsend has not kept up with the rest of the company growth Going forward LL should look to offer discounts to ladies to

encourage a higher volume of sales from higher revenue cuts

Total product revenue fell by £11k from £271k to £260k This is as a result of the recession reducing

discretionary spending in the local area This is worrying as Wallsend has historically sold well and

displays a weakness in the staff’s ability to cross sell Going forward LL should train Wallsend staff to

sharpen their cross selling abilities

Gross profit

Overall gross profit has increased by £323,000 (10.4%) from £3,078k to £3,401k Gross margin has also

improved from 56.7% to £58.5% representing a squeeze in cost of sales

Newcastle gross profit has improved by 12.6% from £782,000 to £881k This is a result of increased

revenue as well as an increase in the number of products sold due to improved cross selling facility This

is a high margin stream and Newcastle should continue pursuing sales at minimum cost

Gateshead profit has improved remarkably by 21% (£25,000) from £392,000 to £417,000 This is

primarily due to the loss of one staff member reducing cost of sales This in itself is encouraging but it is

yet unknown what the long-term revenue impact of this would be LL should calculate the loss of current

recurring revenue and seek to replace the stylist

Wallsend gross profit reduced by £20,000 (1.7%) from £1,139k to £1,119k This is due to excessive

discounts being offered by staff on products This is worrying given the reputational affect the other

salons face as a result of higher prices LL should formalise the discount policy and only offer to the

salon’s best customers

Key performance data

On the whole the number of appointments grew by 4.6 from 114.8 to 119.4 This was primarily led by

Gateshead’s success through attracting young mothers LL should look to increase appointments by

specifically targeting high margin revenue streams such as women’s cuts eg promotions such as loyalty

cards

The number of products sold increased by 3.5 primarily led by better trained staff at Newcastle This is

encouraging as products are quicker sales than cuts and typically carry the same margins LL should look

to boost product revenue through potentially tying up with a well-known brand

Bonus complaint

Amanda should respond to the salon manager in questions and suggest the company is looking into the

matter and will respond shortly

A calculation should be performed analysing the items that were not in the control of the salon and

adjusted through the bonus calculation Not adjusting for these items would be unethical as it could be

deemed that head office forced items such as inventory write-offs to avoid paying the bonus This would

also be crippling to staff morale which is a key driver of LL’s success

LL should look to award Newcastle the bonus if the proposed adjustments result in a 10% rise in gross

profit Going forward LL should ask salon managers to submit a proposal of adjustments prior to declaring the bonus, so that any grey areas can be dealt with

Conclusion

Overall the company has performed well, this is particularly true in relative terms to Gateshead and

Newcastle as the latter has addressed areas that were previously flagged as weaknesses This shows

good management on behalf of the board However, Wallsend is a cause for concern given local

competition being so apparent

Recommendations

Further to the above recommendations, it was suggested that LL should:

 Assign a focus group on Wallsend to see how revenue and profit can be improved

 Monitor stock levels of products at all salons to prevent write-offs

 Make discounts less discretionary and cap annual allowance

 Focus on high margin items across stores Eg woman’s services such as laser hair removal

EXPECTED GROSS PROFIT LOSS

All figures discussed are derived from Appendix 2

As a result of the Wallsend fire the expected loss to gross profit was £331k This was calculated as per

the terms of the insurance policy

This provides a good revenue stream for LL during a time of disaster and is in keeping with the policy

terms of limiting the impact

Assumptions

In the calculation we have assumed that the client take up expectations of 5,000 and subsequent 80% /

50% recurring revenue is realistic This may not necessarily be the case and as a result would impact the calculation

Further to this we have assumed the accuracy of the closure period is also reliable It is possible that the

salon may be closed for longer in which case the numbers would be affected

We have also assumed the seasonality figures are constant across the salons, whilst we know they are

reflective of the company overall, and salon specific change would alter the calculation

As per the insurance policy it is unclear as to whether the salon gross profit percentage is to be used as

the company overall We have assumed the salon percentage is more applicable and thus have assumed

it to be appropriate

Staffing and other issues

From the relocation of staff and customers (at a discount), there is a risk the Newcastle and Gateshead

salons do not have the capacity to accommodate them This would overcrowd the salons and ruin the

ambience of the successful salons Should this be the case LL should look to hire temporary units for the

Wallsend activity

As a result of the relocation, staff may be unwilling to travel due to increased cost and travel time LL

should ensure that staff are adequately treated as they are key to the business It would be appropriate

for LL to provide taxis or reimbursement policies for all costs incurred as a result of the fire

It is possible that the fire may have been caused due to a breach of health and safety and / or poor

equipment This is particularly pertinent as LL has only recently paid £25,000 in legal settlement due to a

hairdryer LL should, as a matter of urgency, ensure all equipment at Newcastle and Gateshead is tested and receives adequate PAT certification

Staff at Newcastle and Gateshead may be disillusioned by the incorporation of Wallsend performance

impacting their bonus calculation This would affect their morale and impact quality LL should send a

letter to all staff clarifying that this will not be the case and ensure staff are aware that this would be a

temporary arrangement

Conclusion

As a result of the fire, LL will lose out on £331k that they will be reimbursed for via the business insurance policy However, this figure has been prepared on the basis of many assumptions which may be

inaccurate which would lead to a false claim The fire will undoubtedly cause staffing and other issues but

it is important that LL ensure good communication across the company to ensure Newcastle and

Gateshead are not adversely impacted by the Wallsend fire

Recommendations

Further to the above recommendations it is suggested LL:

 Make an urgent claim for the business interruption

 LL exercises a building contents claim for all the destroyed equipment

 Ensure there is no trauma involved as this would not be covered by insurance

 Keep paying staff even if underutilised as they are key to the business

 Ensure no more than 2 directors are focussed on the fire

STRATEGIC ASPECTS OF PROPOSAL

Strategically the main benefit would be a low cost way of expanding as Indigo would pay for the fit out of

the salon As LL’s expansion plans were hampered by the fire this may allow LL to continue building the

brand This would limit any negative PR that had developed over this time

As the salon would be in a shopping mall, there is likely to be an increased footfall which would lead to

more people seeing the LL brand This would increase the word of mouth potential and benefit from

people stepping in to buy products even if they weren’t intending on visiting the salon

The fact that Sullivan’s operate on the ground floor would give LL the opportunity to compete on quality

service against their offering However, this would need to be a main consideration when discussing

terms with Indigo

On the other hand, LL has built up a brand of being on high streets with a personalised service for their

customers The move to a shopping mall may impact this image as clients are put off by the big brand

connotations

The proposal would also include beauty services As yet, LL has not provided such services and it may

prove to be unpopular This effect on the brand would be more apparent in a shopping mall there more

people are likely to witness the poor uptake This would be damaging for the brand at large and may be

better tested at another salon

Operational aspects

From an internal perspective it is beneficial for the company that Renata Taylor will be moving to the area and as a result is able to manage the stores This would save having to entrust a new salon manager with the new venture However, this may disillusion other salon managers who may feel there should be a

more formal selection process for the new salon LL should analyse whether Renata is the best person

for the job and decide accordingly

The opening of the store in a shopping mall will likely annoy staff members at the other salon due to the

increased likelihood of it receiving a bonus Given higher footfalls and the fact the salon will be new,

stylists and managers will deem it unfair they are not being rewarded for length of service LL should look

to only introduce bonuses into York in year 2 & 3 and inform remaining staff about this decision

The tie up with Indigo products is likely to cause logistical problems of supply given they are based

overseas LL has experienced problems previously regarding obsolescence and stock write offs and

ordering from Canada will only increase this problem LL should negotiate a just in time arrangement with Indigo from a UK based distribution centre to avoid holding unnecessary stock

As a result of the exclusivity arrangements, LL is likely to lose relations with existing suppliers and are

wholly exposed to the reputation of Indigo This would result in poor publicity for LL should Indigo receive bad publicity even in Canada LL should explore whether any other brands are willing to tender for the

exclusivity arrangement

Ethical aspects of proposal

It appears the shopping mall would incorporate beauty services including sunbeds, 1km away from Marie Duvall’s business As Amanda has written extensively about the adverse impact of sunbeds as well as

vowed to not poach customers from Marie, it appears there may be some restructuring of the proposal

required as this would be unethical LL should look to offer spray tanning services instead and Amanda

could offer a joint venture proposition to Marie to allow someone with experience in beauty to run it

With the exclusivity arrangement, there is a risk of LL increasing their carbon footprint as products are

likely to arrive by plane This would be unethical given the environmental damage LL should look to place fewer orders on a large scale to avoid frequency

As per ‘Property for Tomorrow’ the new shopping mall is set to be “the destination for the image

conscious shopper” It would be unethical for LL to promote this type of mentality especially given the

thought of moving to the younger market This would be unethical as LL would look like a promoter of a

mentally destabilising phenomenon for girls LL should promote the importance of all beauty through a

YouTube campaign to edge away from the negative associations

If LL are to offer beauty treatments, there may be a risk of assistants getting involved This would be

unethical as they are neither qualified nor covered by insurance LL should look to only have qualified

staff performing beauty treatments

Conclusion

Based on the above analysis it appears that LL should accept the shopping mall / Indigo products

proposal but on the basis of a few alterations It would strategically be beneficial but operationally cause

issues which can be managed if addressed at the outset Ethically, LL is treading on very dangerous

territory and it would be appropriate for Amanda to consider these prior to the commercial aspects as the

impact would be far worse for the brand at large

Recommendations

Further to the above recommendations, it is suggested that LL should:

 Accept the proposal to open the salon with Indigo

 Suggest alternative products to what is being offered at Sullivans

 Launch YouTube campaign with PR agency regarding image consciousness

 Ensure remaining staff are not disillusioned by holding a staff-wide awayday to explain