|Leading Through A Crisis – Guest Commentary by Rachel Friend, Right Angle Results, LLC.
As a long-time consultant and business owner, I have helped regional and national companies, large and small, through contingency planning throughout my career but especially in the last seven to ten days. Due to COVID-19, many of my clients are facing significant drops in quote and order activity and are reeling from fear and the impact of business closures. These leaders, probably similar to you, are concerned about the safety and livelihood of their team members and their families, but also about cash flow and potential liabilities such as healthcare and bad debt if their customers are unable to pay receivables. There is a trickle impact that this crisis where few will remain whole.
Fear can corrupt our ability to think logically and use the data we do know. It causes us to want to overthink our decisions because we do not want to make the wrong one. How do you rise above the fear? Understanding your company’s data will help you understand your options and will be helpful in providing a path forward for you and your leadership team. The following questions may be helpful to your decision-making as you assess next steps for your organization:
- What are your current vs. historical trends in data such as quote and order activity, conversion rate – how is your business being impacted from the crisis?
- What backlog do you have to work from for the next four to eight weeks?
- Do you have risk in your account receivable? For non-profits, it may be risk in your donation pipeline, grants or other funding sources.
- How is your cash position and how can you minimize a drain? What is your available line of credit should you need immediate access to cash? How flexible are your lenders? Are you projecting cash?
- How many employees are needed for different levels of revenue, including a full shutdown?
- Which employees are most valuable? Is this an opportunity to reduce non-productive members in a headcount reduction?
- What are the retention strategies in a headcount reduction you can use to quickly relaunch as necessary should your business pick back up?
- What are your supply chain and customers’ plans?
- Is there a market play should you keep production and business going when others shut down?
Once you understand your current situation, brainstorm your options for moving forward. Determine the level of risk you are willing to endure as an owner, and if you are a leader, what level of risk your owners and board are willing to endure. Leverage your access to other experienced and knowledgeable people who have managed a crisis or that are experiencing a similar situation, such as peers in a roundtable, your board of directors or advisors, or an experienced business consultant.
Most importantly, it’s important to over-communicate to your team, and if you are a family business to your families involved in or dependent on the business. All tend to be afraid in such uncertain times and knowledge provides comfort, even if it is letting them know that you do not have a decision yet or that you have less than favorable news. If they do not know, then they will create it and this can cause more fear.
Leaders who meet crises successfully may be rewarded with increased respect from their teams, communities, and peers; with growth in knowledge and experience; and with a strengthening of personal character. As leaders, we are facing an unprecedented and most likely the most unpredictable time of our leadership experience. It is our time to rise to the occasion to make the best possible decisions for our companies, our teams, our families, and the greater Louisville community.