January 30, 2021
It was mid-February od 2021 when I was with a couple of clients who managed business upwards of Rs 15 Cr. 2019-2020 was overall a challenging year for them, but by January 2020 things seemed to be turning around. The last quarter of 2019-20 was not looking too bad – in fact we were all excited about 2020-21
We were planning growth; we were planning expansions; we were planning for exponential growth in Revenue and Profits. By early March, things started changing. India started getting affected by COVID19. State of Maharashtra along with other States saw restriction on movement. On 22nd of March, there was Janata Curfew and by end of March, India was in a total lockdown.
This Crisis has changed the Rules of Business. Each one of us is going to be faced with making decisions that need to be immediate but at the same time, thought through – keeping in mind
As professionals and business owners, we also must lead the way and energize and motivate everyone around us. We will have to keep convincing our people that while the going will be tough, we will all finally come out successful.
I am advising my clients to come out with a 90-day Crisis Management Plan. Currently, there is no point to plan further than 90 days, when the evolution of the Crisis is unpredictable, and the level of Changes underway is significant. Once the first 60 days have passed, depending on how the situation unfolds, we should plan for the next phase.
These are some of the steps that I am asking my clients to focus upon:
a. Employees: Ask yourself a question, whether you would like to re-hire all the employees back if you started your business from Ground ZERO
b. Expenses: Whether you would continue with existing cost structure? Examine this question in the light of this another question” Whether existing expenses are contributing to revenue or improving the processes
c. Assets: Whether you would have preferred an asset light model. Let’s say subcontracting the manufacturing activity or buying your own assets
d. Product Portfolio: Whether you would have sold same line of products or something else
a. Run (virtual) town halls every day for all employees. Sometimes these need to be done multiple times during a day to keep the motivations up.
b. Manage speculations and gossips – plant a couple of whistle-blowers who would pass on these types of communications to you.
c. Speak the truth – Your stakeholders will forgive you for being caught by surprise, but they will never forgive you for lying or misleading them.
a. Mobilize a “War Room” to secure appropriate operational continuity and adjusting Operations to new Business Model and to the Market reality.
b. Stress-test the Operations Continuity Plans, using relevant “What If” scenarios to check fitness.
c. The Supply Chain will be disrupted. Develop an Emergency Plan to roll-out after a calibration. Perfection is the enemy of good. Speed of execution is everything, and there is no time to waste
d. Focus on Inventory Management and ensure timely supply of raw materials and products.
e. Training – Retrain people especially key stakeholders and all sales professionals. They will not be able to meet their clients, but we still need to stay connected. How do we do it? Will Video conferencing work? Digital marketing? Test and Measure what can work and focus on upskilling.
a. Operating Cash flow- This is the money that we need to keep our business afloat. Cash exchange from day to day activities of the business- Sales, Purchase, Salaries, Utilities, Working Capital
b. Financing Cash Flow – How can we take advantage of all the moratoriums given by the Government/Banks to temporarily manage our “Operating Cash Flow”? Can we leverage more with the Banks or Financial Institutions?
c. Investing Cash Flow – For Capital Expenditure. Which are the ones that can be postponed? Have specific timelines and milestones set for these Capital Expenditures.
a. Develop a lean plan, set 90 Days Goals, and reverse engineer to prioritize actions to reach Goals.
b. Define Goals. Define weekly/monthly KPIs – Key Prediction Indicators.
c. Calibrate key resources performance. Factor in key Assumptions of duration & level of changes.
d. Deploy 90 Days Plan across Teams, with clear accountability and responsibilities.
e. Do not overestimate compliance issues. Those were designed for normal operations.
f. Control your actions, and always “control the controllables”.
a. Make sure you get the new marketing numbers and study them well. Become more targeted.
b. Adjust the message and the means of communication to the new customers’ needs.
c. Make sure you have the right Portfolio for the crisis and at the right Price.
d. Go virtual, viral and ensure that the new communication methods reach the customer properly.
e. Cultivate your community – A peculiarity of this crisis is that in one way we’ve never been more alone and yet also more united. In a sense, place doesn’t matter anymore. We’re all alone together. This represents an opportunity.
f. What can you currently do for your clients to keep them engaged even during social distancing?
a. We don’t know what the other side of this crisis will look like, but it is fair to say we will never be quite the same. This doesn’t have to be cause for fear.
a. Focus on collaboration with clients, colleagues and partners on what we can do now
b. What’s possible to get started on now?
c. How can we adapt our processes for the new reality?
d. What technologies can we use to shift a work session to virtual?
e. How can we remain working efficiently while also connecting as humans?
f. We are all tapping into sources of creativity and problem solving we didn’t know were there a month ago.
a. Lead with compassion. Crisis Leadership is about inspiring People, uniting them for a purpose.
b. Embrace new Habits and Rituals. Take care of the health, physical and mental condition of all.
c. Take care of yourself as the Leader. Work hard but leave always something in the tank.
d. Have a Replacement for the Leader and for key People, in case anyone needsto be away during crisis.
e. Ensure that everyone feels that they are all part of the solution (and not the problem)
f. Build an organisational Mindset of Ownership, Accountability, Responsibility (OAR)instead of Blaming, Excusing, Denial (BED).
g. Welcome Feedback & Suggestions, but crush Defeatism. In times of peace and prosperity it is easy to forget that the human race’s chief advantage is resilience. Our ability to adapt, problem-solve and respond to unexpected challenges is central to our survival and success.
COVID-19 will be no different.
With the right mix of empathy and creativity we can help soften the blow, be a source of inspiration and optimism
And most importantly prepare for the opportunities we have ahead.