Updated: Aug 3, 2020
By Rebecca MacKinnon
“COVID-19 Shows no bias!” For large or small business, the current environment is of great concern. We are in unchartered territory, even if an aggressive implementation of public health policy is in our best interests. What is the prolonged impact of this event? It is critical for CEOs to take immediate, proactive steps in navigating the economic impact.
Establish a focus, if only for a brief period. Quieting fears and engaging proactive thinking is an absolute must, at this time. It’s a 360o communication effort – Customers, Employees, Suppliers, Bankers, Investors – each requires multiple touch points in order to establish immediate confidence in your leadership. It’s going to be exhausting, but consider creating small, steadfast, continuous communication touch-points.
Take immediate measures. Identify the cash outflows that can be immediately eliminated – easy, rational and without expensing the future. There is always more room than you expect. For example, freezing budgets, raises and new hires. Pause (not eliminate) expenses with uncertain returns or time frames. Engage your teams in this effort, but you must watch closely. What may seem tactical today, could be a significant strategic error tomorrow.
Develop strategic options. Every business has been delaying certain strategic opportunities to increase revenues or decrease expenses, each means improving profits. How about that virtual model of customer support or onboarding that reduces expenses? At a minimum, these projects will test internal competencies of teams in preparing for the new normal of 2020.
Begin forecasting. Everyone is feeling the bleeding off of cash. It requires an immediate Forecasting exercise. There are three distinct periods that must defined, each requiring very different modes of thought: Survival, Recovery and Competitively Thrive. For the immediately needs of Survival, determine the capital needs for 8 weeks forward. Don’t assume anything! Communicate with creditors, investors and affirm lines of credit remaining strong and open. Look for government assistance and embolden financial resources. Remain abreast of Supplier Financing options that will begin coming to the marketplace. Having options will determine your strength in Recovery.