Six Actions That Will Help Your Businesses Survive Covid-19

Posted: 29 Apr, 2020

Many businesses have continuity plans for dealing with unexpected events like losing key staff, IT failures or theft. But most continuity plans don’t account for how the business would deal with the effects of a worldwide pandemic like the one we’re currently experiencing.

During such an unpredictable and unprecedented crisis, effective responses must be largely improvised. But while improvisation is key, there are some attitudes and initial actions that businesses and those running them can take from techniques regularly used by turnaround professionals to help them deal with the current crisis:

 

• Keep Calm
• Crisis Management
• Communicate
• Adapt
• Manage Cash Flow
• Plan for the Future

 

Keep Calm

While it seems obvious, it’s important for business leaders not to panic and let emotions overrun. As any turnaround professional will tell you, controlling the emotional response to a crisis is half the battle and is essential to prevent decisions being made as the result of panic rather than rational thinking. This is why getting help from an impartial third party can provide real value, by helping business leaders to look at problems objectively and with a level head.
 
Taking an example from the current crisis, many of those companies that responded by immediately laying off staff may have regretted their knee jerk reaction as soon as the government announced its support measures a few days later. While the furlough provisions allow for re-engaging those staff, the damage has still been done through the message conveyed to staff by sacking them – “we don’t value you”.

 

Crisis Management​

Crisis management can be done well, and it can be done badly. Depending on the size of the company it can be useful to create a team that’s focused on crisis management and dealing with urgent short-term problems. It is also necessary to include staff from different teams in order to expedite the communication of decisions to their departments. However, choosing the right staff is key, because not everyone is comfortable with uncertainty. Assigning some people to the crisis management work can leave others to focus on business continuity and business operations. This technique of creating teams dedicated to certain work is often used by turnaround management professionals when helping a company in trouble and is also useful here as it prevents the whole staff from becoming consumed by the crisis management work.

 

Communicate​

Communicating with all internal and external stakeholders (and not just key stakeholders) is critical when dealing with a crisis like Covid-19. While everyone will want answers and business leaders won’t necessarily have them, clear communication of priorities, decisions and why decisions have been made is critical to reassuring everyone about the process towards a successful outcome.
 

• Customers will want to know when goods will arrive and services be delivered.
• Suppliers will want to know when you will place orders and when you will pay them.
• Staff will need reassurance about their employment prospects.
• Lenders and creditors will want to know when they will be paid.

 
Crucially, communication with the different stakeholders needs to be tailored and will need to come from the right level of authority in order for it to be reassuring and trusted.

 

Adapt​

When an unforeseen event such as Covid-19 arises in a way that severely affects a business, the ability to adapt promptly is necessary for survival. The Coronavirus pandemic has forced many businesses to embrace technology and allow mass remote working, change supply and delivery routes, put product launches on hold and change how they service their customers. Adapting with speed is key and will determine which businesses survive and which don’t.

 

Manage Cash Flow​

Even without a worldwide crisis, running out of cash is the cause of most business failures which is why managing liquidity should be a top priority. Any experienced turnaround professional’s first action in a crisis will always be to focus on a business’s short-term cash flow and they will usually establish a rolling 13-week cash flow forecast. Payments should be made on a priority basis and approved by someone who is aware of their impact on cash flow. Communicating with creditors, staff and anyone else to whom money is owed is also important to do before defaulting on any payments.
 
And after establishing a good grasp on the cash flow forecast, businesses should then focus on securing what financial support might be available to them from shareholders, customers, suppliers, creditors, lenders and the government, being mindful not to jump into borrowing any money before reading the small print.

 

Plan for the future​

Planning for the future means thinking long-term which will help to prioritise the business’s needs. Of course, there will be short-term problems that need addressing but these can be dealt with by the crisis management team. Planning for the future means the business will be ready when the crisis comes to an end and will allow the business to provide customers, suppliers, and creditors with the information they need to support it until then.
 
From financial stress-testing to workforce planning to supply inventories there are a range of tasks that can be carried out to help plan for recovery.
 
To turnaround professionals, these six steps may seem like the obvious first actions to take when dealing with a crisis. But for business leaders that have never dealt with one, let alone with a crisis on the scale of which we’re seeing now, they might provide the life raft needed to stay afloat.

 

Article produced by Kickstart PR​


 

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