As the world gets to grips with COVID-19, focus on these six areas to help your staff cope – and benefit your bottom line.
Most businesses have already mobilised their COVID-19 crisis plans. But what comes next? Writing in Strategy+Business, Melanie Butler and Kristin Rivera outline six crisis response areas to help you manage the current situation and prepare for what happens in the coming weeks.
- Crisis management: The role of crisis management doesn’t disappear in the stabilisation wave: there will always be new fires to fight. Have a dedicated crisis management team to free up other leaders to focus on the remaining five key areas. If you’re focusing only on fighting fires, the fires will take precedence, and nothing else will get done.Establish a crisis command centre to manage logistical and strategic challenges and provide up-to-date, fact-based information to senior leadership and all employees. Every member of the team should know who’s doing what. This team’s role is to ensure all stakeholders are informed about decisions.
- Workforce: Communicate clearly what steps you’re taking to secure your employees. Define critical activities that are still able to operate and establish which employees have the skills to do the work. Accelerate upskilling to cover any skills gaps this highlights. Ensure that people are efficient and safe while working from home.Many companies are having to consider furloughs, layoffs or terminations. This is unavoidable for some, but the global nature of the crisis provides at least some protection from the competition – if you can keep people in work, do. Cutting costs to preserve profits only risks deepening the recession.
- Supply chain: Many businesses have been caught out by the speed with which COVID-19 has disrupted supply chains. Those who acted quickly could ensure that inventory wasn’t affected by quarantine zones. But this type of problem won’t go away soon.Check availability across the supply chain and assess demand given how much of the world economy is slowing. You also need a plan to reactivate orders once restrictions are lifted and demand grows. Model your supply chain and collect the most up-to-date data. There will be a first-mover advantage for those whose products are ready to ship.
- Tax and trade: Governments are changing their tax regulations in response to COVID-19. If you operate in different jurisdictions, keep up with the latest developments. Alterations to tax rates and due dates can help you conserve cash and plan ahead.
- Finance and liquidity: Liquidity planning will help your business stay solvent. This may include a rolling 13-week short-term cash flow forecast that can be tested against best and worst-case scenarios. Prepare a list of key suppliers and critical payments that must be made. Identify where you can conserve cash by, for example, canceling orders if demand dwindles. Convert any excess working capital into cash.Central banks are cutting interest rates, and governments are extending grants and loans. What’s the most efficient way to use the new government stimulus packages and other debt or equity options? As you develop your strategy for reviving operations, be ready to take advantage of the extra resources available.
- Strategy and brand: Protect growth and profitability by getting a handle on what the market is doing and where it might go – more frequent financial modelling gives you a better understanding of an evolving situation.
The actions you take now will reflect on your brand reputation. No company can promise to protect all jobs, but some are making it clear that they’re trying to help their people. In the US, 6.6m people applied for unemployment benefits in the week ending 28 March. In France, 100,000 companies covering 1.2m workers have signed up for the government to pay a portion of their wages.