“Plans are worthless but, PLANNING is EVERYTHING” –Dwight D. Eisenhower
2020 started with eager anticipation for many of our clients, several of whom were having record breaking years, and others who could see a bright future. As we come to grips with this surreal environment the focus shifts to helping business owners identify their best options for surviving the crisis with an eye toward thriving during recovery. Here’s how we’re thinking about it:
SCENARIO PLANNING CONSIDERATIONS FOR DURING THE CRISIS:
Exploring a variety of scenarios (or applying a game theory approach) can be immensely helpful – even if none of the scenarios plays out precisely as described. As President Eisenhower noted, the power of the plan is in the planning. Making decisions today that set your company up for success when the world begins to return to normal requires examining your current context, but looking beyond it as well.
Most Important: how do you best care for your self and your people today and over the course of this crisis? What will you do? What will you not do?
Time: this crisis and its fall out are not going away quickly. Create a series of time-based scenarios (30, 60, 90, 120, 180 days) and evaluate as if the impact intensifies. Consider 3 levels of impact – best case, likely case, worst case.
For each scenario consider the following:
Evaluate Resources: identify the critical resources that must be carefully managed (cash, people, supply chain). What is the impact of time on each resource (best, likely, worst)?
Model Your Cash: 1) add a line item into your budget for expenses related to COVID-19. This will help with the scenario plan, it will also help should you need to file a claim under a government sponsored plan or through insurance. 2) Evaluate impact of potential delays in your supply chain on cash. 3) Evaluate delays in your accounts receivable on cash.
In light of these findings:
Prioritize expenses: conserving cash is critical. Examine your expenses carefully and categorize them at three levels: a) Essential; b) Important; and c) Discretionary. Ensure that you challenge your thinking on these categories and consider how your decision-making aligns with your company values. Also recognize that we are in extraordinary times and things that would’ve been essential or important last week may now be discretionary. For example, normally utilities are “essential”. However, the government has said they are not allowing services to be turned off during the crisis. You will still owe the money and you should pay if you can. But, if cash is extremely precarious you may choose to move this expense to discretionary or important. The goal for cash constrained companies is to survive and have a plan for how you will recover when the crisis is over.
Cautiously evaluate government requirements & potential relief:
Guidance & debt vehicles by the US Small Business Administration
State-specific developments and policies by the National Governors Association
Families First Coronavirus Response Act – Implications for sick leave and FMLA from the Education & Labor Committee
Manage Virtually: how will you maintain and/or adjust meeting rhythms; what are your expectations as an employer (work hours, style & behaviors, breaks, kids and pets etc.); how do you want your business culture to be reflected as your team goes virtual; what if your people want to keep working from home after the crisis; how should your employees interact with each other (interruptions, scheduling calls, working around family obligations, response times to email, Slack, etc.), what virtual project management tools will be used and what are the guidelines for using them, and how will decision making change (who makes what decision when?).
Design your communication: Leadership is everything in times of crisis. Whether your staff are working or not, they need to hear from you. This is a time to live your values and reinforce your leadership. Many people are experiencing anxiety, fear, and/or a loss of control. You can help by providing them with information about your plan for the crisis and what will happen after the crisis is over. Will they have jobs to come back to? What services are available to them now (CDC updates; Department of Labor; Families First Coronavirus Response Act – there may be other local resources you want to include). How will you communicate with them during this time? When will you communicate? If they have questions who should they reach out to? If they just need to talk to someone who should that be? What are the messages that you want sent by this person/people who will be taking employee feedback and dialogue?
SCENARIO PLAN CONSIDERATIONS FOR AFTER THE CRISIS:
Staffing: if talent is a critical factor for your business today, what is the impact if less than 100% of your workforce returns? On the positive side, there will be people who are available in the market who were not available prior to the crisis. How could/should you approach this potential opportunity?
Communication: Have a plan for notifying your workforce to return. Determine if they will all return at once or if you will ramp up slowly (note: this may be tied to point “c” below). If you are providing weekly email updates or “town hall” conference calls seek your employees feedback along the way. This will give them a sense of control and help reduce anxiety, stress, fear, and anger.
Supply Chain: evaluate any delays you may experience as your vendors, suppliers, and customers come back online at different times. Also, if you have customer concentration challenges, it will be important to understand the impact of the crisis on your biggest customers.
Making Lemonade: This crisis has served up a lot of lemons, but in every crisis there is opportunity. Take time to brainstorm with your people. What can you do now to maximize your future?
Family business owners are the hope for our recovery and we are committed to their success. Be smart, stay safe, and feel free to drop us an email if you have any questions or need some support – email@example.com.
The Lemonade Summit: A virtual summit for family business leaders to learn from leading experts, harness the collective strengths of other family business leaders, and begin building strategies for the new normal.