Business and Leadership Framework
The international, corporate, and individual experiences of the COVID-19 crisis are unique. While analogies have been drawn to the 1918 flu and seasonal flu, it is the experience and the complete change of life that makes this unlike any human experience seen before. Businesses have been faced with an abrupt change to their business models, forcing complete changes to operations and financial burdens with no clear end date determined yet. Employees are facing challenges as well with stay at home mandates and major changes to their daily routines. Regardless of where you are or where you work, it is clear that the totality of the crisis and response is without precedent.
Leaders are being called to establish a framework of hope and action. To identify the order of operations, to prioritize financials, and achieve critical objectives through their teams. As a business leader, you could close the hatches and bunker down to avoid making mistakes. The alternative is to evaluate, act and adapt. It is our guidance that this time requires substantial collaborative contemplation and effective action. Further, we believe that inaction will result in fewer and less attractive options to protect our families and businesses.
Here you will find our business recommendations and guidelines to help you navigate this challenging time.
- The health and mortality impacts of COVID-19 are serious and will continue to accumulate over time.
- The process of ‘containment’ and ‘slowing the spread’ that is being used across most of the United States will create an imperative disruption to the spread rate of the virus.
- The more populations comply with distancing, the shorter the crisis and the less the consequences.
- The more consistent containment is, the lower the risk to individual jobs, firms and the economy.
- The greater the unification of purpose and commitment to uniform action; the lower the risk of unintended consequences and the better the emergent situation will be.
- The more business and IT leaders conduct business without increasing health risk, the lesser the extent and length of economic consequences will be.
- If the pandemic is not contained, the costs of depression will substantially exceed the cost of the stimulus.
- There is a high likelihood of a substantial revenue disruption, leading to a potential liquidity crisis for many.
- In theory, the stimulus will place the right amount of funding in the right places to keep the economic engine from seizing up.
- Positive, collaborative, effective leadership are essential in times of crisis to avoid personal, corporate and economic depression.
- Prepare for the worst and be thankful if it doesn’t eventuate.
- This is a time for heroes and champions.
- In the short run, revenue disruptions will occur across the board. Some markets will initially benefit and then decline, others will initially decline and continue to do so. A small percentage of markets will prosper.
- The federal government’s stimulus package will reduce the financial losses for businesses and individuals for the next three months.
- There will be a level of medium and long-term societal scarring that will alter changes in communal, business and personal beliefs and behavior including consumer and investment decisions.
- Market changes will result in both risks and opportunities.
- Employment disruptions will offer both risks and opportunities.
- As uncertainty and fears rise, the preference for certainty and safety increases.
- Employers and customers will favor relationships offering certainty, safety, and most importantly, those which are adapted to their changed situations.
- Effective action effectively communicated as to the firm’s altruism, care for the team, the client and the community, along with strong financial performance will provide a substantial and much needed positive perspective.
- Organizations that display or are associated with gouging, advantage-seeking, unnecessary layoffs, risky behavior, or poor work conditions will suffer deeply felt brand impacts.
Advanticom’s Leadership Resource Guide
Here is a list of guidelines for your business to review and questions you can ask your team. It is designed to support you in managing the current challenges of today’s environment.
- Identify Priority Stakeholders
- Employees and their families
- Clients both individual and entity
- How do we do our part to improve safety and lower risks for each stakeholder? Employees and families first, then clients, and on down. If everyone does their part, no segment of society will be left without.
- Develop an engagement plan for each stakeholder.
- What are their needs and concerns?
- How would they prefer us to engage and treat them?
- What can we do within that construct now?
- What can we do to support in the long-term?
- What can we ask of them?
- Recast forecasts and identify risks to revenue, liquidity and most critically, cash
- Protect cash
- Reduce expenses to the necessities
- Minimize outflows without disrupting trade or relationships
- Communicate with AP accounts and agree to specific conduct, timing and response to any non-agreed changes
- Protect cash
- Right-size all aspects of the business
- Some organizations will not need to right-size in the short run either because of temporary bumps in revenue or the stimulus package.
- Those unable to sustain full employment at full salary should identify the “right-size” in all areas of the business, identify multiple strategies to optimize keeping the greatest number of skilled workers, collaborate with employees as to options and choices, and be transparent while communicating facts. Avoid fiction in all circumstances. Integrity is essential in a crisis.
- This exercise should prioritize assets, locations and product lines that are essential to the business and its future, and excise that which can be trimmed at least temporarily.
- All models must have contingency plans in case revenue or cash fall short of expectations. Know and be prepared for successive refinement through cuts, but don’t slow-bleed nor fail to communicate often and openly with key stakeholders. Integrity, trust, and confidence will be of great value.
- Be defensive if you are weak and aggressive if you are strong. The greater the liquidity and cash of the organization, the more opportunistic and aggressive the firm can be. Those who were highly leveraged going into the summer of 2008, were hammered or put out of business. Those with strong balance sheets and an opportunistic and effective leadership team emerged stronger than ever.
- Communicate often, with empathy and a helpfulness towards all stakeholders.
- Offer clients and prospects solutions. Be a sounding board. Focus on collaboration.
- Competitive and client intelligence is of great value.
- Connect with weaker competitors and be able to move on opportunities when they need help.
Our main priority at Advanticom has always been to serve our clients however we can. If any of these questions raise concerns, please click here to reach out to our team immediately to discuss.