We are in an unprecedented situation. Traditional crisis response tactics won’t be enough: the global shutdown is creating enormous disruptions, and we need to figure out how to get our businesses safely to the other side of the crisis. To set ourselves up to survive the ongoing storm, we need to act quickly and decisively. Here are 10 ways you can lead your organization through the crisis:
1. Be a leader, but be a human first. Act with empathy, flexibility and patience. People are stressed and scared. They have kids at home and mortgages to pay. Acknowledge their fears, reassure them whenever you can, and if you’re not sure about something, say so. Be willing to bend (or even toss) processes like PTO or sick leave to make people’s lives easier. And talk to them – tell them what’s happening in the company on a regular basis. Keeping them in the dark, even about tough choices you may have to make, will only make them more uncomfortable.
2. Set up a COVID-19 war room. Appoint a senior, multidisciplinary team dedicated to the task full-time. Empower them to make quick decisions and create critical action plans. Their role is to come up with contingency plans for all scenarios (including worst-case) and determine how to stabilize operations.
3. Get your working capital sorted. You’ve probably already taken significant cost-cutting measures, but now would be a good time to cut unprofitable customers, look at less expensive suppliers or ones with more flexible payment terms, and approach lenders for more lenient terms. Optimize your supply chain to reduce costs. Consider shutting down underperforming business units or geographies and take operations down to a smaller but higher-performing core.
4. Find out what parts of the relief bill you’re eligible for. Of the $2T CARES Act announced March 25, $370B has been allocated to small business loan and tax credit coverage through the SBA. Businesses with fewer than 500 employees can apply for a $2M Economic Injury Disaster Loan ($10K of the applied-for funds may be available within 10 days) and then can apply for a further loan of up to $10M with interest rates no higher than 4%. These loans are part of the Paycheck Protection Program – federally guaranteed loans that may be forgiven if borrowers maintain their payrolls during the crisis or restore them afterwards. We also encourage companies to study the CARES act as it relates to payroll tax credits and tax deferrals, for which you may also be eligible.
Businesses should consider applying for the EIDL as soon as possible. Apply directly to the SBA Disaster Assistance Program, rather than through a bank. There’s no cost to apply and no obligation to take the loan if it’s offered. And it’s not just for sole proprietors – businesses with advanced ownership structures can also qualify. Visit the SBA Disaster Loan Application Portal to learn more and get started.
5. Stabilize your supply chain. Identify any risks including upstream risks, increase stock where you can, boost frequency of deliveries to ensure consistent supply, and qualify new suppliers in case your current ones are unable to fulfill their obligations.
6. Get ready for worst-case scenarios. If they don’t happen, great. But if they do, being prepared will make all the difference. Determine specific milestones that will trigger actions on your part, and put everything in place to ensure those actions can happen if and when you hit those milestones
7. Focus on the parts of your business you can grow now. Move your resources to where they’ll make the biggest difference. Identify the most profitable target markets and be aggressive with promotions and marketing to pull them in. Identify new revenue opportunities. Reach out to existing customers and late-stage leads in your pipeline.
8. Have a business continuity plan in place. If leaders or employees are unable to work because they’ve contracted the virus or are caring for sick family members, ensure plans are in place for operations to continue without interruption.
9. Plan for recovery. Although there are days when it may feel like this situation will last forever, it won’t. And now isn’t just the time to “stop the bleeding,” it’s an opportunity to figure out how you can set up your company to outperform competitors once the crisis is over. A lot of what you’re doing today to make operations more efficient will help you operate leaner in the future: for example, getting your supply chain in fighting shape now will give you greater agility, more capabilities and a cost advantage when COVID-19 is behind us.
10. Get ready for a permanent change in customer behavior. After this crisis, the world won’t be the same – and neither will business. Start planning now for a shift to digital solutions and automation. Adapt your technology and keep a sharp eye on changing trends, so you can invest wisely and drive the charge to capture market share.
We’re all in this together – and ORG is here and ready to help. Please reach out if we can be helpful in any way as you look to navigate these uncharted waters.
Jessica Borowy is a Vice President in the Industry Group at Owner Resource Group (ORG). She is fortunate to meet with hundreds of business owners each year to learn about their unique goals and pursuits for the growth of their businesses. Outside of work, Jessica enjoys hiking and riding bikes with her husband and two rambunctious boys, and has a soft spot for Tex-Mex food and rescue dogs.