Ten things leaders can do to help their organisation through COVID-19
Leaders should fixate on the basics to help their people and organisations make it through COVID-19, writes Professor of Strategy Geoff Martin.
Whether you're running a company, not-for-profit or arts organisation, COVID-19 and the economic chaos in its wake are almost certain to be some of the toughest challenges of your career.
Here are 10 fundamental issues you should address as quickly as possible to keep customers, suppliers, staff and yourself afloat – emotionally as well as financially.
1. Strategic leadership
Nail your purpose and values to the wall – literally. By putting your organisation’s purpose and values front and centre, you provide clear decision-making guidelines for yourself and your organisation.
If you have had issues with employee engagement or social license in the past, now is a great time to rebuild trust and give credibility to a community-oriented purpose.
A crisis reveals and tests your values like nothing else. If you can show your willingness to go above and beyond for important stakeholders like customers, employees or suppliers during this period, you will build the enduring loyalty and trust that defines high-performance organisations.
2. Revisiting strategy
Two big strategic questions to revisit at the moment are where to play, and how to win. In other words, what are your products, services and markets? And how will you differentiate in your chosen markets by leveraging a set of capabilities and resources?
Think about how you have made those decisions in the past and how this will change given the new reality. Find time to revisit these big questions with your team. The drivers of purchase decisions have significantly changed – and will change again once this period is over.
New competitors may emerge during this time and old competitors may fade. Your capabilities may have been augmented or blunted.
As a result of those changes, you need to revisit assumptions about what you are capable of, how customers make decisions and who you compete against. Changes in those assumptions may significantly change your view on what products you should be offering, how you compete and what resources or capabilities are critical.
The COVID-19 crisis is obviously unique and the future unpredictable – but where some see threat, others see opportunity.
For instance, regarding "where to play" decisions, what relationships do you have that could be leveraged to find new customers or new markets? What new products or services could you be offering that you don’t already, given your brand, people and other resources?
In terms of "how to win" choices, how could you sharpen your current offering to improve customer perception and respond to changing mind-sets, thereby differentiating and selling more into your core market?
Take care of yourself! The world needs you and your leadership and your various talents now more than ever.
Just as we re-purpose our organisations by asking what the world would lose if we didn't exist, it is a great time to do the same thing for yourself.
What is your personal purpose? Who matters most to you and who do you need to support or devote your time to right now? What can you do to nurture yourself? What is your vision for yourself in 10 years and what does that mean for how you spend the next day, week or year?
It's also a good time to consider how you could use this crisis as an opportunity to educate yourself (online), get physically healthy and reconnect with the people that matter. A good book to read about becoming stronger as a result of a crisis and developing resilience is Sheryl Sandberg's Option B.
5. Revenue and cash flow forecasting
Estimate what your cash flow will be in coming months. If you anticipate cash shortages, speak to your bank or other creditors sooner rather than later.
You may need to explore alternative lines of credit or invite new equity partners (who may inject cash to keep your firm solvent in return for an equity share of your business) as a last resort.
6. Cost management
Go through your expenses line by line to see what can be reduced or eliminated. If there are fixed costs such as rent, interest payments or leases that cover the next six months, speak to landlords or lessors to see if payment holidays are possible without significant penalty.
Staff are the heart of your business. If your previous revenue is ceasing entirely – or close to it – ask your staff to share the challenge of finding new revenue streams or cost reduction opportunities. Point to your purpose or values and ask them what needs to stop, start or change right now to deliver to customers – whether they be existing customers or new ones.
Where your employees are engaged in remote working practices, seek novel ways to engage and energise them. If your employees are still at work, ensure distancing or other protective measures are in place to keep them safe from infection.
The isolation and challenges imposed by the COVID-19 outbreak are putting everyone under emotional and physical pressure at home and work. How you treat your team during this period is an opportunity to reset or improve your relationships.
8. Supply chain
Supply chain disruption is a major threat in various industries. For instance, those sourcing from China or other countries significantly affected will face significant delays. You should be active in finding alternate sources of supply, even if you don't need them yet.
A balance needs to be struck between ensuring you collect your receivables and keeping your customers solvent. For large wholesale businesses, this needs to be analysed for each major customer with a balance outstanding. It starts with a conversation with customers to understand their capacity to pay.
10. Government assistance
The assistance being offered by government to business is evolving every day. Keep an eye on this space and talk to your accountant (or if you don’t have one, do your own research) about tax breaks or relaxation in timelines for paying different types of tax.
Geoff Martin is a Professor of Strategy at Melbourne Business School who teaches Strategic Decision Making and Business and Corporate Strategy on our MBA programs. Visit his faculty profile for more information.
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