Updates regarding the coronavirus are flying in by the minute, and it’s putting many businesses at economic risk. As an investor who has lived and lost through the dot com and the ‘08 stock market crash, I’ve learned some things that executives can do right now to lessen the blow:
- Contact all customers and speak to them personally. Make sure you are doing absolutely everything you can for your customers during this crazy time. Make sure you’re getting in touch with them and continuing to make them feel like your number one priority.
- Spend time with employees and make sure they are not jumping off a cliff. This pandemic isn’t easy on anyone or their families, so be genuinely invested in how your team is feeling. Help them deal with the personal stuff and support them to the best of your abilities.
- Communicate twice as much with your employees to ensure productivity. Working from home may become a long-term process, so it’s crucial to make sure that everyone is pulling their part and producing. Find ways to communicate more with your employees and colleagues during this time because it’s a necessity to over-communicate when times are tough.
- Consider your overall communications processes. This may be a time to evaluate how you are communicating with your staff, clients, and potential clients. As a majority of people are monitoring social media and using digital tools to communicate, evaluate how you can use these tools to keep your organization ahead of the curve. Be aware that everyone is generally nervous right now, so make decisions with care, but do it expeditiously.
- Stay in constant contact with your customers, suppliers, partners, investors and local officials. Keep your chain of business activity tuned in to what you’re doing and how you’re doing. Communicate all aspects of your business, and let them know that you’re not just sitting around the office waiting for the next call, but you’re actively running your company. Give them confidence that you’re doing better than just surviving, but seeking out success in this downturn.
- Figure out what you can absolutely eliminate at this time. Everything that you’re doing is up for scrutiny, so look at your company’s spending with a microscope. Eliminate anything that’s not essential because every cent counts. Pennies add up to quarters, which add up to dollars, that eventually add up to millions.
- Grab onto the potential opportunity. This is a good time to find out how to get customers to increase their spending. For example, I know of a company that is finding luck with asking clients to buy more software from them at this time because the world is digitizing their operations. There will be opportunities for some companies in this situation, find a way to take advantage.
- Communicate with your board members and investors. Make sure everyone is on the same page. Focus on these key relationships that you have with your existing investors since they are the people who are most likely to support you financially if you need it in the next while. They will likely not let a good company go down because things are tough right now.
- Autopsy your current operations. Realize that this is a totally different time, and right now, you’ll have to dramatically cut spending and non-essential expenses, eliminate all travel, and analyze everything line by line. Ask yourself how much cash you have—is there enough to last you a year? If you don’t, you need to reduce your burn rate.
- This is not the time to start raising capital. It couldn’t be a more challenging time to be raising money, so don’t spend a lot of time focusing on venture capital right now since they are worried about their current portfolios. If you absolutely need to raise funding right now, my advice would be to focus on the good relationships you have already with your existing investors, hopefully, they can help you.
- Keep in mind that failure is always the mother of invention. In my days as a CEO, we had three unsuccessful startups. At the time, shutting them down was not a decision I would have made, but it was the right decision made by the investors. We just had to suck it up and take our medicine. A lot of early-stage companies will be shut down because of this pandemic, but what’s important is that you’re doing everything you can to take care of your people. If your company does end up shutting down, understand that failure won’t be seen in a bad light because of bad timing.
- Start thinking about the future already. If business is slow, this is a good time to work on your processes and operations to be ready to go when things get back to normal. Get ahead when dealing with the aftermath, and do what’s necessary for the next year and future quarters.
- Ensure your executives are all on the same page. Constant communication and constant leadership are non-negotiable right now. If you have a person in your upper ranks who is not aligned with decisions, you will need to change that. The CEO and heads of the organization have to be on top of the decisions and agree during this crisis. They have to show leadership by making the calls to reduce headcount, eliminate travel, and take care of employees.
- Put scenario-based planning (SBP) into play. Scenario-based planning defines all dimensions of uncertainty and prepares us to deal with even the most ridiculous outlier scenarios. Turn over every rock of what you’re spending and make the necessary changes. What are the main issues that you have to solve head-on? Thinking through all of the possible scenarios will give you options to have your variables covered. Things are changing by the minute, so SBP helps us pivot faster and take back control and confidence.
- It is all about the people, so be close to yours. You can’t just be mechanical and say things like, “We’re gonna cut 10%, so the bottom ten people are going out the door.” People are sensitive and scared, so keep that within the CEO and CFO, and try to keep your employees in good spirits and help them find something else. Be flexible with all of the moving pieces, and don’t wait until you haven’t heard from a customer in five days to panic about not having anybody working on something. People are with their families and working on their own lives.
- Be realistic and act decisively and quickly as circumstances change. Things are changing every day—even by the minute—so you need to be quick on your feet to make those big calls. The key is to be agile so you aren’t stuck if everything goes sideways for your company or if you find yourself forced to make a decision that affects your employees. You’ll likely be changing your direction, especially if this pandemic drags on for months, so be nimble and be ready to adjust.
Stay connected with your people during these difficult times and best of luck to you. I hope that some of these points help you and your business see things through for when things settle down. Take care, everyone!