How to Effectively Lead Your Business When the Future is Uncertain
While it is not clear yet the full extent to which the COVID-19 pandemic will take a toll on our economy, it is clear that business owners must prepare for long-term consequences and question how resilient their companies really are.
Right now, you may be developing a contingency plan for your business — or you may be implementing a plan that you created long before the pandemic. However, with the negative impacts of this pandemic mounting daily and speculation circulating that this situation could be long-term, how do you manage a business that survives this crisis?
Here are some suggestions to navigate your business during these uncertain times:
- Develop (or update) your business contingency and crisis management plan. The first step to developing a plan is to identify all of the possible threats that would disrupt your business operations, financial health or ability to stay in business. Work with members of your leadership and crisis response team to determine all critical systems, vendors and employees that would dramatically impact product delivery and service levels if these resources were suddenly unavailable.
Next, identify which actions are needed to help your organization resume normal operations – or adjust to a “new normal” environment for business operations. Think about the steps and resources that would be required to address each threat and how employees can help.
After you have developed your business contingency plan, make sure your employees understand their roles in implementing the plan. When new information surfaces that requires adjusting your plan, update your team quickly to ensure your business stays on course.
- Update your sales forecasts. If your salespeople have been stymied by travel restrictions, you may need to adjust their activities so they are working productively remotely. Now is the time to amplify support from your marketing and public relations team when salespeople are immobile.
- Cut fixed costs and strengthen your cash position. In times of chaos or declining demand, cash is king. This is not a time to fall behind on receivables. Borrowing costs are lower, and this could be the time to store cash and refinance bank notes if there is an extended slump. Given all of the pressures on your finances, this might also be a time to reduce your workforce, outsource some of your functions, and critically evaluate whether you can do more with less and raise productivity.
- Cross-train your employees. If you must reduce your workforce, begin cross-training your best employees now to learn new skills and take on additional responsibilities.
- Seek financing. With the feds dropping interest rates and offering a new stimulus package to help businesses stay afloat, cash is available. However, businesses must analyze the short-term gain versus the longer-term consequences of increasing debt at a time when sales are delayed or uncertain for the foreseeable future. Thus, financing may not be the best option for your business, especially if your margins are thin.
- Explore new products and services. To help your business survive, it’s important to understand the developing trends that are impacting consumers globally. These emerging trends could provide opportunities for your business. For example, consumers are attempting to mitigate their risk, and products/services that reduce risk such as travel insurance are in demand.
- Consumers are also traveling less, dining in, and communicating, working and learning remotely. Think about what product or service can you provide to support consumers in this new normal?
- Consider acquisitions. The pandemic could force the economy to fall into a recession, causing some competitors and vendors to be weakened and industry consolidation to occur. Thus, if you have a strong cash position, it may be wise to vertically integrate or buy a competitor or vendor now.
- Keep your emotions in check. As a leader of your organization, you set the tone. Portray calm and keep your panic private to avoid risking the morale of your team. Limit energy spent on speculation.
- Communicate often. When employees are dispersed, it is harder to check in with them, harder to manage cultural implications, and potentially harder to stay agile and adaptive. So, it important to regularly provide employees (and customers) accurate and timely information while including positive, pro-active messages.
- Empower your people to work smart. With a solid contingency plan in place, empower your team to implement the plan while you are putting out fires and managing your business. Encourage teamwork and collaboration, even if quarantined or working remotely for a long period of time. Set up procedures and tools that allow your team to work smart, and communicate company and individual goals online.
- Provide empathy and support. Expect some employees to express panic, anxiety and fear beyond reason when they feel uncertainty about their future. These emotions may snowball and derail employees from being productive, which can put high-level business goals and solid operating practices at risk. So, this is the time for leaders to help employees manage their fears and thrive as best they can. To help the well-being of your employees, provide your employees with a foundation of consistent support. Listen to their concerns and understand their perspective.
- Remain optimistic, yet realistic. Blind optimism can appear to your employees as not genuine, for they know that you can’t guarantee that everything will be ok. Rather, provide realistic positivity and communicate the best-case and worst-case scenarios to your team, with an emphasis on the most likely scenario. Your team needs to hear the realistic contingency plan, and have confidence that you can deliver on this plan.
- Most importantly, have grit. When it comes to this much uncertainty, we can’t control the outcome. However, we can control our response to it. That’s the definition of grit. It gives you the stamina to bounce back from tough situations and navigate the challenges that your businesses will face.
It’s important to remember that some of the most successful companies reinvented themselves during the most difficult times. Google and PayPal soldiered through the aftermath of the dot-com bust. And companies like Airbnb and Square were founded in the midst of the Global Financial Crisis.
By remaining calm and rising to the challenge at a time your business needs you most, you can follow in the footsteps of these resilient companies. That’s because you have grit – and what it takes to survive.
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Linda Welter, Caliber Group Principal & CEO, is a veteran brand reputation and crisis management expert based in Tucson, Arizona with more than 20 years of experience helping businesses build, position and protect company brand reputations. She has helped the leadership of multiple organizations successfully navigate crises and major issues during times of great uncertainty, including business closures, layoffs, foodborne illness outbreaks, unplanned leadership changes, mergers and acquisitions, arson, litigation, and accusations of corporate wrongdoing.
Contact us for help communicating with your stakeholders, managing this crisis, or preparing your business contingency plan.