As business owners, executives, and directors, we are responsible for maintaining calm leadership and movement toward a unified vision through good times and bad.
When environmental conditions change suddenly and drastically, however, it is completely natural to feel anxiety and confusion about what to do. It's a natural reaction to the wave of uncertainty that is occurring everywhere, as evidenced with our current coronavirus pandemic.
In this article, I will recommend and explain critical actions to take in order to meet challenges with a focused plan, and avoid mistakes that could negatively impact your business.
(For a more in-depth assessment of your strategic readiness, click this link to take a free coronavirus business preparedness assessment).
Critical Action #1: Prioritize the Health and Safety of Your People Above Everything Else
The threat of a catastrophic event can cause even the most rational and level-headed leader to harbor doubt or fixate on a particular fear or solution.
When dangers loom, take a breath, find calm, and remember that every business is fundamentally a collection of people who share a common mission. There's no valid reason to jeopardize the well-being of your employees in favor of the bottom line (aside from the rare situation in which your business delivers life-saving products and services to others).
Ignoring obvious danger will not assuage your employees’ concerns, nor will it portray you as an unshakable leader. In fact, it could do the opposite. They look to you for guidance; so, commit your immediate attention to their welfare and assure them that you are taking the appropriate steps to minimize potential dangers to them and their families. Back up your assurances with proof.
Only after making sure that your people are physically protected is it a good idea to turn your focus to protecting their jobs and economic well-being. More on that later.
Critical Action #2: Conduct a Thorough Assessment of the Business and Form a Strategic Plan
By now, everyone with an email account has probably received dozens of messages alerting them to what their associated brands are doing in response to the coronavirus threat. These emails represent an important piece of a larger process that well-prepared and responsive business leaders are conducting to weather this storm.
After ensuring the safety of your employees, it's easy to fall into worry about how your bottom line will be affected by reduced production, possible work stoppages, and the suspension of business as usual. This is obviously an important concern, and not one you should feel selfish or thoughtless for having.
However, allowing yourself to become singularly focused on this opens you up to unexpected dangers from areas that may initially seem unimportant.
It's a good idea to conduct a thorough and comprehensive assessment of business impact to avoid costly errors.
(Click here to take a free business impact assessment).
Establishing high level areas of focus will help you develop a targeted and prioritized response:
The overall business model: we think of every business as a "value creation machine" which coordinates and conducts a variety of tasks and operations in order to create something of value for customers. Begin by focusing on the needs of your customers, in terms of both health/security and potential harms due to service interruptions. Will any significant changes in the way you do business affect your ability to deliver on your customer promises? If so, develop plans for customer communication and relationship management.
Operations: What impact is the coronavirus having on your operational elements? Consider this your "back of house": all the things you do behind the scenes to make sure your customers stay happy. Is there potential for major shocks to your primary operations (processes that directly contribute to creating and delivering products and services) or supporting operations (processes that internally support your ability to serve customers)? Are you facing challenges in receiving raw materials, services, or information that you rely on from suppliers? Will changes to your organization model cause disruptions in managerial transparency or performance obstacles? Are any of the physical locations in which you operate at particular risk
Stakeholders: We developed and use the PRICE model to quickly assess core stakeholder groups that are important to nearly every business. Every business is different in terms of the people they rely on most; so the order of Partners, Referrers, Influencers, Customers, and Employees may not represent the order of importance in which you should attend to each group. Consider how vital each group is to your business at this moment, and how vital you are to them.
Cash flows: Disruptions to services and operations are likely to affect your ability to pay and collect debts. Take stock of your payment cycle times as well as expected receipts and payouts. Which cost centers do you expect to warrant temporary expansion to manage the current situation? Which revenue drivers may provide enhanced support to help buoy other areas of the business? Rather than allowing yourself to succumb to fear and go into expense lock-down mode, think of your business as a system of rivers and tributaries. In order to facilitate the continued flow, make informed decisions in response to the changes you expect to see in the environment.
A comprehensive business assessment is vital to avoiding tunnel vision and maintaining calm, focused leadership through crisis situations.
In the words of ancient philosopher, Al-Ghazali, "Knowledge without action is wastefulness, and action without knowledge is foolishness." This takes us to the third mistake great business leaders avoid in time of crisis.
Critical Action #3: Make Adjustments Proactively Instead of Waiting Until it is Too Late
Erratic and impulsive actions are likely to add to confusion, fuel anxieties, and create additional work to undo when the dust has settled.
But here's the good news - when you know you are placing the well-being of your people above all else, and you have conducted a calm and thorough review of your business from all angles, you’ve positioned yourself to take reasoned and calculated executive actions and live with the results.
This isn't an exercise in perfection. When the crisis recedes, there will be things you wish you did differently. That is unavoidable. Your job is to accept the unpredictability inherent in the situation, understand that everyone is experiencing uncertainty and frustration, and keep your eyes open so you can make smart choices based on available information that will give you and your business the best odds of success.
To do this, resist the urge to try to solve every problem at once. Delegate actions and responsibilities to others, and trust that they will follow your lead in being thoughtful and decisive.
Though it is important to have comprehensive awareness of the challenge space, do not hesitate to act, even if the situation is continuously developing and fluid.
Use the following Levels of Response to assess your position and prioritize smart decisive actions at the right time.
Current/Immediate: Stay calm. Identify strengths and vulnerabilities as they currently exist. Take necessary action to solve potential crises and keep your team grounded and accounted for. Are any team members ill or traveling to a location which hampers accessibility? What changes have already gone into effect and are altering the way you do business?
Near-term: As new challenges and security measures unfold, what are the expected effects on the major areas of your business? What are the highly likely, potential, and unlikely impacts of these changes? What actions can you take now to preemptively mitigate the most likely scenario coming in the next few days and weeks?
Visible Horizon: Experts expect the coronavirus to cause significant disruption to our economic, societal, and healthcare systems for at least the next 3-6 months. What are the likely consequences of these conditions on your business? Do you have a management calendar to determine actions to take at specific milestones? A decision grid to track roles and assign responsibilities? A scorecard to keep track of the status of important developments, performance metrics, and response variables?
(Click here to assess your appropriate Level of Response).
When facing sudden and unexpected environmental threats, achieve confidence and clarity by placing the well-being of your people above all else, conducting a comprehensive strategic review of your business, and making proactive adjustments at the right time.
Great business leaders exhibit flexibility and adaptiveness during challenging times by protecting their people and their businesses from harm. They recognize ways to create new value by understanding the challenges of people in their network and combining efforts to serve common good.