Crises are not only pivotal moments for a company – but also for their leaders. Questioning oneself on a daily basis, making tough decisions and monitoring extraordinary team efforts generates a mixture of feelings from fear, to gratitude, and even excitement.
In the current context, strengthening the company’s management strategies is crucial to ensuring the sustainability of its business. How do you deal with the challenge of balancing operational efficiency with maintaining the corporate culture and increased focus on human resource management? Here are 4 key factors which deserve special attention in this new era: teams, treasury, working methods and external communication.
Crises require strong management strategies that balance operational efficiency and corporate culture.
Close communication, transparency, and kindness are crucial during challenging times. Cash flow monitoring, cost reduction measures, and flexible strategies are vital for financial stability. Building a longer-term vision and considering various scenarios help prepare for the future.
External communication should focus on transparency, honesty, and respect for commitments, avoiding opportunism. The crisis of 2020 transformed the way we work and collaborate, and has emphasized the need for adaptability and continuous learning in all of us.
Improve team spirit by onboarding employees in the company’s strategy
Changing situations often trigger feelings of worry and stress. This is a time when coming together and supporting each other is essential, so it is important to reassure each other, maintain good communication and provide guidance as soon as possible. Once the situation has been understood, it is all employees’ responsibility to communicate key messages to customers. It is vital for the teams to be involved in the development and implementation of the crisis management plan. The plan could be the most robust and effective, but if it is not understood or practised by the company, it will lose its strength and importance.
To do this, it is necessary to plan ahead for the impact of high priority tasks and to explain the decision-making process for selecting projects which will be maintained or suspended. This educational approach creates a collective awareness that brings everyone together. Close communication on the decisions taken by the crisis management team is favorable. For example, weekly information updates, a regular newsletter from the directors, and empowering each manager so that they can answer everyone’s questions.
Transparency and kindness are essential to coming out the other end stronger than ever. Our teams are on the front line and are putting all their energy, proactivity and creativity at the company’s disposal. Managers should look after their well-being and avoid overworking them. This crisis is a marathon, not a sprint, and it is up to us to remind them of this.
Make cash management a priority
The world economy is in turmoil and the outcomes of the crisis are uncertain. As in any crisis, cash management is central to the strategy. Close monitoring, already necessary in normal times, becomes vital in periods of economic upheaval. The uncertain and unpredictable ups and downs of a crisis (fluctuations in the financial markets, government announcements) are all events that influence cash flow projections; adjusting one’s forecasts on a regular basis is therefore essential.
It is vital to take simple, effective measures on subjects that we are familiar with. For example: taking measures to allow for internal savings (reception fees, seminars, etc.), freezing recruitment and reviewing invoicing conditions, customer reminders and bank loans. Once these measures have been looked at, next prioritize between short- and medium-term profitability. Identify cash generating sources in order to refocus operational priorities, then monitor the results. To support this, key indicators need to be monitored throughout the crisis period and specific to each sector: for example, in the SaaS model, the churn rate.
These indicators must be monitored on a daily or weekly basis in order to adjust the strategy in real time. Hence the importance of having the right tools available for accurate cash flow forecasting. Interactive dashboards and data visualization solutions such as Power BI are particularly suitable.
Become more agile to enable you to adapt to the unexpected
Dealing with an uncertain and challenging economic environment requires flexibility and responsiveness. One must be adaptable in operations but also in strategy – the ups and downs of the crisis will inevitably have an impact on company priorities. In a word: agility!
In critical situations, balancing “defensive” actions, such as cost reductions, and “offensive” actions, such as creating new offers, is key. In order to predict, analyze and make these trends into opportunities, it is vital to gauge the situation but allow time for reflection. For example, this may be by taking part in webinars with peers, by capitalizing on feedback from customers or by drawing inspiration from experts’ books. Always keep in mind that a ROI-oriented is essential: prioritize projects that are profitable in the short and medium term and that generate added value for the company, based on these field analyses.
In order to continue moving forward and to build for future successes, creating a longer-term vision is worthwhile. To do so sustainably, and whilst maintaining flexibility, several forecasting models can be developed: the optimistic, the pessimistic, and the catastrophic, for example. These various options encourage reflection and forward planning, and make it easier to judge the right moment to make a decision – for example, searching for a financing solution if the churn rises above a certain level. Given the very uncertain nature of the current situation, these scenarios allow us to remain alert and prepared for the best and the worst.
Pay attention to external communication
Periods of uncertainty inevitably lead to people asking questions: employees ask, “am I going to get paid?”. Clients may be wondering “will they be able to complete work for me on time? “, and doubts arise on the customer side. In order to squash these uncertainties, it is essential to adapt your communication and to control the frequency, formats and messages. The objective is to reassure stakeholders as quickly as possible by informing them about the difficulties, and forecasting sufficiently in advance to avoid unfortunate situations of breach of trust that will greatly affect the credibility of the company both externally and internally.
Advertising communication must obviously be adapted and controlled. According to a recent study*, 75% of consumers believe that companies should not take advantage of a crisis to promote their brand. There should be no opportunism, and the key principles of crisis communication – empathy, honesty, transparency and respect for commitments – guarantee a solid and lasting collaboration.
The good news? Our ways of working and collaborating promise to be permanently transformed. Beyond the flexibility gained from remote working, we can expect it to have had an impact across our lives as a whole. We are being forced to re-examine our work-life balance, how we spend our time and manage our relationships. The societal transformation underway is very real and fascinating. Let’s stay on track, take care of our employees and our customers, and remain alert and ready to learn; our open-mindedness will allow us to feel if the situation is changing, and to anticipate and manage the “after”.
*Source: Kantar – COVID-19 Barometer: Consumer attitudes, media habits and expectations – 25000 interrogés