By Mike Gerbis, Chief Executive Officer of GLOBE Series and The Delphi Group
We’re in uncharted territory. This is the common refrain I’m hearing as we all do our best to respond to the COVID-19 crisis. The threat to people’s health is real, and so is the impact on people’s livelihoods and the larger economy. The scale of this pandemic, and the unknowns, feel overwhelming. So, let me take a moment to give you some hope as well as concrete actions that you can take now to protect your businesses.
First, the hope: we’re all in this together. And, at the core of Canada and what it means to be Canadian, we are about taking care of the collective. It’s why we have public healthcare and public universities and robust social programs. I have no doubt that that same spirit will help us get through this crisis.
Right now, we are all focused on the health of our families, friends, colleagues and communities. As we should be. But as we emerge from the pandemic—and we will—the silver lining may very well be all the learnings we gained from collectively addressing it. Those same learnings may be exactly what we need to drive the kind of transformational thinking that will help us advance a low-carbon economy.
Next, the actions you can take now. This may be my first global pandemic, but it’s not the first time I’ve come up against a crisis with massive economic ramifications. I survived the 2008 financial crash as well as SARS and the dot–com bubble of 2001/02. However, 2008 was my first time through a crisis as one of the long-time owners of The Delphi Group—and boy, did we make a few big mistakes. On the positive side, we learned from them, have adapted, and are now applying five fundamental principles to steer our companies through this one. I’m happy to share those five principles with you:
1. Respond faster than you think you need to…and breathe
One of the traits that characterizes many entrepreneurs is their optimism. Their positive outlook on growth and prospects often underlies their ability to take risks that others would not. This optimism and positivity can work against you in an economic downturn. It can cause you to see a crisis as a short-term blip and misread the medium- and long-term signals.
Remember, as the CEO or owner you are the captain of the ship, and your number–one job is to navigate your business through this storm so you can rebuild. Now is the time to be more pragmatic:
- Step out of the chaos and really get a sense of the risks (and possibly the opportunities).
- Pick up the phone to your clients to get a better understanding of their challenges and needs.
- Get in front of the turning economic tide by cutting costs, and eliminating all non-essential spending (e.g., new computers).
- Evaluate the services you’re offering, look for new opportunities (e.g., shifting from producing vodka to sanitizer) and pivot quickly when you see oncoming obstacles (e.g., restaurants offering home delivery).
- Work through various scenarios with your finance and executive team, considering even the worst-case scenario, so that you can plan accordingly.
- Gain an understanding of the leaders and critical team members who will help you get through this storm and rebuild on the other side. Watch, listen and see the response—they will emerge, I promise you.
It’s critical to act fast, but this is different from panicking. Make sure that you step back, take a deep breath to get a clear picture and ensure you’re getting the balance right. It’s not just about how fast you act, but what you choose to do—when and, most importantly, how. Your company values and culture are the best lens through which to evaluate your potential actions; acting in line with them is the best way to preserve the foundation of your company and everything it stands for. Using your values as your North Star in times of crisis will also help to safeguard the trust of your people at a time when you need it more than ever.
2. Cash is king
Cash is and always will be king above all else. You need to understand every part of your cashflow as accurately as you can, and run it weekly—not monthly. During the 2008 crash, some of our larger clients delayed paying us by up to 180 days, and some of our smaller clients didn’t pay us at all. Others cancelled contracts with us. That has a snowball effect on a small business because, if you don’t have cash, you can’t pay staff or your suppliers. Bottom line: assess your accounts receivable for risk. Are client payments in jeopardy? Do you need to negotiate? What customer segments have the highest risk associated with them? And watch the sales pipeline: are contracts/orders being delayed or cancelled? What about future sales opportunities—are they up, down, flat?
On the other hand, look to see where you might have some wiggle room in your accounts payable. Reach out to your landlord(s), suppliers and partners and see how you can work together and/or share risks, such as through drawn–out or deferred payments, and/or lower fees. Keep in mind that many of these companies are going through the same challenges you are.
Finally, continuously monitor and assess government programs—such as tax deferral and support for your employees (e.g., wage subsidies)—that are available to you. These can be a lifeline. Learn more about some of the most recent programs announced by the federal government here. At the same time, talk to your employees because there may be creative options here, too—some of your employees may be interested in moving to a part-time role temporarily, if the option is presented to them.
3. Prioritize relationships to protect revenues and drive future sales
Prioritizing the preservation of the company is key, and it’s also critical to keep in place the foundational pillars—partners, key staff, critical suppliers—so that you can get to the other side and rebuild.
As noted above, key short-term priorities during a crisis are to keep the revenue/cash flowing and drive down costs, but don’t forget the medium– and long-term revenues. That doesn’t mean get out there and do hard sales pitches, especially in the short term, because a ‘tone deaf’ approach will backfire. Focus on relationships. Reach out and connect with clients, partners, suppliers. Be supportive and empathetic. This is a time to strengthen relationships, not only because it’s the human thing to do, but also because those relationships will matter the most once you’ve navigated through the storm… or you haven’t. Protecting and strengthening your network and existing relationships will allow you to rebuild faster and more efficiently, realize new opportunities or, if the worst case happens, help you find a new path.
In addition, this is the time to be innovative and creative in how you approach your business and the services/products you offer. While engaging your stakeholders, new opportunities will emerge. Test them with clients, understand the evolving market, listen to and learn from the signals that will emerge from all corners of your domain—political, social, economic. Then, step back and look at the big picture because new opportunities will be there and you need to be ready to pivot. Be nimble and shift as soon as signals show the path that you’re going down is blocked. Also, be quick to jettison a new idea if it’s not helping you get through the storm. It’s all–hands–on–deck, and the waves and winds will come at you from all directions, so be prepared to get thrown around and think on your feet.
4. Communicate, communicate and then communicate some more
There is no such thing as over-communication in a crisis. Even if you have nothing new to report, make sure your employees hear from you often—and that your managers have consistent messaging that they can use with their teams. Any vacuum in the communication pipeline will quickly be filled with rumour and speculation, which only fuels more anxiety in your workforce.
Overall, the best approach we found is to:
- Be as transparent as possible, ideally finding the right balance between realism and preparing them for some tough choices that might have to be made.
- Interject regular messaging that gives them reason for hope, keeps them buoyed through tough times and allows them to connect with one another. For example, I write daily “morning coffee” messages to my full team that are lighter in tone and encourage them to reply to me and one another. For example, one day I encouraged the team to share their best recipes, and another day we shared wellness tips.
- Listen and be empathetic: “we understand how challenging this is, our priority is you and minimizing disruption to your roles, we will update you often, here are resources you can access.”
- Don’t promise what you can’t deliver.
- Always be respectful and authentic. It’s okay to be vulnerable. Your employees will appreciate that you care. Nothing is worse than feeling like you have no control over your situation, so give them as much agency as possible—the ability to reach out to a senior manager, provide feedback, raise concerns or share ideas on business opportunities and cost containment measures.
- Always get back to them if a question or concern is raised and share your response with the entire team so the message is consistent.
5. Take care of yourself
You know that old adage about putting on your own oxygen mask first before taking care of others? It holds true here. Leading through a crisis can take a toll, so give yourself permission to take care of yourself—mentally, spiritually and physically. I’m unbelievably lucky in that my business partners are also my friends and we have each other’s backs. However, I know that, as leaders, it can be hard to find a safe space to vent your concerns and seek support. I suggest you reach out to your peer network as, chances are, they are feeling the same things you are.
I hope these tips are useful. I truly believe that we will get through this by working together and, once we get to the other side, we will be stronger and more resilient. In the meantime, please feel free to reach out to me at any time if you’d like to chat (firstname.lastname@example.org or email@example.com).
To continue this conversation about crisis management, I invite you to join our first–ever GLOBE Virtual event: How to Navigate Your Business Through a Crisis. Join me and experts in the fields of HR, financial management, and communications as we share lessons learned and tough-won insights. We look forward to offering many more useful events as part of our newly launched GLOBE Virtual: Resilience and Transformation Series.