Crisis Management- COVID-19 and beyond

We are in a time of intense difficulty, where businesses all over the globe are struggling to reinvent, stabilise and survive- this is the definition of a crisis. For some this is the first crisis their business has faced, for others crisis management is something they are familiar with. Wherever you stand, there are three key steps to take in a crisis to set yourself and your business up for recovery and to thrive well into the future.

Respond – Looking at how you deal with the crisis, utilising the pillars of crisis management (below) to respond to the crisis
Recover – Delivering on your crisis planning, developing strategies to improve the business operations through this period and taking the time to develop:
1. policies and procedures,
2. automations,
3. plans that will ultimately put you in a position to thrive post crisis
Thrive – resetting the business, building on the operational improvements that you identified and started during the crisis, and placing yourself and your business in a position to thrive when the economy takes off again (because it will)

So, What is business continuity?

Business continuity is a fancy term for being able to do business. It’s all about creating plans and systems including backup plans in case things go wrong.

The pillars of crisis management and business continuity planning

When we talk about crisis management it is important to look at and create plans for particular parts of our business including:

Finance,
Talent and strategy,
Supply chain,
Customer engagement,
Digital capabilities.

Finance

Finance is a key consideration in the crisis environment. After all it is the dollars that keep your business running. You need to think about:

What options are available to you? Can you get financial assistance from the bank, private lenders, equity partners, government loans and guarantees or are other options available to you?
What grants and incentives you are eligible for? For example JobKeeper, NSW small business support grant $10,000, land tax relief or is there a grant specific to your industry?
Are there tax considerations? Can you access tax relief or even payment plans to help you through the crisis?
Cashflow, how much cash can you expect to flow into and out of your business during the crisis? It is important that you create a forecast and budget of your cashflows to understand, in detail, your financial position.
How will you know when you need to source funding? Will a particular level of sales or revenue or your balance sheet alert you to the need to source funding?
Can you sell equipment? Reduce your leased floor space? Or put off payments such as leases to help you have funds to continue operating through the crisis?
Can you review your contracts with suppliers etc for clauses that could help you in crisis situations?

Talent and Strategy

Keeping your reliable, knowledgeable and talented staff engaged in your business in a crisis can be really tough, but if you want to come out the other side and thrive it is often essential. You should consider:

Workforce continuity planning- can you separate staff into small teams? Can you stagger start, finish and break times to reduce contamination if the crisis is an illness or virus? Think about other risks or crisis that could affect your business and create workforce continuity plans for each situation.
Key person risk- Are there particular team members who are essential to your business success and profitability? Can you keep those staff members apart to reduce the likelihood of both (or all) getting ill?
Systems and process documentation-Can systems and processes be documented ahead of time to allow others to complete work if a person became ill or unable to work for you?
Scale down (or up)- How can you increase or decrease your business output in a crisis? Can you make casual staff full time to increase your output? Can you drop your part time or full time employees hours? Can you stand down employees in the short term? It is important to understand the legal, ethical and cultural ramifications of these kinds of actions.
How can you lead your team to ensure they feel confident and aligned with your business goals through the crisis? Would regular team meetings work? Is it about one-on-one conversations? Is communicating through Facebook or email updates best for you?

Supply chain

Supply chain in a crisis is another key consideration that should be considered. COVID-19 has showcased supply chain issues for toilet paper, PPE and many basic “necessities” here in Australia. In order to prepare and thrive after a crisis you should consider:

A back up plan for short, medium and long term disruptions to your supply chain. Can you get products and equipment that are manufactured here in Australia? Can you have a backup supplier in a separate country?
Can you build a contingency plan that outlines potential scenarios and action plans to put in place early to ensure your supply?
Which of your suppliers pose a key risk to your business in a crisis? Can you have a backup supplier who can increase their sales to you on short notice?
Can you create a complete alternate supply chain solution? If your products are usually shipped by air, can they instead go on a ship? How would that affect your timeframes?

Customer engagement

It is easy to forget about your customers during a crisis, you can be so stressed with the day to day functions of your business that you forget all engaging with them. It is important to keep them in the loop so they understand how the crisis is affecting you and what they should expect. Key things to consider include:

Having a plan in place to engage with your customer base on a regular basis, whether that is weekly, fortnightly or at worst monthly. Communication is key to keep customers loyal throughout the crisis. Will you create Social media posts? Short videos? Send an email or a more thorough EDM newsletter or sales pitch?
Protecting and rewarding your important or key customers- how can you stay in contact with the key customers who pay your bills? Will regular emails or phone calls work for you and what will work for them?
Can you create a map or plan to outline the key stakeholders and what influences them? Does the crisis change what influences your customer? Do you go from being a one day to a today need?
Does your value to your customer change based on the crisis? How will you communicate how you can help solve their problems?
Can you prioritise communication that is more likely to lead to sales for your business?

Digital Capabilities

Analysing your digital capabilities is key in a crisis. Moving online can help in a crisis like the COVID-19 pandemic but it can also make you more efficient and save you money to continue these capabilities! You should consider:

Operational and technology needs- can you provide your team with laptops and allow them to work from home to save you the need for additional desk space in the long term?
Identify potential risks and cyber vulnerabilities- do you need antivirus software? Should you backup your files and how? Do you need password protection programs? A VPN? Or stronger systems to protect you from vulnerabilities?
What automation and online tools are available that could improve your efficiency? Can you automate emails and have systems in place to automate your invoicing?
What systems and processes can you put in place to reduce the impact of a crisis? Would time trackers help your team? Daily team meetings via zoom? Would instant messaging allow you to keep track of work?
Is your data safe with your team? Are they working in a common area where others can see private client data or do they have a private space, free from distractions? Are they using private WiFi?

Creating a business continuity plan that resolves these pillars of crisis management will help your business to respond, recover and thrive through this crisis. With some time and serious consideration of the pillars you will find the opportunity in this crisis and emerge with a strong plan (and business) which will carry you well into the future.

Need a hand? We’re here to help! Give us a call on 0411 876 912

Any advice in this blog is general in nature and is intended for information purposes only. For personalised advice please contact your accountant.