It’s hard to point out something not affected by COVID-19, therefore, companies should immediately reconsider the strategy addressing the issue with tact, empathy, and mindful management.
In the current abnormal business conditions, smart companies must be predictive and proactive in their decision-making processes to maintain business continuity and build enterprise resilience.
So, what should a person do if she/he is responsible for a team, organization or a company?
Incorporating these few suggestions into a strategic plan can contribute to business growth and productivity through the ongoing COVID-19 crisis and also in the recovery period.
1. Put people safety first
Anchor everything in what’s most important – the safety of everyone you’re responsible for.
Ensuring the protection and wellbeing of the employee in the workplace is crucial. People are looking to their employer for guidance and it’s important to address their concerns openly and transparently to engage them.
Initiate and expand flexible work arrangements and other policies that allow people to work remotely and safely.
Where telecommuting or flexible work arrangements aren’t possible and companies must have workers on-site or in direct contact with customers, it is important to provide infection protection measures.
2. Communicate with your employees as you do with your friends and family
Effective and timely health communication is always important, but this has become even more clear when creating a plan to reshape the business and to secure ongoing support from customers, employees, suppliers, creditors, and regulatory authorities.
Make sure that you share relevant information with your partners in a timely, frequent, and digestible manner.
Give information regarding what is happening, what the impact is, and how the company is handling it and, of course, always offer guidance on what workers should be doing.
During extraordinary times like the COVID-19 pandemic, you will need effective communication skills to instill trust, confidence, and hope in your employees and other partners that you are working with.
3. Be prepared for changes in customer behavior
Many people will certainly have a higher sensitivity to germs and the risk of spreading infections, so the behavior alone will change many industries.
Therefore, it’s important to adopt a proactive approach to understand what changes will occur and to be ready to customize your products, services, and strategies quickly to meet current and future customer needs.
Customers might go for sustainable brands or for local ones to sustain the national economy – this forced transformation can enhance your business if you choose wisely.
4. Focus on cash
The top concern in the current business condition for many businesses is to manage their cash pressures to ride out the crisis, meaning that your focus needs to be shifted from the income statement (turnover increase) to the balance sheet (liquidity preservation).
There are many actions you can take, all of which focus on improving the immediate cash position:
- Forecasting in real time by:
- preparing short time cash flow with a daily monitor;
- analyzing and be aware of key receipt/ payments;
- mitigating actions if you need (e.g.: supplier payments on the last day of the due date);
- Taking tight control to cash: nominate only one person being in charge with cash monitor, proactively managing the funds received from customers or given to suppliers.
5. Prepare a stand-by cost-cutting strategy
While the turnover increase is no longer a priority, a company should take cost initiatives. It’s critical to avoid aggressive actions because the way you manage your costs decisions now will determine how well you sustain business performance during the crisis.
When cost-cutting is unavoidable, here are some strategies you may consider:
- FTE expenditure – limit personnel costs through freezing new hire, releasing subcontractors and temporary contracts, trying to flex the workforce (e.g. monitoring holiday schedule of personnel when the workload is not so intense);
- Capital expenditure – postpone all CapEx costs and review essential maintenance;
- Other expenses – explore if interest/ rent expenses can be put on hold;
- Involve your team – let your employees feel that they are part of the solution by asking them for ideas on cost reductions.
6. Look for financial assistance programs
Even if you already have a strong strategy implemented, you will still need external help. Fortunately, the restructuring Romanian law introduces assistance measures to help businesses deal with the fallout from the COVID-19 outbreak, in the form of:
- No fines and penalties applied to fiscal obligations unpaid during the emergency period;
- Extension of the due date for 2019 financial statements submission until 31st July 2020;
- Facilitate VAT refund procedures through speeding the actions performed;
- Creation of “Fiscal analysis group” for fiscal advice received from state representatives regarding any concerns that you may have.
You should also monitor nation-wide governmental and organizational opportunities and determine which ones are best for your organization.
7. Plan for recovery now, not later
Time is critical: properly review and adapt the strategy with financial forecasting and cash flow management is a key success factor to prepare the post-COVID-19 environment.
By using some of the tips listed above means that all decisions and actions taken during the crisis will help you obtain business continuity and resilience.
- Understand your current financial and strategic positions;
- Prepare an initial adapted financial plan including cash flow considerations;
- Agree on the relevant next steps and communicate them properly.