Can you manage your business in the middle of crisis?
In the midst of economic breakdown, the last thing a company would need is a leader who easily succumbs to the pressure and forgets that he still has a business to manage.
Can you please give some suggestions on how to maintain good business management when a crisis situation strikes?
Now, what is a crisis?
A crisis is defined as a significant threat to operations that can have negative consequences if it's not handled properly. In most cases, crises can create three-related threats:
They found that the top issues employees have on their minds during the COVID-19 crisis include:
Childcare and home schooling
Visibility of their employer
Stress and mental health
Work life balance
Create a crisis management plan
Appoint a designated crisis management team
keep employees informed (with accurate and updated information)
Give your employees useful advice and keep them connected
I recently wrote an article to address the same question. I am going to mentions those ideas here briefly.
Managing business in the middle of crisis primarily depends on your model of business. It can't be said explicitly that you can mange and sustain your business in a generic way.
Here are few ways you can still manage and sustain your business:
1) Shift your business online if possible (e.g. work from home scheme for employees, use CRM tools (Customer Relationship Management tools) for constant communication)
2) Take care of employees (Firing your current employees and running for new recruitment, training and management just after the crisis makes you weak and sets you back even more. Believe them and keep them as they need their job as much as you need your business)
3) Manage cash flow (cut on petty cash, take short term and long term loan if possible)
4) Make your own health care program for your employees (insurance, sick leave, periodic health check-ups)
5) Collaborate with others in same niche and make a collective plan for group survival (business associations and umbrella organizations are helpful in this)
6) Apply creative problem solving approach (when you encounter a problem either you solve it, or wait for it to get solved itself if you can't, or avoid it , or turn it into opportunities)
Nowadays, numerous businesses are affected by COVID-19.? Here are some tips for managing your business efficiently during this pandemic:
Daily communication – Keep all the communication channels open for your employees and keep yourself updated with the financial data.
Avoid running out of cash – determine expenses that are not essential at this time, that you can that reduce and maintain cash flow efficiently.
Protect your most significant business source – Clients/ customers are the most important assets for every business. Support them and deploy other resources to serve them with the best.
Make bold decisions – Analyze your business’s financial data and make a quick decision based on that.
Apply for relief - Take advantage of loans through the Small Business Administration, including the new Payment Protection Program, Economic Injury Disaster Loans, and SBA 7(a) loans.
Simply following the advice of analysts is not enough. A good top Manager should always have two well-thought-out contingency plans. One is in case of a short-term crisis, such as the appearance of an arrow in the city or a power outage. The other is in case of a threat that may have a long-term effect. First of all, you should know the basics of Economics, read Economics Cafe tuition centre reviews here. It is already clear that many industries will face a serious decline due to the coronavirus: transport, tourism, entertainment, traditional retail, food and beverages, essential consumer goods, automobiles, insurance services. However, it is important for top managers of companies not only to correctly assess losses, but also to understand that the coronavirus will lead to changes in consumer behavior.
To not succumb when things go wrong (and things will always go wrong) a business need a risk management and business contingency plan. Basically you need to assess what might go wrong and then make clear plans on how to best deal with it so that any possible the damage is minimized. I work with this type risk and crisis management and I would be happy to assist.
I agree with Gary Brooks. I might add that in my business experience and my firm's we have lost partner's through unanticipated death. Clients that have been killed simutaneously, children dying. Clients that have gone under etc. Lot's of tragedies. Many economic breakdowns.
I would suggest that many life transitions occur. We believe in having every one who is a stakeholder, partner and top management to be cross-trained as much as possible.
The next thing is to have a really strong cultural match with as many employees as possible. Shared values with your firm's employees, management and partners goes a long way when a crisis occurs.
Certainly you can- and good leadership is the key- some guidelines
Review your business and review the dogs, stars, cash cows and qustion marks- hive off the question marks and dogs.
Review your manpower needs - if unavoidable retrench.
If the leader falls short of expectations, replace him
keep employees motivated at all times
Great answers. You should always have a back up plan. As confident you my be in your decisions things do happen.
A mentor of mine used to ask me when something went south. "Where was you back up plan"? Then he would say you should always have a back up plan! And then you should have a back up plan for your back up. Man that got under my skin.
After messing things up I realized I needed a back up plan and it hit me.
Now I make decisions in total confidence because I have the back up. It allows you to confidently make the shift needed to stay the course.
Best of Success. Gil
A crisis must be looked at as a challenge to be overcome. Unless you try you will never know and will be defeated before the first ball is bowled. In a crisis you will find that your mind is completely focused, you are alert and brainstorming yourself how to overcome the same. The smallest of things will be looked at in detail by you to ensure that they don't add to your crisis and need to be neutralized.Stay focused on your goals, try to understand the environment that has led to the situation, keep your cool and you will find a way. Also, don't be impatient!!! It will take its own time to resolve itself and YOU are going to resolve it!!! Always take advice from your elders, who will have faced the same situation in their lives and learn from their experiences what NOT to do.. Most of all Pray to the Almighty God to give you the courage, vision and strength to overcome. Like Obama said "We can do it and we will". The American Economy is finally on track . Best of luck. Stay focused
Hi Humphrey, actually I believe that the balanced or steady state is abnormal, the crisis or caos is the normal in business. The change or crisis is the reason of your business, and your return depends on how you manage it. Better to define the early warnings of crisis lights for internal or external conditions. The normal flow of business does not allow you to assess the leadership or management performance, once change happens, due to the poor management skills, you may be seeing the change as crisis. So the leadership or management selection process is well above the CV credentials. The crucial value of the people is related to the behaviours. The best behavioural characteristic for your business should be defined firstly over the team design with the required talents. These are for future actions. What to do now? Try to understand the crisis and your positions with weaknesses and threats, and settle down the management for ratipnal and cool thinking. If the managements capacity for handling the issue is inefficient, the manager could be supported with such people or a team to complement the ineffiecies of management. Hope these help you, should you like to discuss further I will be happy.
Crises come in different forms. If you are talking about natural disasters, fire, government intervention, regulatory interference, product liability claims & recalls (ala GM), etc., the responses you have received are valid & useful. Many companies, anticipating this class of problem, prepare a crisis recovery plan, forming the basis of how the company will respond.
However, dealing with the crisis generated by long term inattention to performance failures often is beyond the experience of a management team that othewise has been historically successful. The symptoms of this crisis are long term losses without corrective action; the loss of your credit line; vendors demanding COD; high turnover involving key employees; losing primary customers. Recognition that insolvency is possible.
I have worked with more than 250 companies reaching this critical condition. Management hasn't/won't/can't address the issues. Paralysis exists. What needs to be done? Few managers, if any, are ever schooled in resolving near insolvency crises so that a new foundation can be built. .
1. Operating & strategic priorities must change from a concern of 1-3 years (the usual strategic planning vista) to a focus of 1-3 months. In these crises, time is not a friend. Note: You can't grow out of a crisis. Growth requires time and cash, neither of which is available.
2. Focus on cash generation. Monetize under-utilized assets (slow moving inventory; obsolete equipment; A/R collections. Forget the impact on the balance sheet.
3. Define the operating problems that are causing the symptoms. (Lack of cash is not the problem). Look at issues such as waste, pricing, distribution costs, fraud, theft (inventory shortages), quality performance.
4. Form the crisis team. Identify short term (weekly) milestones with approproate metrics. Do not accept failure.
5. Communicate honestly and continually with every constituency: employees, vendors, key customers. They all can contribute to solving the problems and relieving short term pressures.
6. Reach for the advice of restructuring consultants who have extensive expertise in these matters. Include your attorney in the circle of advisers but resist any attempt to push you into bankruptcy court.
7. If a RIF will be required, use all community resources to help to place excess employees elsewhere. Be sure to address the human concerns.
If this is what you are facing, I hope these comments help. Contact me if you want more relevant suggestions.
This is a great question, but the answer lies in your infrastructure. In order to maintain management in the middle of a crisis you have to have proper systems and processes in place. That means that when something happens everyone on your staff from maintenance to management knows the standard operating procedures for that situations. Crisis occurs because people don't know what to do, take that out of the equation and you cure the crisis.
Some times yes sometimes no, the secret is knowing which is appropriate for you.Some people are crisis junkies other are not.Crisis junkies often perform best in the middle of a crisis. One trick to help you determine which one you are if you fold hibernate then you are not likely to perform well and there fore not the person to tackle the crisis.Not to be ubiquitous but these are important for you to understand.
Hold your chin high and don't frighten the troops. Tell them as much as you can/should. Your priorities change instantly and that's okay, time is of the essence for correction, sustaining......... Bandaids work for very short periods. Remember thoughts are thoughts, don't go rattling off in every direction. You are far from the first and you won't be the last to be in this position. Trust someone to speak too. It's difficult and all actions have consequences so take the day as best you can to solve the big problem while deeply considering secondary action steps required. Big decisions are tough, they cause anxiety & stress in most people and generally there are human relations to give deep consideration. Hold your shoulders high, never forget all that has been accomplished, by you the leader and self-care means, go home after work and do something healthy. If it's sleep - sleep. The next day, those troops are waiting for you to walk in the door. No answer to the question, just a whole lot of circumstances to let you know, you're not alone. Tough world out there
Self serving Answer - Hire us we can create a "Crisis Plan" for you and your company.
Stay calm at all times,because indecision destroys. Define what the crisis actually is. Drill down so you can describe it in one sentence. Create your action plan. Deliver your plan to your team so everyone is singing from the same sheet. Then daily drive the action plan through to its conclusion.
All of this assumes the crisis is a real one,one you can control. Because if the crisis is not of your making,hunker down and learn to surf the waves.
first of all: define exactly what is your business, competitors, and the area of the market. Are you sure that your market share is at the maximum and you can't progress any more, even in crisis?
Crisis can help to clean the competitors... the best and structured will stay. the others will die.
Second point: which are the other growths : markets, customer's needs, export... you could fullfill easily without spending too much time and money.
Give clear objectifs and define strategy step by step to reach them.
We try ! The most imortant thing is Cash Management. Follow the payments of your debtors! Try to negotiate longer terms of payment for You.
I would say , I have faced such situations in my endeavor also .Every thing is a matter of time . First I would say check t your steps, those you are taking . Here is a time where you have to be realistic and you might have to take some difficult decision but that is ok . Most of the crisis are due to fund , think of strategy to gather fund , here you have to think out of the box . Had it not been the case not you would have found it . For example have you check the banking policies in your country and how they can help start ups , As you said in your query , its true a leader knows where he and his team is going and the crisis is part of the path . He has to keep his team working taking all the responsibilities to guide his team out of the crisis and reach the main objective .
A crisis is a highly emotional experience for those in the business. The only way to recover from a crisis is to look at thing analytically and take the emotion out of the decisions you are making,
It can be very hard to reduce someone's hours when you know them, but the alternative might be that you close your doors and they become redundant because you could not make the hard decisions.
Some management and owners are able to make the difficult decisions when faced with compelling data, but most struggle to remove the human aspect from the figures.
External consultants are usually the best answer to a crisis situation as they will help you make some tough decisions that are necessary to get you back on track.