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?
Management in a crisis is made easy when there are solid processes and practices in place. "Solid" practices are those that are developed independent of exterior forces. Solid business leadership should anticipate a crisis of any magnitude. Here are a few suggestions to avoid succumbing to the pressures of crises.
1. Review Policies and Procedures regularly
Ensure that these policies have fails safes and proper checks and balances in place
2. Create and implement best practices
This allows minor issues to be handled on the lowest level possible, leaving leadership time and confidence to deal with the crisis.
3. Finally, Create an integrated Communications Plan
This plan allows the seamless passing of information in both directions so that all stakeholders have perfect, actionable information.
Suggest create an Action Plan based on company history of the business and financial review of costs and margins. The Plan to have the best opportunity for success must meet three conditions: Realistic, Reasonable and Doable. Once implented management mus audit results weekly.Then adjustments can be made to keep the Plan going.
Hi Humphrey ~
It makes sense to plan for crisis in advance. Here's a piece I wrote about doing that: http://www.mosaichub.com/resource_center/resource/when-you-cant-run-your-business-planning-for-the-u
Beyond this, Kevin's and Mark's guidance is spot-on. Good luck!
While no crisis is easy, the company and it's employees depend on good leadership during the crisis. One area of focus that i consult companies on is crisis management. If you develop a crisis plan for your company you can be best prepared for these situations when they arise. See the link below to learn more about crisis in business:
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.
The first thing you must do is remain calm. Many managers will overreact, creating an entirely different set of problems.
Information is key in these situations. Analyze the numbers and other non-financial metrics for success. This should tell you generally where the problem lies.
Listen to the people on the front lines, they are the best source of information. This does not mean that you do what they tell you too, as they may not see the "big picture", but if you listen to the things they are telling you, you should be able to derive the problem.
Make sure you have trusted advisors (hopefully some of these are people on your executive team), these must be people that will tell you the truth, not just what you want to hear.
Once you have determined the problem you have to create a solution and more importantly implement it. Make sure that you can measure the success of your solution and track the success of it closely. You will need to make adjustments.
Use a thoughtful and methodical approach to correcting the problem and have people around you that are competent and honest, if you follow this approach there are very few crises that you cannot overcome.
Cool head and be calm under pressure.
Nothing is worse than a boss who runs around with no clear objectives in mind and an unsettling behavior.
If there is a solution, the boss must make it known and the steps to achieve it. Follow up on the plan and keep all doubts to yourself. Only winners get to overcome bad situations and in terms of experience they are the most valuable.
If you were successfully managing your business before the crisis situation, then you need to continue doing the same things you were doing. There may be a few changes that you need to make in order to compete with a larger business, however that should not be a factor. There are several strategies that you can use to continue to compete with the larger businesses and in most cases take business from them. The main thing is to stay focused and keep your priorities strait.
Manage by metrics. Set up metrics for each aspect of your business and create a revenue capture scorecard to see where you are each week/month/quarter/etc.
Make sure you have good business practices and processes in place.
Create a Strategic Action Plan to guide for the next three years.
Make sure you have a management team and advisers who will tell you what you really need to hear, not what you want to hear. It is advisable to find a good executive/business coach, not emotionally or financially tied to you or your firm to provide advice and counsel.
From "The Servant Manager: 203 tips from the best places to work in America", chapter 14 on How to Manage in a crises there are five tips covering 9 pages that state:
Determine what is a crises
Maintain your composure at all times
Know your anchors
Depend on your values to set the tone
Prioritize resources and critique your actions when the crises is over
These are the titles to the tips. I think these are a good starting point for you. Good luck.
1. learn to meditate or have a vibroacoustic mat of low sound frequencies (ask me about it)
2. keep your business plan as much as possible
4. sleep well
5. eat balanced food
6. keep the good spirit of the management teams and employees.
7. don't get angry
- stop doing time and cost consuming tasks;
- make short term plans, stablish key indicators and monitor this indicators oftenly, but keep your eyes on the long term;
- drive your energy to acomplish your objectives;
- keep calm to take decisions, this will let you see the better way.
Crisis is the result of not having a plan with contingencies. Without a plan every day is a crisis. Business people are typically frightened all the time because they have not developed a plan. Planning anticipates the inevitable, but if you are not contemplating the inevitable then you will be surprised when it happens. Do you have a strategic plan for your business?
Figure out what's most critical to keep the business running, and set your priorities accordingly. Your employees know something isn't right, so update them because they'll cope better when they have the facts instead of rumors and hallway conversations. Update them clearly and succinctly. Don't sugarcoat it but don't make it scary. Let them know you have a plan (share it with them); remain calm and carry on.
You can resist succumbing to pressure when you have a clear plan and know that everything you do every day is aligned with your priorities and your plan. You must work with the expectation that given your plan, things will improve. Believing they will improve will help you stay calm.
Know what your vulnerabilities are and have a plan to deal with each instance -- even if you never use it, you'll know you are prepared. You'll be able to think and act more clearly when you have a plan created before a crisis hits. It's tough to think well when we're in the midst of unexpected downturns.
Humphrey, I hope some of these suggestions are helpful for you. Good luck.
I operate from the assumption that crisis always presents us with an opportunity for personal and professional growth.
We tend to rail against events beyond our control, piling tension on top of an already tense situation. If we instead see the situation as absolutely appropriate for our development, we look for ways to work with it.
We can ask ourselves:
Where am I attached to doing things the way I've always done them?
Is there something I can let go of in order to move forward?
How is what is happening externally affecting me internally?
What can I shift internally to create an external change? (Sometimes, new perspectives and skills emerge when we allow a situation to change us, rather than holding on to how we've seen ourselves in the past.)
This can also be an opportunity to create a deeper investment of staff in your organization by holding brainstorming discussions to trigger creative solutions to the issue.
The symbol for danger in the Chinese alphabet also means opportunity. Holding this perspective, and truly believing in it, can fuel positive and profound shifts in your company.
Ghosn's work in turning Nissan around is a good example of this approach.
The best suggestions for managing anything while under pressure or in crisis come from the "Art of War" and the trained response of a great fighter. First and foremost, be calm and find your center, second buy time, lastly identify opportunity and strike with excellent timing and precision.
Crisis is largely a state of mind. Business regardless of what people think has not really changed over time. The tools may have changed, the product or service may have been refined or extended, but primarily the basic rules have not changed.
Stay calm, lay out the perceived difficulties, revert to the basic simple strategies and the "crisis" suddenly becomes an opportunity. It may require a change to systems or process, a reeducation of staff or product or process . No point in panic, it just creates static that interferes in the simple process of review and recovery.
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.
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 .