Dr Jana Matthews | 4 minute read | Five steps to prepare your company for uncertainty.
Here are five things that will increase the odds that your business will survive uncertainty.
1. Get real about what’s happening to your company and the cash needed to survive.
Take a hard look at your accounts receivable, payable, fixed costs, P&L, and Balance Sheet. Project your cash flow for the next few months. What is your reality? Work on collecting receivables. What’s your “runway” before you run out of cash to pay your expenses? How many expenditures can you delay? Can you ask some of your employees to take vacation days now or drop down to 80%, if necessary? How much do you have in company reserves? Are you personally able to lend the company some money? Check what government grants are available. After you have done all this, then go to the bank, discuss the shortfall, and ask about a loan.
2. Double down on your winners during uncertainty.
Not every company will do it tough this year. Some are going to have their best year ever! Study which of your products have been selling and which customers have been buying. Focus your efforts on products or services that are selling, and identify the types of customers who are buying. Target your marketing on particular customers or types of customers who are most likely to want what you offer.
3. Find the parade and get in front of it.
After studying what people and companies are buying, determine whether you have what they want – or can make some of the components that go into what people are buying, e.g., can you make the straps that secure the face-mask or key components in the ventilators? If so, let the manufacturers know you have these components – or maybe you can figure out how to make the product yourself! If they want it, and you can make it, then make more and sell more. And if they want it, but need to consume it in a different way, then figure out how to deliver it in a form that they want, e.g., people still need to eat, so if you are a café, consider whether you could deliver food to their home.
4. “Strong Eye” your company, people and products.
Study your company, as if you were an outside investor, looking to buy your company. Engage your employees to find the soft spots. Tell them there are no sacred cows – that you want them to identify all the ways the company can become more efficient, at all points on the value chain – from developing/sourcing your products or services, to marketing, to finding and selling to customers, to your people systems, finance, customer service and support. If you have people who have bought into your vision and match your values, they will help you figure this out. If not, then you need to quickly “prune the garden” and get rid of people who aren’t performing and don’t match your values. Also think about what changes you, the leader, need to make in your lifestyle, your health, and your leadership.
5. Have the courage, brains and heart to lead through the uncertainty.
It’s not easy to lead through chaos at the velocity of change we are experiencing. It takes brains to analyse and develop strategies to keep the company alive. It takes courage to stop doing what used to work and move into unchartered territory with new products, new marketing strategies, new customers, and new delivery modes. And it takes heart. Empathise with your employees who are worried about their future and have put their faith in you to make sure the company and their jobs endure. Provide frequent updates; share the good, bad and the ugly; weed out the misfits, malcontent and non-performers; and do everything you can to keep your great people on board. You will need them to help you grow again.
Whether your company continues through uncertainty and is positioned for growth will largely depend on how you lead, the culture you create, the decisions you make, and the strategy you pursue. Be the leader your company needs in this time of uncertainty.