Once or twice in our lifetimes we face events that are completely out of our control and it is easy to be swept up emotionally in the crisis and overwhelmed by the challenge. This is when true leaders stand up and create certainty where none exists.
This blog is meant to be a quick read on some experiences we have had in tackling the 2008 credit crisis and whilst it wasn’t a pandemic, it had many of the same characteristics.
The first thing that happens in a panic is liquidity dries up – ie. Banks, asset managers, funders stop lending. If they don’t have visibility of the potential risk, they decline applications. So the most critical response is to shore up cash by drawing down on available facilities and suspending any unnecessary investments, reduce expenses and manage your cash flow daily!
2) Best Team
When a business is growing, we tend to shift people into roles linked to growth and new initiatives. In a crisis, the best people need to be allocated to the highest priority roles – it could include collecting from customers, raising facilities or engaging key clients.
3) Morale & Communication
People need leadership which includes authentic and regular communication of the situation, what the business requires and how it will be achieved. You can’t control the circumstances, but you can control the response and actions. This is certain.
Every day is important – and leaders need to be hands-on – being in touch with customers, suppliers, funders and staff. Collect data on everything – the mood, the financial metrics, customer stories…. Some of the best information is anecdotal not just the big data.
It’s tough to be prescriptive when you don’t understand all the underlying levers. They can change in a crisis. What worked in a stable environment can go out the window. So best approach is to start again, listen to customers and then adapt your policies within your framework.
It’s tough to write a crisis manual but maybe these points above can add to what is already being done. In simple terms, being overwhelmed is easy, so tackle a few things very quickly and with commitment. This gives certainty and action. The alternative is paralysis.