Companies that run on the Entrepreneurial Operating System® are facing a historic challenge right now: to IDS the business impact of the coronavirus. In many ways, this is an unprecedented time. Futurecasting the effects of the outbreak isn’t a straightforward activity.
To help business leaders get a handle on the situation, I hosted a webinar that explored the factors organizations need to be thinking about as we move forward into the COVID-19 crisis. Here’s a summary of the best practices we discussed.
Cash Is King
Make cash a priority among your leadership team. During economic uncertainty, your cash remains a constant. Banks can change credit terms without notice. To ensure you have the cash you need at your disposal:
- Call your customers in advance to see if they foresee any issues with timely payments. Get ahead of it and work out a plan if they expect to have an issue.
- Call vendors in advance and try to negotiate at least a portion of what is owed. Be creative, leave no stone unturned. Let them know that you will pay, but it will be slower than normal. Get clear on a timeline.
- Proactively contact your bank and let them know where you stand, financially. Talk to them early, and any time your situation changes. Ask if the bank can offer a 0% loan, and ask about interest-only payment options.
The Small Business Association of Michigan has products to offer companies that need a boost — especially as SBA disaster recovery loans are being packaged together.
Layoffs? When?
Your people are probably anxious about being laid off during the coronavirus pandemic. Sometimes a round of layoffs is unavoidable, but you may have some options worth exploring:
- Many teams are taking 20-30 percent pay cuts across the board to prevent layoffs.
- Give employees the choice to work or use FMLA expansion.
- Seek industries that are booming to see if your workers could temporarily help out another company while you are slow, and they are overloaded.
- Check into the Michigan Workshare Program, which is one attractive option to layoffs for many companies.
- Over-communicate to your employees what’s happening. Triple the amount of communication that you think is sufficient. Everyone’s heads are in different places, and information is changing rapidly.
Where to Go for Information
There’s a lot of information readily available online and in the media, but much of it is inaccurate. You need to tune into reliable sources you can trust — sources with the right facts, as well as a balanced interpretation of those facts.
Don’t rely on social media or traditional news outlets to make business decisions. Instead, go straight to the sources of information: the CDC website and Michigan.gov. Lean on your legal counsel and financial institutions. Check in with your industry association and the Vistage Coronavirus network.
Personal Life
Employee morale is more critical than ever, these days. It’s especially challenging to keep employee morale up, now that everyone is homebound. Find creative and innovative ways to provide the connections people need. For example:
- Do a virtual luncheon – order Grubhub food delivery to everyone’s house and do a Zoom video lunch together.
- Host morning and afternoon 15 minute Zoom video meetings to check in.
- Give well-timed gifts, like bigger computer monitors or new keyboards to make remote work more tolerable and doable.
- Send your people the book Relationship Economy.
- Encourage employees to set up new personal morning routines, such as prayer/meditation, exercise, or priority listing for the day.
Want more help? Check out these resources I compiled on Postwire.
7 EOS® Tips to Managing Your Business in a Downturn
EOS helps businesses get healthy and gain Traction® — even in a downturn. Practice these seven tips to strengthen your organization during the coronavirus outbreak.
1) Obsess about cash flow
Predict on a 13-week rolling basis. Actively and assertively manage your accounts receivables and payables. Don’t be the bank for your customers! Get these items on your weekly Scorecard. Lean into your great relationships with your vendors/suppliers and negotiate extended payment terms.
2) Assess staffing and expenses
Identify opportunities to reduce staffing and other operational expenses. The Book All About Earnings is a great resource of 87 areas to cut expenses and increase cash flow.
Meet with your leadership team in a Level 10 Meeting™ or Quarterly session to do a “Reverse Accountability Chart.” Get clear now about how your organization needs to be structured with a drop in revenue. Develop contingency plans for likely scenarios.
3) Adjust your Scorecards
Adjust your weekly Level 10 Scorecard measurables and goals to reflect the new realities your organization is facing. Your “business as usual” numbers may no longer be relevant. Review the Scorecard, evaluate the numbers, and adjust for the current times.
Consider measurables such as:
- Number of employees absent
- Vendors/customers with virus related challenges
- Number of safety/cleaning checks for common areas
- Order cancelations
- AR past dues
- Refunds granted
- Projects delayed/behind schedule
4) Double down on your Issues
Lean into real issues in your Level 10 Meetings. Make “Coronavirus Issues” a recurring issue on the leadership team and departmental Level 10 Meetings. IDS weekly.
Always seek for messages that need to be cascaded throughout the company to keep everyone in the loop, company-wide. Make it a habit to cascade Virus Updates after every Leadership Level 10 Meeting. Your people will be grateful for these weekly updates.
And always celebrate great teamwork in the face of adversity!
5) Maintain your quarterly and weekly EOS meeting pulse
EOS is designed as a quick-response, root cause decision-making operating system for your business. It keeps you and your team focused on working ON your business. Don’t let business conditions or financial concerns derail you from your EOS meeting pulse.
I recently upgraded my session room to enhance the virtual session experience. I’ve done a number of quarterly sessions virtually, and clients tell me it’s a surprisingly seamless experience.
6) Add “Coronavirus Champion” to the Integrator’s seat roles
One key leadership team member needs to own and push for the tough decisions, coordinate communication, and ensure your fiscal strength is protected. This is especially true during COVID-19.
Since these responsibilities typically fall into the Integrator seat, your Integrator should also be the “Coronavirus Champion” for your organization.
7) Consider me as part of your resource team
It’s lonely at the top. Tough decisions? Need a second opinion or simply a reality check-in? Let’s keep our communication channels open. I’m honored to stand with you during these difficult times.
Whether you’re a current client or not – you are welcome to call me or text me at 586-703-8638. I’ll get back to you as soon as I can.
Need to talk through tough business issues? Schedule a call today!
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