by Justin Kulesza, www.linkedin.com/in/justin-kulesza
Friend of the firm, Justin is an experienced finance and operations executive with a passion for driving positive change. His experience includes executive, M&A, turnaround, and consulting roles from start-ups to FTSE 100 and Fortune 500 companies. Justin is a CPA and a CGMA. He holds an international MBA from the University of Warwick (WBS) and a dual degree in Finance and Accounting from Boston University’s Questrom School of Business.
Until recently, most business managers and owners did not have crisis management experience. However, the Covid-19 pandemic has thrust crisis management to the forefront. The critical question for stakeholders today is, “How does our business survive the Covid-19 crisis?” While the answer to this question is unique to each business, there are key questions for managers and owners to ask themselves in order to plan a response in these unprecedented times.
As in any crisis management situation, start with a focus on the core business to ensure its viability as a going concern. To help managers develop plans to work through this crisis, we present a structured list of critical questions to evaluate the situation. The answers to these questions form the basis of disciplined analysis to address critical issues.
Outline of Key Questions for Covid-19 Crisis Management
- Revenue
- What are our core products and services?
- How do we continue to product / provide the service with social distancing measures in place?
- How do we continue to deliver to customers and ensure they are comfortable with the manner in which we do so?
- Is there a market opportunity due to the Covid-19 pandemic and can we take advantage of it?
- Are we addressing secondary products and services in the same manner?
- What are our core products and services?
- People
- How do we ensure that the people we rely on (both employees and contractors) are safely following guidelines for social distancing?
- In our offices/factory?
- At customer sites?
- How are we communicating with our people?
- Is it effective and comprehensive?
- Are we communicating enough?
- Are we embracing our employees?
- Are they engaged with change process?
- Are we listening to their concerns and suggestions?
- How are we engaging our contractors to ensure that we are on the same page?
- How do we ensure that the people we rely on (both employees and contractors) are safely following guidelines for social distancing?
- Process
- How do we redesign processes to support the safety of our people and support our core business?
- Is remote work possible?
- Do we have to redesign service or manufacturing processes to provide for social distancing?
- What changes do we need to make to financial and operational controls under the new business processes?
- What changes need to be made to our business support functions (HR, IT, Legal, etc.) in order for them to continue to support the business?
- How do contractor involved processes need to be updated?
- Social distancing changes?
- Changes to support updated business processes?
- How do we redesign processes to support the safety of our people and support our core business?
- Systems
- Does our current software/systems support the proposed changes in how we do business during the crisis?
- What changes/upgrades do we need to make to existing software/systems to facilitate the changes to business processes?
- Do we need additional systems or software to support new business processes?
- What is the timeline to implement new systems?
- What process/system will be used prior to the new implementation to keep the business functioning?
- Will we use it once the current crisis is past?
- What are the alternatives? Can we use manual processes during the crisis instead of a new software/system?
- Are there outsourced solutions that we can use to support the changes in the business?
- Does our current software/systems support the proposed changes in how we do business during the crisis?
- Costs
- Based on the information from items I-IV above, what are the cost implications?
- Can the business support the new cost structure?
- Do we need to restructure the business?
- Are furloughs or layoffs required?
- Can we improve cash flow?
- Are there ways to reduce operating costs?
- Can we renegotiate payments for leased equipment or facilities?
- Can we renegotiate debt instrument / payments?
- Are there opportunities to reduce operating capital?
- Have we discussed payment options with vendors?
- Have we discussed terms with customers?
- Can we obtain additional financing for the costs of incurred due to the pandemic?
- Have we reached out to our bank to discuss loan options?
- Do we have investors that can contribute additional capital?
- Does our business qualify for any U.S. Federal Government loan programs?
- Are there ways to reduce operating costs?
When working through crisis a management planning exercise we encourage managers to think outside the box. Also, engage multiple layers of the business to develop plans. Ideas come from unexpected places and it is a best practice to consider all ideas regardless of their source.
Once management has developed a plan, we encourage frequent review of that plan. New developments and changes in assumptions may require numerous revisions. With a structured approach and a well-developed plan, even unexperienced managers can help their businesses survive the Covid-19 crisis.
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