COVID-19 How business can prepare and manage through this difficult time

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COVID-19 – How business can prepare and manage through this difficult time.

COVID-19 is having a huge impact on all of our businesses.
It could well be like that for a while yet.

The following text was originally written by a good college of mine, John Downes.
John and I are both committee members at the VIC/TAS Chapter of the Institute of Management Consultants.

John has very kindly allowed us to use this text to share with others. A sincere thank you John.  I have edited his text slightly, but the essence is the same.

If any of you would like a confidential chat with me, please feel free to call on 0424 325 763. Any time. If I am not available I will call you back.

Steve Wood
0424 325 763

Please call Steve Wood, on 0424 325 763, if you would like to arrange a confidential chat or enquire online.

 

COVID-19 – How business can prepare and manage through this difficult time.

1. How will this impact you and your business?
It’s okay that we do not know, exactly. Consider the 5 dimensions, preferably with your leadership team.

2. Settling your team.
Communicate. Communicate. Communicate. Openly, honestly, authentically. People won’t remember what you said, but they will certainly remember how you made them feel and how you behaved. Be prepared to accommodate remote working arrangements if necessary.

3. Assessing your business.
Assess your business in the context of COVID-19.

4. Employer responsibilities and employment position.
Review and prepare for the awkward questions that may present themselves

5. Opportunities.
Keep your eyes and minds open for them: innovation and leadership and connection.

1. How will this impact you and your business?

The short answer is we do not know, exactly. This is something you will need to assess on a daily/weekly basis.

The reality is that the possibility of a shutdown is unprecedented in my lifetime, however, we have seen how people have responded in a number of economic crises since the ‘80s including 911, the GFC, SARS and our own mega bushfire events. My experience and recollection were that some people will be very inwardly focused but, many more – significantly more, will be motivated and nourished by supporting their community.

We are all experiencing this together.

It can be quite revealing, but each person has the right to deal with these things in their own way and they are fully responsible for their own Feelings, Actions and Behaviours.

But I think there are a couple of dimensions that we can consider:

1.1 Staff.

They will be concerned, confused and possibly quite scared for themselves and their family. This will not always lead to rational behaviour. But they will look to us as employers and business owners for leadership and role modelling.

They may need to take time off or work from home (if practical) e.g.

a. to handle childcare arrangements if schools close before the school holidays (or beyond) as some are already doing
b. if they get colds or an infection. They will be even more disinclined to come to work to protect those around them, and of course, co-workers will possibly be very vocal if they do attend work and are visibly ill.

They will also worry about their jobs, whether the business is sound if we can’t do business for a period of time and whether they will get paid.
Some will also talk more about anything and everything while others may become reclusive.

We are not here to be their psychologists and it is important for us to be empathic and also to maintain good boundaries.

They will also ask us questions we don’t know the answers to or which answers may change from day to day. If that is the case, it is ok to say, “I don’t know, yet” and get back to them.

Do not make commitments that we cannot keep such as “No-one will lose their job”, and if you do, be prepared to recant them.

Refer to the article below on leadership communication in a crisis. I think it adds real insight.

1.2 Customers.

Apart from those serving the healthcare industry and some other sectors, customers will be increasingly cautious, and possibly erratic in their purchasing behaviour. Discretionary spend is likely to drop significantly as they batten down the hatches while this hopefully short period resolves. Yet, their core supply chain will be vital to them to serve their own supply chain and they want to be very sure of your ability to supply.

The “Toilet Paper” behaviour has woken people up to our reliance on supply chains and reduced stock levels, so it is important to be certain of our ability to commit to orders and to communicate clearly what we know and what we don’t to our customers during this period.

Payment of orders may also drift out as customers attempt to conserve cash for a temporary slowdown. We need to stay on top of this and again set reasonable boundaries. As you know, I am a great believer in staying close to our customers to help them with their businesses as we would expect similar behaviour from them.

Now is absolutely the time to be on top of collection of any outstanding debts.

1.3 Suppliers and supply chain.

Depending on where their inventory comes from locally and internationally, this may become erratic. Whilst most of China is now shipping and taking orders, our local logistics may become temporarily unreliable. Again, open and constant communication is vital, as is looking at fall-back scenarios.
Suppliers may also be inclined to change their payment terms if they become uncertain about their cash flow. Again maintain good boundaries and communication.
I hope that predatory pricing will not become a behaviour that we see, but if we do it is another one of those “telling” behaviours to recognise and call-out.

1.4 Cashflow, Financial Viability and Financiers

Chances are high that with a government or self-imposed period of isolation, this is going to place strain on your cash flow. Plan and monitor your cashflows on a weekly basis over the coming months and if you need some flexibility from your financiers, speak with them early. They hate surprises but can be very supportive if given an early heads-up. They are already aware of the impact on trade and offering support options such as NAB:

• ‘We are working with our customers on a case by case basis. Anyone who needs assistance should contact their banker so we can discuss their circumstances and determine the best way to help.’
• ‘NAB works with its customers to navigate business cash flow challenges through a range of measures including:

o Deferral of business loan repayments for up to 3 months, assessed on a case by case basis
o Extension of a business loan term by a period of up to 3 months, where individual circumstances warrant
o Support to restructure existing business loans, including equipment finance
o Business credit card deferred repayments.’

The other banks should take a similar stance as, without business lending, they are in real strife.

The Australian Government has announced Cash Flow Assistance For Businesses to “support businesses to manage cash flow challenges and help businesses retain their employees. These two measures are designed to support employing small and medium enterprises and to improve business confidence.” Refer to the link and seek advice from your accountant about these early. The Department of Treasury link is https://treasury.gov.au/coronavirus . I cannot advise on this is any way.

1.5 Government.

Please refer to the government website Coronavirus (COVID-19) health alert for their daily updated view of the Australian situation – health, travel, government support. It contains excellent resources, information to share with your staff and family and workplace posters.

We have seen the start with government recommendations against gatherings of 500+ such as the Grand Prix, football games played behind closed doors etc and warnings against “unnecessary international travel”. What we have seen is the success in China, South Korea, Japan of invoking border controls to limit movements in and out, in an attempt to flatten the cross infection curve.

Is further tightening / shut down possible?  I wouldn’t rule it out.  Schools and universities are already starting to make their own decisions regarding closure before the School Holidays whilst there is discussion about the school holidays being extended to Easter. This is all likely to be necessary to flatten the curve of inevitable virus spread and enable our healthcare system to cope.

2. Settling your team

2.1 Our staff will be unsettled, (as will we).

We need to take good care of ourselves in order for us to be able to help our staff and our family members to take care of themselves.

Speak to peers, loved ones, and your advisers as a way of sharing this, making sense of what is happening, and most importantly activating the “problem solving areas of the brain” invoked through talking about issues that concern you.

You might find this Harvard Business Review article helpful that a client recently shared on LinkedIn about Communicating Through The Coronavirus Crisis. I think it excellent. In summary it recommends that we:
“communicate early and often with your key constituencies throughout a crisis. Even if you’re still trying to understand the extent of the problem, be honest and open to maintain credibility. Approach the situation with empathy. Put yourself in your constituents’ shoes to understand their anxiety. You will sometimes get it right, and you will often get it wrong, but it is still better to be as transparent as you can.”

Please read it thoroughly and work with your team leads to work this through in your context.

2.2 Staff working from home?

If this is possible, be prepared to make information and client/ supplier/ team interaction possible via phone and video/skype/zoom. Make sure you check in with remote staff daily face to face so that they do not feel like they are isolated or adrift.  Recognise that they may be frustrated with the initial inefficiency of unfamiliar remote working systems if they are not used to it (or if they are also juggling child minding duties simultaneously).  Remember, they probably did not ask for quarantine at home/ unscheduled childcare duties.

3. Assessing your business

Over the last decade I (JD) have developed a business assessment tool which I use to review the key elements of a business as part of strategic planning. Please feel free to use it to just think through each of the areas/functions of your business in the context of this COVID-19 situation and make your own assessments of your high priority next steps.

These include:

• Customers – Build Revenue
• Suppliers and Staff – Deliver Profitability
• Staffing and your Leadership Team – Support People Performance
• Cashflow, Inventories, Capability – Drive Asset Returns
• Monitoring your business and cashflows – Organisation Learning.

It might help you get some clarity amongst all the noise about what is important to you, this week, next week and the weeks there after.  This is free. Click onto criticalfew.com.au/assessment/ to learn more about his assessment tool.

4. Employer responsibilities and employment position

On Friday, 13/3/2020 HR Legal released this blog: Employment Law Issues with Coronavirus (COVID-19) which I found to be an excellent assessment of Australian employment law. I think you might find it very helpful to understand some of the following employer/ employee issues:

• What if an employee has been to a high-risk country or been in contact with a person with coronavirus, and they have to self-quarantine for 14 days – are they on paid or unpaid leave?
• What if an employee has been overseas on holiday, but not to one of the high-risk countries, and the employer asks them to self-quarantine? Should they be on paid or unpaid leave?
• What if an employee presents for work and they are sick? Can the employer send them home to self-quarantine?
• What if an employee refuses to come into work, or perform certain duties, as they are concerned about being exposed?
• Does the employer have to pay an employee to self-quarantine?
• Does the employer have to allow an employee to work from home (if they are not sick)?
• What if schools close and an employee has to stay home and care for their child? What type of leave will they be on?
• Can I force permanent employees to take annual leave or personal leave if they have to self-quarantine?
• What about casuals or independent contractors?
• What if the employer needs to close all or part of the business?
• Can the employer force employees to reduce their hours or salary in the event of a slow-down?
• What else can employers do?

Here is the link: https://hrlegal.com.au/employment-law-issues-with-coronavirus-covid-19/

5. Opportunities

This situation provides all of us with real opportunities to:

• Seek out and develop new business products, services and relationships.
• Implement new ways of working which may continue to provide efficiencies into the future.
• Lead our team and our community through this experience to be better connected and higher functioning.

Whilst it may feel unfamiliar and thus uncomfortable, this could be the crucible for innovation and connection of the decade.

6. In Summary

1. How will this impact you and your business?
It’s okay that we do not know, exactly. Consider the 5 dimensions, preferably with your leadership team.

2. Settling your team.
Communicate. Communicate. Communicate. Openly, honestly, authentically. People won’t remember what you said, but they will certainly remember how you made them feel and how you behaved. Be prepared to accommodate remote working arrangements if necessary.

3. Assessing your business.
Assess your business in the context of COVID-19

4. Employer responsibilities and employment position.
Review and prepare for the awkward questions that may present themselves

5. Opportunities.
Keep your eyes and minds open for them: innovation and leadership and connection.

These are exciting and challenging times. We are all experiencing it. There will be mistakes and great successes.

You are not alone in trying to figure this out. Feel free to call 7 days if you need.

Warm regards
John Downes FIMC FCA FCEO | CEO, Strategic Mentor

Thank you John. You are a star.
Steve Wood FIMC
0424 325 763