Uncertaintanty is as high as it has ever been, and it may be challenging if you are leading a business to know where to begin to maneuver through the current climate. Whilst each business, industry and sector will be affected differently - here are 4 tips to help you navigate through the challenges ahead.
Don’t make any hasty decisions – but make plans
Statistically, people are more likely to make mistakes when they are cash strapped and financially stressed. Therefore, it is important to give yourself time to think decisions over. It can be hard to sit and watch things happen without an immediate reaction, but as the days go on, you have more information than you did the day before.
Before taking any big leaps, give yourself a cooling off period. It is always good to have a second pair of eyes, such as a close friend or trusted colleague look over things to make sure no decisions are made, which you might come to regret.
It is suggested that making contingency plans in detail, on different scenarios will help make sure you’ve put some thought into a decision prior to it becoming reality. It doesn’t have to be all doom and gloom though, as it will be just as important to consider what will need to be done if things get better, with a near future timeframe such as the next 2 weeks.
Research in social and behavioral psychology shows that breaking your goals down to smaller, bite size achievements, can help meet targets. Therefore, 2-week timeframes will be easier to tackle and will allow you to react to the changes in economic and social climate over the coming months.
What has changed for your customer?
There have been a lot of life altering and routine breaking events which have hit Australia already in 2020, so your customer and their needs are different now than they were 3 months ago, and will probably be different again in 3 months time.
The biggest challenge businesses will face for long term viability, is figuring out what has changed and how your customers remands can be met. Now is a great time to try and figure this out – you have to experiment if you want to remain part of your customers’ lives going forward.
For example, look at ways your business and its offerings can be nimble – some customers will now prefer to shop online, others will enjoy the face-to-face interaction – communicating with your customers is key to figuring out the sweet spot for your business and how you can adapt.
It is likely that some difficult decisions will need to be made over the next few months. A good starting point to help you with these is by being realistic with your expectations and your accounting. It is important to have accurate estimates of what your cash flow will look like before and after things have picked up again.
From there, it is important to compare the cash flow with your expenses. The business can look at which of these expenses are essential, and which of these can be trimmed. Sometimes it makes sense to cut the flexible expenses early on, to make sure the fixed expenses such as rent and wages are covered later down the line if things don’t improve.
Next – figure out which expenses can be delayed. Whilst it might be difficult to make loan and rent payments up, it is worth exploring all the options and come to a conclusion which is best for the business. Keeping in the loop with the rapidly changing landscape and staying on the ball with the most up to date information from the government will also help you assess what is out there in terms of benefits and assistance.
Keep your best employees loyal
The businesses biggest assets are its employees. Losing your best employees means a bigger challenge when rebuilding your operations. Even if the only viable option is to cut your wage bill dramatically – you will need to maintain the ability to rehire your best workers when you’re back open for business. The key here is to be human, and focus on the long term.
Small business loans, relaxed visa restrictions and job keeper payments have been brought in to help businesses keep employees in work. Reduced hours and temporary layoffs should always be considered before severing ties completely, and even with these options, it is important to ensure that these temporary solutions don’t result in permanent separation.
Emphasising that it is a temporary arrangement and showing their input has been taken on board to come to a mutual decision will go a long way with your workers. If tough decisions need to be made and it comes down to a choice of who the business can keep, focus on retaining people who are the best fit and who really care about being part of your company.
Finally, this is a time to be human with people. No matter what happens with your business, this is likely a devastating time for employees for all kinds of reasons. Do everything you can to make sure that they are safe and to show that your care about their well being. Generosity during a crisis can make a relationship far stronger.
Stopgap is committed to helping its clients and candidates navigate the next few months safely, and are always open to a discussion about how we may be able to help businesses retain or regain the best talent. This article has been adapted from a piece in the Harvard Business Review.
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