Now more than ever, it can be incredibly challenging to manage your business. Daily routines have been disrupted, employees are working from home, and the future is precariously unclear. It’s hard to say when the world will return to normal, or how long that will take. Nevertheless, it’s important for business leaders to hold their ground, and manage their business correctly during these challenging times. Although it’s not easy to predict a global pandemic, change is, ironically, the only constant variable in business. The needs and wants of customers change. Business strategy and analysis changes. As technology evolves in leaps and bounds, marketing, software development, and every other aspect of business continues to change. But when faced with exceptional events, leaders need to have a clear understanding of their tools, systems, processes, and strategies.
This means visibility into cash flow, receivables, projects, inventory, and operational risks. This means having an emergency plan already developed, set in place to be followed when the worst-case scenario starts to unfold. This means knowing how your executives will communicate, and knowing how to help your employees navigate an unfamiliar work landscape. Nevertheless, not all businesses are affected equally. As we’ve seen with COVID-19, some businesses, particularly small businesses, can be crushed by the weight of global panic. Even medium businesses and large enterprises can be unprepared, particularly when they must substantially change their approach.
To help businesses address these unique challenges and develop more flexible strategies, we read through the “Managing Business Uncertainty: Helping businesses manage during challenging times” guide from Oracle NetSuite. Here’s what we found:
Assess the Situation
A fall in demand or supply chain disruption has an immediate effect on cash flow. These sorts of issues also have a tendency to exponentially affect other companies and industries. Even just one loose cog in a machine can lead it to a grinding halt. So, unless your company has reserves, liquidity can quickly become a problem. It’s important that you take stock of the resources you have on hand, as well as pending liabilities and outstanding receivables. You’ll need to make a best guess estimate of how much money you’ll need to sustain operations for a variety of timeframes.
It can be difficult to estimate how long uncertain situations will last, and nothing is for certain in uncertain situations. But with accurate financial data and “what-if” scenarios in hand, it will be easier for you to determine what steps you need to take. Run tabletop exercises, create an array of predictions, and evaluate every possible scenario that your business could run into. This will save you time and money in the long run, and might be the reason your business is able to stay afloat if worst comes to worst.
Determine Your Priorities
Most businesses operate on a 12-month budget cycle and manage various strategic plans with even longer timeframes. Serious and uncertain events throw all of that planning out the window. During particularly challenging times, business leaders need to shift their focus from the long-term to the short-term. This includes making payroll, cutting costs, maintaining liquidity, and more. Use short 30- or 45- day windows to plan immediate actions and develop contingencies based on the assumptions you can make with the information available to you.
During a time of crisis, employees will worry and business operations can become uncertain. It’s important to quickly establish clear lines of communication, and make your new strategies, objectives, and goals easily visible and understandable. The more your business needs to alter its day-to-day operations, the more your business needs to communicate and make sure that everyone understands what is happening. As we’ve seen with COVID-19, it can be difficult to acquire the most basic necessities like groceries or personal care products. The goal here is to reduce stress as much as possible by making sure that everyone in your company is moving and adjusting together to tackle unforeseen challenges.
Monitor Performance and People
When dealing with business instability and economic uncertainty, it’s important to monitor key performance indicators (KPIs.) This will help business leaders spot any performance issues while there’s still time to adjust. Don’t be surprised to see drastic changes during the first few months of an ongoing challenging event. There’s bound to be fallout, particularly if your employees are working in a new environment or using new tools and software to stay in communication with their coworkers. Your business may benefit from tracking things like cycle time, or the time it takes from the start of production to when an order is complete.
On the other hand, it’s important to remember that your employees are human. Critical events can be incredibly destabilizing for employees, and can result in reduced productivity. Make sure that you stay in contact and encourage frequent communication; this lets people know what’s happening in the business. The more that employees stay engaged and aware, the less likely it is that you will experience a jump in turnover. Losing experienced, productive team members makes it much more difficult to succeed when things go back to normal. Take care of your people, and they will make sure your business weathers the storm.
You can download the full “Managing Business Uncertainty: Helping businesses manage during challenging times” guide for free, courtesy of Oracle NetSuite, to learn more about managing your business in times of crisis.
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