The Coronavirus pandemic is first and foremost, a human tragedy. As we move into the Easter weekend the virus is expected to spike, certainly in our main cities, our PM is in hospital, NYC has declared a ‘war’ and millions of families are still indoors entering the third week of lock-down. Resilience is a key coping skill at home, and also an imperative trait for business leaders to practice in order to remain positive, be prepared and keep moving forward so that when the dust settles, they’re able to return businesses to growth.
I’ve been around long enough to have been through several severe downturns and subsequent recessions. Some of the lessons I’ve learnt along the way are definitely relevant in the environment we find ourselves in today. None of us know how long this is going to last or what twists and turns we will witness on the way. But I find the following key principles hold true whatever the outcome.
Plan for the worst and hope for the best: Hope is not a strategy. It is vital that your plans for your business are robust enough to withstand a longer and deeper downturn than you expect.
Cash is king: Any company can fail if it runs out of cash and finance is always most difficult to get when you most need it. Make sure you have accurate cash forecasts that are revisited often and allow for a big enough margin for error if for example a key customer doesn’t pay. Do everything you can to preserve cash which includes acting quickly to cut costs. And as we come out of recession, cash is also key to taking advantage of opportunities that arise.
The road to recovery: Recovery will probably take time as consumer, business and investor confidence will need to be rebuilt. The typical profile is first markets fall very quickly over a period of weeks, this is followed by months of bumping along the bottom and then growth recovers gradually over a period of years.
There are winners and losers in every recession: Focus on who and where the winners are. They will often be companies that have a new way of working, new business models and using new technology or existing technology in a different way.
Agility and flexibility are key: The world is changing very rapidly. Don’t hang on to old beliefs, policies and ways of working that are fast becoming unhelpful.
Stay true to your purpose: A strong unified team aligned behind clear goals is more important than ever.
In addition to the one-on-one advice clinics that we’ve set-up, throughout April, we will be sharing a number of articles to help you manage through these unprecedented times. We hope you’ll find them useful.
As always we’d be delighted to hear from you. Your response today will shape the success of your business tomorrow so please do contact us if you wish to discuss funding options, steps towards business resilience, opportunities to grow through acquisition, or simply to talk through what we are seeing in the market.