Big Picture - May 2020 - 15

team evolved into meetings held almost every other day.
Monthly leadership meetings (our department managers)
and company-wide meetings are now being held weekly. Our
leadership meeting is held on Thursday afternoons and is
used for two primary purposes. One, to see how things are
going within individual departments. Two, to discuss the
messaging for our Friday all-staff meetings. We currently
have approximately two-thirds of our employees working
from home with the remaining one-third working in a
spread-out fashion over a 24 hour shift. Our employees have
been very grateful for this continuous communication.
While frequent communication in challenging times is
critical, "the message" is even more important. In Jim
Collins' book "Good to Great," one of the axioms he teaches
us as business leaders is you must always "face the brutal
facts." That's exactly what we've done with our staff.
Because we're already an open-book organization, sharing
numbers is routine for our employees. However, sharing our
cash projections based on our drop in revenue and what they
mean to the survival of the business is not something they're
used to seeing. Frankly, it was initially unnerving to many of
our employees, but as we walked through the numbers and
shared our plan they began to understand, then appreciate,
our honesty. They were then willing to make the necessary
sacrifices to sustain our business. In short, we simplified our
action plan to two primary objectives. One, do everything
possible to ensure the health of each employee. Two, keep
the business viable with the goal of saving everyone's job.
Although the plan to accomplish this often changes daily, the
message to the staff remains consistent: let's work together
to achieve these two primary objectives.
HOPE FOR THE BEST, BUT PLAN FOR THE WORST

Your challenges are unique and will require
some different courses of action, but the
principles remain the same. Communicate to
all parties under your influence more than
ever before.
* Payroll is likely the largest variable expense you have.
Instead of jumping immediately to lay-offs, consider salary
and wage reductions first. The advantage of doing salary/
wage cuts across the board is everyone feels equal pain,
which, while difficult, can also create some unity within your
company. Saving jobs is always highly appreciated in any
company and can build trust and morale in an otherwise
difficult environment.
* Negotiate payment terms with your creditors and
vendors. Your banker and landlord are much more interested
in your shop staying in business over the next several years
than getting your payments exactly on time. Negotiate with
them. We've been able to defer more than 80 percent of our
equipment loans with our bank for up to six months with no
penalty during this pandemic. I also know of several companies negotiating their rent or lease payments for their facilities.
* You'll likely be able to negotiate longer payment terms
with your key suppliers. For example, if you typically pay your
suppliers at 45 days you can likely stretch it to 60 days, or
something along those lines. Again, they're interested in your
long-term viability above all else.
These are just a few ideas that may help you think
through the challenges of managing your business during
times of crisis. I definitely do not purport to have the answer
to all problems. Your challenges are unique and will require
some different courses of action, but the principles remain
the same. Communicate to all parties under your influence
more than ever before. This includes your managers, staff,
customers, creditors, vendors, accountants, bankers, etc.
Did I leave anyone out? Ah yes, maybe your cleaning crew.
You get the gist. Then make a plan to manage the cash in
your business. Be flexible and smart enough to understand
your plan might change weekly or even daily. But make a
plan and then execute it to the best of your ability. This
proactive approach may make the difference in the survival
of your business.

BIGPICTURE.NET

When confronted with crisis management, leadership can
take on many different faces. Some business leaders may
take a somewhat passive or reactive approach, waiting for
the circumstances to dictate what their next move should be.
Others may choose to ignore or minimize the issues, playing
down reality and waiting until outside factors force them
into decisions. On the opposite side of the spectrum, some
leaders may plow forward at break-neck speed, perhaps
making rash decisions without processing all the available
information. Landing somewhere in between these scenarios
makes the most sense to me. Once we began to understand
the implications of this pandemic and what it might mean to
our business, our executive team immediately decided to
adopt the following approach: "We hope for the best, but we
plan for the worst."
Your plan for the worst must begin with the principle of
hoarding your cash. Perhaps, like our company, you learned a
lesson or two about your cash flow 10 years ago when dealing
with the terrible and damaging recession. I may have
mentioned this, oh say, about 20-plus times in past articles,
but let me again remind you that Cash is King. That truism is
never more important to embrace than when the life of your
business is in jeopardy. As such, our team immediately began
putting together a cash flow plan for survival. Your plan may
look somewhat different than ours, but here are some basic

ideas to consider when mapping out your plan to hoard cash.
This is your company's emergency survival kit:
* In regard to sales and revenue, build multiple scenarios,
changing revenue assumptions from best case to worst
case. This will help you determine what the most invasive
changes might be based on sales and account collections.
Sales by themselves won't save your business. You have to
collect the cash.
* Identify your most significant expenses and deal with
them first.

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Big Picture - May 2020

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