23 April 2020
Private, mid-market and family businesses, need to act fast, stay informed, and do whatever it takes to survive, adapt and contain the business impacts from coronavirus (COVID-19).
We believe that businesses can prepare to respond to the challenges that crises’ create through a three-phased journey: respond, rebuild and rebound. Phase one, respond, is centred around having a rapid response and it calls for businesses to focus on three things – Survive. Adapt. Contain.
In time of crisis, private, mid-market and family organisations need to focus relentlessly on the necessary short-term arrangements required to weather and survive, adapting to new operational paradigms, and containing damages.
To support your organisations ability to navigate through this phase, we have developed a Rapid Crisis Response Framework. The framework is intended to help mid-market organisations plan their response around eight key focus areas that need immediate early attention.
COVID-19 is testing mental toughness of leaders like no other crisis has in recent memory. As private, mid-market and family businesses, you may not always have the combined subject matter expertise to test ideas, scenarios or approaches in your leadership teams – you have to lead with the capabilities you have.
Governance affects every aspect of your business, and requires an appropriate level of attention, oversight, challenge and expertise applied to the decisions being made. Governance in times of crisis is even more challenging and requires leaders to make difficult choices, on almost an hourly basis. It’s important that you understand the strengths and limitations of your operations and organisation, and access external subject matter expertise when required.
Keeping the lights on is a priority. Private, mid-market and family businesses need to understand which part of the businesses and operations must remain operational and in what fashion. This covers areas such as your digital workplace, process changes, security and privacy, and legal and regulatory.
Alternatives to current operational processes need to be established while enabling your employees to perform their jobs regardless of their physical location. Protecting your organisation from security and privacy vulnerabilities, and understanding new regulatory constraints is fundamental. The most effective short-term solution may not be elegant, but will often be the ‘least bad option’.
Private, mid-market and family businesses need to understand the options available them around their policies, mental health and WHS, benefits, payments and rewards, and workforce management during this period. There are often complicated and fast moving circumstances when managing through a crisis, and we recommend that you seek specialist advice before making important decisions that affect your teams.
While organisations make changes to the work environment – policies and procedures need to be updated to support the new ways of working. Special attention is required to maintain the metal health of the workforce, ensuring that staff have access to the right support channels.
As the workforce becomes more agile and distributed during times of crises, organisations will need to introduce mechanisms that enable their workforce to work from home while enabling accountability and performance measurement in the ‘new normal’.
Enabling the workforce from not only the people aspect but also the processes and technology aspects, will be fundamental for the short term and long term success of the organisation. A leadership team that drives cohesion and team dynamics in times of crisis, and provides remote support and clarity for employees will reap benefits of a more engaged and connected workforce on the other side of the crisis.
As liquidity and solvency challenges increase, organisations will need to revise cash flow positions, working capital management and inventory forecasts, alongside their supply and demand forecasts. Understanding how the financial stability of the organisation may be impacted and the restrictions in access to credit is essential. This can be achieved through financial stress testing, performing cost optimisation, capital planning, and accessing any government grants that may be available.
As essential services, transport, logistics and supply chain operators must continue to function throughout a crisis. Private, mid-market and family businesses need to understand supply chain risks, such as logistics shortages, sources of supply and changing delivery times among others – this can be uncovered through performing supplier criticality mapping to inform your contingency strategy.
Third party risks need to be clearly understood. For instance, many makeshift transport providers may advertise services to support the short-term surge in fulfilment. Assessing if your third parties have the appropriate skills and certification, and ensuring ethical practices will help you protect your organisation and your customers. Consider reviewing and where possible negotiating contracts. We recommend that you seek specialist advice before making decisions that could impact your company’s liabilities.
Providing clarity and updates to your employees, customers, suppliers and regulators (where applicable) on the steps you are undertaking to manage the crisis is fundamental – consider establishing a dedicated crisis response team to assist with this. Some strategies involve creating a baseline of information that can be shared with all stakeholders, while a targeted approach is used for engaging with different stakeholder groups separately. Ensure any information you share from external sources comes from credible and verified sources.
Operating businesses in times of crisis, with ‘emergency’ processes, limited supply chain, distributed, and sometimes disconnected, decision makers and employees put the organisation at higher levels of risk. Organisations need to log, monitor and manage risks in a pragmatic but cohesive manner. Any operational changes and risk management changes need to be reflected in the incident response playbook. Leadership will need access to risk insights to make informed decisions.