CEOs and business owners continue to navigate the uncertain climate as a result of the COVID-19 pandemic, and are force not only to grapple with making it through, but how to recover and prosper once things return to “normal”. The challenges range from shifts in supply chain, stalled revenue, temporary closure, and leading and supporting teams of people.
In an effort to help business leaders, we’re sharing insights from member CEOs, business owners, and LXCouncil moderators over a three part series. This is there two in the series – in this segment we’re featuring advice from a combination of our experienced group moderators, as well as CEO and business owner members.
PART 3
Advice from LXCouncil Moderator, Mark W.
Situations like the COVID-19 crisis require leaders to react quickly. It will not get better for a long while and in the meantime your business is going to bleed more and more cash. Cut your losses today. Make sure you communicate the truth to your employees, they will understand and back you up. This is a good time to rethink the future direction of your business. What do you want your business to look like in a year and 3-5 years out and develop the strategies to get there.
Advice from LXCouncil Moderator, Brad S.
Ironically, while social distancing, isolation and warnings are being used to protect us from the Coronavirus, they also make us vulnerable to the “stress” virus. Strategies like exercise, mindfulness, visualization and being present can be helpful in managing the stress virus. Whatever strategy we use, we should be sure to employ it before making important decisions to make sure our experience and expertise are not being blocked by fear or anxiety.
Some ideas for managing expenses and cash flow during the COVID-19 Storm:
- o Reach out to your landlord and ask to not pay rent for next two months and resume paying the month after reopening adding the unpaid rent on a pro-rata basis to your remaining rent payments.
o Reduce your workweek (and salaries/wages) now even if you don’t have to. This can stretch out the work you have for your employees to do. You could offset some of the loss of pay by picking up a larger part of their health insurance premium.
o Set up a separate bank account and pay into it all or a part of the expenses that you have decided not to pay right now like office rent, equipment leases and furloughed payroll. You can use this account to help catch up on unpaid expenses when you are ready to start paying again.
o Focus on contribution margin (revenue minus variable expenses) right now. In other words, try to only incur expenses that generate enough revenue to cover the variable cost and provide a contribution to covering fixed costs like rent.
Advice from an LXCouncil Member
Speak with honesty
People want to hear the truth right now. Over the coming days, as folks around the world continue to get settled into this new normal, organizations will need to share how they have been affected. Being honest without exaggeration and hyperbole will resonate. For example, if you work at a nonprofit and there is a significant loss in revenue due to cancelled fundraising events, share the numbers. Give people both the data and the personal stories, and let them decide how they want to step up and show support. There is a sense of brand vulnerability here and that’s okay.
Don’t plan too far ahead
I would say, at a maximum, plan one-week sprints. If this pandemic has taught us anything it is that things change by the hour. It reminds me of the Yiddish phrase my grandfather used to say, “Der mentsh trakht un got lakht. When man plans, God laughs.” Sure, we need to continue to plan within our organizations in terms of management, internal communication and operations. However, external communication and content creation need to be much more iterative right now. Keep your ear to the ground as things are changing rapidly. Take it week by week or in some cases day by day. You’ll hit your stride.
Schedule 1-1 virtual meetings
There are many organizations in the early stages of moving their large-scale events and programs from in-person to virtual. There are certainly ways to do this effectively and seamlessly. However, one of the best ways for organizations to use technology like Zoom and Skype is going back to basics: 1-1 conversations and virtual “coffee dates.” Use this time to check in with your customers, donors, members or volunteers. Schedule 15- or 30-minute video conversations. These folks will remember you when we do go back to “business as usual.” Use the time to offer support or just take a break to check in. People are craving socialization, even humor at a time like this. Be that person.
Advice from LXCouncil Moderator, Eric H.
As a country we are facing into a shared crisis that everyone will experience and respond to differently. But, despite our differences, rest assured that each of your employees is feeling to some degree the symptoms of Fear, Uncertainty, and Doubt – the FUD Factor. COVID-19 is threatening our personal safety, economic stability, and emotional well-being. You are also feeling the impact of FUD because you too are human. Finding a safe place to deal with the stress and anxiety you’re feeling is critical, because the leadership challenge you’re facing into is to be strong for yourself and for your employees.
We often talk about Emotional Intelligence(EQ) and empathic leadership . The ability to observe, listen and respond with empathy is the interpersonal skill that outshines others for building trust and deep connection with those you lead. And, this moment of crisis is the ideal time to practice it! Rest assured that your employees are watching you and listening intently to what you have to say – and what you do. Speak to them as people who are concerned for their future. Acknowledge what they must be feeling. Speak honestly. Share your humanity and let them know you share many of their concerns. Reassure them where you can do so with confidence. When your employees’ sense that you are truly aware of them, their level of respect and trust for you will deepen. Walt Whitman said, “I do not ask the wounded person how he feels. I myself become the wounded person.” This is that moment.
Make this about them. Remember that Employee Engagement thing so often referenced in popular literature? This is where it becomes real. Be visible. Communicate often—open up. Ask questions. Listen, listen, listen. Find productive ways for your employees to channel their anxieties. As you lead your employees with integrity and empathy through this, they will remember it. What will be the stories your employees will tell about you? It is a legacy moment that the whole world is focused on.
While each of these CEOs, business owners, and moderators come from different backgrounds and industries, the common threads weaved through their advice is clear. Preserve cash, care for human capital to the best of your ability, be visible, and be transparent.
Leaders who take this approach will come out with their businesses better positioned than those who don’t. The crisis will end – hopefully sooner than later.
This is a time for your best leadership.
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If you’re ready to take your business and leadership skills to the next level, and if you think your business could benefit from more insights like what’s offered in this article, let’s start a conversation. LXCouncil may be the perfect next step!
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