Crisis management

Delivering results in a crisis

In any given crisis almost, immediate action is required and a crisis management plan in place which takes care of employee well-being, brand reputation, finance management, supply chain and legal issues which the crisis may trigger. 

First and foremost – Employee well-being

Employees are the biggest assets in any business. Always act in the best interests of the people who work with you and for you including stakeholders, clients, and customers. It is also best for businesses in times of crisis to manage the cost of acquiring, managing, and retaining employees. This can really get tough!

Identify alternative working arrangements and changing the business model so that the business continues as normal BUT that it also complies with the legislation in relation to employees’ rights and their health and safety. Make sure that regular meetings are held to provide support and guidance in these trying times. Make sure that everything is documented

Communicate

Have clear and concise communications. Be open and as honest as you can be. In a crisis it is even more important so that you can continue ongoing support from everyone in the team. It is not all about the staff but your customers, suppliers, investors, and regulatory authorities. You should keep customers updated of any impact to your products or service delivery. If contractual obligations cannot be met because of supplier or production disruption, be prompt to negotiate. Proactive communication and actions will help mitigate punitive damages, liabilities associated with disrupted customer obligations and damage to brand reputation.

Track your income and expenses

Take care to keep a regular eye on the business plan, forecast, and income and expense (we have been advising business owners that they should be looking at the numbers daily in times of crisis). Review how the crisis will affect has already affected the numbers and have in place various financial forecasts which take into consideration several crisis situations. Better to be safe than sorry. If in doubt make further amendments to existing plans and budgets and tailer them for ongoing trading.

If the impact on the finances is significant you need to think about minimum operating requirements, including key dependencies of workforce, vendors, location and technology.

If required, look at near-term capital raising, debt refinancing or additional credit support from banks or investors, or policy support from the government. At the same time, review overall operating costs and consider slowing down or curtailing all nonessential expenses.

Review your supply chains urgently

As most companies are likely to experience significant disruption to their operations and will underperform throughout the duration of the COVID-19 crisis it is important to review your supply chain and see where the biggest exposure is likely to be and fix the broken links. Disruption has been experienced by so many businesses and so a regular (we would suggest daily) review is carried out to ensure that the production stays in tact as much as possible and if there are risks then at least you are able to spot them soon enough to take action.

Keep in contact with your suppliers to ensure that deliveries are not going to take longer, that they have the goods in stock and talk to them about how they are dealing with their crisis management. It could help you in your recovery plan. Always consider option around using different suppliers. Don’t put all your eggs in one basket. Make new connections so that you are not relying on those who could possibly disrupt your supply chain.

Be prepared

There will always be some form of unforeseen crises and or challenges along the way. No matter how big or small. It will still require a certain level of management.

Companies will have to conduct contract risk assessment and identify preventive actions, manage customer-supplier contract disputes due to economic impacts or supply disruptions, and even be prepared to invoke “force majeure” clauses when required.

When communicating with relevant stakeholders, consult with legal teams for advice on potential liabilities. Consult also with business units regarding how to manage communication around ongoing breaches and collection of proofs in writing , if any.

The best way is to stay ahead of it!

Keep the crisis management systems healthy and be prepared to act on a war footing when required – even when they do not foresee a crisis showing up in the near future.

Here are ten questions you can ask yourself to evaluate the vigour and fitness of your current crisis management systems:

1. How will your organisation ensure the well-being of your people and the safety of your productive assets in the event of a crisis?
2. How can you ensure sustainable financing and stable cash reserves?
3. Are there well-coordinated and standardized communication systems and protocols to ensure clear and transparent communication with all stakeholders?
4. Does your organization have crisis management teams to manage short-term liquidity impacts and initiate appropriate countermeasures?
5. What model do you have in place to assess potential risks and define responses in the event of a crisis?
6. Have you considered the impact of a crisis in the budgeting and business planning processes, and implemented early warning mechanisms?
7. When a crisis has significant financial impact, how can you adapt your business model to reduce costs, both in the short and medium term?
8. How will demand disruption impact you and how will you recover from its aftermath?
9. Have you defined supply chain and production risks that crises might pose and what you could do to mitigate those risks?
10. Is your business model resilient enough to recover from the impact of a crisis and manage potential crises in the future?

Next Steps

If you want to find out anything further about this topic then please feel free to call on 0330 236 9930, 0330 236 9938 or 07961 116321. All conversations will be in strict confidence. You can also email vee@navigatebr.com

This article is for information and interest only. It is not a substitute for full professional advice, which will take in to account the specific and individual circumstances. Navigate Business Recovery Limited cannot accept any responsibility for any loss arising as a result of any person or organisation acting or refraining from acting on any information.