The COVID-19 crisis is a huge challenge to businesses right now. As the situation evolves, it’s vital that the C-Suite can steer their company safely through. CFOs need to be prepared to manage financial difficulties in innovative and transformative ways. Here are six strategies to help CFOs navigate the COVID-19 crisis.
Create A Crisis Response Team
Rather than expecting your best and brightest to split their time, re-assign them to focus on the situation at hand. If you’re a global company, take advantage of technologies like business VoIP to have a virtual ‘war room’ to boost teamwork rather than relying on local contacts.
Quantify what cash your company has available immediately, what extra capital you can access, and what payments you have due. The quicker you can create an accurate forecast of your financial situation, the better. See if it’s possible to discuss the terms of any repayments you have, or delay future investments.
Many of your customers and clients will be hit with similar difficulties, and may end up delaying payments. This team and their plan need to be able to decide whether to spend time on collections or to look for alternative options. They may include tapping new lines of credit or raising capital through divestitures.
Digitalize And Stay Remote
There is one area that it’s worth investing money into, even with the financial challenges you’re facing, and that’s digitalization. Rather than trying to plan for when you can return to offices, see how many of your staff can stay remote – and equip them with the necessary tools.
This does require an initial investment, but many of these tools will pay for themselves over time. Whatever the system your employees use you can ensure there are options for everyone. From video conferencing software for Mac to workforce management software. Which is great for optimizing your scheduling and lower operational costs.
Treat digitalization as permanent, not temporary. This will put you in an advantageous position if future waves of the pandemic occur, as your business will already be well equipped.
As you move everything online, you should document everything – digitally. When it comes to big data for business it’s important to document new workflows that emerge out of digitalization, to allow for trade-offs or new staff to be trained quickly. It may seem tedious, but it can avoid costly mistakes in the future. After all, if you’re carefully documenting everything you update, you won’t accidentally breach data storage laws.
This should also include making sure all of your paper records have accessible online versions. For example, if you start using payroll software, ensure there are accessible digital versions of previous payslips available to everyone, as well as new ones.
One thing that is incredibly stressful is the uncertainty of the situation. You may not have answers for everything, but you can make the answers you do have easily accessible.
Together with your crisis team, work on a communication plan. Have separate plans for how to proactively communicate with the C-Suite, your investors, and the rest of your staff base. Having a connected workforce is important for recovery, so don’t forget you need to be part of those connections too!
While the focus of this plan should be on what you can tell them – what steps you’re taking, what the forecast is like – it’s also worth being open about what you can’t. This is especially useful for your on-the-ground employees. If you can’t accurately give them a date for returning to the office, then don’t guess. It’s far better to say you’re unsure but are aiming for the end of the year than to change the plan every month.
Boost Short-Term Productivity
Focusing only on the long-term can miss out on potential opportunities. McKinsey and Company noticed that many companies who were resilient in the face of crises achieved this by investing in short-term productivity.
Take a step back and think if there’s anything you can do to boost growth now. This can include things like throwing more energy into ecommerce or designing new products suited to customers’ immediate needs.
Prepare For Multiple Possibilities
It’s worth having a best case and worst case scenario mapped out in advance, as well as options in between. You may not be able to predict what’s going to happen, but you can have a selection of well-planned options available to you.
Here’s another place where digitalization can be useful to you – there’s a lot of ways to use AI for risk management. Using machine learning and cloud computing can take the stress off your crisis team and allow them to focus their efforts elsewhere.
Any possibility you plan out should be approached from a transformative mindset. Rather than aiming to ‘get back to normal’, start imagining what the ‘new normal’ should be, and take steps to achieve it. This will allow you to evolve, rather than just cling to what came before.