How to lead your business through crisis
Every day, the news gets bleaker. With the coronavirus crisis deepening, the full economic effect is starting to become clear. The latest headlines make very grim reading. Nearly a fifth of small and medium-sized businesses are unlikely to get the cash they need to survive the next four weeks, in spite of government support.
Mental health will increasingly become an issue. In China, the evidence suggests week four of the lockdown was unbearable for large numbers of employees. The next two weeks will seem increasing bleak as many go through the stages one would normally associate with grief.
This crisis seems to be polarising. Last week, I spoke to business leaders whose revenues had dropped off a cliff and others who were busier than they’d ever been. Regardless of the situation in your business, what’s needed now is a firm grip, nerves of steel and deep reserves of energy. As CEO, your role is now Chief Energy Officer. And it’s going to be exhausting, relentless and thankless work.
I’ve been there. Back in 2001, as the dotcom bubble was bursting and weeks before 911, I joined Rackspace. In that recession, we grew the UK business to £30m in five years. Then in 2007, I took over as MD of ITLab. The global financial crisis (GFC) had begun to develop. Turnover went from £8m to £5m overnight.
Our customer base of small London businesses was terrified and instantly stopped their discretionary spend. No-one was buying printers, pcs or servers, let alone having them installed. My company was losing £65K per month and we were months away from bankruptcy. But, after a monumental effort, we managed to turn things around.
In the last recession and with the GFC still in full swing I left ITLab and launched Peer 1 Hosting in the UK. We grew that firm to £30m in five years. It can be done!
So how do you get through this? Based on experience, here are my tips for leading your business through a crisis.
Daily communication with all employees
Nothing is more critical in a crisis than keeping communication flowing. Even when times are good, this can be a big issue in business. Throw in the biggest crisis the world has faced for generations – causing a sudden surge in remote working – and it becomes vital. Take it from me. You’ll rarely hear members of staff saying they get too much communication from their bosses.
Usually, I suggest a weekly communication from the CEO to keep the wheels of communication greased. However, this crisis is so great and causing so much upheaval, I think it merits a daily video or email. Particularly as events seem to be moving so fast and the potential for misinformation is so great.
Think about how you include any furloughed staff. Maybe you’ve cut off their IT after taking advice from HMRC to prove they aren’t or can’t work whilst away. Do you have other means to communicate with them? Personal email addresses or WhatsApp groups?
If you don’t do them already, now is the time to introduce a series of daily huddles that roll up to the leadership team. That’s the best way to keep your finger on the pulse of your business. Use these as a way to capture where people might be lacking information and guidance. Also, use them to catch and praise staff who are doing the right thing. Which brings me to my second recommendation.
Celebrate good news, however small
Just as you can never have too much communication, it’s impossible to over-praise staff. And never have they needed it more from business leaders. Call out any successes, however small. Celebrate every win, even if it’s trivial. Start every virtual meeting with good news and give particular focus to stories from employees’ personal lives.
There will be many, many examples. One of the more positive effects of this crisis has been the explosion of voluntary initiatives in the community. If your staff have been delivering supplies to elderly or vulnerable neighbours, celebrate. If their children have been holding virtual birthday parties (thinking of one of my daughter’s school-friends here), mention this. People desperately need to hear good news stories to balance out the negativity of broadcast media.
Don’t let setbacks caused by this crisis drag your team down. Recognise there are going to be customer wins that don’t come through as well as cancellations from existing customers. Remember that bad news has four times more impact than good so find the positives in your business to counterbalance the negatives.
Maybe, every Friday afternoon you lead the whole company through a remote, all-hands celebration? Suggest they all bring a beer. And this is the time when you might notice bad apples in the bunch. If you’ve identified a toxic C-Player who’s spreading rumours and gossip, jump on this quickly.
Show understanding and compassion
The news is full of stories of companies going bust and the UK government’s new bankruptcy measures. A recession seems inevitable. Life is going to be locked down until June at the earliest and thousands have already lost their jobs.
Many staff are terrified and confused by the crisis surrounding them, particularly over the furlough arrangements. What does this mean? Can they still work or not? So many questions and so much uncertainty. This is when they need leadership. Keep them informed and try to answer their questions, although you probably won’t know all the answers.
Many employees have gone from being office-based to remote working with lightning speed. This is a big shift that’s going to take time to process. People’s behaviour is likely to change. Some will like working from home. The vast majority are more likely to feel isolated and unmotivated. Add to this the enforced confinement of lockdown and lack of social interaction and you’re more likely to see a loss of productivity. More than anything, the shock of the coronavirus crisis means they’re going to need understanding and compassion. And sufficient time and space to come to terms with the new ‘normal’.
Recognise the negative impacts of change
Huge change is destabilising. It can have a massive negative impact. Be careful that fear doesn’t paralyse creativity in your organisation. Scientists have proved this with lab rats who, at the slightest whiff of a cat, are unable to problem-solve their way out of a maze. More than anything, you need your staff to be buoyant, creative and in full problem-solving mode. Your sales team should be working out different ways to keep in touch with customers now face-to-face is out. Delivery needs to find new ways of operating remotely.
One of my clients, Etch, has put together a business continuity plan in reaction to the coronavirus crisis. They shared this with all staff and included everyone’s locations so that staff who lived near each other could organise clusters of support. Another, Six Degrees, are setting aside the same hour every day for remote coffee mornings where teams are encouraged to chat about anything that isn’t work-related. This deliberate sharing keeps remote employees together and makes them feel less isolated.
Make staff feel valued
If you don’t do it already, consider putting in some kind of metric for well-being amongst your teams. I’m a big fan of Friday Pulse. In response to the coronavirus crisis, and at my suggestion, they’re offering my clients and readers of this newsletter (email me for an intro to Nic Marks) free access to their platform for three months (though if you’re fewer than 10 staff this isn’t for you). With your staff now working remotely, this tool can measure the impact. By tracking positive and negative emotions, and collecting ongoing communication and feedback, Friday Pulse gives real-time insights into how individuals and teams are coping, as everyone faces a new reality.
These weekly check-ins will instantly make staff feel more valued. They’ll also help you take the pulse of your organisation every week so you can spot people who are struggling or receive feedback on the changes that need to be made.
Last week, only half of the people I was talking to on Zoom calls were wearing headsets. Most were on a lap-top without a second screen. This kills the quality of the conversation. We’re going to be at home for months. You need to act now to ensure staff are properly equipped for the job in hand. Maybe ask for a team of volunteers to audit everyone’s home set up. Empower them to decide what’s needed and order it from Amazon. Another great way to show your staff you care.
Why not also set up an email address for feedback? This has worked brilliantly for me in the past. I introduced an open email address (stupidrules@CEO your company.com) and gave a £10 Amazon voucher to anyone who flagged up stupid rules or suggested a way we could improve. Similarly, you could set up a remoteworking@ address for ideas and suggestions to make things work better.
Staff need to feel their leaders are there for them. Could you set up an hour every day where you or one of the executive team are available for employees to dial-in and ask questions? You could then ensure that any resulting suggestions or initiatives are rolled into the daily huddles. Maybe the conversations could be recorded or turned into a transcript. This would make it easy to share the headlines as an audio or video file.
Be honest and transparent
Your teams want to know that the leadership team has a plan to get through this crisis. I’m not suggesting that you necessarily share all of your contingency planning but your people need reassurance.
I spent most of last week guiding business leaders through this. Where are they now? What is phase 1? What are the immediate actions? Who’s staying employed? Who’s getting furloughed? Are redundancies needed? What salary cuts need to be made? As much as you can, share this information. You don’t want your staff to be in the dark, worrying about the financial viability of their organisation.
Scenario plan with your Executive Team
I think the impending recession is going to be worse than people think. It’s vital to start planning for this. In my newsletter last week, I linked to a new tool that’s been rushed through to help crisis-stricken companies. It stress tests your financials and will help business leaders with scenario planning. You need to work out how you’re going to deal with different degrees of crisis. What if revenue fell by 10, 25 or 45%? How do you ring-fence your assets? How can you ensure enough cash is flowing through?
Ensure your Executive Team is laser-focused on your biggest clients. Where the top 5% of customers account for 60% of revenue, there needs to be a clear intention to pay. One of my clients spent all last week calling larger customers who already seemed late with payment. His customers were taking the view that he wouldn’t cut them off because it would be bad publicity. Come on everyone! If we stop paying each other’s bills, we’re all going under. Sure, look at your cash flow and turn off the stuff that’s discretionary or you don’t need. But when I hear that companies like Burger King have stopped paying rent… Man, that’s just not helpful. Landlords have mortgages to pay.
We need to support each other through this crisis. Typically, I have monthly calls with my CEO clients but I’ve switched to weekly. I’m also running extra sessions for anyone that needs them. My clients know that if they need help or back-up, they can ask any time and I’ll jump on a call.
Yes – it’s a crisis. And a big crisis at that. There’s no end in sight which, psychologically, makes it much harder to bear. But there will be an end and we will thrive again. The most important thing is to hold your nerve, dig deep and find ways to survive these turbulent months. Above all, put the needs of your staff first.