Crisis management in challenging times - getting started
As the entire world reels from the COVID-19 pandemic, businesses across the globe are contending with challenges that have appeared almost overnight and endanger their very existence. Crisis management is now more important than ever and not just in the immediate shockwave of the pandemic and worldwide lockdowns; the long term economic impacts of coronavirus will be felt for years and these aftershocks will inevitably see more businesses go under than in these initial weeks and months.
Practising proper crisis management starts with the four Ds: Decide, Divide, Delegate, and Deliver. Let’s look at each in turn.
Your customers are the lifeblood of your business. It is crucial that you retain as much of your customer base as possible. 86% of consumers stop doing business with a company based on a bad customer experience. Losing customers unnecessarily like this can be devastating. Retention therefore becomes key.
It’s not enough that you think you are already prioritising customer satisfaction. Keep in mind that only 48% of consumers believe brands and businesses are committed to that goal.
To help you guide your decision-making, start by reviewing your customers’ current situation and listening to the challenges they face. With their feedback, you can decide on what your business can do to help them cope with the circumstances.
As problems pile up, you might feel the urgency to tackle everything all at once. Even just coming up with solutions to address each issue can feel overwhelming.
Break down big action plans into smaller segments that you can work on one at a time to make the entire crisis management process more feasible.
1. Review Workstreams
Your employees keep the business running, so you need to keep them engaged and satisfied during these times of uncertainty. Do what you can when supporting them working at home. With people locked down with their entire families, home schooling needs to be balanced with work commitments, so think about giving your employees flexible hours or implementing shifts if possible.
Bad management is cited as the leading cause of reduced productivity in the UK. Conversely, happy employees increase productivity by 12%. Maintain open lines of communication and listen. Schedule calls with your team regularly, as the value of human interaction becomes even more important during a time of social distancing.
Your leadership will be tested in a crisis, and you need to rise to the occasion by showing empathy and understanding.
Identify your baseline for keeping operations going. Look at your fixed costs and update your P&L statement and balance sheet. In case you need it, check what government or bank aid you can receive that will fit your needs.
With the pandemic severely impacting distribution worldwide, your supply chain may be hit the hardest. Review your stock levels and pricing structure. Talk to your suppliers. If the payment terms are too harsh, try to negotiate.
Marketing and Sales
Your business will wither without continued marketing and support for your sales efforts. Remember that marketing and sales aren’t just about selling your products and services. The tone of your messaging must be sensitive to the situation customers are experiencing.
Protect your customers and preserve their loyalty. Consider waiving penalties and fees and be flexible with your terms. Marketing promotions such as discounts are welcomed. Consumers feel the economic strain, so relieving their financial burden can go a long way.
Be prepared to revise your sales targets as we enter a global recession.
2. Scenario Planning
With a vaccine for COVID-19 estimated to be at least 12 to 18 months away and no endpoint in sight yet for the outbreak, the stability of your company demands that you come up with a specific timeline for this crisis.
37% of projects fail because of a lack of defined objectives and milestones, while 64% of projects are completed on time with high maturity project management processes. The precariousness of our times makes every failure harder to come back from, highlighting the necessity of a timeline.
In creating a timeline, you must plan for the best and worst-case scenario. Approach this process with a sober outlook. As good as it can be to remain optimistic about the future of your business, you must also be willing to face the reality of making hard decisions later on.
Contact your accountant for advice regarding your cash flow, modelling for both scenarios. Account for cost reductions and portfolio optimisations to maximise your resources.
Crises tend to make people more helpful toward each other, so this is a perfect opportunity to collaborate with other businesses. Together, you can fill each other’s gaps, alleviate your target market’s concerns, and even send aid to local communities and organisations dealing with the pandemic.
3. Marketing and Sales Innovations
Extraordinary times like these call for extraordinary measures when it comes to how you market your business and sell your goods. You can’t simply continue executing the same strategies as you had before the pandemic.
Communication with your customers needs to be constant and consistent during an economic downturn. Their spending behaviour can shift dramatically, especially if your target audience is on the lower end of the income bracket. Knowing what their financial priorities are will direct the course your marketing takes.
Targeted social media campaigns can be a direct line to your customers, providing new feedback links with prospects as well. Other online opportunities you can try are hosting webinars and virtual networking events. Such communication tactics could be extended to your own team to organise projects as well as develop their skills.
Once you have actions in place to manage the crisis, you need to start delegating. Each action should have clearly defined people in charge of getting it done, dates and times when it should be done, and the resources required to get it done.
Your attention is at a premium in these high-pressure situations. Do not waste it trying to do everything. Focus on top-level tasks. Trust your managers and employees to accomplish goals under additional stress. Coming out of this global emergency, the people you have assigned important duties will have a greater investment in your business and be better prepared for leadership roles.
Review your plan every week to two weeks depending on the speed of your operation. This ensures your business is on track to meet the objectives in your timeline.
With the preparations for your initiatives done, you must then work out a communications plan to convey to your customers what you are doing to better serve their needs. Social media is the number one platform right now to reach your audience, as people are either constantly checking their feeds for news or updates on their friends and family.
If you have not been leveraging social media as a communication tool, now is the time to start. If you already have, then you should look at new tactics to increase your efforts and use these channels in ways you’ve never used them before.
Remember the Five Ps
The principle to live by in challenging times is following the five P’s: Prior Preparation Prevents Poor Performance. We’ve armed you with a system on how to approach a crisis in this first entry of our crisis management series.
In the second part, we’ll outline more concrete steps to put a plan in place.
If you would like to know more about how we could help you get started with your crisis management plan, get in touch today.