The Business Owner’s Guide to Delegation

As a small business owner, delegating some of your responsibilities and tasks probably doesn’t come very easily to you. Your business is like your child, it can be hard to let someone else be in charge of certain aspects. Delegating requires you to relinquish control of different areas of your business in order for you to devote more time to the business as a whole. 

Without delegation, business owners often spread themselves too thin while struggling to find balance and trying to do it all, which can be dangerous for the success of the business. Delegation is a critical skill for business owners to have, even though you may not find yourself willingly giving away control, because there’s no way someone else can do things for your business as well as you can, right?

With the right approach, mindset, and methods when it comes to delegation and division of labor, you can become a master of time management and allow all aspects of your business to flourish and prosper.

How To Accept The Fact That You Need To Delegate

Let go of the “I can do it all” Mindset

Just because you think you can do it all doesn’t mean you necessarily have to. Doing everything inevitably means you probably aren’t doing everything as well as you could be. By delegating, you are able to focus on fewer tasks, and devote more time and effort to those tasks, resulting in a higher level of productivity, quality, and less stress for you.

Typical Tasks Business Owners Delegate

We should start off by addressing the tasks most business owners usually choose to delegate. These tasks include:

Web Design and Maintenance

Unless you happen to be in the tech business or have extensive knowledge when it comes to web design, this is an area of expertise where it may be necessary to delegate tasks. Learning how to design and update a website regularly, on top of everything else you do to run a small business, can take up a lot of your time, time you could be spending elsewhere. 

Accounting and Bookkeeping 

This is one of the most common tasks business owners choose to delegate, as it requires specialized skill, attention to detail, and a good amount of time to upkeep. Outsourcing the accounting and bookkeeping of your business can be extremely helpful if you don’t feel comfortable managing the numbers of your business all on your own, or if you’re looking to avoid the headache of learning the ins and outs of business accounting.

Digital Marketing 

Similarly to web design, unless you are radically familiar with marketing online using email campaigns, social media, or similar methods, delegating the digital marketing aspect of your business can save you a great deal of time, and can definitely lead to an increase in profits in the long run. Think of delegating your digital marketing as an investment, rather than an expense! 

Customer Service

On top of everything else you have to do on a daily basis to keep business running smoothly, taking breaks in your busy work day to field customer questions and complaints can often feel like the last thing you have time for. Why don’t you let someone else handle it? Outsourcing your customer service can take a huge burden off of your shoulders and gives you one less thing to worry about during your workday.

Tech Support

Even if you’re quite tech savvy, you shouldn’t have to waste your time working to solve tech issues and troubleshoot tech problems when you likely have a million other business related things going on each day. As a business owner, you shouldn’t have to worry about fixing the wifi, refilling ink cartridges, or assisting with computer crash issues. Delegating to a tech service company or individual can save you time, as well as provide advice and guidance towards new technology that may be an asset to your business.

How to successfully delegate

Choose the right person and provide as much information up front as possible

When deciding to delegate, make sure you’re choosing the right person for the tasks you’d like to delegate. If you’re looking to delegate your digital marketing tasks, it likely wouldn’t make sense for you to hire a tech support company, unless they happened to also be skilled at digital marketing. To find quality companies, firms, and individuals to hire to take care of some of your small business needs, try to get references from other professionals or professional websites, such as the testimonials page of a potential company’s website.

After choosing the firm or individual that feels right for you and your needs, make sure you provide as much information up front as possible about the different tasks you need completed. Provide them with details, exactly what you’d like them to do on a day to day basis, what a completed project should look like, and deadline details. Giving explicit details will help the employee to be as efficient as possible, achieve a result you’re happy with, and will help your employee complete a job just as well as if you had done it yourself, which keeps you from feeling the need to micromanage.

Another smart delegation idea is to set up checkpoints to make sure that everything is on track and being completed the way you want it to. Checkpoints offer you and your employee a place to collaborate, regroup, make edits, and create the best final product possible, exceeding your goals and expectations.

There you have it. A quick business owner’s guide to delegation. Delegating can be one of the best things you can do for yourself and your business, as long as you remember to let go of your “I can do it all” mindset, delegate tasks you don’t feel comfortable doing yourself, choose the right person to delegate to, communicate often and avoid micromanaging! By delegating aspects of your business, you’re on the track to a more productive and profitable company.

 

We are here to help you navigate so schedule a call to discuss your specific business goals

Top 10 Time Management Tips for Managers

Running a small business is no walk in the park. Between taking care of clients, managing web presence, working with your employees, general administration tasks, and chasing leads, you tend to constantly have a lot on your plate. As a manager or small business owner, your day to day life and business responsibilities can get pretty hectic. Poor time management can make stressful situations more stressful, and lead to problems, mistakes, and no work-life balance. 

While there’s not a lot you can do in terms of reducing your workload and making yourself busy, managing your time well can make things run smoothly and help your responsibilities feel like less of a burden. By making sure your time is well managed, you will be able to be the most productive version of yourself and get much more done than before, leading to less of the “I need more hours in the day” internal dialogue throughout your work week.

Here are some of the best time management tips that will help to boost your productivity.

1- Avoid Multitasking

While multitasking– jumping from task to task- can seem like a good idea when you’re pressed for time, it can actually make completing tasks more difficult, reducing your overall productivity. Shifting between a number of different things all at once requires your brain to adjust quickly to new tasks, reducing focus levels and leading to careless mistakes you’ll just have to spend time correcting later on. 

Focusing on a single task for a shorter amount of time is a smarter method of time management than working on multiple tasks for long periods of time. Remember, trying to take care of a task while also checking and replying to emails every few minutes is still multitasking and is still taking away from your productivity! Save the emails until after you’ve finished your task.

2- Make a daily to do list and stick to it

You should begin each work day with a list of goals to be accomplished for the day and commit your day to accomplishing those goals only. Without a clear set of tasks at the beginning of the day, you can meander through your day, touching on multiple tasks, but never fully completing any. Making a bulleted list of things to get done or creating an hour by hour breakdown are great ways to keep your day structured and organized.

3- Use an online organizer to keep track of multiple clients, deadlines, and projects

Online project managers, which help you to keep track of multiple projects, deadlines, and clients, can help you to stay organized when you have a lot of moving parts. Getting bogged down and confused by all of the different things you need to accomplish for different clients can seriously inhibit your productivity. Online organizers like Asana and Monday can keep you organized so that you can better organize and manage your work week.

4- Experiment with different productivity methods

Humans are always searching for ways to become more productive, ways to get more done in a short 24 hour day. A popular productivity/ time management method is The Pomodoro Technique. Developed in the late 1980’s, The Pomodoro Technique consists of setting a timer for 25 minutes, working on a task with undivided attention for those 25 minutes, stopping and taking a 5 minute break when the timer rings. Then, you restart the process all over again. After you’ve had four consecutive 25 minute interval sessions, also known as pomodoros, you then take a longer 15 to 30 minute break. This technique allows you to maintain freshness of the mind and not become burnt out from staring at one project or task for hours on end.

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5- Don’t be afraid to delegate tasks

Anyone who’s skilled in time management delegates tasks. It’s one of the best ways to simply have more time. By handing off tasks and duties to someone else, you are able to make more time for yourself, your own tasks, or urgent tasks. While it can be hard to relinquish control, as long as you learn the right way to delegate, and avoid micromanaging, delegating tasks can be the ultimate time management tool.

6- Automate what you can

We live in such a technologically advanced world these days, there is almost nothing you can’t automate. From social media posts to email newsletters to web updates and more, you can automate just about every aspect of your business. Imagine how long it takes for you to go into social media, decide what to post to keep your account active, create a post, a caption, and a photo (depending on the platform). Now imagine how much time you’d save if you used a social media automation tool to post. This is just one example of an aspect of your business that can be automated for efficiency and better time management.

7-Identify and Eliminate Time Wasters

This goes hand in hand with automation and delegation. Identify what you take time out of your daily tasks to complete, identify things that are wasting your time. Perhaps it’s your social media management. Maybe it’s running tech support in the office because the wifi went out for the third time this week. Or maybe it takes you 30 minutes to refill the ink cartridges in the printer each week. Or how it takes you over a month to figure out the accounting and taxes for your business. Whatever it is that’s wasting your time, eliminate it! Outsource these jobs to other people, delegate tasks to your employees. You can improve your time management tremendously just by removing time wasting tasks from your to do list. 

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8- Learn to live by the 80/20 rule

The 80/20 rule is one of the most helpful methods of time management. The method essentially states that 20 percent of your activities will account for 80 percent of your results. What does this mean in terms of time management? Let’s put it in terms of a to-do list. The rule suggests that two out of ten items on that to do list will turn out to be worth more than the other eight items put together. But where does the problem come in? Often, people will procrastinate on the top 20% of tasks, known as the important “vital few”, while wasting their time on the other 80%, or the “trivial many”. 

To fully harness the time management capabilities of the 80/20 rule, you will need to apply it to your everyday work life. To do this, each day, take a look at your to do list. Now ask yourself, if you could only accomplish one of the goals on that list today, which one goal would be the most important, most productive, make the most impact? Then continue to ask yourself that question after each task is crossed off of your to-do list. Get ready to see massive productivity results after starting this method.

9- Organize your workspace

A cluttered workspace can lead to a cluttered mind, which slows productivity and leads to procrastination, confusion, laziness and mistakes. Make sure all areas of your workspace are clean and organized to maximize productivity and improve your overall work experience.

10- Don’t procrastinate!

Procrastination is the polar opposite of productivity and quality time management. Procrastination is the enemy. Oftentimes, we find ourselves procrastinating because the thought of starting a task, especially a large one, or the first one on a large to do list, is too daunting for us to even want to begin. A way to combat this is to just dive right in. Don’t think, just start working. Sounds easier than it actually is, right? A fun method to get yourself to just jump right into a project is to count backwards from 5. Once you finish the countdown, you have to get up, or put down the phone, or stop doing whatever you were doing to procrastinate. This countdown method really works, so next time you find yourself procrastinating, give it a try.

Now that you’re equipped with the 10 best time management tips for business owners, you’re on your way to becoming a more productive, more organized, less stressed version of yourself! Try these tips, tricks, and techniques, get ready to watch your productivity soar like never before.

Why Your Small Business Needs a Consultant

Small Business Consultant

Have you ever found yourself wanting an outside eye to help out your company? Have you felt the need for someone with more specialized skills to assist in a certain area of your business? Do you need someone to help identify problems within your company? Do you just need more time to focus on the day to day tasks and would like to outsource some of your other work in order to supplement your business and your staff? If you answered yes to any of these questions, you may be in need of a small business consultant! 

What is a small business consultant?

Small business consultants are professionals who often specialize in a more niche aspect of business, such as an attorney skilled in business law, certified public accountants (CPAs) or even consulting firms which offer a variety of business-related services, like marketing, management, sales, or advertising. The more common types of consultants include strategy and management consultants, operations consultants, IT consultants, human resources consultants, and sales and marketing consultants.

 

The different types of small business consulting services

To discover which type of consultant may be right for you, dive into learning a bit more about different types of consultants and what they do.

Digital Strategy and Management Consultants can help with expanding your product offerings, widening your marketing footprint, developing a business plan, reorganizing your business for efficiency and cost savings, or even buyout another company. They can assist with your business’ social media, market research, online marketing, and website development.

Operations Consultants can help with increasing your process quality and efficiency. They may work with project management, develop new operation plans, helping to reduce steps or mistakes and increase your profit margins.

IT Consultants are one of the most popular types of consultants, with the rapidly changing pace of modern technology. Different things IT consultants can do include maintenance and support services, application development, application integration, to name a few. They can also assist in updating operating software, updating servers, upgrading internet providers, phones, and much more.

Human Resources Consultants are often used to work on employee needs. They can be helpful in recruiting, training, teaching, and improving employee retention. You may also use them as leadership and communication development specialists, and use them to identify the strengths and weaknesses in your staff..

Creative Consultants, PR and Media Consultants are becoming more popular with the expansion of media and digital marketing. The consulting practices and services may offer include graphic design, videography, photography, branding, promotions, campaigns, outreach, events, and communications.

Sales and Marketing Consultants create marketing strategies, launch advertising campaigns, build a high level cohesive brand, make sure you are generating good business, even initiate the sales process.

So, why would you need one of these types of consultants?

Why you may need a consultant

There are many reasons why a small business may need a consultant. You may want added expertise, a fresh set of eyes, a seasoned problem solver and idea generator, a trainer, an influx of new life into the business, or an objective standpoint on business matters.

A small business consultant can offer…

Added expertise and specialized skills

Perhaps the most common reason small business owners hire consultants is for business growth. They allow them to gain access to special skills they may not have among in-house employees. These skills can range from marketing to finance specialists to recruiters. Hiring consultants makes it easy for you to gain access to expertise and specialized skills on demand, whenever you may need.

Hiring consultants is a cost-effective way to supplement your staff, too. While small business management consulting rates are usually a bit higher than a full-time employee, the money saved by only hiring a consultant when their skills are needed, rather than full time, will be more cost effective in the long term.

A fresh set of eyes, an idea generator

When dealing with an issue or important decisions in your life, do you often turn to friends and family for advice? It can be useful to do this in a business, too! Because consultants have a track record of working with many different companies, they may have seen an issue that you may come across in your business, and often they will have a creative solution to problems or experience in handling something you might not have dealt with before. Consultants are seasoned problem solvers who are able to offer fresh, innovative ideas that clients may not have been able to come up with on their own.

A trainer or teacher

Consultants may help companies keep employees on top of new business trends or developments in their field, consultants may be hired to teach. Consultants can also be useful in training new staff when you don’t have the time to do so yourself. 

An influx of new life into the business

No one likes change, least of all corporate America. But change can be good, and often, change is necessary. Consultants can help usher change into an organization seamlessly, whether it be through staff leadership retreats, workshops, e-learning, training programs, new technology, or helping to teach a new business ideology or way of communication, consultants can provide those much needed new methods and ideas into your business, as well as your staff!

Image Source: Getty Images 

Consultants are a valuable resource for any small business, and the impact they can have on a company should not be underestimated. If your annual revenue has been the same or declining in the last 3 years, your business isn’t serving you, you need help managing your growth curve, or your team isn’t hitting goals month over month, you should consider hiring a business consultant.

We are here to help you navigate so schedule a call to discuss your specific business goals

COVID-19: Systems resilience in times of unprecedented disruption

In the unfolding COVID-19 crisis, systems resilience is being tested like never before. IT and business leaders must ensure that their organizations can continue to operate through this unprecedented disruption by quickly addressing the stability of critical business processes and underlying systems. Systems resilience describes a system’s ability to operate during a major disruption or crisis, with minimal impact on critical business and operational processes. This means preventing outages, mitigating their impact, or recovering from them. Our definition of systems includes applications, architecture, data, cloud, infrastructure and network.The immediate challenge: Operating in a new reality
Companies are operating under a new reality that puts great strain on their systems.

  • Business continuity risks including supply chain disruptions, shifts in customer touchpoints, unavailability of critical resources, and gaps in business continuity protocols.
  • Surges in transaction volumes (for example, because of a shift from physical to digital purchasing) or precipitous declines in demand.
  • Monitoring, reporting, and decision-making with real-time data to respond to immediate business needs in a dynamic environment.
  • Workforce productivity challenges due to employees working remotely, associated with connectivity and security.
  • Security risks including countering bad actors who will inevitably seek to take advantage of individuals and organizations.

Most companies face a significant gap
Based on our research, most companies are already starting with a significant gap in systems resilience. In 2019,  MWC conducted a vast survey of 8,300 companies that revealed only a small minority have cracked the code on systems resilience.

10%

Only the top 10% of 8,300 companies surveyed have cracked the code on systems resilience.

For the rest, the gap has become more acute. Now is the time to take action to address systems resilience issues today and lay a foundation for the future. The leaders today and those who act quickly to address the immediate challenge will successfully navigate the crisis and emerge stronger.
Actions to take Now and Next

We’ve outlined clear steps companies can take to bring stability, reliability and resilience to systems, fast.

MOBILIZE: WITHIN 72 HOURS

  • Establish a lean governance structure for dynamic decision-making.
  • Create an empowered resilience response team to address immediate issues.
  • Proactively identify vulnerabilities and quick wins using toolkits.

NOW: 2 WEEKS AND BEYOND

  • Establish small scrum teams with autonomy to execute point solutions using the six building blocks of systems resilience:
    • Elastic Digital Workplace
    • Hyper Automation
    • Architecture & Performance Engineering
    • Cloud Acceleration & Optimization
    • Service Continuity
    • Cybersecurity
  • Capture remediation actions in the form of 30, 60, 90 day plans.

NEXT: AN EYE ON THE FUTURE

  • Establish a structured intake process and platform to capture areas that need ongoing attention.
  • Scale to the new normal by defining long-term transformation strategies that drive towards a more resilient IT landscape.
  • Focus on small, incremental programs to self-fund transformation.
  • Optimize ecosystem partnerships to shift to an asset-light model and mitigate vulnerabilities.

Mobilize: Prepare to take swift action

CIOs and IT leaders play a central role in ensuring their organizations can continue to operate through disruption, by taking the following steps in the first 72-hours:

  • Establish a lean governance structure with representation from business and technology for dynamic prioritization and decision making.
  • Create an empowered resilience response team that immediately mobilizes resources to focus on business continuity in critical areas.
  • Proactively identify vulnerabilities and quick wins to address current challenges using toolkits such as the Accenture Systems Resilience Diagnostic.

Now: Apply the six building blocks of systems resilience

Accenture has identified six resilience building blocks that will enable a quick response to critical systems vulnerabilities.

01Elastic Digital Workplace

Quickly enable remote work with a focus on culture, technologies, communications and policies—at extraordinary speed and scale.

  • Immediately help employees adapt to remote working (e.g. effectively run virtual meetings).
  • Deploy or scale collaboration tools and provide guidance for operating in a remote connected workplace.
  • Organize an Elastic Digital Workplace Task Force including business, HR, IT and security leaders.
  • Equip traditional desktop workers with mobile solutions and implement virtual desktop solutions.

02 Hyper Automation

Accelerate existing automation investments to mitigate the impact of systems disruption, free up human resource capacity and streamline IT workforce management.

  • Identify and prioritize bottleneck areas.
  • Implement automation to immediately resolve high-volume tasks by leveraging techniques like machine learning and AI models.
  • Augment that which cannot be completely automated with digital co-workers.
  • Optimize the deployment of human talent to focus on high touch activities.

03 Architecture & Performance Engineering

Quickly resolve critical systems availability and performance constraints and scale applications to meet business demand.

  • Set up a triage room to get quick consensus on problems and priorities to address first.
  • Identify and implement quick performance engineering wins such as optimizing application memory, architecture-caching and data-indexing.
  • Quickly scale application capabilities through configuration or commercial changes.
  • Apply rapid architecture remediation techniques, such as streaming data, to offload demand on critical systems.

04 Cloud Acceleration & Optimization

Navigate extreme surges or drops in demand, manage risk, deploy instant innovation and optimize cloud costs.

  • Reconfigure traffic to maximize capacity for critical applications and infrastructure.
  • Leverage the power of cloud to deploy instant innovation through new cloud-native solutions.
  • Take advantage of cloud’s pay-by-the-drink model to align technology costs to drops in demand.

05 Service Continuity

Quickly source and onboard skilled resources to support critical in-flight services or deliver new IT projects.

  • Find the right skilled resources and initiate knowledge transition.
  • Enable accelerated service readiness.
  • Support service continuity through fit-for-purpose modern engineering practices and lean governance.

06 Cybersecurity

Secure your customers, people and systems wherever they are to counter the bad actors who seek to take advantage during a crisis.

  • Rapidly deploy a Zero Trust model for multi-cloud solutions, individually-owned devices (BYOD) and third-party technologies.
  • Identify security abnormalities and events.
  • Institute daily situational threat intelligence briefings virtually.
  • Remind employees and third parties to remain vigilant as cyberthreat tactics increase.
  • Build analytics and automation for monitoring solutions.

Next: An eye on the future

Even before COVID-19, many organizations faced considerable challenges to their resilience. Once we reach the other side of this pandemic, it will be important to establish long-term strategies for greater resilience. Apply lessons learned from the experience to create a systems and talent roadmap that better prepares your company for future disruptions.

  • Define long-term transformation strategies that prioritize and address antiquated applications, architectures and infrastructure, highly manual processes and underfunded cyber resilience.
  • Self-fund your transformation through small incremental programs that drive efficiency and free up capital.
  • Leverage ecosystem partners to shift to an asset-light model and mitigate vulnerable dependencies, choosing partners resilient to global risks.
MWC can help you quickly diagnose critical business processes and systems, identify potential vulnerabilities and take practical and timely action to minimize risk and loss.As the situation unfolds, we will continuously update our materials, so please check back regularly.

We are here to help you navigate so schedule a call to discuss your specific business goals

The heart of resilient leadership: Responding to COVID-19

A guide for Leadership in the crucible of crisis

Five fundamental qualities of resilient leadership distinguish successful CEOs as they guide their enterprises through the COVID-19 crisis. Learn specific steps that can help blunt the crisis’s impact—and enable your organization to emerge stronger.

Therapid global spread of COVID-19 has quickly eclipsed other recent epidemics in both size and scope.In addition to the deadly human toll and the disruption to millions of people’s lives, the economic damage is already significant and far-reaching.

In the face of certain challenges and a still-uncertain set of risks, business leaders are rightly concerned about how their companies will be affected and what they have to do next. In the heat of the moment, there are a number of lessons from history that can be applied now. We have pooled the insights of Deloitte leaders in affected areas around the world to provide practical insights for chief executives and their leadership teams in taking appropriate action.

We recognize that companies are in different phases of dealing with the outbreak, and therefore the impacts vary by geography and sector. But regardless of the extent of the virus’s impact on an organization, we believe there are five fundamental qualities ofresilient leadershipthat distinguish successful CEOs as they guide their enterprises through the COVID-19 crisis:

  1. Design from the heart … and the head.In crisis, the hardest things can be the softest things. Resilient leaders are genuinely, sincerely empathetic, walking compassionately in the shoes of employees, customers, and their broader ecosystems. Yet resilient leaders must simultaneously take a hard, rational line to protect financial performance from the invariable softness that accompanies such disruptions.
  2. Put the mission first.Resilient leaders are skilled at triage, able to stabilize their organizations to meet the crisis at hand while finding opportunities amid difficult constraints.
  3. Aim for speed over elegance.Resilient leaders take decisive action—with courage—based on imperfect information, knowing that expediency is essential.
  4. Own the narrative.Resilient leaders seize the narrative at the outset, being transparent about current realities—including what they don’t know—while also painting a compelling picture of the future that inspires others to persevere.
  5. Embrace the long view.Resilient leaders stay focused on the horizon, anticipating the new business models that are likely to emerge and sparking the innovations that will define tomorrow.

We believe that a typical crisis plays out over three time frames:respond, in which a company deals with the present situation and manages continuity;recover, during which a company learns and emerges stronger; andthrive, where the company prepares for and shapes the “next normal.” CEOs have the substantial and added responsibility to nimbly consider all three time frames concurrently and allocate resources accordingly.

Within the framework of these broad imperatives, resilient leaders can take specific tactical steps to elevate these qualities during the current crisis, blunting its impact and helping their organizations emerge stronger. With the right approach, this crisis can become an opportunity to move forward and create even more value and positive societal impact, rather than just bounce back to the status quo.

Design from the heart … and the head

An essential focus in a crisis is to recognize the impact the uncertainty is having on the people that drive the organization. At such times, emotional intelligence is critical. In everything they do during a crisis, resilient leaders express empathy and compassion for the human side of the upheaval—for example, acknowledging how radically their employees’ personal priorities have shifted away from work to being concerned about family health, accommodating extended school closures, and absorbing the human angst of life-threatening uncertainty. Resilient leaders also encourage their people to adopt a calm and methodical approach to whatever happens next.

In everything they do during a crisis, resilient leaders express empathy and compassion for the human side of the upheaval.

The first priority should be safeguarding workers, ensuring their immediate health and safety, followed by their economic well-being. A survey of human capital policies and practices in China at the onset of the COVID-19 outbreak, conducted by Deloitte China in January 2020, revealed the following steps companies and not-for-profit organizations were considering in response:

  • Ninety percent said that it was an urgent requirement to provide their employees with remote and flexible work options.
  • Companies in industries facing the biggest constraints on providing flexible and remote working options—such as energy, resources, and industrials—were focusing on providing stronger physical protection in the form of cleaner and safer work environments and personal protective equipment.
  • More than half of government and public service entities were focusing on addressing employees’ psychological stress.

Designing for the customer’s heart starts with understanding how that heart may have changed dramatically from what you perceived before. Consider that in crisis, customers often revert down Maslow’s Hierarchy of Needs to basic desires such as safety, security, and health. How does the nature and tone of your customer communications and the sensitivity of your customer experience need to shift in the midst of the COVID-19 crisis? Customers relish the same kindness and grace toward them that you show your workers—they are struggling through the crisis, too, and expect empathy. Simple things can be big things. UberEats is asking customers if they want food left at the door rather than passed by hand. Many airlines have emailed customers to describe their enhanced plane decontamination efforts. Some restaurants have encouraged their wait staff to visibly use hand sanitizer to assuage patron concerns.

Yet for the sake of those same employees and customers—as well as creditors and investors—resilient leaders must stay vigilantly focused on protecting financial performance during and through the crisis … and making hard, fact-based decisions. The adage “cash is king” is most real in the midst of an existential event. There are several critical steps in protecting performance:

  1. Centralizing decision-makingin fewer nodes for consistency, speed, and especially decisiveness—especially since uncertainty can paralyze some decision-makers.
  2. Cataloging the sources of cash the company has available, including unused credit lines (committed and uncommitted), revolving credit facilities, and related borrowing restrictions; new sources of credit, such as fixed credit facilities to refinance existing revolvers; excess working capital (e.g., via inventory reductions, extended payment terms); equity infusions; etc.
  3. Rapidly articulating economic scenariosacross all served markets, generally scaling scenarios from mild to moderate to severe.
  4. Modeling the projected financial impactof the scenarios on profitability and especially liquidity. This includes assessing the probability of violating debt covenants and terms, and determining when available cash sources should be drawn.
  5. Defining the non-negotiables:Which products, services, customer segments, business lines, employee segments, and so on are the most critical to ongoing and future cash flow and should be preserved, although even those non-negotiables may be impacted if scenarios tend to the more severe.
  6. Identifying the levers leadership has available(within the boundaries of the non-negotiables) to impact financial performance, such as discretionary expense reduction, hiring freezes, or temporary plant closures.
  7. Determining the actions to take now, and agreeing in advance on the hierarchy of levers to be pulled as the severity of scenarios unfolds.

Companies that have developed a downturn planning playbook have a head start, since many of the scenarios, projections, non-negotiables, and levers already have been articulated and may just need to be adjusted for present circumstances.

Yet amid the crisis, a company’s purpose should remain steadfast: It’s never negotiable. Purpose is where the head and the heart unite. While many organizations today have articulated a purpose beyond profit,purpose risks getting ignored in day-to-day decisions. In a recent survey, 79 percent of business leaders believe that an organization’s purpose is central to business success, yet 68 percent said that purpose is not used as a guidepost in leadership decision-making processes within their organization.

Making decisions that tie back to the organization’s purpose is particularly important during a crisis, when companies are under increased pressure and stakeholders are paying close attention to every move. We know from research on purpose-driven organizations that they tend to thrive during challenging environments:

  • Purpose cultivates engaged employees.When companies are centered on an authentic purpose, employees feel that their work has meaning. Research shows that employees who feel a greater sense of connection are far more likely to ride out volatility and be there to help companies recover and grow when stability returns.
  • Purpose attracts loyal customers who will stick with you in a downturn.Eight in 10 consumers say they are more loyal to purpose-driven brands, which can help sustain customer relationships in a downturn and beyond.
  • Purpose helps companies transform in the right way.Companies that are guided by their purpose when they face hard decisions have a sharper sense for how they should evolve, and their transformation is more cohesive as a result.When purpose is put first, profits generally follow; when profits are first, the results can be more elusive.

Amid the crisis, a company’s purpose should remain steadfast: It’s never negotiable.

Put the mission first

Organizations in the middle of a crisis are faced with a flurry of urgent issues across what seems like innumerable fronts. Resilient leaders zero in on the most pressing of these, establishing priority areas that can quickly cascade.

Based on our analysis of the leading practices of multinational companies in business continuity planning, especially related to major emergency management of infectious atypical pneumonia, H1N1 influenza, Ebola hemorrhagic fever, and other major infectious diseases,we have identified a number of key actions resilient leaders can take that can be grouped into the following categories:

  • Launch and sustain a crisiscommand center
  • Supporttalent and strategy
  • Maintainbusiness continuity and financing
  • Shore up thesupply chain
  • Stayengaged with customers
  • Strengthendigital capabilities
  • Engage with yourbusiness ecosystem

See the appendix,Action guide—putting the missionfirst, at the end of this article for detailed activities and priorities for each.

The recommendations in the action guide are further informed by Deloitte’s on-the-ground experience serving clients and supporting Deloitte professionals in the China market (see sidebar, “Key learnings from leading companies in the Chinese market”).

Apple provides an integrated case study. Its decision to close retail stores in affected areasdemonstrates a number of these principles:

  • Empathizing with the needs and concerns of its employees, including continuing to pay hourly workers as though operations followed a normal schedule and amending its leave policy for COVID-related health issues
  • Reducing further shocks to an already depleted supply chain
  • Staying connected to—and overtly demonstrating concern for—its customers and local communities
  • Leveraging its at-scale digital presence by keeping its online store open and running
  • Continuing to engage its business ecosystem via new channels, shifting the annual Worldwide Developers Conference in June to a digital-only gathering

Finally, Apple’s bold decision-making demonstrates the courage inherent inAim for speed over elegance, the next quality we discuss.

Aim for speed over elegance

Perfect is the enemy of good, especially during crises when prompt action is required. Most companies do not have the infrastructure to deliver perfect information or data, in real time, on operations that could be affected during an epidemic. There will be many “known unknowns” in the days and weeks ahead. Are you ready to accept that you’ll need to act with imperfect information? Collect as much proxy data as you can to inform your decisions so you’re not flying blind. When the crisis is over, you will have the opportunity to conduct a thorough review to see how to improve information quality in future crises—but during this one, you will likely have to set aside that kind of analysis.

Perfect is the enemy of good, especially during crises when prompt action is required.

As leaders confront situations that were never anticipated, this is also a time to encourage more initiative and decision rights at all levels of the organization, trusting that the teams and individuals who are deeply embedded in a specific context may be in the best position to come up with creative approaches to addressing unanticipated needs. Make the objective clear, but allow more flexible local autonomy. To achieve the overall objective of reducing disease transmission risk in its stores, for instance, one coffee shop chain gave store leadership the flexibility to reconfigure tables to maintain social distancing.The key, of course, is to ensure that all workers are clear on the objectives that matter and the guardrails that cannot be crossed. This approach may have value beyond the current crisis as organizations learn to conduct business in more and more uncertain times.

Own the narrative

As we have seen, there is a fine balance between communicating in advance of having all of the facts and being late to comment. We have seen leading companies adopt a policy of shorter, more frequent communications based on what they do know and filling in details later. In the absence of a narrative from you, your teams and stakeholders may start to fill the void with misinformation and assumptions. Setting a regular cadence with a clear voice is critical. Incomplete or conflicting communications can slow the organization’s response rather than providing better guidance.

In a time of crisis, trust is paramount. This simple formula emphasizes the key elements of trust for individuals and for organizations:

Trust = Transparency + Relationship + Experience

Trust starts with transparency: telling what you know and admitting what you don’t. Trust is also a function of relationships: some level of “knowing” each other among you and your employees, your customers, and your ecosystem. And lastly, it also depends on experience: Do you reliably do what you say? In times of growing uncertainty, trust is increasingly built by demonstrating an ability to address unanticipated situations and a steady commitment to address the needs of all stakeholders in the best way possible.

It’s also important to recognize and address the emotions of all stakeholders. This is not just about charts and numbers. Narratives can be powerful ways to acknowledge the fears that naturally surface in times of crisis, while at the same time framing the opportunity that can be achieved if stakeholders come together and commit to overcoming the challenges that stand in the way.

In the midst of crisis, Marshall McLuhan’s famous observation that “the medium is the message” rings even more true. Many psychologists assert that the majority of communication is nonverbal. Emails, texts, and tweets miss the voice intonation, eye contact, and body language essential to trust-building communications. Encourage the use of video—especially to connect emotionally with your teams—instead of emails and other forms of communication. Just as you may feel overwhelmed by your inbox, so do your employees.

This is not just about charts and numbers. Narratives can be powerful ways to acknowledge the fears that naturally surface in times of crisis, while at the same time framing the opportunity that can be achieved if stakeholders come together and commit to overcoming the challenges that stand in the way.

Embrace the long view

Any period of volatility can create opportunities that businesses can leverage if they are prepared. In the case of the COVID-19 outbreak, organizations that take a more assertive and longer-term approach can spark innovations that will define the “next normal.”

AHarvard Business Reviewassessment of corporate performance during the past three recessions found that, of the 4,700 firms studied, those that cut costs fastest and deepest had the lowest probability of outperforming competitors after the economy recovered.In other words, the group most likely to emerge from the recession as winners were those that struck the right balance between short- and long-term strategies by investing comprehensively in the future while selectively reducing costs to survive the recession.While the importance of this balance may appear obvious when the economy is strong, amid the pressures of a downturn, companies are particularly susceptible to a short-term mindset.

Anticipate structural changes and their lasting effects

COVID-19 is likely to accelerate fundamental and structural changes that were inevitable in any case—but are now likely to occurfarfaster than they would otherwise. Consider that the “virtualization” of work—undertaken from home or elsewhere, with remote collaboration and reduced travel for physical colocation—has been evolving steadily. Today, all around the world, businesses—and their talent—are learning to communicate, collaborate, and coordinate on virtual platforms, and understanding the increased efficacy and efficiency such modalities of work can provide. Virtual work and collaboration tools are likely to create a booming new market space.

The necessity of operating differently gives businesses the opportunity to understand what theycando.

These structural changes also may require you to alter your strategy and planning. For instance, if you shift your staffing model to allow more telecommuting or remote work, how could that affect your real estate portfolio? Are there cost savings you can achieve by shrinking your organization’s physical footprint? What sort of new liabilities or challenges might develop if you adopt a decentralized work model? Will you need stronger cybersecurity protocols? What changes will you need to make to management training and communication policies to run a more distributed workforce? What upgrades are required for video conferencing and network availability?

The necessity of operating differently gives businesses the opportunity to understand what theycando. One company, for example, tested the ability of its finance staff to perform their monthly close while working from home to determine if the company could meet its quarterly financial reporting requirements if conditions persisted.Once you discover that you can do things differently, you may want to consider whether you should continue doing so.

Become a market shaper

Shaping strategies can become a significant source of new value creation emerging from unanticipated crises. The market shapers—those that shape the future of their industry rather than adapt to it—will emerge stronger. Companies emerging from this crisis and shifting into the “thrive” time frame will take part in this reinvention, either by identifying and solving for new opportunities, aligning themselves with the future-shapers of their industry, or actually becoming the nexus of the next ecosystem while their competitors focus on the crisis.

Consider the promise of additive manufacturing. Although 3D printing has been growing, existing global supply chains and the wage arbitrage opportunities they provide have provided powerful economic advantages. The status quo has already been tested by growing geopolitical tensions and protectionism, and growing concern about carbon footprints. Now add the impacts of COVID-19, and it is easy to anticipate huge investments in new additive manufacturing technologies that bring production back much closer to consumption—creating entirely new markets to be shaped.

Build future business models

Likewise, structural market changes and newly shaped markets prompt new business models. Imagine the creation of public-private partnerships to provide redundant infrastructure in a particular geography—an initiative at least one government agency already has sponsored in anticipation of circumstances such as these. How will emerging trends, structural changes, and new markets redefine how your company and industry will be organized tomorrow?

For example, many have long realized that education was ripe for significant changes enabled by digital technologies. With over 290 million students out of school globally due to COVID-19, according to the United Nations,the demand for online offerings, curricula, and platforms will likely accelerate. Yet some universities and faculty are just beginning to improvise remote offerings.Designing around the massive COVID-19 constraint demonstrates the real promise of potentially revolutionary changes in how we structure, locate, and operate our approaches to learning—which are likely to lead to dynamic new market-making opportunities in this area as well.

How will emerging trends, structural changes, and new markets redefine how your company and industry will be organized tomorrow?

As another example, consider the growth in adoption of AI and robotics, which already are playing a key role in detecting and treating COVID-19. AI-equipped tools are scanning social media to analyze virus progression in real time, recognizing viral pneumonia in chest CT scans 45 times faster than humans with 96 percent accuracy, and conducting molecular synthesis and validation in days rather than months or years.Meanwhile, robots are disinfecting quarantined patient rooms to reduce possible transmission.AI also could accelerate drug discovery, preclinical drug development, and phase 1 clinical trials in which safety and toxicity could be tested with DNA-on-a-chip. Imagine how future health care models might change if the typical decade-long pharmaceutical research and development cycle could be slashed by over half. What’s more, post-COVID shifts in popular opinion could suddenly enable changes in the regulatory framework concerning fast-track approvals.

A test of resilient leadership

COVID-19 is a crucible within which resilient leadership is refined. Acting without perfect information, often with only a few hours or days to spare, CEOs will have to guide their organizations through myriad decisions and challenges, with significant implications for their company’s whole system—employees, customers, clients, financial partners, suppliers, investors, and other stakeholders—as well as for society as a whole.

Clarity of thinking, communications, and decision-making will be at a premium. Those CEOs who can best exhibit this clarity—and lead from the heart and the head—will inspire their organizations to persevere through this crisis, positioning their brand to emerge in a better place, prepared for whatever may come. Crises like these, with deep challenges to be navigated, will also lead to opportunities for learning and deepening trust with all stakeholders, while equipping organizations for a step change that creates more value not just for shareholders, but for society as a whole.

Appendix: Action guide—putting the missionfirst

Launch and sustain a crisis command center

Most organizations in the affected regions have launched some form of crisis response unit, either as a result of a preestablished crisis response plan or on an ad hoc basis, in order to gain an enterprisewide understanding of the impact and coordinate their efforts across functions. Subteams have been created to manage specific workstreams such as communications, legal, finance, and operations. They are operating with a clear mandate provided by executive management and have been empowered to make swift decisions in the areas that follow.

Such a command center doesn’t have to be entirely on the defensive: It can also help to break traditional orthodoxies. Airlines that are canceling flights, for example, are making the downtime more productive by prioritizing scheduled maintenance for grounded aircraft—and reallocating larger planes to space-constrained routes—enabling them to make more efficient use of resources.

Such a command center doesn’t have to be entirely on the defensive: It can also help to break traditional orthodoxies.

Support talent and strategy

The key to supporting your talent while they support your strategy involves focusing on thework, theworkforce, and theworkplace.

First, evaluate the actualworkof your company and how it might be changed. Resilient leaders rapidly assess what work is mission-critical and what can be deferred or deprioritized, and then help teams understand where their focus needs to be (including what work is not strategically critical). Allow your people to focus on the most important tasks and empower teams to be creative in how they deliver nonessential work in ways that minimize unnecessary risk or exposure to your employees and your customers. Where work has to be onsite, evaluate what safeguards can be put in place, such as revised cleaning protocols or personal protective equipment.

The next focus is theworkforce. The most effective plans encompass employees—as well as contractors, vendors, partners, and unions—who need to be included to keep the entire workforce safe. Address the immediate COVID-19-related human needs for information, including education on COVID-19 symptoms and prevention and access to employee assistance resources. As the work itself contracts and/or expands, ensure that you have operational plans for site disruption and reactivation, including communicating to affected employees. While assessing possible changes to leave policies (such as for employees caring for affected family members), also prepare for potentially higher absenteeism, lower productivity, and even work refusal until the situation ultimately normalizes post-crisis.

Theworkplaceand its culture are also critical. Companies need to prepare worksites for containment and contamination, and ensure the safety of working environments by thoroughly cleaning and disinfecting workplaces. In the event that an employee is suspected of being infected with COVID-19, a clear process must be in place for adhering to local health care requirements for isolating and/or treating the employee at the facility.

COVID-19 may fundamentally change the culture of the workplace, how you distribute work and deploy your workforce, and how you engage your people. In the longer term, this situation may present an opportunity to think about how you elevate communications, create a more resilient workforce, and build more focus on health and well-being.

Maintain business continuity and financing

In almost every financial crisis, preservation of cash and liquidity is a top priority. When challenges impact all industries simultaneously, even the most financially stable can struggle. For example, companies with strong balance sheets in the 2008–2009 recession were among the many that still experienced liquidity constraints when commercial paper markets were suddenly interrupted. In some cases, this compromised their ability to meet basic short-term obligations.

The current crisis will be no exception, and it could even be more trying for many. A large number of companies now face weeks, if not months, of disrupted markets. For many industries—such as travel and hospitality—the revenue lost during this period may be permanent, rather than made up later. That’s putting sudden, unanticipated pressure on working capital lines and liquidity.

Some companies may be able to maintain adequate flexibility by making drawdowns on their revolving credit facilities. Others are finding that they need to approach their banks to arrange temporarily larger facilities and/or covenant resets/waivers. Such efforts could prove unsuccessful, however, since banks may have reached their risk tolerance limits for a single credit. Revolving credit facilities may be frozen due to covenant limits and/or cross-defaults. Security packages hastily assembled to support new funding may be insufficient due to limited collateral availability or prolonged economic distress. Or companies may be looking for a highly customized, rolling short-term facility on terms that do not naturally fit into a bank’s standard product suite.

Beyond immediate cash needs, the finance function also must respond to potential accounting and financial reporting implications—if they can even get their books closed and/or audits completed in affected areas. For instance, some corporations implementing first-ever (and quite appropriate) remote work arrangements may face unexpected tax challenges when they are paying employees in a different local tax jurisdiction than their main office.

Shore up the supply chain

As the “world’s factory,” any major disruption in China puts global supply chains at risk. The COVID-19 crisis, originating from the highly industrialized province of Wuhan, highlights the potential perils of this dependency: More than 90 percent ofFortune1000 companies had Tier 1 and/or Tier 2 suppliers in the most-affected China provinces.

A decades-long focus on supply chain optimization to minimize costs, reduce inventories, and drive up asset utilization has improved many companies’ supply chain efficiency. But COVID-19 illustrates that many companies are not fully aware of the vulnerability of their supply chain relationships to global shocks when optimizing for efficiency over resilience. Further, COVID-19 demonstrates that a global outbreak can have much longer-lasting impacts than a local epidemic on a supply chain, which endures foreshocks and aftershocks as hot spots evolve around the globe.

Without a comprehensive plan or playbook—and most organizations lack one for addressing a global outbreak—companies can overadjust, causing greater disruption and incurring unnecessary expenses. For example, some companies have responded to the COVID-19 crisis by imposing across-the-board inventory increases out of fear of running short of necessary supplies.Such decisions need to thoughtfully consider the unintended consequences and shocks. For example, a bulge in retail apparel inventory concurrent with a rapid drop in consumer spending can exacerbate cash needs.

See the sidebar “Strengthening the supply chain” for important actions to consider to strengthen your global supply chain.

Stay engaged with customers

This is a critical moment that matters in the relationship with your customers, and it is a time for your company’s brand to lead. Customer needs can shift dramatically during crises such as this one, often from the rational to the emotional, and it is important for companies to intercept that shift. A study of consumer behavior found that a business’s traditional customer segments are at risk during a downturn, as their purchasing behavior is driven more by their emotional response to the economic volatility than by the characteristics businesses typically consider when defining their customer segments.

Particularly important is to take care to consider how your own sales efforts will appear. If you’re going to offer price cuts or marketing promotions, some might see that as an attempt to capitalize on a crisis—or worse, undermine public health efforts to encourage people to stay out of stores and other public places. Look at other benefits you can offer customers that help to sustain the customer relationship. For example, some hospitality companies are deferring the expiration of loyalty points.

Strengthen digital capabilities

Recommendations for “social distancing” have led organizations to expand their operations in the virtual, digital sphere. For many, this means asking their workforce to work from home. If you are preparing for increased remote work, ensure that the organization has the technology capacity to support it. Bandwidth, VPN infrastructure, authentication and access control mechanisms, and security tools all must be able to support peak traffic demands. Provide VPN/remote access to contractors and third parties who are supporting critical services, and purchase additional licenses for collaboration tools.

The sudden increase in online activity can have big implications on system stability, network robustness, and data security, especially in parts of the world where telecom and systems infrastructure are not as well developed. Companies will need to act quickly to ensure they have the systems, and support staff, in place to ensure smooth operation as the workplace and workforce evolves.Also consider the often-overlooked impact of such arrangements on employees who may feel socially isolated—or the potential loss of innovation when you limit in-person interaction.

If you’re going to disperse your workforce remotely, make sure you have the protections in place to safeguard your networks and data.

A particular concern is that cyber risk multiplies when the workforce is suddenly distributed. Although many companies may be set up for remote work, far fewer have the proper cybersecurity protocols in place. Since the crisis began, phishing scams and other attacks have been on the rise, targeting employees working from home … from the coffee shop … from any open network.If you’re going to disperse your workforce remotely, make sure you have the protections in place to safeguard your networks and data.

Maintaining customer connections virtually amid shifting behaviors also has challenges. As COVID-19 fears rose in the United States in early March, online sales increased 52 percent year over year, and the number of online shoppers increased 8.8 percent.While retailers may want to move more sales online to offset declining store traffic, they should ensure that their team has tested a scaled capability before making such a shift. Providing substandard service could do more damage to your brand long-term than the lost sales in the short term.

Engage with your business ecosystem

Finally, as new business models emerge from the crisis, can you become the nexus of a new, emerging ecosystem that’s built for the “next normal”?

Most companies’ networks—suppliers, vendors, customers, investors, employees, and other stakeholders—have grown exponentially since the last economic downturn. In a crisis, these massive global ecosystems add another layer of complexity and potential vulnerabilities—but they can also offer opportunities. Questions to consider include:

  • How can we lean on the ecosystem to improve the resilience of individual organizations during periods of disruption?
  • How am I extending my stakeholder communication to embrace ecosystem partners that have become critical components of the business model?
  • What additional data might my partners have to improve my own operations? For example, one B2B technology supplier is seeking to augment its short-term inventory planning by increasing transparency with its manufacturers.
  • For the investor community—the more traditional “econosystem”—what level of communication is appropriate? Some companies have stopped offering financial guidance to investors in light of the crisis,but organizations should not stop all communication. Keep your investors updated with as much information as possible.

Finally, as new business models emerge from the crisis, can you become the nexus of a new, emerging ecosystem that’s built for the “next normal”?

 

We are here to help you navigate so schedule a call to discuss your specific business goals

Bravely face the epidemic, resume work calmly

As enterprises start resuming work in various regions, they need to consider how to restart business operations amid ongoing epidemic prevention and control measures and ensure they can return to a normal, healthy work rhythm as soon as possible.

MWC recommends that within a week before work resumes, companies should establish specific responsibilities during such a special period to ensure the calm resumption of work.

 

Board and senior management should stabilize employee morale and ensure flexible and correct decision-making

Board of Directors:

  • Together with senior management, the board should evaluate possible major losses during the epidemic, predict and list major incidents the epidemic might cause.
  • Based on the degree of loss, review the enterprise’s annual plan and financial budget, promptly organize discussions among senior management about whether annual goals can be achieved, develop an adjustment plan on the basis of objective assessment results, and make reasonable estimates for next year’s goals.
  • Actively communicate with related shareholders, and promptly disclose fact-based information.
  • Grant management appropriate authority promptly to flexibly deal with and decide various emergency matters in an outbreak situation.

Senior management:

  • Immediately establish a core, cross-function team in response to the management during epidemic; continue to monitor the situation closely and actively cooperate with related regulatory requirements to collect and report relevant information promptly.
  • Organize all departments of the enterprise to ascertain the business and management processes affected by the epidemic, assess the losses, and make measures to minimize these losses, as well as take responsibility for tracking and implementation. It is particularly important to clearly identify trigger events and metrics for initiating different levels of response actions.
  • Ensure adequate communication both inside and outside the company, assist employees, customers, and other parties to understand the company’s actions to enhance their understanding and confidence.
  • Initiate assessment of budget objective and specific scenario analysis, and reasonably adjust business plans based on the results.

 

We are here to help you navigate so schedule a call to discuss your specific business goals

COVID-19: Navigating volatility and distress

Addressing the financial impact of COVID-19

This piece from MWC  provides guidance for companies experiencing significant operational disruption due to public policy measures put in place to contain the spread of COVID-19.

The number of new infections and deaths continues to rise rapidly and, as yet, there are no signs of Covid-19 being brought under control. Whilst the vast majority of infections and deaths have thus far occurred in China, concern is rising across the world that a global pandemic is upon us.

Business in China has been severely impacted. Shopping malls and restaurants are deserted, whilst travel and tourism revenues in China have collapsed. The return to work after the Chinese New Year has been slow and people are being encouraged, where possible, to work from home. Moreover, as the outbreak and growth of Covid-19 has been centered around the key manufacturing hub of Wuhan, global supply chains are being severely affected. Automotive plants in Japan and Korea have already closed due to a lack of parts. You can’t assemble a car with 99% of the parts.

It is possible that Covid-19 may burn out as temperatures start to rise during Spring and into Summer in the northern hemisphere, but at this point nobody knows. It is therefore important that businesses are proactive in assessing their capability to withstand disruption from both an operational and a financial standpoint, and that they act decisively to mitigate actual or potential issues.

Liquidity forecasting and headroom

  • Reforecast trading and cash flows. Test and challenge all assumptions. Ensure trading and cash flow forecasts are integrated. Model a downside scenario to understand actual/potential needs.
  • Review cash flow forecasts. Some businesses’ cash flows are already being devastated as revenue evaporates. Review in detail cash flows for the next 3 months and identify what mitigating actions can be taken to preserve cash in the short/medium term.
  • Review your lending documents. Understand the key terms, covenants, baskets of headroom and flexibility in your banking and finance documents.
  • Remain in contact with key stakeholders. Businesses should communicate regularly with key stakeholders including their lenders and investors in order to retain their confidence and support.

In the event Covid-19 extends into medium term

  • Seek out additional sources of capital early. Should cash flow forecasts suggest that liquidity is or will become an issue, assess options for raising funds including asset based financing, RCF, distressed M&A and alternative financing options (through our funds network) and also tapping the equity markets.
  • Keep plans and options actively under review. Sustainable financing is an iterative process.

Working capital and supply chain

  • Working capital:Working capital management is likely to be challenging:
    – Businesses impacted by lower Chinese demand may experience overstocking that could persist until production reduced or demand picks up.
    – Chinese customers likely to delay payments to preserve cash, whilst Chinese suppliers may be desperate to be paid for shipped/ordered goods.
    – Non-impacted counterparties may offer early payment discounts or factoring opportunities.
  • Affected operations:Assess ability of own affected operations in China to continue production and supply. Make contingency plans for alternative supply in short and medium term as required.
  • Engage with critical suppliers.Assess key trading terms and communicate regularly with critical suppliers to understand their ability to maintain and/or negotiate for continuity of supply.
  • Alternative suppliers.Identify which of your key suppliers may be exposed and consider scenarios for supply being partly/fully restored. Make contingency plans for alternative suppliers as appropriate.
  • Customers:Frequent engagement with customers at an executive level is key to manage expectations.

Impacted sectors

  • China
    – Heavily impacted (almost all sectors impacted): Airlines, Hotels, Restaurants, Hospitality, Retail, Manufacturers – particularly those with complex supply chains: Automotive, Technology etc.
  • Rest of Asia Pacific
    – Exporters, specifically from Japan & Korea, with a significant exposure to the Chinese market.
    – Business dependent on Chinese tourists: Hotels, luxury goods retailers.
    – Transportation: Airlines, Cruise operators, Shipping companies.
    – Manufacturers dependent on parts from China, notably Automotive and Technology.
    – Oil & Gas and Mining & Metals due to fall in both demand and commodity prices.
    – Agriculture and related businesses, including Ports and Shipping and their working capital Financiers.
    – Education: Dependent on Chinese students.
  • EMEA and Americas
    – Business dependent on Chinese tourists: Hotels, some Airlines, luxury goods Traders & Retailers.
    – Manufacturers dependent on parts from China, notably Automotive and Technology.
    – Oil & Gas and Mining & Metals due to fall in both demand and commodity prices.

 

We are here to help you navigate so schedule a call to discuss your specific business goals

COVID-19: Managing supply chain risk and disruption

Coronavirus highlights the need to transform traditional supply chain models

 

Could COVID-19 be the black swan event that finally forces many companies, and entire industries, to rethink and transform their global supply chain model? One fact is beyond doubt: It has already exposed the vulnerabilities of many organizations, especially those who have a high dependence on China to fulfill their need for raw materials or finished products.

China’s dominant role as the “world’s factory” means that any major disruption puts global supply chains at risk. Highlighting this is the fact that more than 200 of the Fortune Global 500 firms have a presence in Wuhan, the highly industrialized province where the outbreak originated, and which has been hardest hit. Companies whose supply chain is reliant on Tier 1 (direct) or Tier 2 (secondary) suppliers in China are likely to experience significant disruption, even if, according to the most optimistic reports, conditions approach normalcy in China by April.

How can organizations respond to the immediate change?

As the COVID-19 threat spreads, here are measures companies can take to protect their supply chain operations:

For companies that operate or have business relationships in China and other impacted countries, steps may include:
• Educate employees on COVID-19 symptoms and prevention
• Reinforce screening protocols
• Prepare for increased absenteeism
• Restrict non-essential travel and promote flexible working arrangements
• Align IT systems and support to evolving work requirements
• Prepare succession plans for key executive positions
• Focus on cash flow

For companies that produce, distribute, or source from suppliers in China and other impacted countries, steps may include:
• Enhance focus on workforce/labor planning
• Focus on Tier 1 supplier risk
• Illuminate the extended supply network
• Understand and activate alternate sources of supply
• Update inventory policy and planning parameters
• Enhance inbound materials visibility
• Prepare for plant closures
• Focus on production scheduling agility
• Evaluate alternative outbound logistics options and secure capacity
• Conduct global scenario planning

For companies that sell products or commodities to China and other impacted countries, steps may include:
• Understand the demand impact specific to your business
• Confirm short-term demand-supply synchronization strategy
• Prepare for potential channel shifts
• Evaluate alternative inbound logistics options
• Enhance allocated available to promise capability
• Open channels of communication with key customers
• Prepare for the rebound
• Conduct global scenario planning

Looking ahead: the imperative for a new supply chain model

A decades-long focus on supply chain optimization to minimize costs, reduce inventories, and drive up asset utilization has removed buffers and flexibility to absorb disruptions─and COVID-19 illustrates that many companies are not fully aware of the vulnerability of their supply chain relationships to global shocks.

Fortunately, new supply chain technologies are emerging that dramatically improve visibility across the end-to-end supply chain, and support companies’ ability to resist such shocks. The traditional linear supply chain model is transforming into digital supply networks (DSNs), where functional silos are broken down and organizations become connected to their complete supply network to enable end-to-end visibility, collaboration, agility, and optimization.

Leveraging advanced technologies such as the Internet of Things, artificial intelligence, robotics, and 5G, DSNs are designed to anticipate and meet future challenges. Whether it is a “black swan” event like COVID-19, trade war, act of war or terrorism, regulatory change, labor dispute, sudden spikes in demand, or supplier bankruptcy, organizations that deploy DSNs will be ready to deal with the unexpected.

*We are here to help you navigate so schedule a call to discuss your specific business goals

Seeking responsible leadership

 

JANUARY 20, 2020 RESEARCH REPORT

In brief

  • The social, economic and environmental challenges of the 2020s require new approaches to leadership and responsibility.
  • As organizations put sustainability and equitability at the heart of their organizations, they will need a broader range of leadership skills and attributes.
  • An ability to master Mission & Purpose, Technology & Innovation and Stakeholder Inclusion must become second nature.
  • We reveal the Five Elements of Responsible Leadership that high performing organizations display.

The decade to deliver

As we enter a new decade, businesses and organizations are facing a range of challenges that are forcing them to redefine responsible leadership:

  • Climate change: 65% of CEOs agree that they need to decouple economic growth from the use of natural resources.
  • Global economic fragility: 87% of CEOs believe that global and economic systems need to refocus on equitable growth.
  • The Fourth Industrial Revolution: New technologies have to be managed for both their potential promise and their peril.
  • The risk of leaving people behind in the workplace: Investment in emerging technologies doubled 2017-2019, but only 18% of organizations planned to significantly increase spending to reskill their people in the next three years.

These issues are encouraging a wider range of stakeholders to raise their voice and to influence decision makers. Leaders are beginning to acknowledge the need for change.

72% of CEOs say citizen trust will be critical to their competitiveness in the next five years.

61% of emerging leaders (the World Economic Forum’s Young Global Leaders and Global Shapers) say that business models should only be pursued if they generate profitable growth and improve societal outcomes at the same time.”Organizations have the opportunity and the obligation to drive growth in tandem with positive social and environmental outcomes. This starts with redefining what it means to lead responsibly. A new generation is leading the way, focused on driving value while honoring values.”

— Monika Wood, MBA, Founder/Principal – MW Consulting, Inc.

Combining responsibility with innovation results in better performance

We examined 2,540 publicly listed companies between 2015 and 2018, indexing them according to their sustainability & trust levels, their innovation and their financial performance. Companies that combine high levels of innovation, on one hand, and sustainability & trust, on the other, outperform their industry peers, with 3.1% higher operating profits and greater returns to shareholders. Companies that excel at innovating alone, without achieving sufficient levels of sustainability & trust, see a negligible impact on operating performance (see below).

A new model of responsible leadership is required

Today’s leaders need to deliver value on three fronts: organizational performance, measured most often by short-term earnings; continuous innovation, the seedbed for longer-term growth, often propelled by emerging technology; and sustainability & trust, earned by attending to the interests of stakeholders.

What leadership attributes are required to achieve all three objectives? We asked approximately 2,000 business leaders and 3,000 stakeholders. We also asked more than 1,800 emerging leaders in the World Economic Forum’s Young Global Leaders and Global Shapers communities.



The five elements model of responsible leadership

Stakeholder Inclusion, Emotion & Intuition, Mission & Purpose, Technology & Innovation, and Intellect & Insight are leadership attributes in the Five Elements Model of Responsible Leadership.
  • Stakeholder Inclusion: Safeguarding trust and positive impact for all by standing in the shoes of stakeholders when making decisions, and fostering an inclusive environment where diverse individuals have a voice and feel they belong.
  • Emotion & Intuition: Unlocking commitment and creativity by being truly human, showing compassion, humility and openness.
  • Mission & Purpose: Advancing common goals by inspiring a shared vision of sustainable prosperity for the organization and its stakeholders.
  • Technology & Innovation: Creating new organizational and societal value by innovating responsibly with emerging technology.
  • Intellect & Insight: Finding ever-improving paths to success by embracing continuous learning and knowledge exchange.

Company executives and stakeholders value different leadership qualities

Company executives recognize that leaders of responsible businesses need to exhibit all Five Elements. They place strong emphasis on Technology & Innovation (Te). But companies’ stakeholders see things differently. Consumers, employees and others have a far greater interest in leaders with highly developed Mission & Purpose (Mi) and Emotion & Intuition (Em). This suggests that organizations may find it hard to meet the expectations of wider society unless they modify their leadership qualities and seek a stronger and more balanced Five Elements profile.”This is the decade to deliver. A new model of responsible leadership can help address the world’s most pressing problems in ways that unleash new waves of growth that are more sustainable and equitable.”

— PETER LACY, Senior Managing Director – Accenture Strategy, Europe, UK & Ireland and Accenture World Economic Forum Lead

Making responsible leadership a reality

Responsible leadership becomes real when it learns from and ultimately reflects those it serves. Getting started means addressing head-on some potentially uncomfortable questions. We suggest three:

Who are your stakeholders and how well do you really know them?

Do they include non-traditional and diverse interests? How important is each group of stakeholders to your organization? Do you understand the negative and positive consequences of your organization’s actions?

Is your leadership team on course to have a balanced Five Elements profile?

In discussions, does the Five Elements profile resonate with your leadership team? Do you draw upon these attributes, skills and mindsets when making strategic decisions? Are the Five Elements present in how you grow and build your future leadership teams?

What do you need to accelerate and scale responsible leadership qualities throughout your organization?

What barriers exist? What opportunities and burning platforms can accelerate progress? Are there particular tools, support, or types of collaboration that can spur progress at an individual, organizational and ecosystem level?

 

*We are here to help you navigate so schedule a call to discuss your specific business goals

The Key to Inclusive Leadership

What makes people feel included in organizations? Feel that they are treated fairly and respectfully, are valued and belong? Many things of course, including an organization’s mission, policies, and practices, as well as co-worker behaviors.

But mostly it comes down to leaders. We find that what leaders say and do makes up to a 70% difference as to whether an individual reports feeling included. And this really matters because the more people feel included, the more they speak up, go the extra mile, and collaborate — all of which ultimately lifts organizational performance.

Given this formula, inclusive leadership is emerging as a unique and critical capability helping organizations adapt to diverse customers, markets, ideas and talent. Our previous research found that inclusive leaders share a cluster of six signature traits:

  1. Visible commitment: They articulate authentic commitment to diversity, challenge the status quo, hold others accountable, and make diversity and inclusion a personal priority.
  2. Humility: They are modest about capabilities, admit mistakes, and create the space for others to contribute.
  3. Awareness of bias: They show awareness of personal blind spots, as well as flaws in the system, and work hard to ensure a meritocracy.
  4. Curiosity about others: They demonstrate an open mindset and deep curiosity about others, listen without judgment, and seek with empathy to understand those around them.
  5. Cultural intelligence: They are attentive to others’ cultures and adapt as required.
  6. Effective collaboration: They empower others, pay attention to diversity of thinking and psychological safety, and focus on team cohesion.

This sounds like a laundry list, so it’s not surprising that we are regularly asked which is the most important trait. The answer depends on who is asking. If it’s the leader, commitment is the most critical, because without it, the other five attributes can’t be fully developed.

For those working around a leader, such as a manager, direct report or peer, the single most important trait generating a sense of inclusiveness is a leader’s visible awareness of bias. To underscore this insight: Our analysis of the 360-degree Inclusive Leadership Assessments (ILA) of more than 400 leaders made by almost 4,000 raters reveals that while all six traits are important and operate as a cluster, a leader’s awareness of personal and organizational biases is the number one factor that raters care most about.

Comments from raters on the ILA tell us that they particularly notice, for example, when a leader “constantly challenges (their) own bias and encourages others to be aware of their pre-conceived leanings” or when a leader seeks insight into their biases by, for example, “[Asking] others to test whether their thought process is biased in any way.”

But this is not all. Raters are not looking for a simple acknowledgment of bias, tinged with a fatalistic sense that little can be done about it. They care about awareness of bias coupled with two additional behaviors:

  • Humility: Raters want to see that their leaders are determined to address their biases. Fatalism looks like “Hey, I know I have this prejudice, but whatever, I am what I am.” In contrast, leaders who are humble acknowledge their vulnerability to bias and ask for feedback on their blind spots and habits. For example, one direct report told us that their leader “is very open and vulnerable about her weaknesses, which she mentions when we undergo team development workshops. She shares her leadership assessments openly with the team and often asks for feedback and help to improve.” Our research shows that when cognizance of bias is combined with high levels of humility it can increase raters’ feelings of inclusion by up to 25%.
  • Empathy and perspective-taking: Raters aren’t looking for their leaders to try to understand their viewpoint and experience as a dry intellectual exercise, but empathically.  That means understanding others deeply and leaving them feeling heard.  For example, one rater commented “[The leader’s] empathy in interacting with others, makes [the leader] approachable, trustworthy and shows [their] eagerness to work with and/or support peers, colleagues and superiors.”  When cognizance of bias is combined with high levels of empathy/perspective-taking, it can increase raters’ feelings of inclusion by up to 33%.

Why are humility and empathy so important in this context? Humility encourages others to share their feedback (e.g., that a leader might have favorites or have a tendency to interrupt people or regularly ignore a class of information). Empathy and perspective-taking gives people hope that a leader cares about them and takes their views into account, rather than barreling on with preconceptions or a narrow set of ideas about their perspectives. Moreover, it creates a sense of personal connection between leaders and a diverse set of stakeholders, making it easier to make and implement shared decisions.

Putting the traits to work

How can leaders put these insights into practice? One tactic is to establish a diverse personal advisory board (PAD) — a group of people, often peers, who have regular contact with the leader and whom the leader trusts to talk straight. These trusted advisers can give leaders granular feedback on everyday interpersonal behaviors that support or inhibit inclusion, for example: Does the leader give equal time to all meeting participants, or favor those who are co-located over those who have dialed in? Does the leader always refer to one gender when giving examples or both? Does the leader use a broad spectrum of imagery when addressing a diverse audience, or imagery (such as sport metaphors or all male iconography) that represents only one group of people? Because a PAD is ongoing, leaders can receive feedback on whether the changes they make are hitting the mark.

A second tactic is for leaders to share their learning journey about recognizing and addressing biases. We have seen leaders do this by discussing their 360 assessment results with their manager, speaking at a town hall about their growth or creating a standing item in weekly team meetings (“inclusion moments”), during which they or a team member identifies what they have learned that week about diversity and inclusion. These actions express humility, help leaders to test and build on their insights and role model the importance of humility in addressing biases.

A third tactic is for leaders to immerse themselves in uncomfortable or new situations which expose them to diverse stakeholders, for example by attending an Employee Resource Group meeting, or sitting in different parts of the workplace each week. Exposure, combined with open-ended questions, helps to expand horizons and disrupt pre-conceived ideas.

Inclusive leadership is a critical capability to leverage diverse thinking in a workforce with increasingly diverse markets, customers, and talent. We have previously observed that only one in three leaders holds an accurate view about their inclusive leadership capabilities. A third believe they are more inclusive than they are actually perceived by those around them to be, while a third lack confidence in their inclusive leadership capability and so do less than they could to actively guide others and challenge the status quo.

Becoming more aware is critical to self-development, but awareness in isolation is not sufficient. Without humility and empathy/perspective taking, it’s difficult for leaders to gain deep insights into the nature of their blind spots or remedial strategies and, therefore, to grow. This requires effort, but fortunately the circle of learning is virtuous. Leaders who are humble and empathetic will be open to criticism about their personal biases, and greater self-insight into personal limitations prompts greater humility, empathy and perspective-taking. Not only are these behaviors critical for leaders’ personal development, they also serve to make others feel more included along the way. And that is, of course, the objective.

*We are here to help you navigate so schedule a call to discuss your specific business goals