21 Apr Lessons From A CEO Roundtable: CEO Tools for Tightening The Bolts During the COVID-19 Crisis
CEOs need to be at the very top of their game right now in order to lead their companies safely to the other side of the current crisis. For many, the focus is now on preserving cash flow and mitigating losses. This is a time when you really need to put your head down, focus on what’s most important to the survival and viability of your business, and dig deep into the fundamentals.
Several excellent ideas were shared and discussed during one of our recent CEO Roundtables on how business leaders can ‘tighten the bolts’ of their organizations:
- The best balance sheet wins. The global pandemic has created a war and your balance sheet is the fortress you need to protect. Cash is key and the three most important words right now are liquidity, liquidity and liquidity. Leaders need to feel extremely confident that their data is as accurate and up-to-date as possible. The importance of a senior leadership team having access to accurate and up-to-date financial dashboards—including daily cash reports and forecasts—cannot be overstated. Ideally this information will be updated in real time. Ask yourself, “How can we tighten up our data and how quickly can that data be updated and accessed?”
- Scenario planning (both financial and operational) is critical. You need to create a variety of cash flow models that reflect what may happen over the coming months, and then adjust these plans regularly. What if your sales decrease by 10%? 20%? 30%? What if you lose your top customer? What if key customers are unable to pay? What will happen to your revenues? Then extend these models into the future and consider how they might be affected as different things wind down or ramp up.
- It’s time to trim the fat. Now is the time to dig deep to see where there might be opportunities to save. Many leaders are surprised by the amount of fat that accumulates within their company over time. Trimming the fat from your business now not only can help improve cash flow while sales are down, but can also help expedite your recovery and growth. Take the time to reflect on and question every resource you currently have to run your business. Go five lines deep on every single item on your P&L and ask yourself where and how you can save money.
- Focus on your ‘A’ Players. Yes, cash flow and liquidity are key, but it’s all about the people. To come out of this crisis successfully, you need to have the best possible team around you. Reorganize and resize your team to be strong and lean, and then skill up the people you want to keep and invest in for the future. Any staffing decisions need to be based on performance versus popularity. Think about the current skills, behaviours, and reactions of your current employees. Ask yourself, “Where does the company need to go and who do I need to get it there? Define the behaviours and skills of the roles needed to reach your destination and then determine who you have to fill these roles.
- Balance the Load. Some team members may be carrying a disproportionate load of work right now. Revisit the roles within your company by task, and ask yourself if there is a way to achieve better equity in day-to-day and week-to-week responsibilities. Can you reassign work across your team to redistribute the weight? An added bonus of reallocating work is that you get fresh eyes in new areas. Often the naïve questions posed by someone new can uncover areas of improvement that may have been previously overlooked.
- Use extra time productively. Time management plays a key role these days so it’s important to ensure that people are using their time as productively as possible. If you or someone on your team has some extra time, perhaps this presents an opportunity to clean up a backlog of paperwork, produce something new, sharpen the saw around skills or knowledge, or improve processes to increase productivity or save money.
Strategic alignment is crucial right now, and one of the best tools out there to help achieve alignment is Kraig Kramers’ Quarterly Priorities Management (QPM). Although the current crisis requires us to think in shorter timeframes, the same QPM process can be used to identify and align your weekly or monthly priorities. How do you do this?
- Write down your top five priorities to get your organization through the next week or month. It’s a tough but vital question.
- Ask your direct reports to do the same and to send you their responses. You now have the critical priorities of you and your team in front of you.
- Determine the underlying alignment between the priorities and then shape this into something that can be cascaded down and across your organization to get everyone focused on the most important stuff – the highest and best use of their time.
This is a powerful tool to tighten the bolts by identifying not only which bolts to focus on, but also by identifying any that may be loose!