COVID-19 in and out of the boardroom
There is a collective global panic surrounding the Corona Virus, specifically COVID-19, which has just been declared an pandemic. The markets are in chaos, executives have had to suspend travel, stores are running out of toilet paper and hand sanitiser, and employees are looking to lock themselves down and work from home. How can boards respond during this time of panic?
The calm before the storm, or calming the storm?
As business leaders, one of your core roles is to guide the business through difficult times – and a global pandemic is undoubtedly one of those times. So while employees and management are panicking about getting sick or (for that matter) merely having someone breathe on them, you need to maintain a level of composure that will rub off on your teams.
How businesses are being affected
Businesses across the globe are being affected by COVID-19, as trade routes are closing down and those that deal with European and Asian countries are being hit hardest. There are also more indirect repercussions such as employee morale and rising levels of fear, management having to deal with increased absences, and the physical health risk of people being confined to small spaces. The truth is, if the majority of people do not start to calm down about the state of the virus, businesses will find themselves experiencing many more challenges. Many of which are yet to be comprehended.
Crisis management and remaining calm
The most important action business leaders can take right now is to remain calm. You also need to work with your management team to implement crisis management plans and response plans. McKinsey & Company outline seven actions that can help businesses of all kinds. These include:
- Protecting employees: Drawing up and executing a plan to support employees that is consistent with the most conservative guidelines that might apply and has trigger points for policy changes.
- Set up a cross-functional COVID-19 response team: Companies should nominate a direct report of the CEO (in small businesses this might mean you) to lead the effort and should appoint members from every function and discipline to assist.
- Ensure that liquidity is sufficient to weather the storm: Businesses need to define scenarios tailored to the company’s context. For the critical variables that will affect revenue and cost, they can define input numbers through analytics and expert input.
- Stabilise the supply chain: Companies need to define the extent and likely duration of their supply-chain exposure to areas that are experiencing community transmission, including tier-1, -2, and -3 suppliers, and inventory levels.
- Stay close to your customers: Companies that navigate disruptions better often succeed because they invest in their core customer segments and anticipate their behaviours.
- Practice the plan: Many top teams do not invest time in understanding what it takes to plan for disruptions until they are in one. This is where roundtables or simulations are invaluable.
- Demonstrate purpose: Businesses are only as strong as the communities of which they are a part. Companies need to figure out how to support response efforts—such as by providing money, equipment, or expertise.
The Australian Institute of Company Directors states that “management will be under significant pressure and directors must demonstrate empathy and manage themselves to ensure that, in their quest to provide support, they are not making the situation more difficult. Boards can help by setting reporting expectations that don’t get in the way of management leading the business through the crisis.” – Sage advice, given the current situation, some something boards can work with through this difficult time.
We will be hosting an online focus group discussion to tackle tips on how to react in uncertain times – focusing on your role as a director and supporting business performance. Click below to sign up.
Yours in boardroom performance,
Carl Bates | Chief Executive | Sirdar Group