MANAGING YOUR MONEY – Rick Harrison, restructuring partner at KPMG
In the current environment, business leaders across the region will wish they had all the answers. Companies will be assessing what support is available via the various Government support packages, but will also be looking at what actions they can take themselves. The best way to be armed for the challenges of now and beyond is to plan ahead:
Forecast cash flow as a matter of urgency. Run them on a weekly basis, extending the horizon from the usual 12 or so weeks to 26 weeks and do them on a granular, receipts and payments basis. Having a clear picture on everything including payroll, suppliers, bank interest, tax and pension commitments is critical.
Working capital management. Consider whether debtor payment terms can be shortened or changed – for example, can up-front payment be requested for new work? – and consider moves like offering a discount for early settlement. Also review your stock levels and ensure you are carrying the “right type and quantity” of stock for your business in the current trading environment.
Make a strong case for extending credit. When applying for government support initiatives available to businesses or additional debt facilities be sure to produce a well-considered, credible plan (supported by financial forecasts) that articulates the health of the business prior to the crisis; the self-help action being taken in the short and medium term; and how the business will return to health afterwards.
FIVE EMPLOYMENT LAW CONSIDERATIONS YOU MIGHT HAVE MISSED – Ben Daniel, partner and head of service delivery for the employment, pensions and immigration team at national law firm Weightmans LLP
Working life has changed beyond all recognition for many of us. As we adjust to ‘the new normal’, it is important that businesses – and their workforces – have absolute clarity on both their legal obligations and the support available from the Government via the wide-ranging Coronavirus Job Retention Scheme. Much has been written about the Scheme already – here are five important details that firms might have missed.
• For employees who were employed on 28 February 2020, but have since left, you can re-employ them, put them on furlough, and claim for their wages through the Coronavirus Job Retention Scheme. This originally applied only to employees who had been made redundant but has now been broadened out to cover leavers for any other reason too.
• You can claim for employees with variable pay – depending on how long they have been with you, it will be either the same month’s earnings for the previous year or their average monthly earnings for the 19/20 tax year, whichever is higher.
• Employees still have the same rights at work, including Statutory Sick Pay, maternity and other parental rights, rights against unfair dismissal and to redundancy payments.
• You can claim for furloughed employees who are shielding in line with public health guidance (or need to stay home with someone who is shielding) if they are unable to work from home and would otherwise have to be made redundant.
• To be eligible for the grant employers must confirm in writing to their employee that they have been furloughed, and a record of this communication must be kept for five years.
SIX STEPS TO COMMUNICATING IN A CRISIS – Martin Currie, managing director at integrated PR, digital and creative communications agency Citypress
As the region’s business community shapes its response to the Covid-19 outbreak, it pays to remember some of the proven principles of communicating in a crisis.
Think audience first. Tailor your response by focusing on what’s most relevant to each of your audiences – employees (security), customers (availability), suppliers and partners (trade) – and consider which communication channel is most effective.
Resist over-promising. People accept you’re reacting to a fast-moving situation, so communicate what you know, not what you don’t. Few concrete guarantees can be given when the impact is still being assessed.
Judge the mood. Most people will be worried or scared – so think compassion and sincerity first. Well-judged and well-timed humour can help bring your brand to life, but insensitive jokes can kill it.
Be useful. Businesses can really underline their purpose in times of need. Practical action designed to help those impacted – however small – will be met favourably and shared. But whatever you do, avoid token gestures, piggy-backing or grand-standing.
Over-communicate. People are reassured by communication – especially employees – so, as long as it’s relevant, make it regular, then find a maintainable rhythm. Learn from feedback and adapt.
Think next step. What’s not appropriate today might be next month. Once you’ve dealt with the priorities, consider how your response needs to evolve.
KEEPING YOUR EMPLOYEES MOTIVATED, CONNECTED AND MENTALLY HEALTHY – Sir Cary Cooper, professor of organisational psychology at Alliance Manchester Business School
It’s essential for managers to ensure their teams feel both connected and motivated to drive the business forward during times of crisis. Business leaders should look to motivate their employees in the following way:
Create a sense of community. Managers should communicate via video calls, not just via email or phone. This way, you can really get a sense of how your team is doing, how their working pattern may be impacted in the current climate, and how you can support them to deliver.
Check-in with colleagues to understand their working patterns but avoid micro-managing. Let colleagues know you’re getting in touch with them, not just to check-in on their workload, but to sense-check their wellbeing generally.
Make sure your team isn’t over-working or trying to impress you by sending late-night emails. The line between work and home life is even finer during times like these – remind employees that they should maintain a healthy balance.
Reassure your team you’re in control. Being positive and decisive will help to drive those lacking face-to-face contact and who might be feeling anxious. Being future-oriented and talking about the business’ plans will reassure your team they’re in a steady pair of hands.
MANAGING YOUR RESPONSE – CREATING EFFECTIVE CONTINGENCY PLANS – Chris Paton, managing director at management consultancy Quirk Solutions
Resilience will be on the mind of almost every business leader and entrepreneur across the region. I’ve seen both good and bad examples of managing the crisis response, but there are five key steps that should always be considered, now and in the future.
Keep it simple and avoid analysing too much information. Focus on the decisions you need to make and only use data that will empower you to make them.
Create a short intent statement of no more than 100 words, which delivers a summary of your mission, your values and your objectives in mitigating the crisis. It will provide you with a rallying call to align everybody in your organisation.
Empower your teams to be more agile and innovative by giving them parameters and frameworks to work in and take responsibility. In a crisis situation, leaders often feel they need to take total command and control when actually the opposite is true.
Use pre-mortem thinking to test your business plans. By examining your model to understand where the weaknesses lie before it’s executed, leaders can identify where and when issues could surface and have processes in place to mitigate them. It also serves to socialise a plan across an organisation, building ownership and understanding.
Find a purpose for the future of your company. The business environment will have fundamentally changed when the UK recovers and considering a new raison d’être will provide your company and people with the communal sense of purpose to succeed.
CREATE YOUR FUTURE BY THINKING LIKE AN ENTREPRENEUR – Professor Vikas Shah MBE, entrepreneur, professor at MIT Sloan and honorary professor
at the University of Manchester
There is no doubt that we live in unprecedented times. But, it’s important to remember that handling crises is a normal part of the life of a business and that in adversity often comes opportunity.
Use your entrepreneurial spirit and focus on how you could adapt and change your business model – don’t be wedded to it. The virus is quickening the pace of change and endless opportunities will open up in every sector of the economy, from restauranteurs providing their diners with meal at home kits to the clear demand for remote consultation and diagnosis in healthcare. Be flexible, fast on your feet and investigate how you can pivot your business.
Strong mental resilience is vital to make sure you can focus on the tasks at hand and will help in ensuring you don’t make kneejerk reactions. While it won’t remove the stress, it will enable you to make better decisions and often involves paying greater attention to your nutrition, exercise, sleep and mindfulness.
Only control what you can and while it may be cliché, it’s regularly overlooked. There are multiple levers you can attempt to pull to keep your business on its feet and see out the crisis, but there are many you can’t control. Pushing those factors out of your mind will help you make good decisions.