Every crisis presents an opportunity in itself. The wise and bold people see the hope and possibilities in the form of opportunity while most others engulf themselves in fear and despair. Great leaders are resilient and agile; they lead their folks to believe in the company’s purpose and get them to deliver the best that their customers expect at the times of a crisis. This leadership practice not only keeps the team in high spirits but also strengthens the core of the organization.
Speak the truth
As a crisis hits, more often than not, it does not make a formal announcement before landing. Seasoned leaders keep their eyes and ears open to all the signals within their organization and in the environment. They need to read these signals and decide action steps. Depending upon the maturity levels of the organization, the leaders have to communicate to their crew that a crisis has hit them and the preparedness of the organization to deal with this.
Some leaders do not recognize the coming of the crisis. Some see it but deny its arrival until their business gets hit. Some do not know how to deal with it; even if they do, it takes courage to face the employees and have the confidence to announce that the organization is dealing with a crisis. The task is uphill because the employees need to get the confidence that their leaders have a method to deal with the crisis and they need to stand together.
Genuine concern for employees
At the time of a crisis, the concern permeates across the ranks and thanks to social media, bad news spread like wildfire. Rumour mills work overtime and they feed into anxiety and uncertainty. A crisis like COVID-19 impacts the health and livelihood of people. So it can drastically disrupt lives and families apart from livelihood. Organizations need to be conscious of the fact that their employees have members in their families and acquaintances. Leaders must show high levels of sensitivity towards the impact of the crisis in the lives of their employees.
Over time, every individual faces natural calamities and socio-economic crises apart from disasters in personal lives. These situations could cause losses of various kinds, some of them may be irreparable. The minimum that an organization could do is to show solidarity and provide assistance that one can. Leaders stand tall when they show genuine care and love towards their employees and their families. Every leader and organization talks about employee care as a virtue. These words face the test of truth and depth in the testing times of a crisis.
Regular updates to the company, opening up quicker channels of communication and forming task forces to work as a war room in dealing with the crisis can assure the employees that their company and leader are doing their best and would soon bring the situation under control. It is natural that situations in a crisis are unforeseen and keep unfolding quickly. So, nobody can predict what is coming and hence the action plans will keep evolving. It is important to provide the best view of the crisis to the employees and the plan of action from their window.
The leaders while making a decision have to think of the impact it will have on their employees and have to immediately communicate the same to them. Sometimes, the decisions taken might be unfavorable to some or all employees, but the leader needs to have the courage to openly talk about it and the skills to articulate them well.
Beef up finances
Addressing soft issues like care and concern for employees, honest communication and proactive thinking is important. The organization will create a strong positive impact on the minds of the stakeholders. However, these impressions wither away soon unless the sources of livelihoods are secure. Every organization does not have a strong enough cash pile to tide over the challenge. Hence, the leaders have to organize finances to deal with the uncertainties of the crisis.
A crisis is bound to disrupt the regular working of the business and hence, its supply chain, production, sales, customer service, and cash flows. May it be a natural calamity like an earthquake or flood, social unrest, a strike, a technological disruption like social media, cloud computing or a health challenge like COVID-19, each one of them poses huge financial risks that threaten business continuity. We have seen many small businesses close down after a natural calamity, large enterprises go bankrupt when technological changes happen or a financial crisis hits them.
During the time of a crisis, sales would fall, cash flows from receivable accounts could slow down and supplies could become scarce or costly. Organizations have to work overtime to bridge the gaps in the cash flow to fund their internal operations such as salaries, rentals, utility bills, vendors and other payables. Sometimes, even after right-sizing the organization, there could be a shortage of funds that need to be bridged. Investors and equity holders might not be in a position to pump in additional capital; the CFO and the team have a huge task at hand to organize alternate sources to make the engines of the organization run and the employees’ livelihoods remain unaffected.