The essential message is to avoid thinking it's all gloom and doom and to avoid making quick, short-term decisions and strategies that may be detrimental in the long term. The goal is to visit strategies to ensure short-term survival and long-term prosperity. 10 fundamental priorities framework is not just a treasury issue - it's an all of business issue.
- Individual circumstances will apply.
- Take a closer look to understand your business and its key drivers (past and going forward).
- Competitive analysis - understand your market and customers.
- Knee-jerk reactions with short-term solutions can cost the business in the long term, eg. redundancies.
- Are you agile and confident? Act decisively, take tough decisions early.
- Operational agility and efficiency will allow business to adapt quickly.
- Cash management should be priority - "cash is king."
- No cash leads to inability to pay debts and insolvency.
- Go back to fundamentals of cash management.
- Consider other sources of cash such as disposal of surplus assets.
- Products and customers create value.
- Research and development.
- Customers must remain #1 priority.
- Focus on existing customers over new, short-term customers.
- Determine the most-valuable customers.
- Review investment projects that can be stopped or deferred.
- Focus on enhancing operational performance and eliminating waste.
- Make targeted cost reductions. Knee-jerk cuts have negative impact on staff morale and customer sentiment. Streamline processes. Consider outsourcing and shared services options.
- Look at management information systems. Need timely and relevant information - financial and non-financial.
- Consider appropriate KPIs and reporting templates that add value to your business.
- Consider fewer, more-pertinent KPIs.
- Evaluate performance against targets.
- Plan for different scenarios.
- Define success for your business.
- Forecasting is essential in the present economic climate, not a luxury.
- Be flexible and have foresight to enable you to be agile and act quickly.
- Model a variety of financial, operational and workforce scenarios that reflect the potential impact on your business. Include adverse scenarios.
- The best businesses continually forecast.
- Tell them they are values, monetary rewards and retention incentives.
- The organisation has a great future.
- Face-to-face, preferably one-to-one, with the best employees.
- Opportunities to secure new talent and refresh your talent pool.
- Great organisations are always on the lookout for the best talent.
- Include shareholders, lenders, investors, key suppliers, customers, employees, &etc.
- Stakeholder management is crucial.
- Communication is key - should be open and regular.
- Ensure you know and understand stakeholder expectations. Avoid surprises; stakeholders like to be informed.
- Take advantage of the opportunities.
- Look at what your competitors are doing. Strong businesses can capitalise on their positions in a downturn.
- Have an eye for the future - smart companies take opportunity not only to cut costs and headcount but also to 'think the unthinkable' - blank sheet of paper. How do you want to do business?
- Innovate and invest in new projects - effective and aligned with your strategies.
- Move from growth dynamic to sustainable profitability.
Deming, best known for his association with post-war quality management and improvement in Japan, says that the worker is not the problem, rather it is management that is the problem. It is up to management to enable and empower his staff.Presumably due to lack of confidence, competence - the absence of self-belief - and maybe some reticence to make any decision that might put them offside with their own manager. Wherein we approach the essence of leadership which is a topic for another day.
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