I was talking to a director of a mid-size organization last week and heard how overwhelmed the board of directors and management were in trying to come to a consensus on how to deal with the coronavirus (COVID-19) pandemic. Too much information from too many sources, too much uncertainty, and the stakes are literally life and death for their business. COVID-19 analysis paralysis. Understandable? Yes – but this this is a pivotal window of time in which business decisions with far reaching consequences must be made.
Many boards of directors and businesses are grappling with these issues in addition to critical personal, family and medical issues. My counsel was that the board and management regroup and perhaps approach COVID-19 as a "three snake" pandemic, each presenting a different critical threat to the business and, for each, the board and management must develop a different survival response.
The Viper: Facing a venomous viper on a trail, with its open jaws threateningly baring hinged fangs, is where your business is today. The business must act decisively. Carefully, confidently and calmly move backwards with those who are with you, never taking your eyes off the viper. Keep going until you are absolutely certain you have reached a place of safety, but stay intensely alert and be agile and ready to respond to unforeseen dangers. At this stage of the COVID-19 pandemic, it's all defence for your board and your business. First, it's about keeping your employees safe and moving them away from danger. Next, address how to keep operating while striving to avoid additional challenges. Protect the brand by making decisions that reflect empathy, understanding and respect for your employees and your stakeholders. Stay well-informed about rapidly changing laws and regulations and do everything that can be done to stabilize the business today so that management can catch its breath and start to assess next steps and to deploy them effectively and impactfully.
The Boa Constrictor: These snakes can be big and heavy, but once they grab hold, a Boa Constrictor will slowly and certainly squeeze the life out of its prey. For businesses, this snake is all about cash - cashflow, cash reserves, costs, payables and liquidity. Businesses should already be well into developing and implementing new protocols and policies to conserve cash, and to prudently manage cashflow, which may include expense reductions, and enhanced monitoring of accounts receivable and the extension of credit to customers. Ongoing engagement with lenders is a must as a positive relationship with this critical ally is essential to maintaining liquidity in the coming months.
The Rattlesnake: The rattlesnake's rattle, located at the end of its tail, warns you that this predator senses that you are near. The rattlesnake's rattle should also warn you, based on information available today, that the COVID-19 pandemic will have a long tail. And we don't know how long the worsening situation will continue. Boards and businesses need insight into possible medium and long-term consequences of the decisions that they are making today. Think ultra-marathon not sprint. While nobody has a crystal ball, boards of directors and management need to combine trusted external advice with their own experience and acuity to plot a forward course.
"Nobody knows what is going to happen" cannot be the best answer when you can hear the rattle getting louder and louder. The board and management must determine which impacts of the pandemic it can control, manage or deflect, while at the same time assessing how to attenuate damage from those which it cannot, and develop and implement strategies and responses accordingly.
By organizing your approach, planning and actions around these three snakes, a clearer path may appear for you, your board and your business.