Business transformation in a crisis [Part 1]

Posted by Matthew Maguire, Managing Consultant - Business Transformation

Topics: Strategy, Business Transformation, Featured

The protracted societal changes necessary to respond to the global Covid-19 outbreak have created an intense crisis for many businesses; the behaviour of the economy, suppliers, workers and customers has fundamentally changed such that many business models are no longer valid.

Firms need to take decisive action to adapt every facet of their operating model if they are to survive; finding new ways of marshalling their staff and reaching their customers.

Despite having Business Continuity Plans, it is unlikely that many organisations will have been prepared for the speed and magnitude of the disruption caused by this outbreak, perhaps a true Black Swan event.

For this article I have drawn upon my Crisis Management experience from challenging military operations to offer some practical advice to businesses struggling to kick start their response.

READ NEXT: Business Transformation in a crisis [Part 2]

Leadership and decision-making in a crisis

The majority of Crisis Management advice online relates to public relations incidents with little to cover the all-encompassing, whole business model crisis that organisations are currently facing. Nonetheless, the overarching leadership principles remain the same: focus on accurate sense-making and decisive decision-making to effectively marshal resources to terminate the crisis.

The following ‘top ten’ tips will help kick-start a business crisis management response.

  1. Accept the crisis

Although your business may not yet be directly affected, recognise that the wider business environment has changed. Move quickly through the early stages of shock – denial, anger, frustration, depression – to acceptance so deal with it decisively. Don’t let your team dwell on the whys and wherefores – focus on the response.

  1. Assemble the right team

Problems have multiple dimensions and need multiple perspectives, so assemble your best talent – not necessarily the most senior - from across each functional area of your business. Assign key crisis management staff positions including a leader, Chief of Staff, secretary and spokesperson as well as empowered representatives to cover marketing, operations, finance, admin, HR, IT, logistics, facilities, legal & compliance, PMO and risk. Carefully time-box the first day and first week to focus on resolving the most pressing issues.

  1. Evaluate information; focus on insight

To rapidly make the optimal risk-balanced decisions you need quality information to work with. Be sure to separate fact from fiction, clearly identifying known, unclear and presumed information. Always challenge assumptions. To avoid being overwhelmed, focus on information which provides insight and foresight over hindsight.

  1. Define end-state outcomes, not near-term objectives

Ruthlessly focus on a single defined end-state, such as ‘generating sufficient revenue to sustain the business until the business environment returns to normal.’ Avoid setting near-term objectives which may or may not support the end-state. Define and refine the end-state through Root Cause Analysis, MoSCoW prioritisation or Eisenhower grids.

  1. Fight for resources

Work to safeguard your resources including time, cash and human resources. Negotiate due payments with creditors and suppliers. Ruthlessly cut discretionary spending. Focus on funding key operations and transformation projects that will sustain the business until the crisis abates.

  1. Plan for the worst case; hope for the best

Think creatively using brainstorming and other tools to understand both the most likely trajectory of events as well as the most damaging. Use the Scaled Agile ‘Plan,’ ‘Do,’ ‘Check,’ ‘Adjust’ approach to iterate towards the target outcome.

  1. Regain the initiative

Act rapidly and decisively to get ahead of events and competitors. Instead of more problems, become a solution for your customers and suppliers. Strive for economy of effort by concentrating resources in key areas.

  1. Empower your staff

Don’t micromanage; set clear objectives to your team then trust and empower them to deliver however they deem necessary. Delegated command and control reduces the burden on the leadership team, enables concurrent supporting activity throughout the business and best enables the specialist expertise and creativity of your staff. Delegation allows your people to fight back against the crisis, improving morale and team spirit.

  1. Accept imperfection

Decisive action is more important the perfect action; accept the 80% solution now. Finer details, inconsistencies and errors can always be refined in due course. The focus must be on achieving the desired end-state at which point mistakes can be corrected.

  1. Communicate, communicate, communicate

Be first with the facts; don’t allow a vacuum for speculation amongst staff, customers or suppliers. Maintain regular updates to all stakeholders; don’t leave anyone out. Use consistent language to avoid ambiguity and add a personal touch to emphasise your leadership.

In a nutshell

Crises like Covid-19 are unavoidable and businesses must respond quickly and decisively to adapt their business models to a new operating environment to generate sufficient revenue to survive. These tips can help businesses focus their response, marshalling the ingenuity of their staff to overcome the challenges.

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