As CEO and leader of a company that is still in business and facing COVID-19 issues, it is critical that you lead with confidence and humility. Employees are scared and concerned for their livelihood. They need a leader to believe in. As the weight of the world may be on your shoulders, you are probably facing one of three modes right now. Here is sound advice a CEO
could follow to survive and then thrive.
Survival –Your forecast models show bankruptcy happening if there is not a cash infusion soon. Your priority is to find cash to maintain your most valuable assets – your employees. It does you no good to revive a company without the staff to make it happen.
Cut executive pay immediately – The odds are high that executives can weather the storm with a significant reduction in salary. A 30% - 40% reduction in pay could fund multiple lower level employees. You may lose some, but a true executive will understand that it is short-term and adjust.
Government programs – Apply for all available government assisted funding options. It may not come in time but at least you are on the list. Ensure you are deeply involved with the options and process. Desperate times will cause many to agree to things that are not good for business.
Infuse cash yourself – If you are a shareholder/family member and CEO of a smaller company, strongly consider providing a cash infusion yourself. You may be a LLC or S-Corp that has traditionally taken profits out of the company. The company has made you wealthy. Now is the time to give some of it back to save employees.
Cut cash outlay drastically – You have probably already done this part. Revisit non-essential expenses and see if you can cut them or delay payment. This includes contacting vendors and negotiating extended payment terms during this event.
Offer pre-paid discounts – if you are in survival mode, consider offering future discounts in exchange for cash now. Examples could be “buy 3, get 2 free” with payment up front. This will hurt some when the products/services must be provided but it can be a quick infusion of much needed cash.
Maintaining – You are probably designated as an “essential” business with reduced revenues. If this continues beyond 3 months or so, you could slip into Survival mode. Here are some ideas to get ahead.
Expand services – now is a great time to investigate filling gaps left by competitors. Target increasing complementary offerings and charging for them.
Contact key accounts – They may be having problems with supply chain issues from other companies. Ask how you can help and what services they need. This is a great opportunity to go from “key” to “strategic” status. Do whatever you can to meet the need. They could pull you along into much needed territories that expand your business long-term.
Pivot – Investigate pivoting into other markets or industries. I.e. if you own a trucking company for oil and gas parts, switch to construction or other “essential” industries.
Thriving – You are fortunate enough to either be in an industry that is deemed “essential” and/or have a strong balance sheet with an Operating Reserve fund of at least 3 months. You are in great shape to take advantage of generational opportunities.
Acquisition mode – you could have “pick of the litter” of key competitors or complementary businesses that expand your offerings. Keep in contact with your banker(s) as you may need to move fast. Companies in your position should have no problems getting investment capital. Do so wisely to ensure long-term and cultural fit.
Upgrade staff – you could pick up some phenomenal resources that become available due to layoffs and bankruptcies. Key advice – compensate based upon what they are worth. Do not take advantage of them during difficult times because you can. When times turnaround, they will stay if treated well.
Community service – people do business with people and companies they like. Give back to the community and help those in need. There is nothing wrong with letting people know what you are doing and receive the public awareness for doing so. Make sure it is genuine and not just a photo-op for Facebook or LinkedIn.
As CEO, you are probably firing on all cylinders right now. Take time for yourself so you can think logically and strategically. Keep your executive team focused on providing outstanding service today while working through potential scenarios you may face in the days ahead. Above all else, ensure employees are safe, both physically and psychologically. This could be the worst or best time of their lives, and you are the one to make the difference.