As leaders across the world and a spectrum of industries try to make sense of the crisis that is enveloping us today, how should you respond? This question was posed to me in a Zoom call a few days ago by a former colleague. Based on my long years of experience as a business leader, here are some thoughts – as seven mantras for the CEO :

1] Identify your position

Before starting on any journey, one needs to know where you are. Current position would determine your staying power and also the envelope of options. Imagine you want to escape and you are at the shore. A boat is your only mode. Before starting out it is important to know how much fuel does the boat have and the physical condition as well. Else there is a good possibility of being lost at sea.

So start with a clear understanding of your current position:

– How much cash do I have?
– What is my fixed cost?
– What services must I keep running?
– What is my inventory?
– Do some of the raw material or finished goods have an expiry date?
– What payments are due in the next 3, 6, 12 months? What flexibility do we have?

2] Undertake scenario planning

The challenge when facing with an unknown enemy is that one does not know when we will return to normal. Also, is the normal a new normal or the old. In summary, return to whatever may be the normal would happen only when (a) Discovery of a drug which would prevent patients rushing to the hospital (b) A Vaccine or (c) Majority of the population getting infected. We are some months away from any of these events, according to experts.

So the scenarios or options would need to take into account normalcy over 6 months, 12 months and 18 months periods. In each of these cases, imagine partial operation at the beginning of this period and full operations another six months thereafter. Of course, be prepared for a hammer and dance sequence of start stop.

In each of these scenarios, the challenge would be to optimise processes so as to ensure maximum productivity (higher numerator and lower denominator). Also focus on cash flows rather than profitability.

3] Communicate honestly to all stakeholders

Once you have a few alternatives to think about from a full knowledge of your current position, the stakeholders need to be informed in all honesty. Do not hold back. The package of communication would need to address the concerns of each of them viz. Shareholders, Customers, Employees, Supplier and Government. Honesty and showing vulnerability need not be a sign of weakness. In fact, in times to come, this is what the stakeholders would remember.

Shareholders (including Banks): What are my scenarios? What is the cash burn? Do I need cash support?

Customers & Employees : More below, but essentially where we stand and what are our principles for dealing with them

Suppliers : Are we going to pay them & when? What are the demand scenarios for the future? What changes in product designs are we contemplating, if any and so what is the support we need

Government : What is the contribution we can do for the society? What are the suggestions for balancing community health and economic interest? Do we need any short term support

So, two things here; be honest and address each stakeholder concern specifically. Wherever feasible, get on the phone (email followed by phone for all A category stakeholders). Periodic communication is also a good idea.

4] Take special care of your employees and customers

Beyond communication is the need to show empathy specifically to employees and customers. Employees are worried about pay check and job loss. Customers, depending upon how they are impacted, are concerned about whether you will defer deliveries and whether you will be standing tomorrow. Both these are key anchors to business.

Take care of employees on a war footing. Assuage fears of retrenchment. Stagger payment, but do not cut back at least for the bottom rung. Set up virtual counselling rooms. Be liberal with respect to sick leave. Provide logistics support for essential supplies. Show them you care.

For customers, seek to understand concerns. Be mindful that they are also in a boat, lost at sea. Demands and expectations would ebb and flow. Be a sponge and do not overreact. Classify customers based on loyalty and volume. Stand by those who have been faithful. Communicate your solutions and suggestions. Keep the flow in a phased manner.

5] Lead by example

Leading by example is crucial because all eyes are on YOU. I believe, all CEOs and business leaders should cut back on pay – 100%. Do not neglect health and fitness routines as you need to be available 100%. Have a few young minds work with you as assistants. This would boost bandwidth as well as help check out the next set of leaders.

6] Balance the long term and the short term

There is a tendency to focus more on the short term issues than the long term in the hour of crisis. But, one cannot allow one to crowd out the other. I would advocate anything between a 70/30 to an 80/20 split, depending upon the flexibility allowed by cashflows.

Figure out the parts of the organisation that are slack. Eg: Sales, Marketing, Manufacturing etc. Create strategic teams within these parts of the organisation, supported by a senior leader to work on ideas for the future. A new product design, a more efficient supply chain, a better in process test for quality…there could be many which have been forgotten in the rush of day to day business! Dust them out of the cupboard. Pay also special attention to business model pivots, especially digital transformation.

And, once the dust settles, these ideas can be implemented to provide better edge for the Company.

7] Create a common purpose

The country and its citizens need every corporate leader to contribute in these times. These provide common purpose for the organisation, when the usual goals of profitability or customer gain are missing. Identify areas where you can contribute. For eg: it could be taking care of migrant labourers, providing logistic support for food supplies, setting up and running a data warehouse for Government, manufacturing PPE equipment..etc

Contribute in at least one social cause. In addition to the external benefit, this helps internal teams with a positive Endorphin flow. You will need every ounce of happiness to bounce back when things become normal again.

A crisis often can bring out the best in you! Take care and all the best!