The art of managing under the lockdown

On 14th April the Indian Government announced an extension of the nationwide lockdown through 3rd May. Although some relaxations will be permitted from 20th April for sectors like agriculture, key industrial units, logistics, construction, and e-commerce in areas with no COVID-19 infections - the reality for most businesses will be continued curtailment of operations. And with many major cities seeing an uptick in cases, further extensions are likely. 

During the lockdown Indian business leaders need to replace their pre-COVID management practices with a dedicated focus on five key priorities: protecting and reassuring your people, communicating often and openly, ensuring business continuity, caring for customers and suppliers, and managing cash flows. These five priorities must be first enabled through immediate reorganisation to manage the crisis. In a context of continued uncertainty leaders must embrace crisis management as an art as much as a science and take a people-centric approach that is rooted in compassion, clear communication, and decisive action.

Reorganise to manage the crisis

To act on the five key priorities under lockdown first requires implementing a fast and unified decision-making approach that by-passes traditional processes. If not already done so, organisations should immediately put in place a COVID-19 team comprising leaders from key business functions to meet daily via video call and with the authority to make decisions on all key issues affecting the business and follow-up with swift implementation. In a far-reaching and fast-moving crisis such as this, businesses cannot wait for perfect information to act. 

Organisations also need to quickly re-allocate roles and responsibilities for specific crisis management tasks along with appropriate decision rights further down the organisation. This decentralised decision making will allow your people to respond more quickly and appropriately to their local context. When they are empowered, your people on the front-line can also be a great source of ideas and innovation in a crisis. However, it is important that they are guided by a clear set of principles set by the leadership. These can include prioritising the safety of colleagues, the community and customers, cooperating with local authorities, protecting essential business operations, aiding customers and suppliers, and conserving cash.

Protect and reassure your people

With a clear and streamlined decision-making process in place, the first priority of your COVID-19 team is to protect and reassure your people. The primary concern of every individual is the safety of themselves and their families. As an organisation you need to help them through this unnerving period by providing access to the right information, giving protective equipment and clothing where required, and leveraging organisational resources to meet the essential needs of them and their family wherever possible. The second concern of your people will be the security of their jobs and income. With many companies having limited visibility on future revenue, open-ended commitments may not be possible. However, prioritising people's safety and communicating transparently about the current scenario and where your business stands will generate trust and goodwill. Leaders also need to show that they are willing to make personal sacrifices for the good of the company - your people will endure hardships to protect the organisation as long as they know 'we're all in this together'.

Communicate often and openly

In a crisis, the best and simplest principle is to communicate often and openly. Leaders should establish a regular frequency and channel for communication at organisation-wide, departmental and team levels. Leveraging video conferencing tools that provide opportunities for team members to share their concerns and questions is a particularly important way to maintain morale through face-to-face contact. During meetings leaders at every level should follow a simple formula of telling your people what you know, what you don't know, and what you now know that you didn't know before. 

Ensure business continuity

For the duration of the lockdown, managing business continuity is vital to serving your customers, maintaining the safety of your facilities, and protecting your people. Therefore every organisation needs to define the minimum viable operation (MVO) for their organisation and put in place measures to ensure it does not fail. The MVO should consider all the steps in the chain to deliver your product and services from your suppliers to customer care. The key risks to MVO should be identified and resources should be redeployed to address them. Such steps can include providing for a skeleton staff to stay on-site, setting-up work-from-home solutions and establishing new protocols for providing customer support. 

Care for customers and suppliers

Whether you're serving large businesses or individual consumers, the way you treat your customers during this crisis will define your relationships for years to come. Organisations need to re-orientate to support their customers in innovative and unconventional ways that may not even relate to your existing products or services. The key principle is to be useful and the first step in this direction is to be in touch. Organisations need to direct sales and marketing teams to reach out and understand the problems and challenges their customers are facing, assure them of your availability and support, and leverage your resources to help them in the most useful way you can. Such gestures are remembered. And when the time is right for your customers to buy they will place the first call to those who helped them through the crisis. 

The same is true for suppliers. While conserving cash is key, if your suppliers go out of business your operations can be put at risk and it will be harder to ramp up when demand returns. Therefore coordinating with suppliers to provide as much visibility on your order pipeline as possible and giving them a heads-up on shifting demand patterns can help them better plan and respond to your needs. Further, by understanding their liquidity position and being considerate in payments you can help them through the crisis and gain the benefits of being a most preferred customer in the months and years to come.

Manage cash flows

Many organisations will be facing weeks of cash burn with little or no income during the lockdown. This places immense pressure on cash flow and could jeopardise the survival of the business. Companies need to prepare weekly cash flow projections for the next 3 months and revise them continually as the situation changes - which could be every day. On the basis of these projections, leaders must take decisive 'no regret' actions that conserve cash but protect people and customers. While many companies will have almost no revenues during the lockdown, those providing essential goods should quickly review how they can shift toward those products most in demand. All companies should take a hard look at all their planned investments, revise their approval processes for purchases and look at each and every cost with both a short and long-term angle.

It is also vital to monitor working capital closely. Through identifying customers in less difficulty you can focus on serving the most resilient revenue streams and by pro-actively changing payment terms you can ease the burden on customers and decrease your accounts receivable. Finally, the standard pre-COVID inventory levels will be less relevant going forward so revise your minimum and maximum stock levels and take steps to clear stock that may not sell in the next six months - even if it may mean selling at lower than market value in some cases. 

By taking these immediate steps to radically streamline decision-making, protect and reassure your people, ensure business continuity, support customers and suppliers, and manage your cash flows, organisations can survive the lockdown and develop a robust operating model to weather the stormy months ahead.