Nobody is crying wolf these days; the wolf is here! Accept the reality that businesses are operating in an unprecedented world event with multi-dimensional implications. Therefore, understanding the possible outcomes communicating worst-case outcomes to everybody connected to our businesses is good business today.
Improved, rolling, ongoing, two-way communication is the best way to convey the hard realities we are facing. A CFO’s primary responsibility is facing sponsors but in this crisis it’s also very important to address all other stakeholders for the company. Keep in mind that our employees, suppliers, vendors, customers, shareholders, regulators, public-at-large all are also facing the same crisis and will not only appreciate the transparency – on an ongoing basis – but likely also share experiences, possible solutions or least relate to everything you are going through.
Immediately, all businesses need to have a Communications task force working very closely with the CFO and other C-suite executives and be the go-to for everybody in the company.
Employees and internal teams need to understand the health, financial and market impacts the company is facing and may yet face. Possibly some key people may become unavailable because of health reasons. The liquidity shortage may need to shutter or slow down some operations affecting jobs, digital connectivity – as we work at home or quarantine ourselves – may change some business activities all together resulting in some positions becoming redundant (not just currently, but also in our distant future).
A clear message now is vital; in terms of positioning your organization’s brand.
Vendors & suppliers, local or international are similar, they would be facing a myriad of blockages – from lockdowns, movement orders, shipping shutdowns, component & part supply issues in addition to the health crisis. They may have decided to shut-down temporarily and may need longer/larger commitments or expedite fees in order to prioritize their supply. The business with the best back & forth communication will likely recover the situation better than its rivals.
Customer service cannot be canned responses anymore. Demands are changing and may be more urgent now depending on the industry. In others, customers may want to delay payments. A two-way real time communication approach, possibly help them find additional credit or cash so that these customers can prioritize you over others, will at least sustain sales & liquidity while keeping your customers satisfied. And with the supply chain in the loop (previous para) customers can be better informed.
For the CFO the most critical outside contact is the main sponsor, whether shareholders, private equity, bond or credit providers. Its important to proactively convey the current reality, and the assumptions about the near future to them. As we go through this crisis, our understanding of the situation as well as the reality will change also. It will stay important to convey that on an ongoing basis.
The current situation analysis, the short-term impact on top line, liquidity, supply chain, staffing and bottom line is important to understand, and communicate at a higher frequency than in the pre-Covid era. It’s a tool to elevate the company’s narrative; brand management while being transparent about damage control; strategies to mitigate short term disasters and plan.
Investors are seeing similar crisis and creative solutions in other companies they invest in and are well positioned to help & guide. Take that opportunity and talk to them. We have believe and relay the confidence that this crisis will not last, but it will hurt a lot… We will come out of it; many businesses will survive, markets will pop back up, commodities will find demand and customers will be back. We have to survive the storm and how we survive, we should share with us key stakeholders, while honoring that our health; their health, their well-being and family’s well-being, is the primary win in this pandemic.
