- Date : 18/03/2021
- Read: 4 mins
Lessons top CEOs swear by when it comes to tackling a brutal year like 2020.
The COVID-19 outbreak affected the entire world population, directly or indirectly. Financial slowdown was a main aftermath of the pandemic, and it affected many business entities as well. However, the foresightedness of top executives ensured that many companies used the pandemic to improve their processes and quality, broaden their product line, and even expand their customer reach.
Behind such success lies some basic financial lessons. Let’s see what they are.
1. Leading from the front
The year that went by was not a time when leaders could instruct and come back later to follow up. For most of 2020, businesses struggled to assemble their workforce. Inspiring leaders like Squared Away founder Michelle Penczak, are always around for their employees and are ready to work on anything to get the job done. The pandemic taught successful change leaders that they need to be as active a worker as the workers themselves.
2. Turning the situation to your favour
Business had no time for a wait-and-watch approach in 2020. During the lockdown, it seemed as if there was no end in sight to the crisis. A good leader has to make changes to the operations and business style to adapt to the changing scenario. Quickly creating a remote working environment and empowering employees to work in safety helped many businesses to survive and even thrive.
3. Managing workload efficiently
In 2020, managing the normal workload was not a possibility for most businesses. The manufacturing industry suffered a lot due to the absence of workers, as well as lower demand. Jason Fried, the CEO of Basecamp, believes in setting a limit to the number of hours in a work week to ensure quality and productivity rather than overstressing employees. Such qualities of a good leader suit the pandemic situation perfectly.
4. Maintaining agility
A sudden disruption like a pandemic can catch a business by surprise. Only businesses that can improvise their processes end up surviving such scenarios. The best CEOs are the ones who profess the need for agility in their business processes. Streamlined business processes and avoiding layers of bureaucracy helps CEOs to make strategic changes in their direction and implement the same.
5. Being financially prepared
A demand-supply standstill can have a brutal effect on businesses. With few resources available for production and fewer avenues to sell the produce, companies have to rely on their emergency fund to see themselves through lean patches. Top executives always follow financial tips and keep an eye on their financial preparedness to meet running costs, even if the revenue streams dry up momentarily.
6. Controlling liability
The government offered a moratorium scheme to protect the stability of individuals as well as corporates. In a year like 2020, the burden of debt repayment can deal a crushing blow to your financials. Maintaining a healthy debt-equity ratio helps businesses with their liquidity position. Using windfall inflows to repay existing debts can help you maintain a healthy debt ratio.
7. Strategic cost-cutting
Top executives like Alexander Bant, VP Research for Gartner, observed that businesses often resort to a blanket approach to cost-cutting. However, drastic steps like job loss should be taken keeping the customer’s needs in mind. A pandemic-driven lean spell doesn’t need a permanent closure of production. Most industries stand to bounce back from 2020, and once they do, many of the closed-down facilities would have to be recreated. This justifies a more strategic approach to cost-cutting.
8. Promoting innovation
The hierarchy of global planning and budgeting solution provider Cubewise chose to retain its workforce during the tough times and direct efforts towards business self-improvement instead. This helped the company build new solutions by allocating workload effectively and strengthen their supply chain reporting and planning solutions. For Cubewise, the pandemic turned out to be an opportunity to expand its product line and strengthen future service delivery.
9. Staying connected with customers
It is easy to lose sight of the customers when a lean period prevails. However, prudent top management stays connected to the customer base. This way it can build trust and keep them informed. For instance, the COVID-19 pandemic saw a global hike in prices. Companies had to convince their customers by stressing the supply availability, despite the circumstances, to justify such price hikes.
The success of any business lies in planning and being ready for the future. This eternal truth stamped its authority during the pandemic. With the foresight of the top brass, a company can stay afloat even in difficult times and even come out on top of its game despite the odds. COVID-19 swells the ranks of new investors, but there are lessons to be learnt