How to steer in times of crisis?

— Startup successes | Other — 5 minutes read

A message from Gilles van der Meerschen, co-founder & Chief Business Officer of Spreds.

Within my activities I see about 80 project leaders per month, with solutions that are both very valuable and (sometimes) far-fetched. They all have the merit to try, to risk, to expose themselves, to innovate and to be passionate.

Supporting entrepreneurship in its early stages is fundamental to tomorrow's jobs. Structures of less than 10 people represent 63% of employment in Belgium. This ratio is similar in France. It cannot be an option to see these social instruments disappear! These companies are structures that guarantee employment and promote the competitive advantage of our economic model because they are factors of innovation and differentiation.

Guiding them with appropriate financial instruments, helping them (because they are asking for it) not to reproduce the mistakes we have made ourselves and allowing them to make their models viable is the goal of our team.

And in these times of crisis, it has never been such a challenge to be a corporate sufferer. In these difficult times, as a business leader you have to make a series of decisions to ensure your baby's sustainability and continue to demonstrate the robustness of your model. These decisions are difficult because we know that they are likely to affect those involved at all levels, whether employees, partners or service providers.
Let me use an image we shared with our team. No one has the means to avoid such an unpredictable and dizzying storm, the gusts of wind will prove violent for some, catastrophic for others. Wisdom is needed when possible. 

For those who navigate, they know that trying to resist, or even defy, the elements of the weather is often fatal; using them wisely is salvation!
It is often advisable to reduce the sail area and limit the wind grip as much as possible so as not to deflower and damage the ship. Part of the crew will not be useful and they must be "cape" so as not to expose them more than necessary. The hatches shall be closed to prevent the sailboat from entering the water. Everything will be "grabbed" so as not to risk further damage.

The same principle applies to companies.

The crew must get to work as quickly as possible to secure the production equipment and enable the company to "ride the wave".

However, certain fundamental rules must be applied.

Just like on a sailing boat, clear communication is important.

The crew must know which maneuver the helmsman is going to try. Indications about the nature of the operation must be well described so that everyone can understand and carry out the tasks. This communication must be fully transparent. It will not only reassure the team members, but will also have the merit of strengthening the cohesion of everyone, without giving the impression that it will leave some of the team members alone in the dock. The sense of belonging, whatever the nature of the company, is vital.

If a crisis is painful, it is a source of opportunity for those who know how to reinvent themselves and take the necessary distance to eventually correct their position.

We ourselves have had to take a series of measures that are not at all pleasant, but I can tell you that our energy has increased tenfold when we were able to measure the solidarity of the team in this time of crisis!

We put in place a series of hard procedures that had the merit of aligning the entire team for the good of the organisation, in the interests of the company, and therefore of everyone.

We talked about what we were going to go through, presented the different hypotheses. Everyone remained committed to our side. All of us!
It is no longer encouraging for a ship's captain to know that his choices seem fair to everyone and that everything is therefore done to achieve the same result. Together!

The measures to be taken in the event of a crisis such as the one we are currently experiencing must ignore all emotions as much as possible.
They must be rational and realistic.

We must review as soon as possible, based on various scenarios, the impact on the growth curves, on sales, on the operating margin, on free cash and, of course, on the team. Not all resources can be maintained, but protecting the well-being of the crew is vital.
I'm not telling you anything new by saying that "Cash is King", and the manager who has a precise view on the available reserve will know how to determine the time he will be able to spend "in the hold".

A prudential or even pessimistic plan must be drawn up to distill the expenditure of the available cash into what is strictly necessary to carry out the activities. Start with a worst case scenario. The 100% reduction scenario cannot be dismissed for fear of what it would mean!
Anticipating also means avoiding the worst case scenario.

Let's draw up measurable procedures, let's make sure that we set weekly or even daily criteria to enable the crew working remotely to continue to reach the set objectives, to reach them in time without destabilising the ship and causing an even greater drift.

Let's pay attention to any form of optimisation of operations. When 100% efficiency is no longer possible, the management of backlogs and risks must be parameterised as clearly as possible in order to optimise every effort; without losing sight of the impact on cash burn and gross turnover; and to let everyone know where they need to intervene.

Plans and assumptions must be closely monitored and orchestrated to keep the company on track. Let's focus on the essentials.

While we know that drifting is sometimes a necessary evil in stormy weather, attention must remain focused on the "best" route, because when the ship restarts, the crew must be brought back on deck at all times to get the ship and its activity back on track.