You’re currently bombarded by information about COVID-19, the coronavirus pandemic gripping the world right now, much of it changing hour to hour. You’re likely bombarded by questions too — from employees, customers, your CEO.
But it’s critical you as CFO also ask a few key questions to make sure your business is ready to weather the uncertain times ahead. And many of them aren’t easy.
The folks at McKinsey recently mapped out the implications to businesses during this unprecedented crisis.
From that we at Resourceful Finance Pro identified four questions all CFOs should be asking right now, regardless of their size or the industry they’re in, to make sure they’re as ready as they can be for the COVID-19 crisis.
COVID-19 Question 1: Is our response being handled in silos?
True, this is a scramble for everyone and new policies are being put out day by day to respond to the COVID-19 crisis.
But if each individual group is handling its own part (Procurement tackling supply chain response, Marketing reaching out to customers, etc.) you might not be getting a strategy that’s properly aligned across your entire organization. And that can come back to bite you down the road.
As CFO you want to be making sure that each piece of the org chart isn’t responding in a way that could make expensive headaches for another group.
COVID-19 Question 2: Could our current policies be putting employees at greater risk?
You’ve likely put a serious limit if not a complete ban on business travel at the moment. But if you have yet to commit to an all-workforce remote work arrangement, you may be flooding your office with more people than usual, whether that’s employees or additional visitors to your office.
And since we’re learning that many people spreading the virus are asymptomatic, the increase in volume alone could be driving up the chances one of your employees falls ill to the coronavirus.
COVID-19 Question 3: What will we do about compensation?
It’s the question nobody wants to think about. And many of your peers have already made some tough calls.
Some industries and positions lend themselves better to remote work than others. Companies have already had to lay off people; others are offering to pay their salaries … for now. But as no one knows how long this pandemic will continue it may not be possible to continue that indefinitely.
Consider too specific groups of employees, such as salespeople who depend largely on commissions and will not be able to make that money if they can’t travel due to COVID-19.
As CFO you’re in the best position to do some scenario planning and map out the options for supporting your workforce while not jeopardizing the financial health of your company as a whole.
COVID-19 Question 4: Are we being overly optimistic?
CFOs are known for being realists, which is what’s very much needed right now. But this pandemic may be a large scale and even catastrophic problem that extends way beyond the second quarter of this year. Many companies – your own and your trading partners included – are being too positive about when demand will return to normal. And that can be dangerous.
It turns out the companies in the worst current financial shape tend to be the ones that think we’ll bounce back way faster than we actually will.
So you need to ask the tough question of your suppliers, your customers and even within your own company. If you plan for a deeper recession now you may have better and more attractive options than if you’re surprised come summer when things haven’t bounced back.
Need more information?
Premier Learning Solutions is offering a workshop, COVID-19 & Crisis Management: 7 Actions to Apply For Businesses of All Kinds.
The workshop covers:
- Specific techniques to protect cash flow: Ensure that liquidity is sufficient to weather the storm
- Strategies to stabilize the supply chain and minimize any impact on your production
- The importance of a risk and business impact analysis and how to construct one
- Ways to communicate effectively both internally and externally with employees, customers, clients, vendors, suppliers and the public at large
The speaker is Max Muller, who has 40 years of business experience as an attorney, businessman and professional trainer.
Click here for registration and more information.