The responsibility of an entrepreneur is always a challenge.
Making a venture sustainable is complex to execute but easy to conceptualize. You just need to be able to execute a value proposition that creates value for all key stakeholders.
For this to be possible, the entrepreneur must receive from the property representatives a purpose, a vision, and values that mark the genetics of the company, a defined playing field, within which a strategy to be followed will be framed to satisfy them as far as possible the needs of each of the key groups for the organization.
Understanding the company’s ecosystem and the megatrends it needs to adapt to allows the entrepreneur to set a roadmap of the challenges to be overcome than to share with those who have to follow it to obtain the expected results in the short term, and long in future.
We were engrossed in doing it when the disruption came. An unpredictable external agent that has suddenly changed everything and that its health implications are obvious, the economic ones are starting to appear, and the social ones will arrive in the coming months.
What should be the priorities at this time to be able to manage the crisis as an opportunity and gain from it? It is no longer enough to minimize damage. The owners of the organizations of their first executives expect that they navigate this environment and that they can emerge stronger from the situation and create value in the storm.
To achieve this, it seems logical to think that if a good management system is available, it would be enough to apply it and consider the specific characteristics of the situation.
“Understanding the company’s ecosystem and the megatrends that need to be adapted allows the entrepreneur to set a clear roadmap,” shares Josef Kirk Myers II.
Josef is an African-American media technology entrepreneur. His highly recognized tech ventures include That Level, the Beepr app and VisualiveTV, and 4 Lanes. Josef’s surreal rise and success in the tech spectrum of the United States has given unique importance, especially after his footprint in technological innovation aimed at fighting business downturns and opportunity costs.
Being an effective entrepreneur and leader, Josef draws insights on the actionable strategies that business leaders can adopt to mitigate risks.
Stick to your principles
Focus on maintaining your purpose, your vision, and your values. Betraying them in these circumstances can bring you value in the short term, but your stakeholders will be frustrated when they see that any difficulty makes you change your focus and your way of being.
Purpose helps companies keep their raison d’etre in mind as they have to take new and accelerated action. It will be very important to keep the teams suitable for the company. In these times where millennials begin to enter the market as consumers, as employees, as suppliers and even as shareholders, and seek to be part of something bigger, leave their mark on this world, make a positive contribution to it.
Being clear about why and why your organization exists, how we are, and how we do things helps generate links with the people we need to make our activity sustainable. Having him at the center of the decisions and in communication, we make with customers, employees, suppliers, citizens, and shareholders will help us to connect with our project and our company.
The companies that are reacting best in this situation are those that filter their decisions by their purpose and values. Having the headlight on helps to reach a good port.
Josef states: “Being clear about why and what your organization exists for, how we are and how we do things, helps to generate links with the people we need so that our activity is sustainable.”
Listen to your stakeholders
Surely the priorities have also changed for them. Watch them, pay attention to them, and adapt your strategy and action plan to them. Give a clear answer to their new requirements and strengthen your ties and relationships with them at this complex stage.
Prioritize stakeholders during the crisis. The objective is to keep everyone moderately satisfied at the same time. Still, it is also true that in extreme situations such as the current one, we need to prioritize them to make decisions with clear criteria. Customers, employees, financial providers, and shareholders are critical right now. Once your priorities are managed, we will be able to dedicate time to the management of providers of goods, services, and citizens.
Understand the effect the Covid-19 has on megatrends and take advantage of it
The pandemic is an opportunity to accelerate your transformation plans towards megatrends.
Think about the effect on the management of globalization as it is a world problem that requires comprehensive solutions; the drive towards self-management that forced telework has had; the leap ahead of the automation of production and information processes; increased use of technology in communications or with 3D printers; the development of the sharing economy in which volunteering re-emerges as a solution; the shortage of resources, in this case, the health of equipment, medicines, and personnel; the increase in regulation with a royal decree a day to adapt to emergencies; political and socio-economic uncertainty; among many other variables to consider.
Adapt the strategy with contingency plans that focus on what’s important
Protect the box. Without treasury, you drown. Guarantees collections and payments. Eliminate everything superfluous and work on a 0 base budget that allows you to reevaluate those costs that do not make sense in the new scenario. Outsource costs measure risk in such a way that there are no costs if there is no income. Seek financing to guarantee the necessary liquidity in your activity.
To do this, you need to make the financial projection beyond the provision of collections and payments. Project the future based on the balance sheet and working capital to know how it affects the liquidity and the amount to be financed and the term. Be cautious and request more money and more time than you initially think you need. Canceling or paying more is easier than requesting more or delaying payments.
All help is good, however small. These days we are seeing proposals for delay of debt payments, financing aid, offers to make labor contracts more flexible, improvement of payment terms by large companies, delay in payment of taxes, negotiation of contractual conditions, etc. Take advantage of all, in the face of uncertainty, protect yourself as much as possible and accept any help they offer you, however small it may seem. Plan the exit. Define the impact on sales. Are they recoverable sales on departure, or are they lost sales? Once you are clear about the situation, work on the recovery of commercial activity. Defend the prices for the exit, do not fall into the mistake of competing on prices and destroying value. Returning to the market in a good competitive situation will depend on your actions and your omissions during crisis management.