As business leaders, how do we navigate the road ahead when there is no map or guide book?

Doris Valade, The Malabar Group Inc.

On March 11, 2020, the World Health Organization (WHO) Right now, as business leaders you are facing challenges that are officially declared the outbreak of COVID-19 a pandemic. not found in a typical business plan or company handbook. Your Day-to-day life changed for all of us. Many of you business is at risk and perhaps in critical condition. Much like remember the financial crisis of 2008 — 2009. It wiped out $2 a surgeon, you must make difficult decisions — decisions that trillion in global growth and cost 2.6 million jobs in America. In cannot be based on thinking about immediate pain or eventual Canada, unemployment rose to 8.4% and more than 1.5 million recovery. Rather, you must focus on the goal of saving the life of people were looking for work. Yes, Canada went into a recession, your business right now. But where do you start? Start with the but we did recover. Will we recover again? It depends. two key fundamentals to running a business that are now more Today, we are facing the possibility of another recession, but this important than ever – communication and cash flow. time with the added stress of risks to our businesses and our The fundamental need for communication health. It’s a lethal combination. Fear, uncertainty and confusion As your company’s leader, you make important business are making it difficult for many business leaders to think about decisions every day. You are the go-to person for guidance and tomorrow. After all, who plans for a 100 per cent drop in revenue? direction. So right now, everyone is looking to you for answers “Fear, uncertainty and confusion are making to, “What is happening?” and “What can do we do about it?” If you haven’t done so already, it difficult for some business leaders to think about tomorrow. After all, who plans for a 100 per cent drop in revenue?” open or expand the different channels of communication around you. Communication should include open dialogue with your team, your customers, your vendors, your family and yourself! No business leader has all the answers. (If you think you do, trust me, it will impede your company’s recovery.) Start the conversation and bring SAVE THE DATE! together resources that can provide reassurance, understanding and support. Your team needs reassurance — they will be worrying about job security and income. Their emotional and financial wellbeing will directly impact their productivity. Open dialogue and regular company updates are important. So is sharing the challenges you are facing as a company. As leader, you are also human, so it is a great time to share more of that side of you. Share your experiences. Encourage questions. Engage your team with topics that include how the company could improve its processes through the pandemic. If you’re not in business, but are staying in touch with staff, invite suggestions for improvements when operations resume. This gives everyone hope and keeps you in touch.

Communicating with your customers is also critical — like your staff, they too will have questions. Communicating with your customers is also critical — like your staff, they too will have questions. The simple things are important for them to know now. What are your hours of operation? Who can they talk to if they have questions or concerns? How can they contact you? Have your services/ products changed during the pandemic? Let your customers know that they are still top-of-mind. Regular email updates provide the reassurance that business will continue.

Don’t forget vendors! This includes your suppliers as well as your bank, shareholders and private equity partners. You may need to reach out to key vendors to ask for extended payment terms or to your bank to review your line of credit. Let vendors know how your business is doing, even if you don’t need additional help. In cases where you think a vendor may be able to provide support in the future, share your key challenges with them now. Managing inventory, accounts payable and commitments for future orders will be more important than ever. Last but not least, don’t forget your family and yourself. Your family will be aware of your frustrations and fears. Sharing your thoughts with them can provide an amazing sense of relief and emotional support, for you and for them! As with your team at work, you’re in it together. Banks and financial institutions were especially hard hit Cash flow refers to the monitoring and tracking of the movement of cash in and out of your business. A cash flow

statement or cash position report provides you with a current ‘picture’ of how your business is doing, as well as key financial indicators including total revenue (for the week, or for the month), accounts receivable (including over 60 and over 90), accounts payable, cash on hand (current bank balance), cost of inventory and line of credit balance (if applicable). Managing cash flow is critical to the life of your business. Increasing sales is also important, as is making sure that your profit margins on selling prices are competitive and greater than your costs. Consider including employee input and suggestions to help increase sales and/or reduce expenses by having a contest to encourage their ideas on how to either increase product/ service sales or reduce everyday expenses. Award gift cards for Your role as a business leader/owner can still be lonely. Think about joining peer groups (e.g. PEO – Presidents of Enterprising Organizations), contacting mentors or reaching out to other industry leaders through associations such as Meat & Poultry Ontario. What about your expenses? Take a hard look at the top five expense accounts in your business right now to The importance of cash flow see how you can lower costs. by the 2008 crisis, confirming the importance of tight rules on Once you have the sales, never lose sight of the receivables due the amount of debt they could carry (US regulators and Congress from those sales. Do you have a follow up program in place to supported an increase in the amount of capital that banks should track receivables once they are over 30 days? Over 60 days? What hold in reserve to deal with unexpected contingencies), along about your expenses? Take a hard look at the top five expense with a more conservative approach to risk. Canada was able to accounts in your business to see how you can lower costs right avoid the worst of the crisis since under the Bank Act, our banks now. Look for alternate suppliers. Find a freight broker to are forced by law to have cash reserves of approximately 14% 1 . manage and reduce courier and freight costs. Reach out to your Canada’s businesses are bound by no such requirement. employee benefit provider for more cost-effective options. each idea that is adopted by the company.

When business is going well, we sometimes forget about the day-to-day operations and the key financial numbers that we should monitor at all times because they provide us with warning signs of trouble ahead. I know this from experience! As the 2008 financial crisis approached, like most business owners I was wearing many business hats. We were understaffed and I had no growth strategy for the company. We did not monitor our over-30-day receivables and had not done a recent analysis of our break-even costs for products. Cash was tight … and then the 2008 financial crisis hit and we fell flat on our face! Recovery was long and painful with many hard lessons learned. One tool that I implemented and continued on a weekly basis, was a cash position report (1 page) that provided a snapshot of our receivables over 30 days, our cash on hand, our inventory values and our profit margin by product category. This represented the ‘heartbeat’ of the company and staying healthy was our priority. As I write this article, there is a lot of discussion around getting back to full employment, opening up all businesses and trying to get back to ‘normal’. None of us are sure what ‘normal’ is going to look like. In fact, many businesses are not even sure they can continue to operate. Open communication and positive cash flow are vital. So stay strong — in every way! And remember … “In the midst of every crisis lies great opportunity.” – Albert Einstein Recommended reading as an alternative to watching the daily CVID-19 TV or online updates: Michael Beer writes about organizational trust and honest communication in his new book, “Fit to Compete – Why Honest Conversations about Your Company’s Capabilities are the Key to a Winning Strategy.” (Harvard Business Review Press, 2020).

Doris Valade has been involved in the meat and poultry industry for over 35 years, and has sat on the boards of Food & Beverage Ontario, Canadian Meat Council and the Canadian Spice Association. Doris has been included on the list of Profit Magazine’s Top 100 Female Entrepreneurs from 1999 – 2005, and again in 2016. Meat and Poultry Ontario recently awarded Doris with the Lifetime Member Award for her outstanding contribution to the industry. Doris now keeps busy as a business and leadership coach supporting business owners and entrepreneurs to challenge, define and lead. She can be reached by email; doris@malabargroup.ca

Doris Valade The Malabar Group Inc. 905.659.8473 doris@malabargroup.ca