In this session, we will be unpacking three out the five "Es'' of managing crises applied to SMEs.
Tune in to the next Inuka Chat session for the remaining 2E's
Engage all business stakeholders in framing the COVID-19 crisis and get your framing right.
a). Understand the nature of the problem you are facing
- Very important for meaningful response to the Crisis. What is the true nature of the problem we are facing: Debts, Salaries, Overheads, Reputation, Remote teaching (for schools) etc!
- Identify patterns on how crises unfold and how to respond.
•Salary= Monthly; Rent =Quarterly; Overheads= Monthly; Other General = Monthly/daily; Teaching; Daily/Weekly; Reputation= anytime/Continuous.
b). Minimize Loss
The appropriate framing is to minimize losses both of finances and other risks.
- Once devised, the framing should be communicated to all stakeholders (Employees, Landlords, Suppliers, Bank, KRA etc.)
- Forecast how revenues will be affected by the pandemic-induced downturn.
- Develop a range of scenarios tied to assumptions about the downturn’s severity.
- Determine how soon your funds/ resources might be depleted.
c). Reduce Spending
- Reduce capital asset investments.
- Defer some purchases.
- Improve capital project management.
- Re-examine maintenance and replacement standards.
- Refinance debt –replacement of existing debt with new debt whose T&C favorable
Explore the crisis and how to fight it (Pragmatic not just aspirational).
a). Once the problem is framed, prioritize and plan
- Remember, how we got into the situation is not how we get out of it.. “Faith without action is….”
- Foster down-to-earth expectations by focusing on the most pressing and achievable goals.
- What is your priority and how do you execute it?
b). Communicate: Share information generously
- Let people know what you are doing and why
- Focus on the immediate solution but prepare for aftermath (post-crises) BC/DC/AC
- Post-crisis next steps and how to return to normalcy.
- Provide hope and resolve so as to reduce the chance of stakeholders being swamped by negative news
a). Explain what you have decided, why and how it will work, then commit to action.
In a crisis, inaction always makes the problem worse /Analysis Paralysis.
- A failed action may teach you something that leads to a breakthrough. But failure can lead to panic, chaos and a loss of credibility unless you prepare the ground beforehand.
- Have three lines of defense.
- Crisis managers should go into battle with at least three lines of defense.
- Explain the logic informing your plans and convey clearly to all your stakeholders that should the first attempt fail, there are two less preferred, but still possibly viable man oeuvres up your sleeve.
*Remember: Without a full explanation, stakeholders get the impression that the situation is worse, leading to panic and negative reaction.
b). How to Communicate
- Use videoconferencing, Facebook Live, other technology to get the word out and gather feedback.
- Technology allows new voices to participate.
- Use social media and the schools website to provide updates.