When a crisis emerges, such as COVID-19, putting a plan of action together is critical to ensure the business can survive. When a crisis emerges, we dive into our fear response of freeze, flight or fight and whilst in this state it is often the case the rational thought eludes us. With the onset of the COVID-19 crisis, many businesses immediately knee–jerked to protect their businesses without first determining the situation and putting a plan of action together.
In this article, I want to share with you some of the learnings from my military experience of planning in times of crisis and under extreme pressure. So, to plan for a crisis what do you need? You need information, facts and your assumptions. To plan there must be an element of analysis and then preparation to put all the pieces together to produce a plan. This will also include several assumptions that you will have to make.
Before I go on to share with you a business planning strategy for a crisis, I’d like to give you some insight into three questions which will help in making assumptions for your plan. During my service in the military on multiple operational tours it was a case that we were faced with a scenario and had to think quickly as to the course of action we needed to take. In looking at the facts as they confronted us, we would ask the following three questions:
- What is the best course of action that we can influence in this situation?
- What is the worst-case scenario in this situation?
- What can we live with?
In answering these three questions in turn making assumptions based on what you are confronted with you create a series of courses of action you can take. The point here as you start to build your situational awareness for your business is that you can make assumptions towards the future and how you’re going to navigate it. You will create this series of decision points in the future where you will have already had some idea of the actions you need to take.
Take for instance creating a cash flow forecast and during the forecast you’re able to identify certain criteria that may or may not happen at that point you can already have a series of courses of action prepared in your plan. Take for instance you are not paid by a customer you can have a course of action in terms of they don’t pay anything, they phone and agree to pay a percentage or they pay in full and on time.
Looking towards creating the business plan itself there are seven key questions which you must answer. The first 3 questions are all focused on building your situational awareness for the current situation. The final four questions are all focused in building your plan of action.
Situational awareness
In building a plan of action you first need to understand as much about the situation your business finds itself in as you can. In order to do this, you need to ask a series of questions to understand the situation and make the assumptions for your plan.
Question one:
What’s happening in the marketplace or industry and why? In direct relation to the crisis you need to understand the impact it is having in your marketplace and or within your industry. As you answer this question you will draw some assumptions and start to create the thought process to shape various courses of action.
One area to look at here is to assess what your competitors are doing, likely to be doing or not doing. In looking at your competition you can then ask yourself that question what do I need to do in my business to counter them and what are the likely financial consequences?
Question 2:
What is the purpose of my business and why? In answering this question, you can confirm if the business remains a viable focus in its current form. You can determine what the driving factors are for the business going forward and even establish if there is a need for change. Essentially this is about understanding what drives the business, the team and indeed your customers.
You also look at what constraints you need to consider regarding time, team, finance, marketing, sales, logistics and any other relevant impacts on the business and opportunities. Which of these do we impose on ourselves and which are imposed on us? Looking at this what deductions concerning our business purpose can we make. What is essential? We also need to understand what the critical numbers required are: The break–even, gross profit, net profit, lead generation, conversion rate, stock holdings, and any others which through measuring and testing we can make informed decisions and have positive impacts on the business.
Question 3:
What impact do I want to have on the marketplace and what must be achieved to achieve that? And answering this question you will start to gain an idea in direct relation to what we want to achieve in the marketplace. This will help us to develop our targets and goals.
The next 4 questions are designed to assist in the construction and development of the business plan.
Question 4:
What are the business objectives and how best can I achieve them? Having a clear understanding of your business environment, you can now develop the plan of action. What would be the objectives and outcomes for all the various areas within the business? Who will be responsible for each of these actions and outcomes and what was support will be needed?
Having answered question four we will also be able to establish a clear mission statement to what is and must be achieved. At a time of crisis having a mission statement is essential in offering clarity what are the team and aligning everyone to the common goal which must be achieved.
One clear aspect of a mission statement is the fact that it gives purpose and direction to everybody in the team. If anyone forgets the detail of the plan but can recall the mission statement it should be able to give them clear direction in determining the next step. Just understanding the mission statement will allow good decisions and actions to be made.
Question 5:
What would be the resources needed to accomplish the objectives? Here you can determine what you will need to assign to each of the desired outcomes to ensure that they are delivered. You’ll need to look in terms of time and how much needs to be allocated, financial implications, who is required to do what and what logistic support will be required.
The most important point here is what direction support you need to ensure is in place to facilitate the delivery of these tasks. How much detail will be required for the team to undertake the activities?
Question 6:
When and where will each activity take place in relation to the overall desired outcome? Here you’re going to look at the timeline to synchronise the delivery of the plan. When will activities take place and what will be the priority of activities? What needs to happen to trigger the following activities? You will also be able to define the decision points, at which point a multitude of alternate actions can be defined only by the specific outcome of previous actions. These are in fact as a result of determining the various courses of actions. In many cases question six will prompt the production of a Gantt chart.
Question 7:
What control measures and limitations do you need to ensure are in place? To create momentum and facilitate the delivery of the plan without you becoming the default solution to every problem or issue you will need to have clearly defined limitations for the team. At which point do they need to seek clarity? What happens if the situation changes and when did I need to refer to you for guidance?
In times of crisis taking the time to put a plan of action in place and reflecting on your situation and the situation your business resides in can make the difference between your business survival and your business thriving. Failing to plan is almost certainly planning to fail and time spent in the production and delivery of a plan is seldom wasted.
If you’d like to know more book onto any of the business support webinars which are being run complementary for business owners CLICK HERE
Alternatively book an hour of Pro Bono coaching to discuss in detail how you can pivot your business right now BOOK HERE
