7 Ways To Manage Your Business In Times Of Crisis
This article is from Jonathan Small, Editor in Chief of Green Entrepreneur
These are uncertain times for all of us. Small business owners with little cash flow are especially feeling the squeeze. To help figure out how to manage your business in times of crisis such as the coronavirus, we talked to Dr. Ichak Kalderon Adizes, one of the world’s leading management experts and an international best-selling author. He has written 27 books, translated into 36 languages, including How To Manage In a Time of Crisis and Managing Corporate Lifecycles. He is the founder of The Adizes Methodology for Organizational Transformation and has taught at Columbia University, UCLA and was a visiting professor at Stanford, Tel Aviv, and Hebrew Universities. He is also a Holocaust survivor. You can find a stirring documentary of his story here.
To listen to our entire interview, please visit the Green Entrepreneur Podcast. Below are some highlights, in which Dr. Azides offers guidance on how to manage your business during this unprecedented time.
1. Fix your own house first
Dr. Adizes draws the analogy to holing up in your home during a major storm. Now is a good time to fix parts of your business that you didn’t fix before because you were so busy working on exterior problems. “Take care of the inside,” he says. “Find out what is broken, what can be fixed, so when the flood is over, your house is in better shape than you found it before the typhoon.”
View the crisis as an “opportunity,” he says. “Because you will learn from it. By solving the problem you will become stronger.” This means doing a deep dive into your infrastructure. “Look at your reward system. Look at your organization structure. Look at the accountability system. Look at your sales strategy. Look at your marketing strategy. Look at everything,” Dr. Adizes says.
2. Do something
“If you do nothing, your depression is going to increase,” says Dr. Adizes. By doing something and taking decisive action, you’re giving yourself and your team a sense of momentum and movement. “They see light at the end of the tunnel,” he says.
3. Don’t lay off employees
While your first instinct may be to start laying off staff members to cut costs, Dr. Adizes says you should approach this decision with compassion. “Take care of your people,” he says. Not only because it is the right thing to do, but it makes practical sense too. “If you fire them then when the crisis is over and you start revamping, you need these people back. How long does it take you to find new people, to retrain them, to integrate them with your culture?” Dr. Adizes suggests cutting salaries temporarily. For example, he has cut his own team’s salary by 20 percent across the board—even for himself. In the podcast, he gives a formula for coming up with a number that’s right for you.
4. Manage with the heart
Dr. Adizes believes the essential ingredient to surviving this crisis is to manage with the heart. What does this mean? Putting your heart and soul into serving your customers. He gives the example of a restaurant he visited once that advertised that they would not feed you the food that they would not give to their own children. Ask yourself: “How much do you really care for your customer beyond making money? How much do you really love your product?” Now is the time to find a passion for your product or service, passion for helping your customers. This will shine through in times of crisis and propel you forward. “The small companies that are going to go through all this turmoil, you need to manage your cash flow, no question about, but you have to manage with love,” Dr. Adizes says.
5. Build trust
“Whatever you do, don’t lose the trust and respect of your people,” says. Dr. Adizes. This is especially essential in times of crisis. If you lose the trust of the people who work for you and the people you serve, “you’re dead,” he says. “They’re not going to listen to you. They’re going to bypass you.” He continues saying, “Trust and respect are what makes integration happen.”
“It is what you get the power from. Disintegration is where you lose power.” Trust is also important outside your company. For example, you may need to postpone payments temporarily. Vendors that trust you will be more likely to allow this to happen.
6. Do cash flow projections
For small companies, Dr. Adizes recommends cashflow management and projects every Friday for the next 13 weeks. You cannot predict the entire year at this point, so it’s better to look 13 weeks ahead at the end of each week and update accordingly.
7. Work collaboratively
You didn’t build your company on your own, and you can’t save it on your own. “What we need now is collaborative leadership, teamwork,” says Dr. Adizes.