5 steps to resilience in the face of a crisis

All of the advice gratuitously sprayed around the web, and via the millions of video conversations going on, ‘Resilience’ is a very commonly used word.

However, what is it we actually mean by ‘resilience’?

The oxford dictionary definition is: ‘The capacity to recover quickly from difficulties; toughness’. Does that cover it?

To my mind, James Stockdale, US Vice presidential candidate, medal of honour winner, POW for 7 years in Hanoi put it best: ‘Resilience means striking a balance between facing the brutal truth of how bad things can get,  while also retaining confidence that you will survive to see the other side’

When you think about resilience in the context of what we are currently facing, and you consider the strategic rather than just tactical implications, there are a limited number of management levers you can pull. Luckily, they are powerful when activated well, and at the right time.

Act quickly, and decisively.

It will be better to be early and decisive than late and ambiguous, by which time, you may no longer be in a place that enables you to come back.

Cash is your lifeblood.

Get cash in, as fast as possible, and, cut every activity that does not add immediate value greater than its total cost. There are many strategies to achieve this outcome, the most obvious are: Collecting from debtors, shore up existing revenue sources, such as your current core customers, selling down inventories, and focussing your best revenue generation resources on the highest priority areas and customers. The most commonly used tactic is to delay payment to your creditors. This is a desperation tactic, as once you start that cycle, you in turn will not receive the goods/services you require from your suppliers, and word does get around quickly.  I also suggest a review of your cash to cash cycle in order to identify the components of your processes that could be speeded up to remove time, and therefore working capital requirements.

Collaborate and share the pain.

The better you maintain your supply and distribution ecosystems, the faster you will be able to rebound. This means you work with them, assisting them to manage their cash while you manage yours, support their key staff, reinforce the relationships that already exist by communication, and work with them in every way possible.

Embrace the opportunity of uncertainty.

One persons problem is another’s opportunity. In uncertain days, those that are willing and able to recognise the opportunities that will emerge from the uncertainty, and act quickly and decisively, will emerge quickest, and perhaps even stronger.

Plan for the worst, hope for the best.

Having a plan is essential, but you also need to consider the differing scenarios that may emerge. Planning for the worst means you are never surprised by that worst when it happens, but are in a better position when it does not occur.  That means you need a plan that articulates the response to varying potential situations. In my experience, 3 is a reasonable number.

• The ‘Hail Mary’ plan. This is for the worst case scenario, the last resort. Selling significant assets, deep layoffs, a radical contraction of activities. Planning how you would execute such a plan prepares you for the pain should it come to pass, and also offers insight into the less than worst case options, and what they may be, in a graduated manner. This is just about the survival of the core of the business, to offer the opportunity for some rebuild after the chaos clears.
• Tough but not future limiting plan. This is the plan that removes every ‘nice to have’ in the organisation, the time to make the very hard calls that have to date been kicked down the road for another time. This may be that time.
• Reversible plan. What actions can be taken now that are reversible, perhaps in revised form, should the former two scenarios not come to pass.

Beyond the planning for immediate survival, you also need to be able to think beyond the current crisis, assuming you have survived, and now are able to leverage the opportunities that will emerge. It is hard to lift your eyes to the future when the current looks so bleak, but those that do so will emerge the winners. As Churchill once quipped; ‘Never let a good crisis go to waste’