Five birds are sitting side by side on a telephone wire. If you shoot one bird, it falls off the wire and hits the ground.
Question: How many birds are left on the wire.
Obvious answer: 4
Correct answer: 0 As when you shoot the first bird, 4 birds flew off
All of us are experiencing infestation of flying birds and because of COVID 19 VIRUS and ensuing economic crisis it has generated.
Crisis force you to change your priorities.
In Crisis, your priorities would logically shift to accommodate the new reality of your circumstances.
During crisis, your priorities and focus must shift from strategical to TACTICAL.
When you think of emergency room in a hospital
There are only two strategic outcomes.
- Keep Patient alive
- Stabilize the vital signs
- Extreme focus and breathtaking level of intensity
- Constant monitoring of vital signs
- Instantaneous & Constant communication
- Massive flexibility to respond any new crisis that could destabilize or kill patient
- Speed of action & interaction
If you compare this to your business the first one priority should be
- Keeping your business alive and getting it stabilized as quickly as possible
Keeping a business alive requires CASH
Your priority should be to focus on the problems you can solve.
How you run your business during good times dictate how well you survive in bad times.
As Warren Buffet had said that A bad economy does not cause business to go broke, but it does expose the weak ones.
Crisis has forced you to make radical changes to your expense structure and cash burn rate
Work out detailed specific plan on expenses considering your current cash balance, cash flow and realistic anticipated revenue.
During a crisis, a business goal is not wealth creation but rather loss avoidance.
The few business that can pursue wealth creation strategy in this crisis are businesses that have an abundance of cash and cash flow.
Not all progress is measured by ground gained, sometimes progress is measured by loss avoided.
When bad things happen, the speed accuracy and clarity of your response is vital.
Be anticipatory versus relying on your reflexes to react fast enough to dodge all the bullets.
Sometimes you can afford to carry loss for while if you have dry powder (CASH) and choose to invest your capital now and not try to play catch up later.
Extreme frugality is the new mantra, minimize expenses fast.
Cut fat, then muscle and be careful about bones.
In financial crisis, Growth will not you bail out.
This is not adding new customers. It is about survival.
How do we survive
How do we stabilize
How do we breakeven
How can we preserve our oxygen (CASH) to be able to make it one extra month or quarter if needed be
How do we minimize the money of our future by being aggressively frugal today?
Silence erodes trust in crisis.
Communication with your team, lenders, vendors, and landlords is key.
In a crisis more communication is better than less while none is permanently damaging.
In a crisis communicate frequently, candidly, and caringly. Championship teams have world class defenses. While offense scores points, defense wins games.