The current COVID-19 situation has delivered a kick in the guts to everyone. There is not one person or business that I know of that has not felt its impact in some way. By focusing on the things that we can control on a day by day basis, we can take action towards our goals through these challenging times. With uncertainty at an all-time high we need to have even more clarity, more focus and more effective execution of our plans if we are to stay on track and in many cases…survive.
The last few weeks have been very busy indeed for our team at Supply Clusters. We took action early. As the crisis began to unfold, we implemented business continuity plans to protect our customers, partners and our team. We have an experienced team that has faced economic downturns and cost reduction environments over many years. I am proud to have them by my side as we face this unprecedented situation together.
Our focus over the past few weeks has been to mitigate the impact to our business and make sure that our customers are well informed. Supply Clusters is in the business of reducing and managing business expenses, so we are making sure that we continue to have the capacity to deal with the increased demand from our customers and partners during the pandemic.
Keep abreast of what is happening in the market
It is very easy in a high pressure situation to lose sight of the broader picture. Typically, most businesses become inwardly focused and may miss what is happening in the market.
What we are seeing at the moment is that markets are changing at an incredible rate. In our interconnected global economy, a small change can have a big impact. We are sharing what we see on our blog and hopefully this information can provide some clarity or reasoning behind what you are seeing in the market.
Don’t let perfect get in the way of getting it done
Speed to value is important when considering cost reductions. Cumbersome policies and processes may have no place in an action oriented environment. Delegating authority and outsourcing can speed up the result. Obtaining 100% of the result in 6 months may not be smart if you can achieve 90% of the result immediately. This approach will save expenses now…and possibly jobs into the future.
Empower people to make decisions.
During a crisis, the leadership trait that is most important is clarity:
- Decisions must be clinical – not everyone may be involved as time is of the essence
- Communication must be clear – there can be no confusion
- Agreed actions must be executed well – is ‘everyone on the bus?’
Quickly identifying the individuals suited to lead during these uncertain times will ensure effective execution of your strategy. Identify them and delegate appropriately.
There is no such thing as a ‘free lunch’
Many people during cost reductions focus only on the dollars saved. Watch out for specific supplier terms that may hurt you later such as:
- Price increase clauses
- Negative equity risks with asset financing at the end of term
- Contract roll-over clauses in categories such as energy supply and waste services agreements
- Poor payment terms
Think outside the box
In times like these, you might need to consider rapid changes to your business model. You may need to change your approach or change your thinking altogether. This is not the time for ‘this is how we have always done things around here’.
For example, we can see a major liquidity crunch approaching businesses in Australia with costs rising as suppliers look to increase prices whilst tightening up credit terms. We have moved quickly to develop solutions that can free up cash-flow for our network of customers and partners that include:
- Asset sale and leaseback for vehicles, plant & equipment
- Supply chain financing which releases cash flow tied up in your supply chain
- Invoice financing which releases cash flow early on invoices issued
Look after your people
Your people are your business and they are suffering. Being a strong and compassionate leader whilst keeping your composure during this stressful time will be a massive challenge.
Jobs are being cut. People are being stood down. This is not an easy time for anyone and the mental health issues that will follow COVID-19 will also be unprecedented. This is what I fear the most!
For example, what will happen to suicide rates? Job losses and the inevitable recession will push many to the edge. Are you equipped to support someone you know suffering with depression?
This topic is very close to my heart. Two years ago my father committed suicide. He felt helpless and believed that he had no other way out. He was suffering and we were not aware. My family was simply not equipped to deal with the situation. We also missed the signs early on.
I urge you to ensure that you have the right mental health support mechanisms in your business. Your people are suffering and may need help now. Whilst we are busy responding to our business challenges, we must remember to ask your people if they are ok?
Take care of your people. They are your business.
In the coming weeks and months, we will continue to share our insights into what we are seeing in a quickly changing market. We will be sharing our experiences, our thoughts and potential actions in this environment. We will also be here for anyone that wants to bounce ideas or just ‘check-in’ and have a chat.
We are also accelerating a number of programs and expanding supplier engagements to help our members during this time. There will be more to come on these solutions later.
Our network of members, suppliers & partners has always provided Supply Clusters valuable insight. There is no more important time to rely on your network to share experiences. You are likely to be facing many of the same challenges that others are.
We are here to help.