The fundamentals and motivations of a business enterprise have been greatly affected after the outbreak of Covid 19. The basics and ideologies of business which were considered true prior to Covid 19 are no longer true in the post Covid 19 scenario. Senior Management professional therefore have to strategize on evolving a plan to run the business without unduly burdening all stakeholders concerned.
In a good scenario different business heads are characterized by their perception of running the business in line with their stated goals. For instance a CFO may take a conservative approach which may not be popular, whereas a CEO may be more balanced in his decision trying to bringing parity and the Board of Directors may be influenced by its desire in achieving their stated goals
However in the current scenario where the whole world has been affected by Covid 19 it is imperative that senior management in any organization work closely and devise ways of running the business in a sustained manner without unduly affecting the stakeholders and community at large.
Some measures that could be envisaged include:
- Board of Directors meeting with senior management team to revisit business plans for current year and agree for a revision in the same which could help the organization
- Budgets for current year to be revisited. Each Quarter to be split and analyzed to work on action points. It would also be prudent to work on a Zero Base Budget based on new data and achievable assumptions for a period of one year to 18 months as past data may not be relevant and not indicate the right results. Based on the same remedial action could be taken
- Existing Capital Expenditures may be reviewed and a revised cost benefit analysis may be formulated which could provide the best approach in achieving benefits while preserving savings.
Additionally, curtailing expenditure on any activity that could be deferred to a future period may be considered.
- Work-from-home methodology to be considered during the critical period which can help in curtailing a lot of expenditure in terms of travel, rent, utilities, staff related expenses, related administrative expenses and bring about a reduction on Overhead costs. In fact even after the current crisis settles down this concept may be considered for the future too. However they may be a need to invest on automation of business processes in such a scenario.
- Negotiations with Vendors seeking extension in payment terms without interest. Negotiations on discounts with vendors as we could have a roll down effect from our customers too on the same issue
- Negotiations with Banks and financial institutions on deferred payments and lower interests
- CSR funds attributed for community could be used as appropriate in a beneficial way to the sector they are meant for.
- Supply Chain & Logistics is also a vital area in the current crisis and has its troubles too. With numerous challenges encountered worldwide due to lockdown it is imperative to maintain links to ensure that suppliers do not delay production and we work out a reasonable compromise between vendor and customer in case of delays. Otherwise companies will stand the risk of importing goods and not being able to deliver. Even from a logistics point of view, proper planning in advance must be initiated to ensure that suitable flights/carriers are requisitioned to ensure deliveries in time.