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Managing the crisis and prepare for your return to business


What are the main avenues you should focus on to manage the COVID-19 situation?

 

According to the Caisse de dépôt et placement du Québec, your action plans should be built around the following three principles:

 

  • Ensure the safety of employees and stakeholders.
  • Anticipate worst-case scenarios. In other words, take a conservative approach.
  • Preserve liquidity, a key factor in business continuity.

 

Given the very high level of uncertainty, your financial partners and you will have to be agile in analyzing the situation and adjusting quickly. You must develop action plans for several scenarios and take account of the varying impacts on different sectors of the economy and geographic regions.

 

What actions should your management team and board of directors prioritize?

 

    • Create an agile crisis cell
    • Protect employees’ health
    • Preserve cash flows
    • Mitigate impacts related to demand, customers and marketing
    • Adapt operating procedures as necessary
    • Mitigate impacts related to supply chains
    • Conduct financial stress tests

How can you protect your liquidity to prepare for the end of the crisis?

 

  • First, secure available cash flows by identifying your short-term needs and regularly updating forecasts.
  • Minimize cash outflows by tightly managing accounts payable; control expenses by prioritizing those related to crisis management.
  • Keep in constant communication with your financial partners.

 

More specifically, you might ask yourself the following questions:

 

  • How much cash do we need to meet our essential obligations in the coming days and weeks?
  • Do we have any investments that can be liquidated?
  • Do we have a tool to track all our cash flows on a weekly basis?
  • Should we limit the delegation of authority for commitments or payments?
  • Do we anticipate any issues related to cash flows/non-respect of ratios/interest payments that should be discussed beforehand with our financial partners?

 

What should you do to minimize the impact on your operations (marketing, procurement, etc.)?

 

  • Communicate with your customers regularly and focus your marketing efforts on your top-performing products and services.
  • Promote loyalty programs and revisit your pricing policies to adjust to the situation.
  • Evaluate your exposure to risk, for both customers and suppliers. Track inventory levels.
  • Stay in constant touch with your suppliers. Identify alternative suppliers and examine the possibility of financing certain critical suppliers, if necessary, to avoid supply disruptions.

 

More specifically, you might ask yourself the following questions:

 

  • Do I know how my main customers are doing?
  • What is the impact of the crisis on my sales?
  • Which of my business’s activities/functions can be carried out remotely (via telecommuting)?
  • Where are the hot spots in my supply chain?
  • What is the status of my inventories across the value chain? What is the situation’s expected impact on business continuity?
  • How are prices changing? What are my suppliers’ product availability and delivery times like?
  • What percentage of our procurement is or could be covered by alternative sources?

 

What should you do to keep your employees safe while also keeping them motivated?

 

First of all, it is important to follow all the official guidelines issued by the local and provincial governments.

 

If your operations are continuing:

 

  • Regularly disinfect your facilities and monitor your teams’ health.
  • Provide any protective equipment that may be necessary.
  • Communicate with your employees regularly:
    • Provide tips and advice on staying safe and healthy.
    • Keep them informed of important decisions concerning the business’s operations.

 

Finally, make sure that your troops’ morale remains high by suggesting online activities, and provide support to workers who need it.

 

More specifically, you could ask yourself the following questions:

 

  • What protective measures should be taken for employees who have to come in to work?
  • What communication strategy should be adopted with employees (frequency, channels, key messages, level of awareness, etc.)?
  • What measures should we put in place to keep people committed and connected (in light of the “social distancing” we must all respect)?

 

Source: Gestion de crise COVID-19, Réponse à la crise pour les sociétés en portefeuille, Caisse de dépôt et placement du Québec, Placements privés Québec, March 2020

April 2020

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André Williot

Client Service Officer

1 844 474-6367
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