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Managing the crisis and prepare for your return to business


What are the top priorities for businesses that want to manage the repercussions of COVID-19?

 

According to the Caisse de dépôt et placement du Québec, these businesses’ plans of action should focus on the following three principles:

 

  • Ensuring the safety of employees and other stakeholders
  • The need to anticipate worst-case scenarios (adopt a prudent approach)
  • Preserve cash flow, a key component of business continuity.

 

Given the very high level of uncertainty, companies will have to be agile in analyzing the situation and adjusting quickly. They will have to develop plans of action for a range of scenarios and take account of the varying impact by industry and region.

 

The Caisse believes that all management teams and boards of directors must act quickly and with a sense of urgency, prioritizing the following actions:

 

    • Set up an agile crisis response cell
    • Protect employees’ health
    • Preserve cash flows
    • Mitigate impacts related to demand, customers and marketing
    • Adjust operating procedures as necessary
    • Mitigate impacts on supply chains
    • Perform financial stress tests

What is the best way to protect your liquidity in preparing for the end of the crisis?

 

  • First, secure available cash flows by identifying your short-term needs. Update your projections regularly.
  • Minimize cash outflows by tightly managing accounts payable and limiting expenses, prioritizing those related to crisis management.
  • Maintain constant communication with your financial partners.

 

More specifically, you might ask yourself the following questions:

 

  • How much cash do I need to meet my essential obligations over the days and weeks ahead?
  • Do I have any investments that can be liquidated?
  • Do I have a way to track all my cash flows on a weekly basis?
  • Should I limit the delegation of authority for commitments and payments?
  • Am I anticipating any issues related to cash flows, non-respect of ratios or interest payments that should be discussed in advance with financial partners?

 

As an entrepreneur or business leader, what can I do to minimize the impact on my operations (marketing, procurement, etc.)?

 

  • Contact your customers regularly and focus your marketing efforts on your top-performing products and services.
  • Promote loyalty programs and review your pricing policies to adjust to the situation.
  • Assess your exposure to risk, in regard to both customers and suppliers. Monitor 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 crisis’ impact on my sales?
  • What business activities/functions can be carried out remotely?
  • 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?

 

As an employer, what should I do to keep my employees safe while also keeping them motivated?

 

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

 

If your operations are continuing:

 

  • Keep your facilities disinfected and monitor your teams’ health.
  • Provide any necessary protective equipment.
  • We also recommend that you contact 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 your troops’ morale remains high by suggesting online activities, and provide support to workers who need it.

 

More specifically, you might 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 used with employees (frequency, channels, key messages, level of awareness, etc.)?
  • What measures should we put in place to keep people engaged and connected (in light of the “physical distancing” we all have to maintain)?

 

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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