The onset of the coronavirus (COVID-19) outbreak has had an immediate and potentially long-lasting impact on virtually all business entities, their workforce, customers and vendors worldwide. Standard business operations and commerce have been dramatically impacted through efforts to contain the spread of this illness. While the timeframe associated with the ongoing “business disruption” is unknown at this time, various governmental assistance programs, both federal and state, should provide some eventual economic relief. The ability to develop, implement and administer these programs on such a massive scale, however, will require a significant undertaking.
Health care professionals use the process of triage in allocating limited resources in emergency situations. This process determines the priority of patients’ treatments based on the severity of their condition, rationing patient treatment efficiently when resources are insufficient for all to be treated immediately and influencing the order and priority of emergency treatment.
The concept of triage, however, isn’t limited to the health care setting. The business community can benefit from using triage in assessing and prioritizing their needs during the current health crisis. Below, find five steps to use as the framework to triage your own business during these times of uncertainty:
1. Stay calm and conduct an assessment of the current condition of your business: This assessment should consider employee needs, customer needs, disruption of your critical vendors and the financial resources available to weather the storm.
2. Gather information from department heads on what is most critical, from their perspective: Each will offer important feedback, but priorities must be established from the overall organizational perspective.
3. Develop an organizational set of priorities, from a planning and contingency planning perspective. This type of crisis management occurs in a very fluid environment. New information, new developments and further clarification of the likely impact to your organization may require modifications to the original plan.
4. Conduct scenario planning: Scenario planning means making assumptions on what the future might be and how your business would be impacted under those circumstances. Scenario planning is identifying a specific set of uncertainties, or different realities of what might happen in the future of your business. Among the most critical uncertainties related to COVID-19:
- How long will physical business locations be shut down?
- How long will normal business operations be significantly disrupted?
- What government programs will be made available to businesses and impacted employees?
- How long will it take for government relief to be received?
- What are the short-term and longer-term implications to your business’ revenue streams and cash flow resulting from this health crisis?
- What cost containment measures are available to us, what is the financial and operational impact and when do we implement them?
Different underlying assumptions to these uncertainties during your scenario planning will likely result in dramatically diverse outcomes (best to worst-case scenarios).
5. Select and implement an initial course of action by top management: Decision-making by CEOs and other top leaders is critical during times of crisis and should be based on a realistic assessment of the information gathered during the triage process. This course of action may change over time based on new information, but the ongoing course of action should be effectively communicated throughout the crisis period to employees, customers and other parties. During this time, it’s crucial that the rest of the management team rally around the decisions of the CEO and present a unified front.
Soliciting outside and independent feedback from your trusted business advisors can prove a useful roadmap in navigating current and future challenging times. Top management can also benefit from reviewing their strategic and operational objectives with outside advisors (including your RKL tax professionals, attorneys and lenders) to obtain candid feedback that either reinforces the viability of the planned actions or suggests that alterations may be needed. In addition to providing the initial feedback, these outside parties can offer the technical support needed to navigate the maze of legal, financial, operational and governmental challenges in executing the chosen course of action and obtaining access to available resources.
RKL’s Consulting Services Group is here to help you weather this and future storms. Contact your RKL advisor today or use the form below to learn how we can help.