The COVID-19 virus has really highlighted the importance of good contingency planning. A few businesses have already put resources into thinking about how to respond to a situation like the one we currently face, but most haven’t. That doesn’t make it too late.
Here are some tips for how to do effective contingency planning.
Involve Your People
It is tempting to do this in a small circle or even alone. As a business or organization leader, you may want to protect your people and avoid a panic. However, people are smart. They know that there are challenges ahead and nothing is worse than facing those challenges with little to no control over what will happen. Engaging your team in figuring out what you can do in a crises will increase engagement and put more brains on potential solutions. Furthermore, it will have a long-term positive impact on your culture as teams that solve problems together tend to be stronger teams.
It is helpful when planning to think about various milestones that occur so that you can think about what contingencies will “kick in” and “when”. For example, you might set different thresholds for profit or revenue with different options for each. If profit drops below “x”, you might cut a series of expenses. If it continues to fall and drops below “y”, you might do additional expense reductions and possibly even layoffs.
Don’t Just Cut…Innovate
It’s easy to see opportunities to stop doing something when times get bad. Circling the wagons is a natural response. However, this might be an opportunity for your company to innovate and find a different way to deliver value to your customer.
Listen to Your Customers
This is a good time to listen to your customers. Find out what they are going through and listen to them. There might be ways where you can help your customer which can build a more solid relationship.
Ask for Help
Don’t be afraid to ask for help. Most businesses have teams of experts that support the business. Ask for help early. Your accountants, lawyers, and yes, business consultants, might have insights or resources that can be critical during a challenging time.
Be Prepared for Future Events
If you find yourself wishing you had spent time doing this before the challenge happened, then fix it. Great companies conduct regular contingency planning as part of their strategic plan annually. If you felt like you weren’t prepared this time, don’t forget to get prepared for next time.