As we face an unprecedented health and financial crisis, we as leaders are being called upon to make decisions that will impact the very sustainability of our organizations’ futures, retain staff during periods of uncertainty, and reinvent our ability to work effectively and deliver services as remote teams. In working with our clients through these difficult decisions, and reflecting on our firm’s own circumstance, Edgility has advice on how to best navigate decisions around leading in a time of crisis.
Don’t panic! Help is available.
Make sure you have taken advantage of the aid packages available to small businesses and nonprofits. The federal government’s CARES Act SBA Loans and Grants are opportunities worth applying to (see https://www.sba.gov/funding-programs/loans/coronavirus-relief-options for more details). They are offering forgivable loans that can be used for specific expenses including payroll, rent and other core operating expenses. In addition, many companies are also repurposing corporate giving campaigns toward COVID-19 relief funds. Doing some research online will serve you well in taking advantage of these opportunities.
Reinvent and repurpose your organizational superpowers.
The first thing Edgility did was to inventory what we are best at. We shine in connecting organizations with amazing leaders, hiring and managing teams virtually, and consulting organizations on equitable talent practices. Then, we then held a strategic planning session with our senior staff to identify who would most need support in these areas. Next, we developed a plan to support them immediately. This meant reaching out to new segments of the market in some cases. In other cases, it meant repurposing or creating new service lines. But in every case, we recognized we had critical skills and insight to offer and needed to get them out to the sector immediately.
Don’t panic, do the analysis.
We noticed that within days of school closures and shelters in place, some organizations were immediately implementing pay cuts, furloughs and layoffs. Don’t do that. First, go back to items one and two. Next, do some financial scenario planning to project your best case scenario, worst case scenario, and middle of the road scenario. Finally, develop a plan for how you will navigate each of those scenarios.
Take this as an opportunity to course-correct compensation levels.
We conduct dozens of compensation studies for clients each year. In each case, we always identify staff that are paid below market, at market and above market. In times of plenty, correcting salaries for staff who are underpaid is easy. However, correcting salaries for staff who are overpaid is nearly impossible. So if you think you may have to reduce salaries, do a comp analysis so that you can be strategic and ensure pay equity for everyone in the organization. Instead of applying a uniform across-the-board cut, consider adjusting all salaries to be within a certain percentage of the median for that role and market.
In addition, you will want to look for places where you can cut expenses before you cut personnel. At Edgility this meant temporarily scaling back on professional development expenses. Instead, we crafted PD plans that focus on stretch assignments and on the job training. This reduced our budget for conferences and travel. And again, review the CARES Act SBA Loans. The Paycheck Protection Program offers loans that are forgivable if you keep all your staff on payroll and the money is spent on approved expenses.
It isn’t all about the money! It really isn’t. Trust us and build trust at your organization.
Transparency in communication is not only intended to share good news. At Edgility, we focused an entire staff meeting on talking about our financial situation, being transparent about the support we were applying for, expenses we were cutting, and new business initiatives we were implementing to target new revenue sources. By conveying a strong understanding of the situation, open dialogue, and a sense of calm, you can use this opportunity to build trust and avoid hysteria. Share as much information as you can. The more your staff know, the more likely they are to be focused on their work and not where their next paycheck will come from.
When in doubt, consult the experts.
Look to your network and find help where you need it. Talk to your CFO, or seek out a consultant CFO to review your finances. If communications isn’t your expertise, hire someone to plan your communications rollout. Reducing salaries? Engage a compensation expert to help you be equitable in your approach and transparent in your roll-out. Most consultants offer an hourly rate if you need some quick one-off work done.
Crises are scary, disruptive and stressful. But they are also opportunities for ingenuity, reinvention, and for compassionate leadership. May you emerge from this crisis as the type of leader who guides your people through the danger. A leader who seizes new opportunities for impact, and fosters a sense of security, compassion, and calm in the midst of the storm.