Urgent Action Plan in Economic Crisis
In my previous article titled ”Check-Up Time for Corporates”, we touched on the result of the search on companies that endure in economic crisis and after than show success. We offered TDG-Check-Up to companies as the beginning of the ”preparation” process that is a key word in the period of crisis. Based on the check-up results, now we will share the details of our 5- Steps of Urgent Action Plan that will be applied by the executives. The preparation secrets that draw the own urgent action plan of the companies that come successfully through with the crisis contain flexibility and adaptation and other elements are built over them. That is to say, it should be accordant with the flexibility and speed and results of cycle according to the effect of the economic wave.
Now, let’s review the 5 basic steps of the Urgent Action Plan:
- Establishing a New Financial Model: First, one leads off with ‘urgent financial action plan’ by analyzing alternative scenarios for the effects of the crisis, according to the sensitivity analysis of results of check-up. Thus, it is possible to being on the defensive and putting into practice the proactive decisions by assessing the projected risks with right timing.
According to potential economic situation scenarios, this is the process of setting a dynamic and unique financial model, which consider all income and expense items, the operational structure and business processes, debit and credit situations, sanctions and the other factors.
- Talking about Future with Stakeholders: As executives, we should not hasten in decisions. The communication processes should be managed very well. The financial model that we have decided to put into practice, should be talked starting with key employees in all positions in the company, shareholders, employees, supplier, main customers, financial institutions and the other important stakeholders. It should be discussed with them and they should be persuaded it. And after the final version of model should be applied by making the necessary retouch on it.
- Reorganization: The organizations of the company is restructured within the present model. Savings measures are taken immediately, and operational structure / decision processes are made faster and more flexible. The organization of the company is compacted in the integrated way with digital transformation, its level of efficiency, productivity and economy is increased, and basic competitive advantage is provided.
If innovations are included in that, it creates a leverage effect to the competitive advantage. If all these situations mean to you that ”no more gibble-gabble, it is just fire issues.” Then my advice to you that it can be that you take humanitarian decisions.
By giving mandate to the executives, who make business in different places instead of the central office, in this period, the decision processes are speeded up and step of management is cut into. With these actions, it is important issue for leaders to be able to proceed without firing. The question, how we can turn the organization into a flexible and quick structure, is needed to be answered in this period, by the way.
- Digitalization Practices: If you say, ”there already is no money in crisis, what is this digital transformation now? ”, I can say from my 30 years of experiences, even in this period, companies absolutely have spending of resource to places that is not priority. The digitalization that is a long-termed investment, can be turned into an opportunity, if an adequate resource is provided. Your company can have a more economical and safe operational structure with the in modular concept implemented general digitalization project and the technologies that is had at affordable price in crisis. Your company becomes flexible, gathers momentum, improves its product quality and are remembered with their creative ideas. The general situation can be analysed quickly with data sets that are achieved with the advantage of digitalization and are deeper and more dimensional: The productivity grows in making improvement of business processes and company become transparent.
While deciding on digital transformation, the basic consideration can be ‘self-financing’ investment. Another issue is that the company priorities the projects, which the company are urgently in need for, and which are replied in a little while. The digitalization projects that lower the cost provide extra competitive advantage in crisis. Taking advantage of this opportunity, trying to apply some operational activities are remote, is a digital transformation project. COVID has taught us that, as well.
- Strengthening Audit Mechanisms: Performing the surveillance function of executives are generally forgotten, while things are going well. But, in these crisis times, it is very difficult to conduct the business perfectly. About this matter, internal check and auditing should be done seriously, stated problems should be solved and these should be followed carefully.
Internal control mechanisms like the corporate culture strengthening attitudes and behaviors of executives, human resources policies, effective risk assessment activities, control processes, management of information and communication should be applied effectively and efficiently.
As mentioned, it may be possible to attain success, if it is handled the subject with integrated approach and the company takes firm steps forward. To be succeeded in, it is needed to show prudential and brave executive skills. Does already not Bill Gates prioritize the words ”individuality” and ”transformative” when he describes the leader?