As most CEOs are executing their plans to keep their people safe, we must also lay plans to keep our businesses alive so when normalcy returns our people will have jobs to return to and our customers will be able to depend on us. In my previous article, I wrote about how to lead employees through this crisis. But as leaders, we must live in the future while our teams execute in the present.
An economic downturn is barreling at us. The only way to know how to prepare our businesses is to make assumptions about how bad it will be and to reflect those assumptions in a proforma set of financials going forward 12 months from now. Only by looking at the company’s financial health 4-8 months into the future can we know what to do now—how many to lay off or furlough, how loudly to demand reductions in fixed costs from landlords or others, what expenses to cut. Midsized companies are too large to do this by “feel.” I also believe that many companies will have to make heart-wrenching choices to stay viable, laying off good people and scrapping what seemed like great ideas. To make those types of decisions quickly requires some quality analysis to push us to make the difficult decisions.