Crisis Management 101

We all are thinking through how we are going to manage through the coming weeks and months. I for one turned to a group of my closest friends and advisors, who happen to also be colleagues and experts in crisis management. The conversation I had was so compelling that I decided to have it a second time but this time recorded. Billy Susman is one of the leading financial minds in the consumer investment banking world; Geoff Lurie is the President of Traub and serial optimization CEO and leader and former CEO of The North Face; similarly Joe Ahearn is Managing Director at Traub who among other things was the CEO of Marvel and ToyBiz.

Between the three of them, they advised the following steps which are catalogued in the podcast:

1. Don’t panic: this may cause you to over react and shoot from the hip. Don’t
2. Plan: Sit down calmly and objectively and come up with a plan
3. Watch your cash position by generating a normalized 13 week cash flow, then stress test it with the daily realities that come your way
4. Keep mission critical people at home. Likely all employees will need to stay home
5. Do daily or twice daily company conference calls
6. Make sure those people have remote access
7. If you are in a part of the country / world where your area has not been shut down, cross train key players so that each can do the other’s job in case one falls ill
8. THINK OUTSIDE OF THE BOX: Requests you might never have been able to make of suppliers, landlords, retailers are now all on the table. We are in this together, so people will have to give and take
9. Don’t communicate false hope to employees. Transparency is key. There is nothing more demoralizing than a second round of layoffs if people have been reassured that they are all secure
10. Don’t hide the truth from partners, banks, factors, lawyers, suppliers and other key stakeholders. “Honesty is always the best policy.” Said the late Marvin Traub
11. If you work to “extend the runway” with an optimization plan make sure the extension leads to something or somewhere. A debt package, equity infusion, M&A. In other words more stability

I tried to get this out as quickly as possible to be of help to those in need of someone to turn to. Thanks to Geoff, Joe and Billy who dropped everything to do this today as I know they have been dealing with all manner of issues for their respective clients.

Stay safe.

To listen to the full conversation on crisis management, please listen to our The Safari podcast, in which, Billy Susman, Geoff Lurie, and Joe Ahearn elaborate on the 11 steps mentioned above.