Tough Times call for Tough Leaders
Dear Leaders & Managers,
Beware! The global economic downturn seems looming around.
It is time whereby your knowhow, skill & intelligence is to be tested. The cash shortage is getting intensified day by day. The question is are you ready to survive this financial tsunami? Or are you just comforting yourself pretending the danger is not real or will pass soon? Hold on!
The problem is a serious one and it is gonna stay longer. The El-Nino crisis is getting manifested in other terms. Local production is low, food products inflation is high, export income is low, project expense is high, credit supply is tight. And your companies revenue is getting low, inventory is growing everyday, fixed expenses are getting difficult to pay and some of you are engaged in projects which were started based on inflationary economic growth seen in the past and are draining your cash now. In a nut shell, now cash has become scarce. What shall you do?
As a business leader there are certain specific things which you shall do and which you shall refrain from. The actions you take shall increase cash inflow and decrease outflow or conserve cash.
As you know, cash has three internal sources. The first one is earnings from operations which is getting diminished from falling demand. The second internal source of cash is working capital which is composed of inventory and receivables. The third internal source being sale of assets.
Cash conserving is another area you have to deal. Trimming off over capacity, leveling headcount with the reduced capacity, discarding cash-inefficient activities, dropping off cash draining customers, outsourcing some activities are some of the actions you take to avoid cash draining.
Your actions shall focus on increasing the efficiency in the first and the second internal sources of cash though the the third source can't be ruled out too.
Keeping the moral of the staff is activity that shall not be relegated. Your task shall be to survive and come out stronger and prepared for the better future. Your actions shall not damage the brand and moral of the staff. You shall not lose sight of the aftermath.
If necessary you can call for external help to assist you in formulating & managing those activities crucial to survival without much bruises. An outsider will have a fresh outlook and will be a good supplement & rescue to your internal staff.
Above all, you shall contain your frustrations to yourself. In times like this it is easy to get frustrated. You have to be tough. Tough times call for tough actions and need tough executives.
Good Luck!
