By John Maculley

At a Glance

• Establish data-driven decision frameworks to speed response-time to new information
• Implement proven financial strategies to control costs and target investments
• Develop flexible and resilient supply chains and partnerships to increase agility

Global crises are inevitable, whether caused by geopolitical uprisings, cyber-attacks, or the COVID-19 pandemic we are now facing. A prudent response for most companies is to manage expenses and adapt to the change; however, analysis of history reveals that leaders can do much more. Accel Management Group’s research indicates winning companies that experienced prior disruptions not only adapted their strategies quickly to protect liquidity, but they positioned their businesses to leapfrog ahead of competitors before the dust settled. Accel recently studied the last two decades of global economic disasters to learn how leading companies responded in crises. We integrated our analysis with over 20 years of experience helping F500 companies weather financial storms. Our findings point to proven strategies that will not only help your employees through this pandemic but also position your business for future growth.

Companies that master the delicate balance between controlling costs to survive and investing to grow in the future will likely perform best once the crisis is contained. Executives who focus immediately on accelerating operational efficiencies, while also maintaining their spending on marketing, R&D, and asset acquisitions have the highest probability of success. Our research points to three actions c-suite executives can take today.

Establish Data-Driven Decision Frameworks

Decision-making speed is paramount in times of crisis, and experience indicates that critical decisions can be made more quickly by organizing for the response. One of the first actions companies should take is to establish Crisis Response Teams (CRT) that are structured and governed to achieve results (Exhibit 1).

Once established, Accel recommends CRTs create financial models designed to analyze three scenarios, 1.) quick recovery, 2.) global slowdown, and 3.) pandemic-driven recession. They should model for cash flow, P&L, and the balance sheet to identify critical risks and critical success factors in each of the three scenarios.

Exhibit 1
Crisis Response Team Structure

Implement Proven Financial Strategies

In parallel with the establishment of CRTs, c-suite executives must be on the front lines communicating to stakeholders and calming markets. Customer demand can be a significant uncertainty during a pandemic. Accel recommends that leaders stay close to key customers to understand concerns, empathize with their situations, and identify friction points that may help improve overall customer experiences going forward. How your company responds to customers now reinforces their journey and loyalty with your brand.

There are many financial levers companies can pull to control costs and improve liquidity. Accel identified and documented ten key actions that leading companies in highly cyclical industries have historically implemented to deliver outstanding financial performance. One critical step is to accumulate enough working capital to cover multiple quarters of reduced revenue, assuming a worst-case scenario, then invest the remainder in strategic acquisitions, bulk supply orders, and in securing additional capacity.

We recommend conducting response workshops to walk executives through each of the ten critical actions in detail. It is vital to collaboratively develop financial maneuvers that can be handed to CRTs for execution. Accel’s extensive experience running these types of meetings positions us to be neutral facilitators who bring expert insights into complex discussions.

Develop Flexible and Resilient Supply Chains and Partnerships

CRTs should focus on stabilizing supply chains by analyzing the risk exposure and prioritizing adjustments. Companies need to optimize for resiliency by increasing redundancy and taking more modular approaches to backend functions, like assembly and packaging. Companies must strengthen their vendor alliances and attract new strategic partners to boost manufacturing flexibility and cost-sharing (Exhibit 2).

Accel uses its deep understanding of high-tech manufacturing networks and proven frameworks to analyze opportunities and make company-specific recommendations that are actionable and effective. With insightful data in hand, c-suite executives can quickly adapt their strategies to navigate new and evolving economic environments.

Exhibit 2
Strategic Manufacturing Framework

Preparing for the Future

High-tech operations have transitioned toward comprehensive, proactive modeling to mitigate risks. To stay ahead of this curve, Accel recommends that executives establish permanent Supply Chain Command Centers (SCC) that continuously monitor geopolitical issues and global crises ahead of disruptions. SCCs should focus on longer-term strategies that will position companies for success once markets are stable, while CRTs tackle urgent issues and execute more near-term actions to plug holes. Both teams should report status to the c-suite and operate within the guide rails of boundary agreements (Exhibit 3).

Companies that utilize boundary agreements see a marked increase in their ability to execute projects quickly. SCCs and CRTs with boundary agreements in place transcend legacy process bottlenecks to operate more efficiently and effectively. The autonomy and decision-making authority offered to teams working under these agreements create room for experimentation. Executives trust that they can course-correct if operating boundaries are breached, and teams feel empowered to explore new ideas.

Exhibit 3
Governance Structure

What Does Accel Provide

• Reasoned leadership over disciplined assessment and delivery
• Experience in solving, planning, and executing complex and dynamic problems
• Knowledge of high-tech companies globally, understanding of collective response themes, and arming for optimum business under these evolving conditions

How Accel Can Help

• Facilitation of c-suite workshops to address financial levers
• Rapid design and chartering of Crisis Response Teams and Supply Chain Command Centers
• Establishment of Boundary Agreement governance contracts
• Analysis of supply chains and factory networks for weaknesses and risks
• Development of standard operating procedures and process frameworks

About the Author 

John Maculley is a principal with Accel Management Group. In this role, he helps clients grow their companies and improve their operational efficiencies by designing and implementing customer-driven innovation and product development frameworks. Maculley brings more than 20 years of high-tech industry experience, which enables him to deliver innovative methods to improve time-to-market, reduce costs, advance performance, and increase revenue. Connect with him on LinkedIn at https://www.linkedin.com/in/johnmaculley