HR in the Age of COVID-19

HR in the Age of COVID-19

woman having a video meeting with her colleagues HLH “At the end of the day, you bet on people, not on strategies.” – Lawrence Bossidy

In the last few months, your team has probably surprised you. Some reacted to this crisis in unexpected ways and others have risen to the occasion with remarkable purpose and clarity. 

Now, and in times ahead, you need to nurture the bonds that are holding your business together: you need to take care of your people. And, to do this well, a strong HR group is vital. From safety standards, to reassurance, to a sense of community, well-deployed HR will help you get through. 

 

Adapting Your Culture 

HR has always focused on safety, but COVID brings a whole new set of safety expectations well above last year’s standards. Now, keeping your team safe is more than merely good management; it’s essential for both them and your business.  

build a culture of transparency and disclosure, document your business processes for COVID prevention HLH

If COVID-19 sweeps through your business, you lose on many levels. The way to avoid this is to build a culture of transparency and disclosure. 

Take the time to document your business processes regarding COVID prevention and control in the workplace. Don’t wait until an employee gets exposed or infected – we’ve already seen how quickly those consequences can get out of hand. 

If your team knows exactly what will happen if they’re exposed (whether they come back to work after testing or after a negative result, for example), it will make it easier for them to disclose any potential exposures. And you need to know about those exposures to keep your team safe. 

 

Morale Matters 

COVID has been an emotional and—for those scrambling to keep their businesses afloat—intellectual rollercoaster. And it’s not nearly over.

build your community HLH

You’re exhausted, and so is your team. One of HR’s urgent tasks this year is to watch for signs of staff burnout and act to remedy it. 

In a time of isolation, the workplace can offer a valuable sense of community. You’ll need to enforce physical distancing in the office, but that doesn’t mean you can’t build up the connections between your people. 

Take the time for physically-distanced events. Include yourself, even if “the boss” hasn’t always joined in. Don’t be distant; be present so that they know you’re in this with them. 

Listen to their concerns. If they have fewer concerns than usual, talk to them about it. Anxiety is running high right now and we need more communication rather than less.

 

The Future of Hiring 

The COVID crisis has had the side effect of accelerating the digitization of our workplaces. The explosion of e-commerce, remote workspaces, and having to do business without travelling will have real implications for how we hire going forward. 

Accelerated digitalization means more machine learning. In other words, the easy stuff is being done automatically or remotely at a rapid pace. Competing post-COVID will focus on the abilities that computers don’t have. Expect future hiring to be about skills and adaptability more than ever before.

 

In a recovering economy, business survival is about efficiency and innovation: the company that can adapt to new footholds will stay on the mountain. It will be the managers who have invested in their people that stand back and watch their teams confidently scale the cliffs ahead. 

 

Track Your Cash Better, Part II

Track Your Cash Better, Part II

person holding phone with calculator on desk HLH“Number one; cash is king.” – Jack Welch

Alberta’s economy is in an ocean of hurt. At times like these, cash is the life preserver that will keep your business’s head above water.

Last week we talked about why you should have a 13-week cash flow forecast. Now let’s build the thing and dig deeper into what it can do for you!

 

Structure

The beauty in this 13-week forecast is its simplicity. It forces you to focus on cash. Cash is the lifeblood of our businesses, but we frankly don’t think about it enough. No matter how big and complex your business is, knowing how much cash you have (and will have) in the bank is typically a simple affair.

Break out the spreadsheets, graph paper, or whiteboard. The horizontal X-axis is your “Reporting Period.” Typically these are weeks, so give yourself 13 columns.

The vertical y-axis should be labeled “Reporting Categories.” It’s your call how deep (or shallow) you want to go. For expenses, usually, a few categories (labour/ cost of goods/ utilities) will account for 80% or more. 

Revenue is simpler. When you designate those rows, make sure to account for A/R and (if it applies) the % of bad debts you tend to have. A lot of cash is lost in either negotiating for late payments to be made or losing them entirely.

Remember: this is about cash. It’s not about how much you invoice or the exciting new contract around the corner. This is cash in the bank.

Fill in the 13 weekly columns. Inevitably, you’ll be speculating by the end. These are your weekly forecasts. 

You can go deeper into expenses if you want by looking at the 3,5,10% of your revenue line items. These add up fast, and often contain a lot of the fat you could trim. We spend a lot of time wondering how to trim labour, but often travel, marketing, and office supplies get forgotten about. Transparency is the first step towards flexing those Process Improvement muscles.

Rinse and repeat for each fiscal quarter, using more tabs along the bottom. Download our template.

 

Visibility Matters

As the weeks creep by, replace your forecasted numbers with actual ones. Keep it brutally honest. 

You’re building a mirror that will allow you to stare back at your business’s cash health. It’s about making expenditures visible. When you’re forced to look at a business activity as cash out of pocket, you’re more likely to interrogate why you need it and to potentially cut it.

Remember: this is an organic document; build it with the intention of altering it. As the weeks creep on, edit it in real time and anticipate the impacts of that change as far forward as you realistically can. 

If you get the numbers wrong, don’t let your pride get in the way of changing whatever needs to be changed.  

 

Embrace Difficulty

If your business is struggling, this could be a hard exercise. If it’s only now becoming evident that it’s struggling, it could be even harder.  And that’s the point.

If you’re bleeding cash, now is the time to stop it. If you’re not, now is the time to know for sure.

embracing difficulty HLH

 

Track Your Cash Better, Part I

Track Your Cash Better, Part I

hand on calculator HLH“The fact is that one of the earliest lessons I learned in business was that balance sheets and income statements are fiction, cash flow is reality.” – Chris Chocola

You know how much cash your business has in the bank right now, but how much will there be in a week? How about in a month? 

If your business is an engine, cash is the oil lubricating it. If the cash dries up, it seizes. That’s why being able to anticipate our cash position is so important.

A 13-week cash flow report is a simple tool that you can use to predict and react to pending cash pressures. If your business is struggling (as so many are), this is vital. If your business is healthy, this report will make it healthier. 

In our next 2 blog posts, we’re going to introduce the 13-week report as a tool and tell you exactly how to create and use it. 

Why 13 Weeks? 

We typically know what our cash flow is for 2 time periods: the past and the year ahead. Unfortunately, the past is the past and the year ahead tends to get abstract. It’s a big chunk of time, and so much will happen that it’s difficult to accurately predict more than a few months ahead. (We learned that all too well back in March.)

On the other hand, very few businesses have a stable cash flow week-to-week. One week the payables come in and it’s Christmas, and the next week is payroll and suppliers’ bills. 

13 weeks, being a fiscal quarter, is the “Goldilocks” middle ground. It’s meant to provide enough time to iron out the ups and downs, but not so long that we need to speculate madly on what will happen 6 or 9 months away.

 

Why is this Useful?

First and foremost, you’ll be able to anticipate cash crunches more accurately and have the time to react to them. But watching your cash is about more than vigilance; it’s about focusing on what matters in your business financials.

We often get caught up in past costs, inventory, and other abstractions. Cash is a number that is real, present, and brutally honest. It’s the boiled-down truth of our businesses and we need to think about it more.

13-weeker benefits HLH

Be Honest (With Yourself)

It’s awful to bleed cash from a business you’ve poured your time, heart, and energy into. It’s even worse if you’ve invested your equity as well. But pretending it isn’t happening when it is won’t help anything – not a bank in the world accepts wishful thinking…

Doing these cash flow reports will keep you aware of how your business is really doing: the numbers go in, ugly or not. Having this kind of accurate information is the baseline you need to think strategically about your next move and to start moving your team in the right direction.

Next week:
How to Build It, Step by Step

Do you have a 30,000-foot view

Do you have a 30,000-foot view

Alberta is in an unprecedented economic time. The impact of the COVID-19 crisis on the energy and other sectors is already rippling out, and individual businesses are facing a perfect storm of money-sucking problems.

We’re re-doing our “Deadly Waste” articles—and we’re taking it up a few notches to help you adapt to this storm. The cost-saving ideas in these articles may be uncomfortable, but growing pains can hurt even when we know it’s for the best. 

Motion waste can feel petty. In a financially stressful time, it can feel like there are plenty of other, more pressing priorities. 

But motion waste is a symptom of general inefficiency and can be a real safety hazard. Letting it spread can endanger your staff and make other processes—often the most repetitive ones—take longer than needed.

Here’s how to get brutal with motion waste, even as your business adapts to life in a recession-hit Alberta.

 

30,000 Feet 

We’re in “adaptation mode,” and we’re stressed. Those two things combined are a recipe for a whole lot of wasted motion. 

In anxious times, especially with new processes, people are running this way and that, overlapping and bumping into each other (sometimes literally). This is called motion waste—the unnecessary movement of people or items within a work centre.

Like many of the deadly wastes, motion waste stems from good intentions. Your team is trying their best, and in times like these, they’re probably working even harder for the sake of the business and their families. Fortunately, like all deadly wastes, the key to eliminating it lies in communication and careful observation.

As soon as you start a new process, take the couple hours required to close the door, unite your team, and process it out. Start documenting once the major growing pains have been ironed out and things feel like they have started to roll (reasonably) smoothly. Engage your team to identify pain points and inefficiencies, and to think through how processes could adjust.

Keep the process organic and flexible enough to change on a dime. Waste begins the moment adaptability ends.  

 

Over Communicate 

Talking is easy during the good times and vital through the hard times. If you close your door when things get stressful, they will only get worse. You need to jump in.

Get on-site, at the front desk, or on the shop floor. Talk to your team about what’s working and what isn’t. And take time to watch; preferably long enough that others forget you’re there. 

The boss is the only one with a 30,000-foot view. You understand all the variables at play, and ultimately you make the calls. But to make the right decisions for your team, you need to hear from the front line over and over again about what is efficient and what isn’t. 

Create a central hub for communication—it could be as simple as a clipboard or communal whiteboard. Encourage people to use it and never penalize anyone for what they put on it (within reason, of course). 

 

Remember Safety 

Motion waste often implies safety issues, especially during a pandemic. Every time someone overextends to reach something or walks across a busy area unnecessarily, there’s a risk. While documenting your processes, address safety head-on. Your people are your biggest asset, now more than ever. Examine whether your processes are doing enough to keep your team, and your customers, as protected as possible.

Tackling motion waste, and any other form of waste, requires a commitment to tackling the problem. Waste happens when no one is paying attention. Empower your team to observe and report, with the confidence that they’ll be heard, and you’ll be able to trim it out. 

Defend Your Business from Defects

Defend Your Business from Defects

Alberta is in an unprecedented economic time. The impact of the COVID-19 crisis on the energy and other sectors is already rippling out, and individual businesses are facing a perfect storm of money-sucking problems.

We’re re-doing our “Deadly Waste” articles—and we’re taking it up a few notches to help you adapt to this storm. The cost-saving ideas in these articles may be uncomfortable, but growing pains can hurt even when we know it’s for the best. 

Defects—whether it’s an error in a file, a misdiagnosis, or a poorly built house—can cripple your business. On top of the cost of making it right with your client, your reputation takes a hit that will follow your business around. 

 

Be Careful What You Cut 

We’re all in cost-saving mode, and it’s easy for quality control to get caught up in the purge. But remember that your quality control process is what keeps annoying defects from becoming catastrophic. 

The people checking quality seem expendable until we realize they’re invaluable. Make sure not to cut corners with this step in your production cycle. The last thing your business needs now is to lose a customer over an avoidable mistake.

 

Be Intrusive

The golden rule about defects is that the earlier in the process you catch them, the less expensive they are. It’s easy to assume everything about your production processes is fine, but in times like these, throw “fine” out the window.

Insert yourself into the process. Ask your people how it’s done, and get to know your inner-business operations as intimately as when you first helped build them. You’re not accusing anyone; you’re doing the due diligence that the situation demands.

Find out where people have taken liberties and “tweaked” the processes, then ascertain what impact changes have had on your overall flow. You have the 30,000-foot view: put it to good use to audit the process and root out defects. 

 

Empower Your Team  

Your team is as nervous as you are. They know what Alberta’s economy will be like for the next few years, and they want to go the extra mile to make sure their families will weather the storm.

The worst mistake you could make right now is to assume that you’re alone. Your staff have your back more than they ever have. Engage them. Get their thoughts on your existing quality control processes and talk with them openly about how to spot defects. 

 

Processes 

The importance of mapping your processes comes up repeatedly in our Deadly Waste lessons. Many “deadly wastes” arise when you, as the boss, aren’t clued in. Documented processes give you a window into what’s really going on.

With your process map in hand, find out where the defects are happening. Can you identify the stage at which they’re occurring? If there are multiple, is there a correlation? 

If you can trace the source of your defects, you can arrive quickly at a solution. Make a habit of being present—with your team, and throughout your production process—and you’ll breed a culture of high standards.

If you found this article helpful, browse our archive of COVID-19 resources. Keep checking back for news updates, tax advice, and business tips for keeping your business on-track through uncertain times. 

 

Is Your Product Costing You Money?

Is Your Product Costing You Money?

Alberta is in an unprecedented economic time. The impact of the COVID-19 crisis on the energy and other sectors is already rippling out, and individual businesses are facing a perfect storm of money-sucking problems.

We’re re-doing our “Deadly Waste” articles—and we’re taking it up a few notches to help you adapt to this storm. The cost-saving ideas in these articles may be uncomfortable, but growing pains can hurt even when we know it’s for the best. We hope this helps.

Overproduction is the deadliest of the wastes. It takes away your ability to adapt and business and dovetails into multiple other wastes. 

It’s also one of the hardest to squelch successfully, but well worth the effort. It requires a long look at the products or services you’re offering and whether or not they’re the right ones, at the right time, for your customers.

 

Don’t Get Comfortable 

If you’re like most of us, a comfortable business position is now a thing of the past. But it’s not all bad: instability can make you adaptive, and adaptation is how you’ll survive. 

 

Overproduction is a waste that stems from getting too comfortable. It’s a waste that comes from the optimism of being so confident you’ll sell more, that you produce more. 

Comfort is expensive because it freezes your cash. Every widget you produce and extra material you order is a handful of cash that’s frozen until a customer thaws it out. If you take a loss on it or throw it away, it stays frozen.

As you know, cash represents a lot more than buying power. Cash represents the flexibility and the adaptability you’ll need to get through this. You’ll need all the cash you can get right now, and that means trimming back production to rock-reliable numbers. 

 

Do You Have to Push?

Overproduction happens when optimism leads to gambling on increased demand. That brings forward bigger batch sizes (which entice us with discounts on raw materials), and the cash freezes begin en masse.

Trying to “push” a product onto the market is a challenge during good times, and almost impossible during these times. The secret behind eliminating overproduction isn’t easy, and it’s not quick, but it is effective. It’s converting to a “pull” system.

If you have to push your product or service onto customers, it’s time to take a step back and try to recall the last time they actually asked for it. When was the last time they were enthusiastic about your offering? Or the last time someone asked you when they could expect a restock?

Are they in love with your product or service, or have they formed a habit? Habits, even necessary ones, are in danger of being replaced.

There’s never been a better time to think about your products and services in a new way. What will your customer love? To find out, you can ask them, you can infer from everything around you, and you can see what your in-house potentials are.

If you create or focus on a product or service that your customer loves, you won’t have to push it on them: they will pull it out of you. 

 

Time is Money

Overproduction is about more than building too many widgets. It’s the most capricious waste because it overlaps closely with so many others, and often quickly leads to over-inventory.

 

It’s also closely related to over-processing. Overproduction is running too many tests, too many iterations on a file, and putting excessive resources into a construction project.

Time eats as much cash as materials do. When the time gets excessive, the cash freezes into the product. Take a look at each of the individual products and services you’re offering and ask yourself, “if this were gone, would anyone miss it?”