Simulation leads the way! Our CAT community is undertaking some wonderful projects supporting the global Covid-19 response. In his blog post below, Nigel Orme, StratStep Group CEO, explains how to survive, maintain and then restart your aviation business during the global Coronavirus challenges.
Right now, many aviation business owners, leaders, managers and employees are doing everything they can do preserve cash flow and save their companies. They’re also trying to figure out how long this is all going to last before we can restart our businesses and the global economy.
The important thing to remember during these challenging and uncertain times is that you are not alone and that everyone is experiencing the same concerns, stresses and headaches. You also need to remember that the current pandemic is only temporary; the economy and the aviation industry will rebound from this crisis like it has done before.
The power of realistic positivity that many people hear me talk about is not some meditating guru philosophy, no, it’s something that if practiced can be infectious for all the right reasons and applies to how we all deal with this global challenge together as an aviation family.
How to Survive
If you’re based in Europe, then you’ve already had several sleepless nights worrying about cash flow and how to keep your business. The reality is nobody knows how long this will last, and that includes the timescale of the economy and aviation market coming back online after self-isolation and quarantines end.
Most companies have already pulled out the P&L, assuming no revenue is coming in, and so are looking at what expenses need to be cut to protect cash flow, how much cash is in the bank and what other sources of cash there are for a ‘worst case scenario’.
On the expense side (in most countries) there seems to be a lot of strong responses from governments to offer grants, loans and schemes to protect employees. In addition, there also seems to be strong movement with the banks to grant payment holidays on mortgages and loans along with many landlords granting rent payment holidays.
Now is not the time to be proud, get on the phone and try to suspend every payment you can possibly imagine all the way down to monthly online subscriptions, license fees and any small bills you can defer or suspend to protect your cash.
The final large expense, and most important, is employees. Do you make them redundant, put them on furlough, or make them work from home? It’s a hard decision to make.
We all understand the ‘domino effect’ – if your employees have no income and how that trickles down through our economy – so hopefully you have a government scheme like that of the UK where they are paying 80% of employees’ salaries.
However, if you don’t have that, hard decisions must be made. We all know that these measures and shutdowns are temporary, so don’t be too quick to act without consideration of the impact it will have on your staff, and the prolonged consequences it’ll have on your business over the next twelve months.
Loyalty and a good work ethic are often hard to find, so consider options such as asking them to go on unpaid leave until business starts to return. Making redundancies in any capacity is not the best solution for your business, although it will provide some needed cash flow relief in the short term, but when things start back up you may struggle, which is not what you want during an economic restart.
In summary, do what you must do to save your business, but we now know through statistical modelling in other countries that there will be a managed restart in each country around 2-4 months post peak infection period. Therefore, planning for that restart will be more critical to your business as far as tactical and strategic planning goes over any other time in your business.
Transitioning into the New-Norm and Maintaining for 2-4 Months
Sales and Marketing
So, you’ve slashed your expenses, many of your staff are on furlough, what do you do about your sales and marketing activity? It is critical that even at a reduced to non-existent revenue stream you maintain your brand awareness during this ‘new norm’.
Yes, your sales team is putting most efforts on hold as very few, if any, companies in aviation are buying goods or services now, but that is no reason to shut down your marketing efforts. Many of our businesses will be scrutinised and judged on how we manage our internal and external client relationships during this pandemic so getting your positive messages out there is more important than ever.
This is not to be seen as trying to profiteer from the current situation, but to communicate properly and professionally all that your company is doing to help the situation. How can you help your clients during this period of shut down, what programs are you putting in place to help them with their challenges? If you try to help others, they will try to help you, and more importantly your brand will not be known for burying its head in the sand, but rather taking responsibility and leadership in the market.
Nothing you do that is of a positive, constructive focus and effort will be known if you don’t get that message out. Please, keep your marketing and customer communication robust, timely and focused on the positive actions your business is taking.
For most of us, operations have come to a standstill with employees put on furlough and essential personnel now mostly home based. However, we must not forget to manage and lead our home-based teams who still need our structure and guidance.
We have all worked from home at some point in our careers; some people thrive on the environment, but there are also those who don’t always put a full day’s work in or may not perform at optimum efficiency outside of an office environment without the structure and accountability they are used to.
Although I am not a proponent of micro-management, leading a home-based team does take a different tact and strategy. Simply motivating a team can be challenging during times of uncertainty and part of your new role may be that of a cheerleader. Schedule daily calls to check on how they are doing, as humans and not just as employees, and don’t hesitate to ask them how their families are, what challenges they are facing working from home and if you can help them accomplish the goals that you have set for them. Put your mentor hat on and not just your manager hat.
Now is a great time to build stronger relationships with our internal teams and staff through interactive conversations and open lines of personal communication. We still need to get the very best out of our employees’, but a more ‘human’ approach will work better in this new-norm environment.
Restarting Your Aviation Business and the Global Economy
Pushing the start button
We all know the day is coming when our governments tell us this is all over and we are permitted to return to the office and restart our businesses. Will you be ready? What is understood is that over the last two months everything has moved very quickly in moving towards this downturn and it is safe to say that we need to be prepared now (even though some of us are still in survival/fire-fighting mode) for how we organise ourselves to hit the ground running when that light turns back to green.
The second you feel you have protected your cash-flow and moved into the ‘new-norm’ holding pattern to sustain your business you should start planning what you need to do in a month or two as things restart. Everyone will be eager and ready to get that revenue flowing again.
Take a systematic approach starting with sales and marketing, as although there will be some bumpy first days with people still watching their cash closely, there will be an immediate need for aviation products and services across our industry. How do you recall your staff, how do you reengage with clients, what will your marketing message be and a hundred other questions you should be considering!
Outside of grants there is some hesitation to take advantage of business interruption loans. None of us want to take on any debt, but do you have the cashflow to restart your business and stay ahead of your competition? Ask that question now and get a plan together as you don’t want to be the last out of the gates.
Understanding what your clients are thinking – how to re-engage
Let’s say we’ve now restarted our business and the global economy is slowly winding back up, how do you reengage with your clients? Do you just try to go back to ‘business as usual’ and hope the relationships you have will be enough for them to start buying from you again? I wouldn’t count on it.
A new dawn will be upon us and it will be a bumpy restart with people watching how they spend their money very closely. Clients will also take this opportunity to review their supplier relationships to see if they should be pushing for better deals and review how they felt they were treated by your company during this downturn.
Anticipate this new attitude by your clients as you’ll probably be doing the same thing. This goes back to my previous point about restarting your business, as it’s not just your internal operations to consider, but planning for your clients’ needs as you reengage will be the difference between successful restarts and ongoing, compounded problems that none of us can afford.
The Power of Realistic Positivity
None of us have all the answers right now, but I can assure you that the right mental attitude and using realistic positivity is the best way to deal with and overcome all the ongoing and future challenges.
What this means is we must be realistic about what is going on right now, the challenges we face and the tough times that will continue for all of us into the foreseeable future. That being said, we can look back through the ups and downs the aviation sector has seen over the decades and the only realistic conclusion based on those lessons learned it that we always bounce back stronger and continue to grow exponentially.
Your attitude impacts everyone around you, and as leaders in the aviation sector, we all have a core responsibility to be part of the solution and not promulgate any of the problems we face. This doesn’t mean we all try to live in a fantasy land where everything will be fine no matter what we do, but at the same time we can’t be all ‘doom and gloom’ as that will not help anyone right now.
I challenge myself every day and now pass that challenge to you to practice realistic positivity in your day-to-day activities and instil that philosophy with everyone you work with. The restart is coming, and once we’ve survived what we’re all going through right now we can only thrive in the future.
Step towards the stratosphere and let’s give this helpful insight and realistic positivity a chance to take hold within our aviation family!