Next steps following video
If that video felt like a lot to take in at once, don't worry! It is not as complicated as it sounds, and the hardest part is getting started actually. Just follow this step-by-step process below to help you get going and get the job done. If you feel it is necessary, get a Strategic Planning Facilitator to support you through this process.
Step: Assemble your cost cutting and cashflow team
-
Action: List the group that will co-develop the cost cutting and cash opportunities plan. This is probably a subset of your Task Team, including persons with intimate knowledge on each income statement / P&L item. Likely it will include CEO, CFO, head of marketing and sales, COO, head of HR
- Suggested timeframe: Next 24 hours
-
Action: Schedule a series of workshops to work through each item on the income statement and identify opportunities to draw down cash and to cut costs (you may decide not to have the full team present at each workshop, but the CEO and the CFO should attend all workshops).
- Identifying opportunities to draw additional cash from banks (1.5 hours)
- Identifying highly-cash generative customers for sales focus (1.5 hours)
- Identifying eligible (government) funds (1 hour)
- Identifying need to raise cash from investors (1 hour)
- Identifying opportunities to reduce employee costs (2 hours)
- Identifying cost reduction opportunities (2 hours)
- Suggested timeframe: Next 24 hours
Step: Identify and quantify opportunities to improve runway and cashflow
-
Action: Run scheduled workshop to identify opportunities to drawn on additional sources of cash and reduce costs, ensure that each workshop results in clear output: a list of actionable opportunities, each with an owner assigned (but don't let the perfect be the enemy of the 'good enough')
- Suggested timeframe: Within 1 week
- Suggested tools: Maximise cash position checklist, Immediate cost reduction checklist, detailed cost reduction planning tool
-
Action: Quantify each identified opportunity; this should be done by the owner of said identified opportunity and should include a 'size the prize' or even business case calculation, including:
- Potential savings / cash opportunity
- Potential adverse costs
- Estimate time it will take for savings to become effective
- Grading for 'ease of implementation' of opportunity
- Grading for 'speed of implementation' of opportunity
- Suggested timeframe: within 2 days of workshops
- Suggested tools: Detailed cost reduction planning tool
-
Action: Mandate CFO to review each business case / 'size the prize' opportunity with the owner individually to test the assumptions, savings opportunity and ease of implementation
- Suggested timeframe: within 2-4 days of workshops, before prioritization workshop
- Suggested tools: Detailed cost reduction planning tool
-
Action: Schedule prioritization workshop (2-3 hours) with all cost cutting and cashflow team members to evaluate and priorities activities together
- Suggested timeframe: 24 hours after workshops
Step: Seek legal counsel and identify your options
-
Action: Get in contact with your lawyer / legal council to discuss potential options to reduce employee costs and work through list of identified opportunities to highlight any potential legal risks; again it is important to have clear output form this session, ideally a clear understand of what you can and cannot do regarding employee cost reductions.
- Ideally, you want to talk to your lawyer first about your initiatives and employee salary options before talking to your employees as not give them false hopes or make promises on what you can achieve
- Suggested timeframe: 1 day after workshops
Step: Talk and include your employees
-
Action: Schedule first townhall meeting (1.5-2 hours) with your employees to share with them the position of the company, show commitment to reducing costs and protecting jobs, discuss potential options and let them participate in idea generation
- Suggested timeframe: within 24 hours after talking to legal counsel
-
Action: Schedule second townhall meeting (1.5 hours) with your employees to share prioritized list of concrete cost saving actions and re-assure commitment to reducing costs and protecting jobs
- Suggested timeframe: within 24 hours after talking to legal counsel
-
Action: Schedule second townhall meeting (1.5 hours) with your employees to share prioritized list of concrete cost saving actions and re-assure commitment to reducing costs and protecting jobs
- Suggested timeframe: within 24 hours after talking to legal counsel
-
Action: Run first townhall meeting with employees with a 45min - 1 hour brown back session to generate and build on cost cutting and cash generation ideas
- Suggested timeframe: 1 day after talking to legal counsel / lawyer
-
Action: Run second townhall meeting with employees to discuss the clear prioritized actions that you are going to make, re-assure your commitment to preserving jobs and charter the clear course ahead
- Suggest timeframe: 1 day after prioritization workshop
Step: Priorities opportunities and build cost cutting and cash generation plan
-
Action: Run the prioritization workshop with the full task team to go through each identified opportunity, evaluating potential savings / cash generation and ease and speed of implantation to build a list of prioritized initiatives. The output is a list of prioritized initiatives to reduce costs / generate cash with clear owners.
- Suggested timeframe: after business plans for each opportunity is completed
- Suggested tools: Detailed cost reduction planning tool
-
Action: Integrate prioritized cost cutting and cash generation initiatives into task team plan (each initiative needs a task team member owner who drives the activity).
- Suggest timeframe: 24 hours after prioritization workshop
-
Action: Use weekly review meetings to review progress of cost cutting and cash generation initiatives and re-prioritize resources if necessary
- Suggested timeframe: ongoing
