On Thursday, April 30, the SobelCo webinar panel included two CFOs, Ken Brown and Phil Orsi, both from the light manufacturing and manufacturing sectors as well as Alan Sobel, Managing Member of SobelCo and moderator Brad Muniz, Member in Charge of the SobelCo Audit Practice.

The presenters were tasked with the goal of providing practical advice based on insights from the trenches and they proved to be an excellent source of important information.

It was clear from the outset that there are two critical issues that every business leader in every industry is facing. The first is best described as human resource challenges and the second is cash flow.

Human Resources

People are at the core of every company. Their safety is an immediate priority. The two CFOs on the panel indicated that anywhere from 50-70% of their workforce is on site, concerns about social distancing are top of mind. Factories do not have the requisite space needed to separate large numbers of employees. The use of protective clothing (masks and gloves as a place to start) and regular cleaning routines are becoming common place. Going forward, additional options will be considered, such as installing Plexiglas partitions between work stations, using improved air filters, ensuring ingress and egress for easy exiting and entering of the work space or cubicle, placing floor arrows to direct people without bumping into each other as they approach high touch areas, and even employing thermal scanners in entrance lobbies to enhance recognition and record individual temperatures are all on the agenda.

Poll question: When asked how they will create a safe work space during recovery, 21% of the respondents answered a work space reconfiguration; 21% said working in shifts; 21% said increased sanitation measures; 38% said they will look into this later and 0% said it is not necessary.  

Safety is one aspect – but attendance is one of several other human resource considerations that can create legal concerns and require attorney advice. In some cases, incentives (increased pay) were one effective method for encouraging employees to return to work.

But there are those who refuse. Questions are now being asked regarding how to handle employees who might not want to return to work, or how to ask questions regarding employees’ vulnerability upon coming back. In the past, many of these questions were considered intrusive and could lead to discrimination law suits. The legalities established around human resources clearly were not intended to be used during an unprecedented pandemic! Alan Sobel mentioned surveying the employees to see when (or if) they prefer to return as the firm considers using a three-phase approach.

Financial Modeling and Growth  

The panelists agreed that there are so many unknowns in the circumstances brought by the pandemic that forecasting is a tremendous challenge. Cash is king, but it is almost impossible to conduct forecasting at this time. The suggestion is to look at the ‘worst case’ versus the ‘best case’ scenarios and then discuss all the “what if’s?” with the leadership team. 

Despite the obstacles, forecasting cash flow remains an imperative for these CFOs.  The best advice is to understand your bank’s position on credit, contemplate how you can best handle receivables, and plan ahead to the third quarter (and perhaps fourth) quarters. 

Poll question: Attendees were asked how far out they are looking when considering their business strategy. 46% responded they are looking six months ahead; 37% said they are looking 12 months ahead; 17% said they are contemplating the next two years and no one replied that they are looking as far as five years ahead.

When collaborating with the sales team to boost growth, new ways for connecting with current and prospective customers may be discovered. This is a good time to engage in some brainstorming regarding sales growth as the company tries to determine what the target audience will look like in the coming months – what will change and what will remain the same? While the sales force may be temporarily grounded, and trade shows canceled, phone calls, emails, use of social media and video vignettes can all play a part in maintaining and expanding relationships.

Poll question: Regarding marketing in a pandemic, the audience was asked to identify any tactics they are using now. 20% said they are pursuing new niches; 32% said they are unveiling new services; 9% introduced new products and 7% are looking at new demographics. 32% said they are not pursing any changes to their marketing strategy now.

Poll question: In answer to the poll asking, “How do you keep in touch with top customers?” 57% of respondents said by email, 37% said by phone, 4% use texts and 2% said they are not keeping in touch. 

Attendees were asked how far out they are looking when considering their business strategy. 46% responded they are looking six months ahead; 37% said they are looking 12 months ahead; 17% said they are contemplating the next two years and no one replied that they are looking as far a five years ahead.

Final Take-Aways

As the webinar concluded, some critical points emerged.

  • Effective, honest communication has always been essential but it is even more critical when people are working remotely, isolated from each other in order to maintain connectivity and the organization’s culture.
  • Productivity demands more attention when additional coordination is required by remote working environments.
  • Technology has enabled greater efficiency when working remotely – and improvements and changes in infrastructure have allowed many companies to expand their capacity.
  • These are unprecedented times, and as such, it is difficult to anticipate what is ahead. In many instances a company will be reliant on the speedy recovery of its customer base; in some instances there will be a regional influence; but in all instances the many facets surrounding managing people and cash flow will be at the top of the list!