Situation: The CEO of a service company continually finds the company short of cash. They have just hired a new accountant, but it will take time for this individual to understand the financial situation and to generate recommendations to improve cash flow. How do you keep a company afloat short-term?
Advice from the CEOs:
- Point #1: This isn’t just a question of controlling costs; the company needs to build the infrastructure to succeed.
- If there isn’t someone on the team in a position of authority, who the CEO can trust completely, hire this person. The CEO can’t control all risks.
- While the company has shrunk over the last two years, it is still a substantial company and needs professional management. To grow effectively, professionals are required in key leadership positions. If necessary, hire experienced outside talent
- Look for teachable moments as challenges arrive. The CEO, instead of solving a problem, should work with employees and mentor them through discovering and implementing solutions.
- How to communicate this to current staff?
- Put the story together. Be able to make a clear statement to them, including the current situation and future possibilities for which the company must prepare.
- Generate charts and metrics to support key points.
- Use senior staff as the mouthpieces to present the story to the rest of the organization. Once they are onboard, have them help craft the message. Don’t underestimate the CEO’s authority. This is business, not a popularity contest.
- Let others make mistakes – it is part of the learning process – no matter how critical the situation.
- Point #2 – Return to the company’s roots.
- The faster everyone accepts that a focused approach is the only way to survive, the faster the company will turn around. Reestablishing company presence in key markets with a new model that speaks to their desires makes a lot of sense.
- Be very clear as to what flat-rate service pricing covers. Include this in the signed customer agreement. Don’t allow costs to creep up or it will kill the profitability of flat rate jobs.
- Create an infrastructure nimble enough to adapt as market conditions change. Identify what really works and focus on this.