Written by Larry Prince, CEO of PrinceLeadership^TM. A version of this article originally appeared in New Jersey Business magazine. 

The COVID-19 crisis is testing our leadership mettle in ways we have never experienced. We’re pressed to confront harsh business realities—how to keep the doors open, how to pay the bills, how to address staffing issues. But most importantly, how to make tough business decisions tempered with compassion for our people.

So, let’s take a look at key considerations when leading our business with our head and leading our people with our heart.

Our People

The journey forward begins by recognizing that our employees are our lifeline.

Offer them the rationale for our decisions. Remain transparent about our plans for the company amd solicit their input and feedback, ensuring they’re clear about their expectations. These actions may mean the difference between failure and survival—and between losing our most talented people or having them stay on board.

Observe how people are reacting to the crisis. Reactions may fall anywhere on a continuum from anger to frustration, to anxiety to acceptance, to hopefulness.

If you have communicated your intentions and had a clear dialog with them, in the best-case scenario, they’ll react by remaining engaged and possibly even inspired by the strength of your leadership and the care you display.

Like you, employees have financial obligations and families to care for, during both the best of times and the worst of times. They face the same uncertainties as you do.

At the same time as you make the decisions that will affect both the short term and long term health of your company, you need to stop and consider your own emotional health, as well.

Consider the effects of the crisis on your relationships with your family, friends, management and employees. Find a place outside the office and think through how you will make the necessary adjustments. Most important, don’t go it alone. Talk to a trusted advisor—a mentor, another business owner or a business consultant.

Protecting the Business

Here is a logical process that I employ with clients to help them think through their financial challenges:

First, evaluate your cash position and determine how much cash you have on hand and how much you can reasonably expect to receive. Next, determine what you need, to break even.

Is there a gap between projected revenue and projected expenses? If so, quantify that amount.

Then, discuss with your team how to close that gap. This is where the tough decisions come in, regarding what staff to keep on board through the crisis, whom to cut and perhaps whom to furlough. In addition, examine all nonessential expenses and decide what your business can live without.

Finally, engage in conversations with suppliers, vendors and landlord, as well as assess any and all financing options, government programs and loans.

Applying this process, the owner of a retail store developed two-week projections for cash flow and expected revenue. This will help him manage staffing and expense decisions within short time frames; making tough choices seem workable.

Now apply the same disciplined approach to evaluating your market, customer needs, sales messaging and operations. Evaluate how the crisis has affected the markets you conduct business in. What issues are your customers grappling with? How can you help them? Ask how disruptions in the supply chain affect your company.

Next, what adjustments does your company need to make with your sales and marketing messages? And, let’s not forget streamlining internal workflow processes and operations, especially in light of those employees working remotely or in the absence of employees who have been cut or furloughed.

By all means, evaluate the effect of your decisions on the future of your company. Consider how employee and resource cuts will affect your company’s potential growth, when the crisis passes. Remain transparent and honest with employees about the company’s financial position. Involving them in the problem solving process will help to relieve some of their anxiety and provide them with a greater sense of control, at work.

The sum of these considerations and actions will instill a greater sense of hope, trust and confidence with our employees—whom we need now, more than ever.

Larry Prince is the CEO of PrinceLeadership, a New Jersey-based business consultancy that works with middle market companies to create growth and sustainability. You can reach him by emailing: [email protected].