For managers from mid class companies who struggle during the pandemic covid-18

1. What are precious lessons gained for middle class companies during covid-19 pandemic?
By: Muhammad Nino Mayvi Dian
As we all know that covid-19 pandemic causes the worst crisis ever in the last 9 decades after the great
depression in 1930. Especially for developing countries, like Indonesia, this crisis gives lot of pressures on
country's annual expenditures. However, these pressures aren’t being coped only by the government,
small and middle class companies are also severely being pressured by this crisis.
At this moment, I’ll only share about lessons learned on the middle class companies, because right now I
manage a middle class company. Also according to my perspective, small and middle class companies are
most likely coping with similar problems during this crisis.
First thing that I've noticed from this crisis was the absence of a business continuity plan (BCP). I and the
management team were never thinking or even discussing about this kind of business continuity plan. We
were only making annual operating plan, cash flow plan, and investment plan. Never had a glimpse in our
mind that the worst thing, such as force majeure event, could be happened in our business. It was
unfortunate for us that none of the management team members knew how to make this BCP, and even
myself, who had more than 10 years managerial experience in several multinational companies, never
had any exposures and hands on experience on what is BCP and how to make one. I only know this BCP
term from my colleagues who work for big companies, such as Unilever, Philip Morris, etc. Thus, we
couldn’t mourn or even worse surrender from this challenge, because there are more than 100 employees
who rely their livelihood by working with us. BCP still needs to be made, there’s no right or wrong in this
kind of situation, because our top priority is our company’s survival from this crisis. Learning by doing,
make and do the plan at the same time, far from perfect, after all there will be no results without efforts,
only one thing in our mind, survive. You can find lot of references about BCPs on the internet, as long as
you have the eagerness to learn, it won’t be difficult to find one BCP example that will 70%-90% suitable
into your company (don’t expect you will find 100% suitability, because you still need to improvise).
Second thing that I’ve learned was the importance of good cash flow plan which is able to cope with crisis
condition. According to my current experience, a good cash flow plan is a plan that prioritizes the
appropriate balance between cash inflow and outflow. The key to make this balance is managing properly
your receivables, ensure that your days of outstanding invoice are at the lowest level. Why? Because
during the crisis, your company will need more cash, good income statement doesn’t guarantee that your
cash in hand is at the reasonable level to cope with the crisis. Don’t bother to rearrange your income
statement, because during the crisis your profitability will probably hit the lowest level in your company’s
history. One thing that also important is be a wise spender, you should always have thorough judgment
before spending your company’s cash. Be strict with your cashflow plan, avoid unnecessary expenses.
Thirdly, crisis doesn’t mean that your company should stop investing to develop the business, especially
if your company’s business has vital roles during the crisis, such as banking, grocery retailers, security
services, etc. However, you need to be smart when finding the capital source for investing. The key point
is avoid to loan from financial institution. No need to push yourself too much when it comes for investing
during crisis, taking loan from financial institution is just too much, because you oblige to pay monthly
interest and installment. During the uncertainty period, paying fixed amount of monthly interest and
installment will become huge burdens for your company’s cashflow. Believe me, it won’t be nice if your
company unfortunately needs to have credit restructuring, the process that you have to deal will make
you exhausted and drained your energy, I feel it until now. So, what are the options? First, you can use
your company’s last year retained earnings as your investment source, and second, you can ask for a

2. special shareholders meeting to discuss whether shareholders could give additional capital without taking
loans from financial institutions. However, if both ways above don’t work, postpone your company’s
investment plan, focus more to strengthen your company’s cashflow.
Fourthly, ensure all your employees aware and know about your company’s BCP, cashflow plan, and
investment plan. Be open to them, it doesn’t mean you need to be open in everything, but key points of
your plans should be known by your employees. Why it is important? During the crisis, it’s a highly
sensitive period, because layoffs would be common thing happens. You need to gain your employees trust
by ensuring that all your plans are solely for the sake of company interest to survive during the crisis. No
hidden intention to avoid paying employee’s rights. After all, your employees livelihood continuation
depends on your company’s abilities to survive during the crisis. I believe that if management and
employees have the same goal, the company will survive throughout the crisis.
All four lessons above are based on our current experience. I share and do the corporate actions based
on these lessons until today. Almost 2 months now, this covid-19 pandemic occurs in Indonesia, our
company’s has lost some significant amounts of monthly revenues, however until now, no layoffs for all
employees, only small portions of salary deductions. At least, I believe that our company would be able
to survive with this condition until 3rd quarter of 2020, always pray and hope that this crisis will be over
as soon as possible .