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Stewardship

stew·ard·ship

/ˈst(y)o͞oərdˌSHip/

Noun

The careful and responsible management of something entrusted to one’s care.

In a ‘normal’ world, there are so many areas of our personal and professional lives that require stewardship. In this current operating environment, we are seeing a heightened level of need for this mindset.

Personally, many are navigating the care of a variety of emotions, with a variety of family members, in their homes. You may be managing your child’s education as an interim teacher. You may be carefully managing a household budget after a layoff. As a community, physical distancing is intended to avoid overburdening healthcare resources. We are responsibly managing our behavior and subsequent impacts on our vulnerable populations.  So, there is all of that. And that’s a lot.

Enough to address in its own post.

Professionally, we have an unexpected work from home experiment occurring and, within the same company, we may also have certain staff that cannot work from home, leaving disjointed communications and a loss of shared daily experience. We are caring for assets like empty, or mostly empty, facilities that still receive mail, have mechanical breakdowns, and may have security issues. We may have stranded inventory caught up somewhere along a supply chain that needs responsible managing. Maybe we were in the middle of a product launch and now need to carefully park the work to date with the least amount of damage upon restart. So, there is all of that. And that’s a lot.

In recent conversations (and webinars, thank you internet) with a few CEOs it really hit home how many decisions they are making right now, quickly, with little information or measures of certainty. That must be exhausting. Talk about decision fatigue. And, it occurred to me, if trust exists, the CEOs aren’t alone, they have management teams. And the management teams aren’t alone, they have lateral peers and may even have their own teams. And many of the individual team members aren’t alone, they have coworkers (excepting, of course, job losses which equate to teams with severe headcount reductions – I am deeply sorry to all experiencing those issues). Taking that a step further, it reminded me that none of us are alone and, no matter the position within the organization, we are all leaders, more so now than ever. Further, I believe a marker of leadership is demonstrating stewardship, the careful and responsible management of something entrusted to one’s care.

In my world of finance and business operations, I spend a lot of time thinking about people, processes and the numbers. Here’s what I’m wondering – with this crush of new data and slew of distractions, can we, no matter what our functional roles may be, ease decision fatigue for all by simplifying our thinking into buckets of people, processes, and the numbers while viewing them through the lens of stewardship?

Here’s what that might look like for the People bucket:

  • We can all have open ears and practice active listening. Have you checked in with that coworker that may be homeschooling, juggling project initiatives and who also has a parent in a long-term care facility that is now severely isolated? Maybe they need to vent a bit, express fear, or just tell you about the antics of their dogs during their last virtual meeting. Are they sleeping? Remind them of self-care tactics. Text them. Better yet, call them. Say hi.
  • We can all remind each other of the values and guiding principles of the organization and facilitate decision making by staying true to that north star. Speak up, if needed. Be that voice in the room (the virtual room) to remind everyone to stay true to what matters. Sometimes you need to be the contrarian to keep people headed in the right direction.
  • Is there a colleague that is burning it at both ends in a critical company operation? Can someone spell them? Is this the right time for a junior member to be allowed to take on more and integrate other talent to a task? Ideally, HR takes this on, but they may need to be alerted to an issue or concern.
  • Are you playing to individual strengths on teams? Some people are built for crises, others are not. That’s ok and definitely something you should know.
  • Don’t forget suppliers, vendors, customers, partners. People. I talked with a CEO who, in the face of reduced demand, decided he still needed to move ahead with a large supplier order because of the ripple effect on the partnering company if he cancelled right now.

Ultimate stewardship question: How do I carefully and responsibly manage the ecosystem of people entrusted to my care? Answer: Communicate, be transparent, show you care, and look to values and guiding principles.

Processes Bucket:

  • Really understand the value drivers in a business. Those operational functions that may be small but have an outsized impact on outcomes. There are a lot of resources online demonstrating how to create a Value Driver Tree. Super useful for focus and the exercise may also shine a light on potential pivot areas. And, again, it doesn’t matter where you are in an organization. There is something you do that ultimately touches a customer (your customer may be internal). Think about how the pieces fit.
  • Use time/self-management tools like an Eisenhower Matrix to think about the levels of urgency and importance in tasks. You may not be in a position to delegate the non-important work, but maybe you can propose an extension of time, or an alternative way to complete the task, or maybe the task needs a rescope. Mostly, think about what is important to accomplish near term and try to mitigate fire-fighting where you can.
  • Consider processes and flows (maybe in conjunction with a value driver analysis) openly and allow team members’ thoughts and ideas to surface on innovation or improvement. Particularly on those things that move the needle. Once you put a call out, you may hear from that oh-so-quiet Customer Success Associate on long-held thoughts about a handoff process from Sales that isn’t serving anyone, least of all the customer. Identify bottlenecks for operations that are capacity constrained – don’t bother with creating idle time for resources that don’t have demand.
  • Get rid of vanity metrics. A vanity metric is one that moves, but you don’t know if that movement means positive outcomes for the business. For example, eyeballs and page views may have been tracked prior to the pandemic, closed customers is the meaningful metric to track now. Remove the noise. Active users and retention may matter more than new sign-ups for trials that expire in 30 days (people at home, on the internet, hitting subscribe).

Ultimate stewardship question: How do I carefully and responsibly manage the organizational processes entrusted to my care? Answer: Think about ways to create value for customers (internal and external) through innovation and eliminating waste in systems. Protect capacity constrained resources.

The Numbers Bucket:

  • Right now, someone in the organization is thinking about cash flow. Just because you may not be in that function, it doesn’t mean you don’t participate in cash inflow and outflow activities. Is there an operating expense you can help the firm avoid because you have a better way of doing something (maybe it’s combining/sharing platform tools amongst departments, or reviewing software seats to reduce for changes in headcount)?
  • If you are in Finance and Accounting, create a value driver tree similar to the one discussed above, but use it to track major spend categories (for most companies wages, rent, and travel). Make those expenses visible by including them on a dashboard. Again, focus on costs that move the needle – this time impacting EBITDA and cash balance. If you are in a department outside of F & A, try to provide as much updated budget and forward-looking information as you can to this exercise.
  • Consider discretionary spend. Managing cash doesn’t mean all discretionary expenses are eliminated (although there should be an approach similar to Zero Based Budgeting to justify line items), but it does mean thinking about runway (the cash needed to sustain) versus investment. An easy response is to cut marketing spend. I’ve talked to CEOs who are doubling down on investments in Sales and Marketing to accelerate out of the curve. These will continue to be critical line items – perceived brand value, differentiation, and closed customers lead to enterprise value. Know your cohorts and channels, reforecast for runway, and invest when/if you can.
  • Manage working capital – Accounts Receivable, Inventory, and Accounts Payable. It’s likely you will start to see some aging and/or collections issues. Work as a team (F&A and Sales) to communicate each week on accounts. Get creative – maybe a discount on a multi-year contract can be added on the back end of the final year. Manage A/P – consider your responsibility toward your suppliers (they need to collect cash, too), but communicate with those that may be able to offer more favorable terms. Talk with your landlord about abatements or concessions. Add working capital to the expense dashboard for visibility and track weekly.
  • Work with Sales on customer discount options. If the discount is less than your Customer Acquisition Cost, it will cost less to offer than adding a new customer. If you can get it, look for ways to receive pre-payments.
  • Scenarios: you can create many but, at a minimum, worst case (100% expense, reduced sales) and most likely are needed.

Ultimate stewardship question: How do I carefully and responsibly manage the numbers entrusted to my care? Answer: Everyone can rally around the goal of extending the amount of time to sustain in the current operating environment. Treat the firm’s money as if it is your own and understand there is an ecosystem relying on you to make good judgment calls on cash, customers, suppliers, and partners.

If the COVID-19 pandemic is a reset and a time to pause, as many have expressed, I believe we can use this time to integrate stewardship into our daily activities and decisions in ways we may have overlooked before, depending on our place within a company. Take care of the things placed in your hands. They matter.