By Renato Seraphim
Brazilian agriculture currently feeds 1.5 billion people worldwide. This condition of “breadbasket of the world” enabled the practice of more accessible prices to consumers, increased income and job creation and boosted the participation of agriculture in the Gross Domestic Product, Todays agribusiness accounting for 21.1% of the Brazilian GDP and we are fully convinced of our role in the economy and that regardless of the government, we must once again be the protagonists of that moment.
The economic moment foresees serious impacts for the country and especially for companies, whether large or small. More or less we will all be affected by the post-crisis moments. It is in the spirit of the community that the strength to recover the damage is born, as well as the sense of unity, confident that each one needs and must contribute to the whole.
Knowing that the situation we are facing is one of the most serious that I have gone through in my entire professional life and despite having gone through several other crises, I believe that none of us have experienced such an experience, and this will create major disturbances in itself, and regardless of the severity of the virus spreading, we need to share some actions.
For me 6 reflections that I am trying to build with me and my team and maybe I can help you in this difficult time and will always test our leadership
1. Prepare for the worst and be grateful if it doesn't. At this moment, we cannot wait and see, and believe that it is only an epidemic that we have been through in previous years.
• Implement the most well-known guidelines available to employees and customers: Monitor suspected cases of employees and relatives. Learn from what other companies are doing - and continue to adjust - Map employees in a Risk group and work so that they stay at home safely and with all our assistance.
• Communication with total transparency and sometimes in excess, better to sin by excess than by omission.
• Assist epidemic limitation initiatives in any way possible - Implement Home Offices and shifts, limit supplier visits / Make billing shifts for customers. We know that our client will not stop planting, and pests, disease, plant metabolism will also not stop, and the farmer will need our inputs to produce - So we have to be available all the time.
2. We created a Covid-19 crisis committee under our leadership, fully dedicated, focused on it all day, every day and clearly communicating the actions and monitored KPIs
3. There is a high probability of a substantial revenue disruption, leading to a potential liquidity crisis for many companies,
• Plan urgent cost cuts to save: Cost savings without regrets
• Freezing of all expenses (replacements of employees, new hires, Expansion projects and total attention to working capital.
• Contrary to what everyone preaches, we do not want to delay payment to our suppliers, many of them are in a worse situation than ours. The famous WIN-WIN here is not strategy but respect and credibility.
• Define aggressive cost actions, initiated by more extreme revenue cut scenarios
• This is (can be) about saving the company and jobs - no idea is too extreme and we call on all employees to think the same and offer us ideas, amazing how collaborative people are.
4. The recovery may not be fast; we have to plan the lowest revenue and consequently be aware of expenses. We don't know if the revenue will come, but the expense does.
• Total focus on where we need to be most efficient. We will take this opportunity to build a lighter company, conserve cash levels and reduce defaults.
5. Our Employees and our customers are probably experiencing fear or panic, so communication, transparency and serenity will be key. Our resilience will be tested every moment
• Have a customer-centric view; how will we build trust, loyalty and market share during and beyond this crisis?
• Monitor suspected and confirmed cases in our clients and be supportive
• Offer campaign with products we have in stock (Possibility of cash sales, the farmer comes from a good and profitable season and we can offer good deals for them and for us)
• Plan product deliveries avoiding losses of the off-season due to logistical or supply problems that may occur.
• Assess the level of daily delivery and sales to observe the level of business continuity.
6. Customers will change some behaviors and we must be attentive to the movements of extension
• Monitor our competitors. Agro does not stop and we need to be ready for the current moment and for the resumption. Avoid distractions
• Plan and take advantage of a radical change in customer behavior - Especially digital
• Assess the % of order in Barter - Use this natural hedging to protect the organization
• Monitor the number of visits we are making to customers to monitor the level of activity, I know that not all sectors can do this, but we can visit crops and send information via WhatsApp or email, our farmer is one of the most digitalized of the world
• Measure fuel expenditure compared to previous weeks to assess the level of activity
Finally, we must be ahead of all actions, showing serenity and clear communication. Difficult times demand that we take difficult measures and that our leadership is calm and focused on deliveries.
Trust your team and let the leadership emerge, incredible the number of leaders that we have in the organization that were hidden and at that moment take the lead, perhaps this is the most pleasant lesson I am having.
I hope your suggestions and that we stop being in this insane disunity, wait for actions from governments and third parties and that we assume our role as protagonists.The Agro does not stop ...