Don't assume a crisis will only hurt your company value and your net worth
Even if a crisis, like COVID-19, negatively impacts the revenue, profit and cash flow of your business, don't assume that it still doesn't give you the opportunity to help build your company valuation for the long term. Specifically, building a more effective company organization culture.
A crisis affords your company the air cover to make personnel changes to reduce your cost structure. And if labor cost cutting is needed, then make changes that also help you improve your long term organization culture. Think about your culture today, and if you know that you have toxic employees that are hurting your culture and therefore company value or worth building, use the cost cutting need through the crisis as a time to make needed changes with these particular employees. And it's important to think in the opposite sense, if you know you have positive aspects to your organization culture, ensure that any labor cost cutting is minimal in those areas where you want to nurture and protect your culture. You want to avoid labor cost cutting in a way that eliminates certain employees from your organization that underpin a positive culture.
For legal purposes, you certainly have to develop a labor cost cutting plan that is fair in terms of the employees selected to participate in any downsizing, but as you develop this plan, have your future desired state of your organization culture in mind. Developing your labor RIF during a crisis could be the opportunity you've wanted to protect positive aspects of your culture and accelerate improving your problem areas. Your company culture will be a huge contributor one day to the valuation you might receive from an acquirer. Use the crisis as a time to enable your culture and enable your company value, or company worth as we refer to it!
