During April and May many companies have Annual Meetings which allows shareholders to hear from the senior leadership of the company, vote for the financials of the past year, select an auditor, and any other items management would like to see. Very often if the company made money, shareholders vote with management. One of the reasons shareholders often vote with management is does the company meet expectations or exceed them? With improvement in AI and computing, some companies forecast should be very easy. Others reasonably easy and most given a reasonable stable government and economy, the numbers should come in what Wall Street expects. The last part is what is not happening with President Trump and deciding to throw out global supply systems, to replace it with??

In an article by Chris Hannay of Reuters, companies such as Delta Air Lines Inc and Walmart Inc said they could not offer financial forecasts as they navigate through the fog of a trade war.

Delta CEO Ed Bastian said given the lack of economic clarity, it is premature at this time to provide an updated full-year outlook.

Walmart CEO Doug McMillon said it could not provide guidance on operating income for the quarter because of factors that included tariffs. The situation was fluid. Mr. McMillon said that 2/3s of what Walmart sells is made, grown or assembled in the US. Although assembled often means the parts come from outside the US. In the meantime, Walmart will take it one day at a time.

A side note is in the retail world, advertising campaigns are planned 6 months plus in advance, and ordering is done 3 weeks in advance. If sales go better than expected it is relatively easy to get more stuff. Not being able to plan, says a great deal or they will tend to order the minimum.

Another factor in the retail world is Goldman Sachs has a forecast there was a 60% chance that tariffs would drive the US economy into negative territory. After the tariffs were paused, Goldman decreased it to 45%. One must remember, 60% of the economy is based on consumer spending, throwing uncertainity means more people save or cut back or do less shopping and more browsing which tends to be a self-fulling prophecy that negative growth will happen.

Linking to dividend paying stocks, ideally these are companies that have either a near monopoly or are so ingrained into the economy or law that consumers will continue to buy their products. For example, the law says to drive a car you need to have insurance. Some insurance companies are better than others. Utilities are a near monopoly, there is always alternatives, but most people use the local utility. Ideally, many of your investments have the stability that allows for uncertainty even if comes from the White House.

There are more questions than answers, till the next time – to raising questions.

For most of us, thankfully we are not involved directly in armed conflict, but what happens when there is one in a country. From the outside looking in, we know there will mass migration to safe areas of the world, ideally all those leaving have some form of money to ensure travel costs. After the mass migrations which will make headlines, the businesses that are left, how do they function? Louai Al Roumani, Former CFO of BBSF Bank in Syria has written a book about how to function, which can be used for contingency planning if fortunately you are not involved in armed conflict. The book is titled Lessons from a Warzone, Penguin Business, London, UK, 2020.

Chapter 10 Align motivation and never become lax

Most of the book has been about the company’s perspective and how to keep the company in operations through the crisis. The greatest resource of the company is people. The greatest source of issues inside the bank is people. Therefore, it is important you maintain standards of the company and do not allow people to become lax in their attitudes and judgements towards the rules. There will a thousand good reasons to become more lax, but being lax never helps to reinforce adherence to the laws and create a more effective system.

A crisis stretches both people and organizations. It reveals weaknesses and vulnerabilities. How you react, when enter a confrontation, imparts a signal to people about the extent to which you will budge to pressure. People will try, some will succeed but it sends a signal to others, do not bulge to pressure. Remember to align your goals in good and bad times.

The easiest thing to do at all times, when times go wrong, is to blame external factors beyond your control. In BBSF’s case it was the war. Why did you not meet your targets – the war.

The solution is effective communication of your strategic objectives. A handful of KPI or Key Performance Indicators are developed and explained as to their importance.

Linking to dividend paying stocks, in North America we generally think about external events such as weather or medical conditions as the big factor. Then President Trump threw the supply chain into chaos, because he could so you never know.

There are more questions than answers, till the next time – to raising questions.

For most of us, thankfully we are not involved directly in armed conflict, but what happens when there is one in a country. From the outside looking in, we know there will mass migration to safe areas of the world, ideally all those leaving have some form of money to ensure travel costs. After the mass migrations which will make headlines, the businesses that are left, how do they function? Louai Al Roumani, Former CFO of BBSF Bank in Syria has written a book about how to function, which can be used for contingency planning if fortunately you are not involved in armed conflict. The book is titled Lessons from a Warzone, Penguin Business, London, UK, 2020.

Chapter 9 Don’t overplan

War or no war, it was really a no-brainer at BBSF, budgets and plans still needed to be done. One of the plans to be done is the Business Continuity Plan (BCP). The plan highlights business processes across all operating cycles and categorizing them by several factors including their criticality and the impact they had on different areas.

The project defined the highly critical operating functions that needed to be undertaken in case of disruption and itemized all the resources required. We reviewed and identified every single activity that took place on several areas.

We did multiple scenarios and tested them several times on different sites. The odd thing what activated it – a snow storm. In times of crisis, it is likely to become more and more difficult to forecast all possible triggers, and any attempt to do so might be both overwhelming and futile. We found it far more effective to focus on assessing the impact of the disruption and train the staff to take the initiative, depending on the actual circumstances.

in planning for the BCP, there is a tendency to rely on the numbers. The numbers do not lie, they are what they are. A possible better approach is The Crisis Planning Model

You always need a plan.

Always focus on the vision and your ultimate goal, but have flexibility in your operating plans. The spirit of the plan should be focused on fulfilling the evolving Critical Success Factors (CSF). What is normal is to change your tactics and be flexible in them to meet the constant vision.

Focus on the long-term

Shock your systems

Be open to creating a strategic rift

Become better at assessing change

Situational leadership approach

Have backups

Linking to dividend paying stocks, you have heard all the cliches – by the numbers, the numbers tell the story, and then comes a crisis and the numbers do not make sense for a time. If you never practice some flexibly, it will be a shock to the system. You will be paralyzed for a brief period of time. We all know it happens, but not on my watch, it happens on everyone’s watch.

There are more questions than answers, till the next time – to raising questions.

For most of us, thankfully we are not involved directly in armed conflict, but what happens when there is one in a country. From the outside looking in, we know there will mass migration to safe areas of the world, ideally all those leaving have some form of money to ensure travel costs. After the mass migrations which will make headlines, the businesses that are left, how do they function? Louai Al Roumani, Former CFO of BBSF Bank in Syria has written a book about how to function, which can be used for contingency planning if fortunately you are not involved in armed conflict. The book is titled Lessons from a Warzone, Penguin Business, London, UK, 2020.

Chapter 8 Do more and speak less

As actions become harder, talk becomes cheaper. The author relays a story about a year into the war, one of the principal owner of BBSF decided to set away. What to do? the Board decided to stay in business, but actions speak louder than words. You can say what you want, but people will judge you be what you do or talk is cheap. The company said we were staying and the bank did the same thing from before – pile up the bank notes in front windows.

in crisis management, the principle is that relaying the right information at the right time is always recommended. When announcing a crisis, stating the company’s perspective on it and how it will deal with it usually constitutes the first thing to do. Ultimately it is your actions, not words that matter.

Linking to dividend paying stocks, actions speak louder than words and making a profit over the years is a great thing to be able to do and pay dividends. How it makes it profits is the reason why you invest.

There are more questions than answers, till the next time – to raising questions.

For most of us, thankfully we are not involved directly in armed conflict, but what happens when there is one in a country. From the outside looking in, we know there will mass migration to safe areas of the world, ideally all those leaving have some form of money to ensure travel costs. After the mass migrations which will make headlines, the businesses that are left, how do they function? Louai Al Roumani, Former CFO of BBSF Bank in Syria has written a book about how to function, which can be used for contingency planning if fortunately you are not involved in armed conflict. The book is titled Lessons from a Warzone, Penguin Business, London, UK, 2020.

Chapter 7 Cut costs, but don’t slash morale

When an organization faces a crisis that is likely to last for some time, increasing strategic, operational and tactical difficulties will likely lead to some extent of financial distress. Managers are typically drawn to slashing costs – it is easy to do, it leads to an easily measurable outcome and it is a convenient route to fulfil budget profitability targets.

We operate in an environment where decisions need to fulfil the criteria of satisfying SMART targets – Specific, Measurable, Attainable, Relevant and Time-based.

Mr. Roumani suggests asks how cutting costs how it affects your staff morale and your organizational core values. His 4 principles are:

Know your cost-appetite culture – cutting costs is more of an art than a science. Each organization has a different culture when it comes to cost appetite and you need to ensure that your actions are aligned with this culture.

Never save costs by compromising on your staff’s sensory needs or they will not take the extra leap for you when you need them to in difficult times.

Understand your cost drivers – make a list of all your expenses. Categorize them into broader groups, what you are trying to determine what drives each of these expenses. The next step is divided into contractual and non-contractual obligations. This way you will know which is easier to cut.

Some of the expenses need some short term capital increase for longer term cost savings. For example automated temperature controls. No one working at night, lower temperatures, equals savings.

Motivate your good staff, lay off your bad ones – use methods such as etraining to engage your workers, If they do it, they are keepers. In reality, just about everyone knows who the bad ones are even the janitor, nobody asks them.

Keep some leeway – do not operate on the bare miniumum – the idea is to continue operating and being sustainable in the operations. In a crisis, people go for lots of reasons, which is why you do not want to operate short handed for vey long.

Linking to dividend paying stocks, as much as we would like, in investing in a company the company does well, the stock goes up and the dividend is paid and often increased. The reality is overtime stock prices often fluctuate and you will read how your company cuts costs. Do you like it?

There are more questions than answers, till the next time – to raising questions.

For most of us, thankfully we are not involved directly in armed conflict, but what happens when there is one in a country. From the outside looking in, we know there will mass migration to safe areas of the world, ideally all those leaving have some form of money to ensure travel costs. After the mass migrations which will make headlines, the businesses that are left, how do they function? Louai Al Roumani, Former CFO of BBSF Bank in Syria has written a book about how to function, which can be used for contingency planning if fortunately you are not involved in armed conflict. The book is titled Lessons from a Warzone, Penguin Business, London, UK, 2020.

Chapter 6 Change, but don’t rush to change everything

Mr. Roumani at BBSF over the course of 8 years of employment had 6 different CEOs. Every newcomer, particularly at the CEO level wishes to relay now this is how things should be done or change is about. A good leader has the ability to lead a change process.

An effective leader in an crisis recognizes the unhealthy triggers of change and is capable of identifying areas that need transformation, but does not uproot core values. They usually get 4 things correct

Being mindful of opposing forces in a changing context – in a crisis there are opposing forces at play. Change induces stress and people want some form of stability. An example is asset-liability meetings were boring before the war because the levels were comfortable. When the war started and continued the meetings could last a couple of hours due to different viewpoints.

Rewiring their thinking: from temporary and permanent changes to changes mapped against CSFs – in normal times temporary measures are done for temporary changes and permanent measures for permanent challenges. In a crisis, it is hard to draw the line between the 2. Therefore it is better to identify and changing criticality of the CSFs and can you still meet them.

Having a strong sense of the organization’s core values – core values are the unwritten rules that an organization is run by. These procedures were started long ago, for good reasons, a crisis happens and someone wants to change it.

Always asking the 5 whys – a successful leader in a crisis asks the 5 whys behind every change. Ask why 5 times to identify the true reason for the change. This method helps people become aware of the structured approach to assessing the need for change, and will be more diligent in making requests for change.

The 5 outcomes of change

Good outcomes

change to less – there was a desire to triple check everything, sounds great. Reality is that the other 2 relied on the someone else doing most of the work. Better ensure one robust control layer or sometimes less is more.

another example how to find a ghost worker. People cheat the system, but there are tell tale signs for example: a manager with a 300 employees has discretion and people were put on payroll. Trying to vertify was frustrating, however everyone takes holidays. Vertifying those that do not take holidays led to the fraud.

change to more – creative accounting is bad. Creative finance is good. Having the right information at the right time is always vital.

an example is all banks have provisions for their doubtful debt. It is usually between 0 and 2%. In the war the ratio went up to 40%. What to do? What can you control? how systematic this figure is to everyone including your competitors? if you adjust the ratios, with explanations, the Board will accept it.

remain the same – sometimes the answer is no change needs to be done. For example the change may not be a CSF and better left alone for now.

Bad outcomes

remain passive – do not do anything this means not doing the assessments to even consider changing, just try to wait it out.

change things half-heartly -f if change is going to happen, then all in, not at the margins.

Linking to dividend paying stocks, a constant in life is change and how an organization deals with it. If you examine the biggest companies from 20 years ago, they have changed. If companies are not dealing with change and how to adjust to it, find an alternative.

There are more questions than answers, till the next time – to raising questions.

For most of us, thankfully we are not involved directly in armed conflict, but what happens when there is one in a country. From the outside looking in, we know there will mass migration to safe areas of the world, ideally all those leaving have some form of money to ensure travel costs. After the mass migrations which will make headlines, the businesses that are left, how do they function? Louai Al Roumani, Former CFO of BBSF Bank in Syria has written a book about how to function, which can be used for contingency planning if fortunately you are not involved in armed conflict. The book is titled Lessons from a Warzone, Penguin Business, London, UK, 2020.

Chapter 5 Be a situational leader

Leadership in all times, people need clarity, purpose and direction.

There are two distinctive leadership styles – the autocratic (leader makes the decision himself) and the participatory (involving as many people as possible) and everything in between. There are advantages and disadvantages to both. In a crisis there tends to more autocratic thinking. What is needed is more situational leadership.

Strategic, yet always on the ground – ask the front line people what they see and need. You make policy, but does it make sense when it is implemented?

Persistent, yet knowing when to stop digging – in a crisis, you will likely find you are in a hole you dug yourself, you need to stop digging. How do you tolerate mistakes and learning from them.

Focused, but not yet restrained – in every crisis, things happen all at once. Most of them will be things you never really worried about before, now they are a problem. The challenge is always keeping an eye on the strategic focus and vision.

Adaptive, yet not submissive in stakeholder management – when a crisis unfolds, people’s needs change. The change will be more demanding, not less. Know your priorities and your readily available tools, as well as the time that you have to commit to changing needs. Strong empathy is needed.

Leading change, but not changing everything. see Chapter 6

Linking to dividend paying stocks, everyone pays attention to the actions of the leader. Sometimes as an investor, you love the leader and that is partly why you invested in the company. Sometimes you wonder, as an investor you should pay attention to leadership.

There are more questions than answers, till the next time – to raising questions.

For most of us, thankfully we are not involved directly in armed conflict, but what happens when there is one in a country. From the outside looking in, we know there will mass migration to safe areas of the world, ideally all those leaving have some form of money to ensure travel costs. After the mass migrations which will make headlines, the businesses that are left, how do they function? Louai Al Roumani, Former CFO of BBSF Bank in Syria has written a book about how to function, which can be used for contingency planning if fortunately you are not involved in armed conflict. The book is titled Lessons from a Warzone, Penguin Business, London, UK, 2020.

Chapter 4 – Now could be the best time to create a strategic rift

No one likes a crisis, expects a crisis, looks forward to a crisis and life is better if it does not happen. However, crisis do happen and how you react is key. The first aspect is to know your CSF or Critical Success Factors and ensure they stay in place.

BBSF was similar to most banks in operation, everyone had the same goal to be liquid and meet the government regulations. In normal times, it is not hard. When there is a crisis or a series of events that cascade through the country, suddenly a routine aspect can be a competitive advantage.

Mr. Roumani studied for his MBA at Harvard and was exposed to Michael Porter’s 5 Forces Model and he likes it. Competitive Rivalry is impacted by Threat of New Entry, Buyer Power, Threat of Substitution and Supplier Power.

Competitive Rivalry

What cost does my client incur to switch from my product/service to another? If low, how can I make in higher?

In banking, the switching cost for depositors is almost nil. The way a bank makes it more difficult is add products and services. If they are reasonably happy, they are more likely to be anchored.

In banking, there is very little differentiation when it comes to loans. The money comes from Bank A or B and the rate is the only determinant for differentiation. The CSF is to price competitively. During the crisis, the liquidity of banks was different. Analyzing other banks for liquidity, made rate setting a more important CSF.

Threat of New Entry

In every stable economy, there are always plans to add more competition. In times of conflict, those who wanted to come into the market hold their plans.

What is different can be technology. Prior to the conflict, the main servers would be located centrally because it made logical sense to do so. In Syria the center of the country was where the fighting started, how does the company change to a star system to allow greater independence in the network? For a bank, do the ATMs work?

Supplier Power

Who are your main suppliers? Who is at risk of going out of business? Do you have alternative suppliers? At BSF, they stockpiled things banks used such as ATM paper rolls, printer ink. During a war, the basics of water and diesel are more important, can the business be supplied?

Threat of Substitution

What products/services were usually substituted for yours before the crisis? are there emerging substitutes in the market? One area, BBSF saw as an opportunity, when people moved their money from the bank, where was it going? Some went into gold, BBSF offered safe deposit boxes.

Buyer Power

How powerful is your client in deciding to choose your product over another? Has the crisis changed this? Is the buyer more in demand?

What to do with the competitive analysis: Focus on what matters

In times of crisis, having a clear vision of what your company aspires to achieve is fundamental; it provides clarity, purpose and direction. In unsettled times, the room for misunderstanding, miscommunication and disorientation grows.

A corporate strategy relates to the overall direction of the company. A company should have corporate strategic objectives it wishes to fulfill. At BBSF, the vision is to be the number one bank of all Syrians. One of the strategic objectives was to be a great employer.

Achieving this requires several tactics. A one page strategy map is laid out. The next aspect is a SWOT or Strentgths, Weaknesses, Opportunities, Threats is clearly laid out.

Your vision should be one sentence. Keep it simple.

The strategic objectives should in principle work towards satisfying the vision. The tactics explain the how to element. They help explain the actions to be taken. No more than 5 tactics for each strategic objectives.

Finally, a set of 5 overriding values and business principles that govern the overall ethics and code of conduct expected from your company. Setting the ethical compass is important.

Linking to dividend paying stocks, when you buy these types of companies, it should be easy to see the vision and values of the company. There are many voices and consultants to ensure they exist and the company lives the vision. As an investor, if you agree you can invest your money into the company, understanding you want to see a profit to pay dividends. The company can do other things, but as an investor you have your priorities.

There are more questions than answers, till the next time – to raising questions.

For most of us, thankfully we are not involved directly in armed conflict, but what happens when there is one in a country. From the outside looking in, we know there will mass migration to safe areas of the world, ideally all those leaving have some form of money to ensure travel costs. After the mass migrations which will make headlines, the businesses that are left, how do they function? Louai Al Roumani, Former CFO of BBSF Bank in Syria has written a book about how to function, which can be used for contingency planning if fortunately you are not involved in armed conflict. The book is titled Lessons from a Warzone, Penguin Business, London, UK, 2020.

Chapter 3: Chase opportunities relentlessly and don’t die until death comes to you

the souq must go on. The souq is an outdoor market mentioned in the bible that has been operating for generations. When an operation exists for generations it has gone through every economic up and down the world has endeavored or the souq must go on. There are lessons in how merchants treat customers.

Mr. Roumani worked for a bank. In times of crisis, people want their money back. When more and more people have access to internet banking, it will change how they do it, but a decade ago, most people went to the bank. What should BBSF do? Similar to all banks, there is a desire to avoid a rush to withdraw funds, partly because banks cash is used in loans, there is not a 100% cash deposits in the bank, it is typically less than 5%. What to do? limit withdraws? raise the deposit rate? BBSF decided to stack banknotes next to the glass counters so everyone could see they had enough money. For any client to withdraw 1 million Syrian pounds, they could. The approach, BBSF said was we understood the motives, they are same as ours, but after withdrawing the funds, we made sure to say if and when you feel safer, you can deposit back anytime.

We learned that that to put the customers at the forefront of everything was fundamental to us. After that it was easier to search for opportunities. An opportunity was in many countries, there are people working outside of the country, but send money back to their families. In conflicts, the price of real estate falls because of lack of demand. However, those working outside the country may be able to afford the mortgages because prices have decreased and they want to invest in the country. BBSF offered housing loans and some people took out loans.

In most businesses, there is a Pareto rule which states that roughly 80% of the effects stem from 20% of the causes. Transferring this principle to customers, 20% of your clients would give you 80% of your revenue.  

In adverse times, the rule changes to 95/5 or 5% of your clients would generate 95% of your revenue. 

This implies you have to know which ones are successful and be flexible with your pricing to keep them satisfied in the short-term knowing in the long term the benefit of a long-term strategic partnership is possible.  

In addition to maintaining profitable customers, you need the right information systems that will enable you to break down accurately the profitability per channel, platform and customer.  

Linking to dividend paying stocks, there is opportunities somewhere and with the recurring dividends you have the ability to search and locate the opportunities. Once you see them, the world is better.  

There are more questions than answers, till the next time – to raising questions.