Ask CEOs what they spend most time doing and the answer is always the same: attending meetings.

Then ask how much time they devote to improving their meeting skills and you’ll get blank looks. We spend most of our time on an activity we were never trained for.

What happens in most meetings? The most senior person — who usually called the meeting — sits at the head of a table. Others drift in. If you’re lucky, you start only 5 or 10 minutes late. The issue, problem or question is identified, and then the ritual begins. Just like some people at school always sat in the front row, some in meetings always speak first — and there will always be the laggards who wait to see how the wind is blowing. And then there are what psychologists call the ‘social loafers’ — the individuals who always turn up and contribute nothing. For half an hour or more, a vast amount of second-guessing occurs, as everyone gropes for the answer that will receive the leader’s blessing.

What’s wrong with this picture? Well, first of all, meetings are expensive. If 6 people are 10 minutes late, the firm’s lost an hour of productive labor. Then, there’s rarely much conflict (a topic for a later post). The range of options proposed tends to be pretty narrow and everyone leaves less energetic than they arrived. But the biggest problem of all is the boss, the person who called the meeting. Because his or her presence alone encourages everyone to compete for attention and approval. Whether we like it or not, leaders set an invisible agenda which implicitly curtails thought and exploration.

I’ve seen two relatively successful attempts at combating this. Donna Shirley, who ran NASA’s only successful mission to Mars, always made a point of not sitting at the head of the table. She wanted to be part of the team, not its focal point. Her highly collaborative style was controversial within NASA — but it worked.

If anyone’s more impressive than Shirley, it may be Mona Eliassen, CEO of the Eliassen Group. Eliassen doesn’t chair her own meetings; she gets a facilitator or someone else in the business to do it. Monthly and quarterly management meetings are run by someone from outside the company who has no power to make the final decision; that’s left up to the team. But more often, because she suffers from chronic fatigue syndrome, she doesn’t turn up at all. She has devoted years to developing her leadership team, and she expects them to be able to find solutions that secure everyone’s support.

One of the mistakes I see leaders make most often (and that I know I’ve been guilty of) is to underestimate the power of one’s own presence. This has nothing to do with charisma. If you’re the most senior person in the room, people will defer to you, and that usually means they’ll think less. So if you have a very hard problem to solve, call a meeting — and don’t turn up. You may be dazzled by the results.

Firstly, get to grips with your exact cash position by way of preparing a cash flow; then to both improve the control of the cash you have as well as identifying opportunities to create or free up more cash.

Understanding your position

A cash flow definition is the forecasting of a business’s real cash inflows and real cash outflows over a period; usually on a weekly basis for a full quarter in a crisis, but sometimes on a daily basis in extreme cases.

You can buy cash flow software, but in practice a basic forecast can usually be prepared using a simple spreadsheet on which you set out in a logical structured way the expected timings of real cash:

- coming into the business from debtor receipts, loans raised or assets sold; and

- going out of the business as payments.

Together these will give you a net cash movement over the period which can be used to walk forward your expected cash position based on the assumptions you have made.

Controlling the cash you have and managing cash flow

You should then actively use your cash flow forecast to control the cash in your business by using it to make decisions on the timings of payments and what commitments you can make to creditors.

In preparing your forecast you should also be using it to examine your business. For example, can you spot places where cash is either leaking out or getting stuck? Is it a particular part of the business or its activities? If so, you should immediately target these areas for specific reviews and remedial action.

At the same time you should centralise and tighten up on your controls over purchasing and making payments by for example, increasing the level of authority required for purchasing or payments or cancel or restricting the use of credit/charge cards so that cash is not wasted or committed outside of your central cash management process.

A cash crisis can arise for a number of reasons from your business’s sales shrinking on one hand, to them growing too fast, and the type of problem will tend to suggest the long term changes that you will need to make in your business.

But whatever the underlying reason for the crisis, once you have taken the steps outlined above to control the cash you have, you should then focus on some or all of the following key areas:

- Get in more cash or credit from elsewhere – what surplus assets could be sold, what loans can be raised?

- Reduce and/or control the cash going out – what you don’t spend you get to keep, so can you agree deals with key suppliers or the Crown over PAYE/NI and/or VAT?

- Reduce the amount of cash you need in order to trade – don’t think of stock and debtors as assets. Instead think of them as cash that has been frozen in place and which you need to get flowing again. If money tied up in high stock or debtor levels are part of the cause of your cash problems consider bringing in a lean process expert to help free this up.

Steps to consider

In the longer term you are also likely to need to improve both profits and management but in the short term can you for example:

- Sell or rent out surplus land and buildings, plant and machinery, or motor vehicles?

- Free up assets that can then be sold by sub-contacting out manufacturing processes?

- Sell and lease back assets to provide cash, or use other asset based financing to borrow more than presently?

- Agree better payment terms with supportive creditors?

- Ask customers whether they would supply free issue materials?

- Seek injections of capital in cash or kind. Would a key supplier be willing to swap some of their debt for equity in the business?

- Improve debtor collection performance?

- Reduce raw material, work in progress or finished goods stock by introducing lean processes?

- Cancel discretionary or non-essential expenditure such as payments of dividends.

- Negotiate scheduled payments of arrears with key creditors (an ‘informal arrangement’) or a time to pay agreement with HM Revenue & Customs on arrears of PAYE/NI or VAT (although a condition of this will always be that future sums due are all paid on the due dates).

Remember, if you do negotiate payment terms with the Crown or suppliers, don’t make arrangements to pay that you cannot stick to.

The steps that will be appropriate will vary widely from business to business so this is by no means a full list and you should always keep in mind that you can also consider using one of the rescue procedures available under the Insolvency Act 1986.

Of course the information contained in an article like this can never be a full statement of the legal position as the relevant laws are complex and liable to change. This article can only therefore be a general guide as to the issues involved and as these can have serious implications you should always seek appropriate professional advice on your own particular circumstances before taking any steps.

This article was written by Mark Blayney an accredited business rescue expert and describes the key steps in dealing with a real cash crisis should it happen.

Global equity investors chose to shrug off average economic data last week, encouraged by signs that tensions over the eurozone debt crisis were easing. The boost came in the form of a statement by European regulators, who said they would reveal details of European bank stress tests by the end of July. A successful Spanish government bond auction mid-week also gave markets a fillip.

Chancellor Merkel was quick to point out that Spain could tap into the €750bn eurozone rescue package confirming “The mechanism can be activated at any time”. Traders also highlighted the fact that it is not just Spain that has been marginalised: short term debt markets are effectively closed to the banks in the peripheral economies of Ireland, Portugal and Greece too.

On the economic front, worries about the global economy resurfaced following weaker than expected data from the US, with the Economic Research Institute saying that its weekly leading index had fallen to a 45-week low of 122.5. Earlier in the week, data released showed US housing starts had dropped unexpectedly sharply in May, down 10%, as the homebuyer tax credit was withdrawn. This came alongside a rise in jobless claims and a fall in factory growth.

By the end of the week, leading indices had all gained, with Europe leading the way and enabling FTSE100 to close at 5,250 – helped by a rally in BP’s shares, who announced, under pressure from the Obama administration, that it would suspend its dividend to the end of the year and set aside an initial $20bn fund to cover the cost of the Gulf oil disaster.

Japan caused some consternation when its new government announced that it was going to renege on its election promises and impose an austerity discipline on its public finances. The country has as we’ve commented before, one of the most strained public balance sheets in the world – even surpassing Greece.

Its new Finance Minister is faced with defusing the country’s 200% ratio of debt to GDP. Previous Finance Ministers have not been known for being tough, so in describing Japan’s situation as “severe” Mr. Noda is setting the scene for unpopular measures.

The timing of Japan’s announcement coincided with a call from President Obama for governments not to cut back on stimulus spending – he said that the highest priority must be to “safeguard and strengthen the global economy”. He also said that “market-determined exchange rates are essential to global economic vitality”.

This was seen by observers as further criticism of China’s policy to refuse to allow the yuan to rise in value, which would most likely act as a demand stimulus for Chinese consumers as imports would be cheaper. However, in a surprise move over the weekend, China sent a signal that it may allow a more flexible exchange rate for its currency by ditching a two-year peg to the dollar.

In the UK public finances in May improved as data showed that the government borrowed less than expected, implying improved tax receipts on the back of a growing economy. Inflation was also down more sharply than expected last month – from 3.7% to 3.4% – prompting economists to suggest the peak in price pressures had passed.

The newly established Office for Budget Responsibility, headed by Sir Alan Budd, revised downwards its UK growth forecasts just ahead of the Budget, implying potentially greater cuts in spending by the government than those already planned. The OBR cut earlier Treasury estimates made under Alistair Darling from between 3%-3.5% to 2.6%.

According to the Nationwide’s index of consumer confidence, this slipped ten points to 65. However, there was room for cheer – house prices are still edging up and the demand for mortgages rose by 7% in May, according to the Council of Mortgage Lenders, although it described the market as subdued.