During the financial crisis of 2008 and 2009, nearly every business owner across the United States faced dire circumstances. As the economy ground to a halt, the just-in-time revenue that many businesses relied upon to fund their operations during times of prosperity dried up. Hardly anyone was buying anything, and even the most loyal customers stopped buying products or using services because they did not have the money to spend.

Everyone was making difficult decisions at this time. The businesses that survived often did so largely because of their cash reserves. Nearly everyone tried cost-cutting and layoffs, which helped. But the recession was so deep that simply trimming expenses was not enough. That experience affected me deeply, and it showed me that part of a CEO's responsibility for the numbers is to have a contingency plan in place if the bottom should fall out.

In chess, there is a word for placing your opponent in such a position that you remove every single option she has except for the move you want her to make. In other words, you decide her moves in advance, based on the circumstances you create. This is called zugzwang.

I never want to have my options decided for me, and I don't want that for you, either. The only way to maintain your positional freedom in difficult business circumstances is to have a cash reserve built up for emergencies. If you are able to endure hard times, you will not be forced to lay off half your workforce to avoid bankruptcy.

In practice, cash reserves can intimidate some CEOs because they believe that capital should be put to use. The cash reserve does not necessarily prevent you from leveraging it, but when I suggest that a business set aside a full year's worth of operating expenses, I often see looks of astonishment.

Building up that reserve might be difficult to do, but having that capital locked away is incredibly liberating. Even under the worst business conditions, no one will ever be able to force your hand. That cash reserve, even if you never touch it for any reason other than emergencies, is a huge source of freedom and autonomy.

It will ensure an accountant will never look at you and say, "You have to fire someone if you want to keep the doors open." Instead, you have a cushion to brace for problems and solve them long before the wheels fall off.

According to Richard Neil, CEO of Springboard Benefits of Atlanta, Georgia, having adequate cash reserves has helped his company weather the storm:

"Given the current turmoil, no priority will be more important than having an accurate understanding of the cash required to survive. Many business leaders incorrectly assume that the problems will be rectified quickly and underestimate the cash needed to make it to the other side. Thankfully, our growth and capitalization plan has positioned our company very well, enabling us to better navigate the crisis."

Confronting the challenge

In a time of economic and social disruption, we all have responsibilities: to ourselves, to our families and to our neighbors. But it is the business leader who has the greatest responsibility. You must not only steer your company through uncharted waters, but must also serve as a beacon in the community, a light towards which we can turn for assurance. For this to happen, the CEO and other business leaders must adhere to certain practices during a crisis.

Remain visible

We've seen it far too often: When bad times occur, leaders disappear. Rather than step forward, they turn to their legal staff and communications department and ask them to draft a response. Press releases, emails and social media posts then go out. The message is almost always about how serious the company takes the current situation; how the company is making every effort to respond; and how it is committed to supporting all of its stakeholders during the crisis. The effort is always professional and almost always rings hollow. Rather than a human response to a human tragedy, it sounds like an automated recording you get when you call the Department of Motor Vehicles.

The role of the leader is iconic. Many companies are identified, not by their products or services but by the individuals who lead them. In a time of crisis, leadership means stepping to the forefront with total transparency.

Transparency requires leaders to communicate often and personally—not through proxies. For example, the CEO must clearly demonstrate that he is following every aspect of the evolving situation and adjusting the company's response accordingly. The CEO must be honest about what he knows and does not know. If necessary, the CEO must detail everything he and his team are doing to address the crisis. Members of the team should be introduced and allowed to take part in the public discussion.

Susan L. Combs, CEO of Combs & Company in New York City, recognized the importance of transparency when she was personally diagnosed with COVID19:

"If I simply disappeared, it would not only have a damaging effect on company morale, but create uncertainty with our clients. Instead, I decided to announce my condition on both Facebook and my personal blog, then leverage Zoom to hold online meetings where I openly discussed my progress. By doing so, I was able to reassure my team as well as others who had also contracted the virus."

Be decisive

Modern business is driven by the numbers; facts and figures that enable us to plot the trends that predict the outcomes. Being dependent on the numbers, far too many CEOs and leaders are prone to suspend decisions for long stretches of time as they wait for the full body of facts to emerge. Waiting for all of the facts to come in before determining what to do is a mistake. Because a crisis is constantly evolving, it's never possible to have all the facts.

Leaders cannot allow uncertainty to breed indecisiveness. During a crisis, a company's stakeholders want reassurance. And the only way for them to feel reassured is to know that the CEO and leadership is not only acting decisively, but with intent. Equally important, the CEO must recognize that there is no single, all-encompassing decision. Some decisions will be incremental, others temporary.

The CEO may announce a work-from-home policy, implement collaboration tools, or expand paid sick leave. What's most important is that the CEO is seen by the company's stakeholders as being proactive and in charge, rather than simply reacting—often too late—to events as they unfold.

For Mike de Koning, CEO of Allstate Benefits in Jacksonville, Florida, decisiveness meant quickly moving to a remote working environment:

"I knew that if we moved slowly, our people would suffer. To prevent that, I charged our executive team with providing our entire staff with VPN access. People with laptops started working from home immediately. The remainder were given new machines and trained on how to login. Within three days, 97% of our staff was working online. It was an amazing team effort, and those we serve—brokers and policyholders—saw no service interruption."

Be compassionate

The rise of COVID-19 is not simply a business challenge, but a human tragedy that will impact the lives and health of virtually every one of your company's stakeholders. This is why one of the key responsibilities of leaders during a time of crisis is to have a positive impact on people's lives—not just economically, but on a personal level.

Fear and isolation generate a variety of responses. Some people become angry, while others fall into depression. When this occurs, the fabric of society begins to shred. One of the roles of a leader is to prevent the shredding. The key is maintaining the human touch.

Mike Patton, CEO of Quandary Insurance in Denver, Colorado, believes that compassion extends beyond his company walls:

"As CEO, my responsibility is not only to my employees, but to my community. I sit on the board of a local not-for-profit program that conducts job training for homeless women. When COVID-19 hit, many of the graduates of this program were laid off. Rather than watch them suffer through economic hardship, we decided to run an online auction. To date, the auction has raised more than $30,000 to help these women through the crisis."

Leverage technology

With so many people either laid off or working from home, maintaining a connection can prove to be a challenge. With the aid of technology, it is a challenge the CEO can easily overcome. Today, we have a multitude of apps and platforms that enable us to hold online meetings, conferences and seminars. Many of these contain video functionality that allows us to see and hear the other participants.

Recognizing the need for the company's stakeholders to stay connected, the CEO and other leaders can leverage these tools to build a virtual community in the midst of a crisis. The CEO can also create a video blog where each week, he reaches out to his company's virtual community, then invites comment and feedback. The solutions are many. All that is required is the will to make them happen.

Emerge strong and united

COVID-19 has hit us hard. While we need to acknowledge its deadly effects, we must also not succumb to fear and paranoia. Throughout our nation's history, we have been confronted by crises that seemed insurmountable. And yet we not only overcame those crises, but emerged stronger and more united. Working together and with the leadership of our country's businesses and leaders, we will do so again.

Be well. Lead well.

Trey Taylor is the CEO of Taylor Insurance Services, managing director of trinity | blue, an executive coaching consultancy, and the founding partner of Ascend Partners, an equity investment vehicle focused on the employee benefits space.

Read more: 

• Leading through the COVID-19 pandemic: A Q&A with CVS Health's top lawyer Thomas Moriarty
• Focus is a superpower: Tips for great leadership
• Don't look now, leaders: Your human side is showing