Business Leaders Must Safeguard Immediately
The COVID-19 pandemic will test the operational resiliency of every company. Before it does, check your assets and conduct your own research to make sure you pass.
The coronavirus outbreak is no longer a significant inconvenience but, in fact, a global emergency that affects every layer of every single business and organisation worldwide. Bob Sibik, Senior Vice President and co-founder of Fusion Risk Management, offers advice for CEOs looking to safeguard their companies.
The pandemic is a strategic CEO-level incident for every company to deal with. In the last week, the Prime Minister Boris Johnson has put the UK on full lockdown where people are only allowed to leave their homes for essential food, medicine, and work. Every other type of interaction has been banned until further notice. Countries around the world have also put their people, and their infrastructure, on lockdown too.
Workforce disruptions continue to grow and are widespread as every business across every sector tries to navigate through this turbulent and uncertain time. Many organisations had plans in place for many or all their employees to work remotely. But others are now scrambling to implement remote working programmes.
Consequently, whether we’re prepared for it or not, we are heading into a recession due to the knock-on effects on not just local and national economies but the global economy. And we need to manage this as effectively as possible to minimise long lasting implications.
CEOs must focus on the broader business implications of the pandemic. Given the economic decline that’s being caused by the social distancing regulations to stop the spread of the virus, they are rightly concerned about their bottom lines.
Driving that concern is their understanding of how dependent they are on external parties for some of their business functions. Whether they operate in manufacturing, retail, financial services, or other industries, they are part of a global economy where they rely on other providers and sources for information and goods. If their third parties are vulnerable, that makes their own organisations vulnerable.
CEOs must focus on the broader business implications of the pandemic.
If they haven’t already, CEOs need to start talking about their ability to respond to disruptions in supply chains, service chains, information chains, and value chains. They need to consider what to do now, as well as what to do later, if disruptions in these chains become chronic which there’s a high chance they will. Above all, they need to instill business resilience across the entire ecosystem of their business.
The need for enterprise resilience, I believe, will be one of the biggest lessons learned from the COVID-19 pandemic.
So, it is with a sense of urgency that businesses review and update their business continuity plans to insure their operational resiliency.
A healthy and available workforce is any organisation’s most valuable asset. A pandemic will incapacitate some employees and result in other employees being quarantined. The consequence would be a major disruption to normal operations, with potentially large numbers of employees working from home or remote locations.
To protect your workforce and help ensure its continued productivity, it is important that you:
- Establish a strategy that enables employees to continue to function without endangering them.
- Have a plan to isolate your employees should the threat of possible infection arise.
- Ensure your employees can effectively work from home.
- Verify that you have the tools, technology, capacity, and security measures in place to support a large, remote workforce.
- Review your HR policies to ensure your employees will not be personally impacted if they must be quarantined for an extended period and modify any policies as appropriate to give greater flexibility to normal working arrangements.
- Determine your priorities and minimum staffing requirements to support these, in case you need to function with a significantly reduced workforce.
- Identify key employees and ensure other staff members have received appropriate training to comprehensively cover their absence.
- Create a communications plan that includes providing regular situation updates, along with actions taken, to your employees and other stakeholders.
In a global economy, virtually every organisation is connected to or dependent on others. You may not be directly affected by a pandemic, even when a vendor at a critical point in your supply chain is. Understanding your dependence on entities outside your business is critical. Are your critical third parties (suppliers, vendors, service providers, etc.) prepared?
To protect your operations and ensure continuity of services or products to your customers, it is important that you:
- Map your dependencies to understand where disruptions might impact your value chains.
- Review the preparedness of your critical third parties (suppliers, vendors, service providers, etc.).
- Identify ‘single points of failure’ in your ecosystem
When assessing the impact of a disruption to your ecosystem it is important to recognise the amount of time before the actual impact occurs. So, as you review and update your plans, you should also conduct walkthroughs and exercises. This is the best method for identifying gaps in your procedures and will give you the highest chance of successful execution. Active participants will become familiar with the goals and objectives of the plan and begin to use it as guidance rather than a prescriptive list of tasks to be followed without applying rational thought. Practicing the execution of your plan ensures all necessary parties understand their roles and responsibilities.
When assessing the impact of a disruption to your ecosystem it is important to recognise the amount of time before the actual impact occurs.
During your preparedness reviews, you should also assess the tools used to maintain relevant information and assist in the execution of your plans. Old technologies and obsolete tools will put successful execution of even the best plans at risk. Identify any deficiencies in the tools you have available and create a comprehensive list of requirements that will enhance your ability to execute. The sooner you begin to upgrade your tool set, the sooner you will be able to reduce your execution risk.
Your organisation’s ability to effectively respond to a disruption of the workforce, or the disruption of a critical third-party, not only depends on how effective you were in the planning process, but also how effective you were with the tools you have and the training you implemented. The tools you use to communicate, maintain situational awareness, and provide current and accurate information will also have a major impact on the execution of the plan.