Potential Economic Consequences of a Pandemic - Part Two

22/02/2018

One key issue that businesses face with a pandemic that is different from other disasters is that multiple locations could be affected simultaneously.


Business Impacts – How Long Can You Survive?

Impacts can be immediate and expensive. It is therefore prudent that your pandemic planning efforts consider the dynamic nature of the world’s markets as part of your overall strategy.  This makes good business sense.  It can be readily applied to situations other than a pandemic.  With this broader perspective in mind your pandemic preparations can be leveraged into greater management awareness and perhaps, more of a competitive edge for your enterprise.  This is true, for public sector entities too.  Government can be more competitive and forward thinking and gain leverage with the constituents (taxpayers) whether they are individuals or businesses.

One key issue that businesses face with a pandemic that is different from other disasters is that multiple locations could be affected simultaneously.  This is complicated by loss of personnel that could occur for several reasons – sickness, caring for sick individuals, school closures, fear of contamination at the workplace, etc.  Most of the current business continuity models are based on the recovery of technology and facilities (“brick and mortar” type structures).  Few are addressing the human component and if they do they are not doing it very well.   First and foremost a basis for ensuring that communication and information flows seamlessly vertically and horizontally throughout the enterprise is essential.  This means that you must have common terminology within and with all the external touchpoints (customers to vendors) that is clearly understood by all.  Most organizations come up short when an analysis of the communication and information flow is undertaken.  The general finding is that fragmentation and a lack of seamlessness exists.

Decision making regarding governance issues can only be addressed by senior executives.  Senior executives will establish and manage voluntary compliance mandates as well as ensure compliance with regulatory driven requirements.

Strategy requires management engagement to achieve 3600 coverage.  This coverage consists of: 1) forward looking capabilities “active analysis” and situational awareness; 2) awareness of challenges; 3) executable goals and objectives and 4) ability to capitalize on experience and past successes.  Operating in a pandemic will require that your organization have a flexible and responsive strategy.  Incorporating business strategy elements into the management decision making process at all levels of contingency planning can facilitate greater flexibility.

A tactical focus on processes rather than a strategic focus that is broader based – business goals, objectives and response to market demands can equal less than effective business continuity.

Steps to take…Now
 

The ability to effectively respond to and manage the consequences of an event in a timely manner is essential to ensure an organization's survivability in today’s fast paced business environment.  Several steps can be taken to prepare your organization.  

First, put in place an effective surveillance program; meaning, expand your business impact assessment activities.  See my article, “"Futureproofing" - the Process of Active Analysis” written in 2003 for a discussion of how to rethink the business impact assessment process.

Second, recognize that you cannot depend on public authorities (read this as government at all levels) to be there for your organization.  Rethink the basis on which you developed your plan – talk to the risk management and strategic planning personnel in your organization and find out what they are looking at regarding business expansion, contraction, risk mitigation, etc.  Revise your business continuity plan.  Develop the ability, as an organization, to sequence back your operations while ensuring that your business system and its network (“value chain”) can maintain level of functionality while operating at reduced capability.  When your business system and its network reach the state of minimum functionality, the organization can begin to conduct a campaign of "agile restoration" until it achieves a state of full functionality and a return to normal operations.

Third, train, drill, exercise.  All the planning in the world is never going to be effective unless it can be implemented.  One key to implementation is having a trained organization. That means that we must train not only the primary position holders in our organization, but we have to train the secondary and even a third level within the organization. 

If Only We Had Known…A New Paradigm for Planning Strategists
In my book, “Integrated Business Continuity Planning: Maintaining Resilience in Uncertain Times” I asked:

"Is Business Continuity integrated into your business operations as a way of doing business; or is Business Continuity an adjunct to the business that you are involved in?"

As you ponder this question, you need to reconsider the value proposition offered by having an integrated approach to business continuity.
I offer the following definitions for this article and as a basis for developing an “integrated” approach to continuity:

Crisis: "A disruptive event that is amplified, elevated and magnified."

Business Continuity: "All initiatives taken to assure the survival, growth and resilience of the enterprise."

Executives have an obligation to their stakeholders to assure that everything that can reasonably be done to protect the business and ensure its competitiveness in the marketplace is done.  Unless executives rethink the relationship between how they do business (strategy, competitive intelligence, etc.) and the way they currently address business continuity (managing disruptive events, security, etc.), the imbalance between "security" and competitiveness will not be resolved.  Therefore, businesses must rethink their recovery strategies to be able to deal with and survive pandemics.  This is a whole new paradigm for planning strategists.

The table below speculates on some of the possible outcomes when the pandemic strikes.

 

 

Conclusion: Seize the Initiative - It Makes Sense

A Chinese proverb states that "Opportunity is always present amid crisis."  Every crisis carries two elements, danger and opportunity.  No matter the difficulty of the circumstances, no matter how dangerous the situation… at the heart of each crisis lays a tremendous opportunity.  Great blessings lie ahead for the one who knows the secret of finding the opportunity within each crisis.

Today business leaders have the responsibility to protect their organizations by facilitating continuity planning and preparedness efforts.  Using their status as “leaders,” senior management and board members can and must deliver the message that survivability depends on being able to find the opportunity within the crisis. 

Market research indicates that only a small portion (5%) of businesses today have a viable plan, but virtually 100% now realize they are at risk.  Seizing the initiative and getting involved in all the phases of crisis management can mitigate or prevent major losses.  Just being able to identify the legal pitfalls for the organization of conducting a crisis management audit: can have positive results.

We cannot merely think about the plannable or plan for the unthinkable, but we must learn to think about the unplannable.  Business continuity planning must be overlapping in time, corrective in purpose complimentary in effect.

Geary W. Sikich Principal Logical Management Systems, Corp.
http://www.logicalmanagement.com/

Marko Jurinec/PIXSELL
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