The coronavirus outbreak is a major concern for the health of potentially hundreds of thousands of people. It is also having an impact on the global economy with tourism, aviation, and hospitality the initially hardest hit industries. Almost all global supply-chains are affected at some level. Realistically, many sectors will be affected to different degrees, with many organizations implementing policies to limit employee travel and to prepare employees to work from home if necessary, and if possible, to ensure the safety of their employees. The outbreak is moving quickly, and most countries are trying to respond quickly to contain the impact. However, the spread of the virus may continue through 2020 and impact the operations of many industries for months to come.
In working through similar situations in the past we recommend organizations focus on a business continuity program to mitigate the impact of major events. Business continuity means ensuring that primary business functions can continue to operate within a technological failure, natural disaster, or other major disruption such as a pandemic flu or the spread of another contagious disease. A pandemic flu requires a particular set of assumptions as the impact is likely widely dispersed and could last for a longer period.
Business Continuity systems exist to manage the impact of potentially catastrophic events that threaten the ability of a business to operate at a fundamental level.
At a high level, most business continuity management may consist of 3 key steps:
- An appraisal of what the critical / vulnerable areas, usually within the organization as well as outside of it (such as partners, other stakeholders)
- As a result of the above, the development of a risk management plan for the specific risks identified and how to mitigate them systematically and proactively
- The development of an implementation plan with structured projects and assigned project management
With the uncertainty and anxiety brought about by the Covid-19 epidemic, establishing a sound and tested business continuity management has very specific goals:
- Protecting human health and safety
- Protecting and sustaining management and operational capability
- Securing reliable and alternative supply of raw materials and key ingredients from multiple sources
- Strong incident management/investigation capability that ensures operations availability/stability and brand protection
- Preventing and minimizing loss of valuable assets
- Traceability in the event of reputational risk issues
- Mitigating financial and legal exposure
- Assurance of actions in accordance with established laws
- Providing assurance to stakeholders (such as shareholders, customers,
- government agencies, media, etc.)
- Protecting business growth and profitability
- Potentially turning a crisis into an opportunity to showcase strengths
Your work on developing a business continuity plan should start with the following self-assessment questions:
- How do you assess and prioritize the business continuity risks for different parts of your business?
- How do you design and choose an appropriate business continuity plan/portfolio of activities?
- How do you ensure effective implementation of your business continuity plan?
- How do you test your ability to execute and respond, “under pressure”?
- How do you track and report on the execution of the plan?
This may not seem to be a pressing exercise for your organization to undertake, but working through this process and creating a plan positions your organization to continue operating effectively through a crisis. This is much more than a communications management exercise. Creating an effective business continuity plan creates a sense of security for management and employees, and potentially prevents the collapse of many organizations.
After working through a business continuity planning exercise, organizations commonly initiate the following tasks as a next step:
- Optimize de-centralisation of management team / key operatives
- Develop alternative supply partners and channel
- Establish separate legal entities
- Identify alternate manufacturing sites
- Improve HSSE governance and escalation protocol
- Improve non-conformance resolution capabilities
- Develop an emergency response team
- Generate a product disposition plan based on the specific situation and risk assessment
Effective execution of a business continuity plan requires clearly defined and structured projects. The projects that are identified through the business continuity management process need to be prioritized effectively to ensure effective use of available resources, and to ensure existing projects are also managed effectively. Simply adding a new list of projects to the project portfolio within an organization does not mean the resources will be available when they are required. Our experience in working with a range of organizations regularly demonstrates more projects are listed in the company’s portfolio than can be completed successfully. Additional information on managing a project portfolio and reducing complexity can be accessed here.
About Kepner-Tregoe
For over 60 years, Kepner-Tregoe has empowered thousands of companies to solve millions of problems. We provide a data driven, consistent, scalable approach to clients in operations, manufacturing, IT Service Management, Technical Support and Learning and Development. We empower you to solve problems. Kepner-Tregoe provides a unique combination of skills development and consulting services, designed specifically to reveal the root cause of problems and permanently address your organizational challenges. Our approach to problem solving will deliver measurable results to any company looking to improve quality and effectiveness while reducing overall costs.
The following organizations provide updated information on the status of the COVID-19 virus: European Centre for Disease Control and Prevention, the US Centers for Disease Control and Prevention, and theWorld Health Organization.