September 14, 2020
Many companies were ill-prepared for 2020 disruptors. Leaders and boards found that their continuity plans inadequately considered the contingent impacts of a prolonged pandemic, and crisis management playbooks were insufficient when critical decisions had to be made. Working from home increased cybersecurity risks, global supply chains were disrupted, and business continuity plans, designed for 60 days in-emergency, could not cover the scope of risk caused by COVID-19.
Leaders’ duty of care is to prepare the organization for current and future crises. Disruption is the norm, and leaders have a responsibility to effectively prepare for the future viability of the company. The risk to organizations includes public health, cybersecurity, climate change, civil unrest, and supply chain disruptions.
The COVID-19 pandemic is one example of business interruptions companies will face in the future. This public health emergency has exposed weaknesses in both business continuity plans and ongoing operational models. What can a company’s leaders do now to plan and make lasting improvements to the resilience of their operations? We examine key lessons learned in 2020 and consider how we may prepare for future risk.
Lessons Learned So Far:
PEOPLE – Focus on the workforce getting the job done.
- Staffing impact – front line employees are directly in harm’s way, resulting in staffing shortfalls and delegation of authority/succession issues
- Cross-training – ensure that others can step in and perform tasks that require specialized knowledge when others are unavailable
- Tools – teams need to find best-fit platforms to support communication and collaboration in remote work environments
- Value-based job analysis – identify “critical employees” deep in the organization chart so companies can prioritize their availability and retention
- WFH supervision – creating and managing a high-performing at-home workforce is a new skill without a playbook
GOVERNANCE – Consider the structure and pathways required to drive success.
- Dedicated crisis resources – assign focused leadership and supporting resources to manage a crisis
- Decision-making – a defined, well-exercised crisis management governance structure is necessary to respond to an evolving situation
- Communication – an effective strategy is essential to providing clear guidance to staff and maintain contact with suppliers and customers
- Situational awareness – the ebb and flow of the crisis requires rapid changes to operating posture in response to external factors
- HR policies – updates required to accommodate modified work schedules, medical accommodations, and a shortage of sick time
TECHNOLOGY – Examine the technology keeping your organization operational and safe.
- IT infrastructure – IT likely did not contemplate the massive and prolonged work-from-home model that expanded security perimeters
- Bring Your Own Device (BYOD) – BYOD policies need to consider the fundamental security of mobile and home devices including network access
- Security training – home workers must practice positive cybersecurity habits in a far less controllable work environments
- Facility hardware – employee and customer systems, including entry, surveillance, and payment mechanisms, must evolve rapidly
PROCESS – Consider the processes and dependencies necessary for mitigating risk and driving success.
- Dependencies – internal and external process dependencies must be considered; plan upgrades and new manual workarounds
- Supply chain – the fragility of any single/sole source provider was demonstrated to an existential degree
- Risk management – contingent business interruption claims are being denied by insurers, demonstrating the need to reexamine policy details for business interruption and other coverages
- Maintenance – employees and vendors must be prepared to meet changing operational requirements
- Agile transformation – organizations have proven how quickly they can adapt and make positive changes to operations
PLANT & EQUIPMENT – Target your critical assets and the risk associated with maintaining operations.
- Disruption duration – The typical business continuity planning assumption of 30-day availability was rendered obsolete
- Mechanical considerations – upgrades of air filtration/exchanges, water, and sophisticated building management systems may become a de rigueur work-around for factories, data and call centers, and office buildings
- Transportation – re-think employee arrival/departure process (e.g., encouraging biking and driving as an alternative to public transportation, requiring physical facility upgrades, policy changes, and shifts in work schedules)
- Physical workplace – examine design, space, and location requirements, with expectation of long-term need for physical distance, remote work, and distance collaboration
- Footprint – consider overall real estate portfolio taking into consideration geographical locations, multi-tenant spaces, and potential decrease in staff due to work from home
VITAL RECORDS – Refine access, approvals, and security associated with your data.
- Record access – hard copy files required when working from home dictates the need for new secure document access and sharing platforms
- Secure file sharing – broader and more secure availability is required for many organizations
- System access – review adequacy of VPN and other capabilities for security and capacity limitations
- Digital approval – consider E-Sign and other virtual, collaborative systems required for approving essential documents
- Facility data – pertinent data must be documented off-site in the case an inaccessible site
Preparing for What Comes Next:
Leaders should analyze these recommendations and their own lessons learned by performing a formal after-action review. Organizations must turn these observations into an action plan to remediate existing gaps, respond to current-state dynamics, and incorporate action items to improve overall business outcomes.
Organizations should establish a governance framework for crisis management that is robust to evaluate and improve resiliency and be better prepared for the next crisis. Additionally, leaders must collaboratively develop an enterprise roadmap to identify and implement initiatives to improve proactive responsiveness to disruption.
If you are struggling to know where to start in this crucial effort please contact us. Ankura has a proven crisis management governance framework. We can help you prepare for whatever the future may hold.