Business continuity planning during COVID-19 requires flexibility and strategic thinking in response to the changing risks. Arash Rashidian, Lighthouse Advisory principal, shares top tips for all boards.
Well-crafted and implemented business continuity plans typically aim to quickly and efficiently restore normal service. The presumption is that most levers of action are in the hands of the organisation. But in a pandemic, recognition and response to the event rests mostly at a national or state government level. So, what are the most productive choices ahead for boards that are not being made at government level?
- Start by contemplating optimistic, expected and pessimistic scenarios using the key variables of:
- Time elapsed before operations can resume
- Economic markers of severity
- Workforce health/readiness
- Commercial arrangements with counterparties — supply chain integrity and scale and significance of damage.
- Distil critical and operational choices with the executive during the pandemic escalation phase, and execute important emergency actions in real time. The window of opportunity is short, so act fast.
- Plan and implement “care and maintenance” or “survival mode” where the pandemic has resulted in reduced activity and demand. Preserving capital is mandatory. Winding down operations in an orderly manner and compassionately and transparently dealing with people is critical. You will need them when you are ready to recover.
- Or plan for high activity — potentially beyond your current limits — where the enterprise is part of the response to the pandemic. There is limited time to do this, but it’s a critical part of performing to expectations. Work out what is mission-critical, devote your best talent to it and give them all the available resources needed. Be pragmatic — carefully trade off normal checks and balances for expediency where time is of the essence. Curiously, the competitive nature of market participants may take on a much more collaborative approach to deal with the pandemic. Note international willingness to share commercially valuable information about the COVID-19 and its mutations by all. Initiate, explore and carefully make use of this spirit of collaboration where possible.
- Looking to the recovery phase, individually and as a board, engage in dynamic contemplation of what the world might look like. For example:
- Might the pandemic accelerate the transition of customers’ comfort with — and share of wallet of — online retailing?
- How might consumer and supplier behaviour change in your arena as a result of such a once-in-a-century event?
- Could workforce experience with remote working become a source of cost reduction and operational flexibility or efficiency in the future?
- Might a long-term international travel lockdown lead to a short to medium-term boom in domestic tourism?
- When the pandemic peaks, start planning contingent options for recovery. Target financial resourcing, hiring and client priorities, re-contract with relationships nursed during the worst of the pandemic. Formulate short- and medium-term priorities. Longer-term plans must wait until the level of uncertainty reduces to an acceptable level.
- Once the pandemic peaks and begins to recede in Australia, be prepared to quickly execute your plan on direction from regulators that service can resume. One of the biggest tests will be the need for a longer lockdown than most are emotionally ready for. Don’t jump the gun. This isn’t just about restoring normal operations, but rather recognition of how the world has changed and orienting the organisation appropriately. The board must comprehend the significance of change and strategise accordingly. The regulatory environment is likely to remain volatile at a national and international level.
For more resources and tools, visit our dedicated COVID-19 hub.
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