The recent outbreak of a new virus, COVID-19, or the coronavirus, has many businesses scrambling to develop or review their business continuity plans. While there is much unknown about COVID-19 and whether it will turn into a pandemic, there are many things business can do today to ensure their businesses continue to operate if it does occur.
With the globalization of many businesses, the potential for a pandemic and the impact of such a pandemic could be significant. In particular, the impact to the supply chain could be enormous since so much of the world’s manufacturing occurs in China, ground zero for this virus. With the potential impact to business supply chains, both direct and indirect, it’s important to have a solid business continuity plan (BCP) in place.
BCPs should be driven by risk assessments. In this case, a pandemic risk assessment should be used to develop contingency plans. Here are some key considerations for a pandemic risk assessment:
1. What is the potential impact to your revenue stream?
Will consumers still need/want your products or services during a pandemic? Recent stock market volatility shows the vulnerabilities in different sectors. The travel industry is expected to be negatively impacted, while online entertainment companies are expected to be positively impacted. Understand your business, your customers and the potential change in demand in a pandemic. Also assess whether the changes will be temporary or possibly permanent. Identify any mitigation plans to shore up business during a pandemic and plans to recover afterward.
2. What is the potential impact to your supply chain?
If you produce goods, where are the components sourced? Recent news reports of shipping delays expected from China have impacted many global companies from electronics to pharmaceuticals and beyond.
If you produce services, where are your employees located? Expect travel restrictions, especially in countries where the COVID-19 virus is spreading. How will limited business travel impact your business?
How will you provide global services in areas where you have limited staff due to an outbreak?
3. What’s the potential impact to your customers?
Are there any upstream or downstream impacts if your customers are also experiencing supply chain issues or severe staff shortages? Are there other impacts to your business beyond revenues?
An additional consideration is whether there are any opportunities in a pandemic scenario to improve business relationships with customers – not through opportunistic exploitation, but through collaborative, compassionate assistance. Is there a way you might help your key customers during a pandemic? Helping out in hard times generates the kind of goodwill you can’t buy.
4. What is the potential impact to your employees?
How will your business operate if 25% of your employees are out sick or unable to come to work? Will you be able to run critical operations with reduced staff? What plans do you have to assist employees who are quarantined (those who are healthy and able to work as well as those who are ill and unable to work)?
As with your customers, are there opportunities to assist your employees? If employees are healthy but their children are kept home for weeks at a time, or if an employee is ill and lives alone, are there ways the company can appropriately assist? Take a look at your HR policies to see if you need to make temporary or permanent revisions to address pandemic-related issues. Your employees are your most valuable resource, so you want to do all you can to protect them from the pandemic and assist them if they are impacted by it.
5. What are your delegations of authority and leadership contingency plans?
Some organizations overlook the important aspects of how to delegate authority, such as authorizing large expenditures, as well as making strategic (or significant tactical) decisions, declaring a pandemic activation plan or returning to normal operations. When key leaders are unavailable – either because they are unable to be physically present or because they are ill – the organization must have contingency plans spelled out in advance as to how the authority of the organization will be delegated. These need to be tested with various scenarios to ensure vital operations will not be impacted if one or more key leaders are unable to work.
Summary
Until fairly recently, few people outside of governmental agencies seriously planned for a pandemic. It was always a line item in a business continuity checklist, but one most organizations passed over. Now that there’s a growing threat, it’s important to look at the organization holistically to understand how a pandemic could impact your revenues, your customers and your employees. The time to prepare, not panic, is now. With proper planning and scenario testing, you can help your company be better prepared to survive a global pandemic.
About the author: Susan Snedaker is a recognized IT leader and award-winning author. She writes about business continuity planning, operations management and IT leadership at www.susansnedaker.com.