Operational risk mitigation for businesses

Businesses are evaluating risk mitigation strategies during these uncertain times, reflecting on how to strengthen processes to pull through a global pandemic. While many things are out of our collective control, Jim Mello explores how preparedness can strengthen a workforce. 

Only 12 percent of more than 1500 people polled in a recent business continuity webinar by Gartner believe their businesses are highly prepared for the impact of coronavirus, with the majority (56 percent) rating themselves somewhat prepared.

Jim Mello, senior director at Gartner, recommends the following 10 crisis checkpoints to start your COVID-19 pandemic planning:

1. Establish a pandemic preparedness framework

Form a team that represents all critical business functions and reports directly to executive management. The first priority for this team is to assess the relative importance of business activities and organise them into tiers for response or recovery. For example, critical IT infrastructure such as network or VPN servers may occupy the top tier for remedial action, while deferrable activities such as training or budgeting may occupy lower tiers.

2. Monitor the situation to determine a change in severity

Numerous sources of information can help you monitor the rate at which the infection is spreading and its severity. Many organisations rely on the comprehensive information found on The World Health Organization site.

3. Review finance and treasury implications

Make sure to revise revenue forecasts and communicate with investors and suppliers about any potential financial issues. It’s also critical to ensure that your organisation has the working capital to ride out the storm. Consider seeking loans or government sponsored financial relief to support cash flow. 

4. Extend your clean workplace/personal hygiene protocols

It’s critical to ensure your organisation complies with any new workplace regulations. Beyond that, establish handling protocols for staff returning from affected areas and extend your organisation’s existing hygiene activities around cleaning and providing hygiene supplies.

5. Review HR policies and practices

Closely monitor your organisation’s absenteeism rate for any sign of a problem. Identify critical staff and make sure your organisation can continue to function in their absence. Be as prepared as you can be for absentee rates of up to 40 percent. Be sensitive to changes in employee engagement and workplace preferences, and consider offering extra sick leave or a remote work program. Other things to consider are possible repatriation of employees and visitor handling procedures.

6. Establish a pandemic communications program

People can feel out of the loop quickly, especially during a pandemic. Assign a spokesperson for the company that is appropriate for the situation. Establish a pandemic communications program with preapproved messages and scripts for various stakeholders, including employees, customers, supply chain partners, insurance companies, regulators and community public health officials.

7. Review impact on business operations

Break down this potentially overwhelming task into activities or business areas. The team formed in step 1 should identify key areas to consider. Understanding the reality on the ground in countries of operations is critical, and this includes assessing third parties for their exposure. Key questions include: Is transport functioning? Have holidays been extended? Where can operations continue and where must they stop?

8. Review IT actions and considerations

IT as a business function tends to be relatively well prepared in terms of business continuity, but nevertheless, assess the supply chain for critical equipment and keep extra inventory if needed. Look at remote data centre management and cloud options for critical systems. Enable remote working programs and investigate alternative voice and chat options. Also reschedule nonessential IT work and prioritise key applications.

9. Use a preparedness exercise to review pandemic plans and identify gaps in response

Validate roles and responsibilities, recovery requirements and procedures with a preparedness exercise, such as a work from home drill or a table simulation that operates on a compressed time scale. Identify any gaps in recovery capability and resource needs. Assess whether team members can cope with their responsibilities and also promote collaboration between them. Then get feedback from the crisis management team.

10. After-action review

Identify three lessons learned or key observations as a result of pandemic planning. Also get each area to identify at least three areas for improvement in the exercise. List and prioritise your short and long term follow up actions, and schedule future exercises or results reports.

Photo by Kelly Sikkema on Unsplash.