In the face of a global crisis, well-prepared businesses can help protect their workers and their bottom lines
NO CRISIS IS an isolated, neatly contained incident, and the COVID-19 outbreak is exceptional by any standards. It comes with extreme scope and levels of uncertainty. It’s a situation that is well beyond the experience of most business leaders — the median tenure of a CEO is five years, and the last epidemic that approached anything near this scale was the SARS outbreak in 2003. SARS infected more than 8,000 people and lasted nine months. In much less time than that, COVID-19 has already infected more than ten times as many people and is spreading fast.
Business leaders see managing a crisis as an inevitable part of their role. According to PwC’s most recent Global Crisis Survey, nearly seven in 10 leaders (69 per cent) have experienced at least one corporate crisis in the last five years in their companies, and the average number of crises experienced in these firms is greater than three. COVID-19 will test many business leaders to the limit.
The key to managing any crisis is preparation. The PwC Global Crisis Centre has compiled seven actions that you as a leader can take to ensure your organization is in the best shape possible to withstand what’s ahead.
Review workforce locations and travel
The first priority is to establish exactly where staff are and how many workers are in affected or vulnerable territories. Do any need to be repatriated? Or have they asked to work from home? Upcoming travel plans will need to be reviewed, reschedule or canceled.
Clear policies should be in place to address absence due to sickness or caring for relatives, the protocol for visitors to company sites, the procedure for reporting illness and travel restrictions. You also should plan for policies for school closures — what will the policy be for working parents? Lastly, be prepared to continuously refresh and update these policies as circumstances evolve.
Revisit your crisis and continuity plans continually. Every well-run business has a crisis or continuity plan, and many will have a specific pandemic plan. But nothing tests theory quite like reality. If large numbers of your employees are set to work remotely, for example, is there enough technology bandwidth to cope? Will your operations be impacted if outsourced, offshore workforces are unable to come to work? What is the procedure for updating travel advice and policy? How will communication with employees be managed? During any crisis, the biggest worry for managers is gathering accurate information quickly.
Evaluate the supply chain
A clear understanding of your supply chain will help to expose any potential vulnerabilities. This means beginning with the most critical products and looking well beyond first- and second-tier suppliers, right down to the raw materials, if possible. For example, if your products contain a component from a country that becomes isolated, is there a secondary supply?
Identify potential points of failure
Who are the teams and individuals on whom critical processes or services depend? Are there workers with the right skills who could step into critical roles if needed? Call centres and shared service centres are vulnerable — can steps be taken to reduce the level of human interaction, such as staggered shifts or remote working?
Get communication right
Although we’ve seen employers work hard to keep their workforce informed, disinformation and confusion have spread along with the virus. Your employees (and wider stakeholders) will be looking for reassurance from you that they are being protected and that the business is prepared. Leadership should be seen as a source of truth — consistency and accuracy of messaging is the key, as is reassurance from the top of the organization; your workforce will need to know that their welfare is paramount.
Use scenario analysis
With uncertainty rife, and COVID-19 holding the potential to impact every part of a business for months, scenario planning is a critical tool to test preparedness. What are the best- and worst-case scenarios, and is the business equipped to cope? What could be the impact in the longer term, for example, on working capital or bank covenants, or even rents for shops and restaurants if public places are closed? Ask searching questions of your finance team to highlight critical sensitivities. Organizations in some sectors could see a significant rise in demand if more of the population is spending more time at home rather than at work — are they prepared for this?
Don’t lose sight of other risks
COVID-19 isn’t the only threat on the horizon — and often organizations are at their most vulnerable when dealing with a crisis that dominates their attention. The many other risks that your business faces aren’t diminished by an epidemic. Cybersecurity, for example, should always be top of mind.
We don’t know what the next few weeks and months could bring. If the World Health Organization upgrades the current COVID-19 epidemic to a pandemic, the tone of the conversation will shift from containment and prevention to protection of key workers in order to keep businesses running. National restrictions on movement and the gathering of people could come into force, and organizations will need to be agile to respond.