All organizations can use the basic principles of risk
management to shape a path through the COVID-19 pandemic and
minimize the lasting negative impacts. Whether you have a robust
Enterprise Risk Management (ERM) program in place or have not yet
turned your corporate mind to risk management, the principles
outlined below can help you move through this crisis and
beyond:
1. Identify your risks
Organizations use risk management to “predict the
unpredictable.” To navigate the risks (and opportunities)
associated with the pandemic, it is critical to first identify what
those risks are. Indeed, the exceptional circumstances surrounding
COVID-19 may have brought to light risks you had not yet considered
– or may have imbued previously identified risks with a new sense
of urgency. Whatever the case may be, before moving in any one
direction take a moment to catalogue the risks your company may
face over the next month, three months, six months, nine months and
year.
In order to accomplish this most effectively, you should:
- Consider all kinds of risks -
including operational, strategic, financial and
reputational; - Gather information from all employee
levels and from a large cross-section of stakeholders (clients,
vendors, etc.) – they might be in a position to identify risks that
you would not think of; - Look at other organizations, in
Canada and abroad, and consider what they are facing; their risks
might be the same as yours or perhaps their risks will create risks
for you down the line (think supply chains).
Dig deep into this exercise before you move on, and return to it
often over the next year, two years and five years so that you can
update your risk profile as the world progresses through these
unprecedented times.
2. Be agile
Albert Einstein said “learn from yesterday, live for today,
hope for tomorrow. The important thing is not to stop
questioning.” The world is collectively questioning
everything as we navigate a new normal. The plans that you had two
months ago are no longer appropriate, feasible or realistic for
today.
Do not throw your entire play-book out but instead return to
your values and redefine how you will realize them. Be ready to be
uncomfortable. Navigate this period with flexibility and
understanding. Be creative in your approach to moving forward,
listen to what your stakeholders want and need and consider how you
can pivot to fill a void.
3. Think people
The backbone of every organization lies in its people. Today
people are stressed, tired, taxed, scared and pre-occupied. The
organizational risks associated with mismanaging your employees in
this time can be significant (health and safety, financial,
reputational, legal, operational, to name a few).
Where then do we start? People generally need to feel heard,
they need to be able to trust and they need to have information.
Let your employees know that you have a risk plan, a business
continuity plan, and a crisis plan – and take the time to
communicate what each plan entails and how it will evolve, while
also seeking their engagement and input.
ERM works because it fosters and relies upon a holistic approach
to identifying, analyzing, evaluating and treating risk. While it
has to be fully endorsed and supported by top management, it must
involve the entire organization in order to succeed. ERM also
encourages frequent communication between all levels of the
organization, which in turn leads to greater transparency and
trust.
As we move through this pandemic, we see that the heroes come in
all uniforms – from the delivery drivers, to the cleaners, to the
grocery store clerks, to the health professionals. The heroes
within your organizations will also come in all roles. Consider how
you can make their days easier in order for them to be more
physically and mentally able to help you. Whether it is
implementing flexible work hours or ensuring that they have a
computer at their home, it starts with asking them what they need
to do their job during these times.
4. Consider business continuity
The purpose of business continuity is to ensure that your
business is able to survive a critical incident. It consists
of a series of plans implemented over phases to shorten recovery
time and mitigate impact. For more information regarding
business continuity, please see Gowling WLG’s article “Business Continuity Planning in
COVID-19.”
Now is a reasonable time to evaluate the impact of COVID-19 on
your organization, looking both internally and
externally:
- Internally: This
involves identifying business critical functions, equipment and
employees, and determining how, where and by whom critical services
are provided. You may consider suspending non-essential work
to reduce risk of exposure, to support social distancing and to
reduce unnecessary cash expenditures.Ensure you carefully monitor employee availability, health and
safety. As all people are at risk of being personally
impacted by COVID-19, a continuity plan must be developed for all
business critical employees that can be easily triggered should
they become indisposed. The chain of command must be clearly
identified and alternates and designates put in place for all
critical functions.
- Externally: This
requires a supply chain analysis and assessment of the possible
risks faced by vendors, manufacturers, suppliers, distributors,
purchasers and all organizations and stakeholders that you interact
with and rely upon.
Amid government restrictions and instructions to “stay
home,” the use of technology is exceptionally important for
many organizations. Most have already mobilized an
infrastructure to support remote working. To increase productivity
and reduce interruption, ensure that employees have the necessary
hardware, software, equipment and internet connectivity to work
safely and efficiently from home. Also ensure that your IT
infrastructure can support the increased pressure from a
significant portion of your team working from home.
The new normal has created the need for new policies and
procedures. On the technology side, the remote working world
has greatly increased the risk for cyber attacks and
phishing. Employees must be aware of these risks and trained
on the new policies pertaining to the use of technology and the
transfer of information and funds. If employees remain onsite
to work, organizations will need to address health and safety
concerns through new and evolving policies.
Consider your internal and external communication plan. Updates
need to be communicated to stakeholders in real time. The
situation is constantly evolving and appropriate measures need to
be implemented such that communication can be disseminated
immediately.
5. Consult with advisers
This is the time for everyone to work together. Consider
reaching out to:
- An outside risk management
consultant: We can assist you in identifying, analyzing, evaluating
and treating your risks. If you do not have a business
continuity, incident management, risk management or crisis plan, or
if the ones you do have are not working, it is not too late to seek
advice to review, improve, create or implement. - Legal counsel: We can help you
navigate new and rapidly changing legislation, assist you with
managing health & safety, employee, regulatory, essential
service, insurance, travel, and contractual issues, to name a few,
that present themselves. - Insurance broker: Can help you
understand your current insurance policies and advise whether you
have coverage that can assist you and how. - Financial advisers: Can discuss which
financial incentives, loans, government programs, deferrals, etc.
are available to you and how can you access them. - Mental health professionals: Your
staff may need support during these times. Finding a way to get
that support to them may prove invaluable.
6. Consider your reputation
Last, consider your reputation. The success stories of COVID-19
will be the people and organizations whose reputation was improved
with their response to the pandemic.
When the dust settles, we will remember the Marriott CEO
relinquishing his salary for 2020, his executive team taking a 50
per cent pay cut and the Lyft cofounders donating their salaries to
help their drivers. We will also remember the many companies that
re-deployed their entire workforce and production capabilities to
create and produce personal protective equipment for frontline
workers, hand sanitizers for health professionals and technology to
help track the spread of the disease.
For those organizations that take a short-sighted view of the
pandemic, by price gouging or supply hoarding, the long-term
negative reputational impact may far outweigh the short term
benefits experienced.
Stay true your organization’s values and take the higher
ground. It will pay dividends in the long-run.
“Read the original article on GowlingWLG.com“.
Originally published 23 April, 2020
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
