Responding effectively to a crisis
Eight measures which can be taken to mitigate the effects of the coronavirus crisis
A crisis is never an orderly event which only affects one part of the economy, the chain, or an organisation. That certainly applies to the COVID-19 outbreak which is exceptional by any standard. The majority of directors and managers also have no experience with such situation. The average term of office of a CEO is five years and the previous global epidemic, the SARS outbreak, dates from 2003.
As far as managers are concerned, controlling a crisis is an inevitable aspect of their role. They are the captain of the ship which has found itself in the middle of storm. In such situations they are the only ones who should be steering the ship and the coronavirus crisis will test their navigation skills to the limit. The following are eight measures which you, as a manager, can take to ensure that your organisation is in the best possible shape to withstand the choppy waters ahead.
- Take full control
Show directive leadership. Although you can work with a small group of experts who take all the decisions, ultimately it is the CEO who has final responsibility. If you give directive leadership, it will be completely clear and obvious to employees what is expected of them. This is essential during this period, in which a focus on tasks and action is high on the agenda. You should also keep good records of all decisions made.
- Find out where your staff are and who is travelling
If you have not yet done so, the first priority is to determine where your employees are located and how many are in affected or vulnerable areas. Are you going to have to repatriate people? Revise or cancel imminent travel plans. Take decisions about working from home and about cancelling events and training courses.
Draw up a clear policy for coping with absenteeism as a consequence of illness, or for arranging care for family members, a protocol for visitors to business locations and a procedure for reporting illnesses and travel restrictions. Now that the schools have closed you should also draw up a policy for working parents with school-age children. Be aware of the fiscal measures if employees are forced to stay abroad for longer than expected and become liable for tax in those foreign countries. Lastly, make sure you continually renew this policy and update it as circumstances change.
- Revise your crisis and continuity plan
Although any properly run business will have a crisis or continuity plan, nothing tests theory better than reality. Align generic plans with the specific challenges of a pandemic. If, for example, large numbers of your employees have to work remotely for a certain period of time, is there sufficient IT bandwidth? Will your activities be affected if outsourced workers are unable to come to work? How is communication with employees being managed? During a crisis, the greatest concern for CEOs is to collect accurate information rapidly
- Evaluate your supply chain
A clear insight into your supply chain helps to expose any vulnerabilities. This means starting with the most critical products and then looking further than just first-line and second-line suppliers, right down to the level of raw materials if possible. If, for example, your products contain a component which comes from a country which has become isolated, are alternative deliveries possible?
- Identify potential bottlenecks
Assess which teams and people are dependent on critical processes or services. Are there any employees with the right skills who can step into crucial roles if that becomes necessary? Call centres and shared service centres are potentially vulnerable if the virus continues to spread. Can you take steps to reduce the level of human interaction, such as staggered services or working remotely?
- Ensure good communication
Disinformation and therefore confusion are often problems during a crisis. Your employees and other stakeholders expect you to provide certainty with regard to protection and support. As a leader you should be a source of truth. The consistency and accuracy of notifications are the key, as is reassurance from the top of the organisation. Your employees have to know that their welfare is the number one priority. You should also bear in mind that everything you communicate internally will also become available externally.
- Use scenario analyses
Given that the coronavirus crisis will probably affect every part of your company for months, scenario planning is a crucial resource when it comes to readiness testing. What are the best and worst scenarios and is your company ready? What may be the longer term impact on your liquidity or bank covenants? Ask your financial team to emphasise critical sensitivities. Organisations in some sectors may experience a considerable increase in demand if people spend more time at home than at work. Are you properly prepared for this?
- Do not lose sight of other risks
COVID-19 is not the only threat. Organisations are often at their most vulnerable if they are confronted by an overwhelming crisis. The many other risks your company will have to deal with do not simply disappear because of a pandemic. Cybersecurity should, for example, be a priority at all times. Several vital organisations have already had to deal with hacking attacks. You should therefore make sure that your employees stay alert to phishing attacks and continually monitor the safety of your online systems. Given that many companies are now urging their employees to work from home, this also applies to the confidentiality of information and sharing such information, both from a business and privacy perspective.
It is unclear what is going to happen in the coming weeks and months and which measures the government is still going to take. In any event, you should make sure that you are prepared and that your organisation is resilient.
For more information, please contact Edwin van Wijngaarden, Peter Wolterman, Andreas Mikkers.