Risk and resilience expert Junita van der Colff from Protean Business Solutions explains how ‘The Corona Effect’ — the impact of COVID19 — is already changing the way we approach risk management.
It’s a crazy time to be alive. It may be only March 2020, but we have already faced some enormous challenges – raging bushfires here in Australia, political instability in the Middle East and elsewhere, cyber-attacks and data breaches, legislative changes – and now the declaration of a global pandemic by the World Health Organisation on 11 March 2020!
The ‘Corona Effect’
I believe that what we have experienced during the past 12 months – and what we are facing with COVID-19 right now – is going to change the world as we know it, just as the 9/11 terror attacks changed the world back in 2001. We can call this The Corona Effect.
The Corona Effect is a sudden realisation that we are exceptionally vulnerable, and those “this will never happen” moments can, in fact, come to pass. Events of this nature bring major changes, and the term ‘business as usual’ no longer applies (unless or until the situation ushers in a ‘new normal’). We would like to think we could have done more to plan for or mitigate such events, but it’s only by constantly adapting our business for uncertainty that we can come up with an effective response.
Risk management can never be a tick-box exercise
As a risk and resilience consultancy, we have been advocating for a serious approach towards risk and resilience for some time. Risk management should never be a tick-box exercise — and we can see why right this moment. We must view resilience-building as a catalyst for active change, something that assists us in creating and protecting value. This should be our focus when going about our day-to-day business, not just during adverse circumstances.
As the Corona Effect is teaching us, uncertainty is ongoing, and disruptive events can happen at any time. We must plan for them. What should we consider?
The human factor
Panic and fear are an inherent response to uncertainty (for more information on this, get a copy of Steven Taylor’s insightful book The Psychology of Pandemics). We need to manage our communication in such a way that employees and the public are provided with a degree of comfort and assurance. Now more than ever, we need to see the bigger picture and take a responsible approach.
Nothing is more important than good leadership right now – leadership that understands the anxieties and needs of all stakeholders. Leaders must have the ability to make difficult decisions (e.g. Apple has closed all its stores outside of China until 27 March) by using credible data and information to drive informed decision-making.
One of the biggest challenges COVID-19 is forcing us to face is the impact on our economy. This needs to be balanced by the legal and moral obligation that companies and governments have towards their employees and citizens. Therefore, as much as we want to ensure that business continues, we need to safeguard the health and safety of the public, our staff, visitors and service providers. In order to minimise the impact, we need to understand the importance of Business Continuity and building Operational Resilience. There is a misconception that Business Continuity Management (BCM) has all the answers and will prevent a disruption. This is not the case – it is there to minimise impact when there is a disruption. BCM is not only there so you have plans in place for the big events, like the COVID-19 pandemic, but so you can build resilience within your operations.
Updated business models
Most business models are outdated and haven’t been adapted for the current operating environment. They don’t leverage the technology available and are not focused on building an ecosystem. We still have linear supply chains that are vulnerable and exposed to single points of failure. When we take a more eco-systemic approach, we build more resilience into the supply chain.
Embracing the new way of work
We have seen a massive shift in how we do business. We have learnt to trust technology and are forced to embrace more flexible work arrangements. Trust plays a major part in embracing the new way of work and this is currently being tested.
We need to understand uncertainty, identify potential causes or contributing factors, and create action plans to ensure that such risk is managed or mitigated. When it comes to acting, the most important factor is taking ownership – understanding who is responsible for what, by which date, and then working together to ensure we minimise the impact of a disruptive event. Identify and understand the red flags (key risk indicators) and respond to those timeously.
How will you carry out risk assessments in the future?
In conclusion, we have already learnt a lot in these challenging times and will continue to learn as the current situation unfolds. The COVID-19 pandemic will probably shape the way we view risk and resilience in business forever — leading to real changes in the way we carry out risk assessments. Understanding the uncertainties we face, leads to the appropriate action: adopting good communication strategies, having updated Business Continuity plans and showing leadership have never been more important than they are right now.