"There are four lessons for CEOs and directors to mobilise their businesses and build resilience into their continuity and emergency response plans, to create the environment for the best possible recovery."
The International Monetary Fund Managing Director Kristalina Georgieva called the coronavirus COVID-19 pandemic “a crisis like no other” when she revealed 103 countries had asked the IMF for financial assistance.
The IMF has stated the need to eradicate COVID-19 will cause the worst economic downturn since the Great Depression and many countries are bound for a very sudden and unprecedented recession. The planning for CEOs in almost all businesses has changed dramatically. Employees and managers are working from home, travel bans exist everywhere, aeroplanes stand idle and factories have had to close.
Graeme Beardsell, Akamai’s Vice President and Managing Director of Asia Pacific and Japan, remembers SARS and the lessons learned. He writes how CEOs and directors can manage to overcome the crisis as it will be a long time before businesses and industries get back to normal.
“I was in Hong Kong leading a team of executives across Asia Pacific when SARS broke. It was the first time we had all experienced quarantine measures like the ones now being enforced around the world. It was every bit as concerning and confusing. Every question felt surreal, every business decision heavy with risk.
“I was watching a health crisis unfold in China, but with implications for the rest of the world. The SARS epidemic wiped $40 billion off the world economy. In a 2004 analysis, researches wrote that the economic fallout would ‘go beyond the direct damages incurred in the affected sectors of disease-inflicted countries’. A global economy facilitated the spread of the economic impact via travel, trade and financial networks.
“In many ways the COVID-19 crisis is similar to SARS. First and foremost, this is a public health crisis and as business leaders we need to respond to this challenge in human terms, to help those afflicted and to save as many lives as possible. This is not ‘flexible working’ – there is an acute health risk for employees, their families and the community, and the priority needs to be the health and safety of our people.
“Second, we’re facing an unprecedented and indiscriminate health crisis with an indeterminate end. Unlike the two recessions – the Global Financial Crisis (GFC) and the Asian Financial Crisis – there is no clear path to recovery, to normality for markets and business operations. Economists and health experts have suggested the current crisis we’re enduring has more in common with the wartime efforts than the GFC.
“In these disorienting and volatile times, with an uncertain end date and no precedents to follow, it falls on the leadership at the top of the organisation, both the executive and non-executive teams, to define the new rule book. However, it is not clear how well businesses are prepared for this evolving crisis.
“I believe there are four lessons for CEOs and directors to mobilise their businesses and build resilience into their continuity and emergency response plans to COVID-19, to create the environment for the best possible recovery.”
Don’t overreach communication
Boards need to strike the right balance between being a sounding board and offering advice, and the need to avoid distracting management teams. Boards need to resist the urge to micromanage and request information, to enable the organisation to operate as productively and effectively as possible.
In a crisis with great uncertainty, where directives from health authorities and governments change daily and where employees require additional support remotely, the last thing management needs is more questions.
It’s important to set clear guidelines on communication to ensure the Board and management are aligned on roles and responsibilities. The CEO or the Chair can lead on external communication for the organisation, but it should not be both.
Identify the most appropriate communication two-way channels to keep the Board informed on the developments relevant to the company to avoid day-to-day disruption. The Board should also echo the messages of the leadership team to its network, to eliminate confusion.
Understand your underlying IT infrastructure
Compared to the SARS era, the connectivity of the workforce is significantly greater, and businesses have access to all kinds of technology that enables them to support employees, customers and partners.
But what we’ve soon discovered during this COVID-19 crisis, is that a number of companies haven’t invested in their underlying IT infrastructure to enable robust internal and external communication, 24 /7 remotely. Most companies have a real weakness when it comes to scaling support for all employees to work from home, on different devices at different times on different connections, with varying speeds and reliability.
Leaders need to consider the role of technology to support business continuity in all scenario planning. The greatest strength and weakness to ensuring your operations continue to run as ‘business as usual’ in this changing work environment is the investment you’ve made in your IT infrastructure.
It’s important to ask tough questions of the CIO or CTO on the underlying technology, on how robust and secure it is. Choosing the right technology partners will also equip you with stability, resilience and insights.
Prioritise employee mental health and wellbeing
Leaders need to evaluate the health and safety of their employees, as well as the economic and commercial dimensions of this COVID-19 crisis. Maintaining good mental health in a protracted and uncertain public health crisis is extremely difficult, particularly with enforced social isolation measures.
But today there is an expectation that there will be no disruption to the normal work day and that employees will deliver the same work results, despite being in imposed quarantine or isolation for seven weeks or more.
This expectation is unrealistic in an environment where every time employees walk out their front door they are in fear of catching a disease. The potential physical and psychological impact of this crisis is significant and cannot be underestimated. Leaders need to have a clear understanding of their duty of care obligations in these new work arrangements, including mental and physical health risks, communication flows and productivity support.
Technology is essential here, in not only enabling employees to work virtually and remotely, but also to enable people to feel like they are connected and a valued participant in the organisation and community.
Plan for all scenarios in your supply chain
Board and management teams needs to continually evaluate their business continuity plans to include every possible scenario that could impact business operations all the way through the supply chain.
Why? Who would have thought three months ago, with the market booming and the US/China trade deal about to be signed off, that we would be staring down the biggest drop in share markets in 40 years, with talk of a recession globally and with a health crisis at pandemic proportions with no end in sight?
Scenario planning is a critical tool for dealing with uncertainty in the future. Leaders need to work with management to develop and run multiple crisis scenarios and simulations, to test the strengths and weaknesses in the organisations’ response.
It’s important to build business continuity plans at either end of your supply chain; from suppliers to end users. As we’ve seen, a reliance on a global supply chain anchored in one country can be detrimental to a business’ continuity.
It’s also about planning for the rebound. It’s hard to imagine the end now, but in order to bounce back, businesses need to plan for a surge in people, processes and technology. A multi-option continuity plan underpinned by a robust IT infrastructure can support businesses on the long road to recovery.”
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