by Chloe Demrovsky
May 13, 2020
by Chloe Demrovsky
May 13, 2020
From a safe social distance, I’ve been fielding frantic calls from organizations that don’t have a business continuity plan to help them respond to the spread of the COVID-19 global pandemic. I’ve also gotten calls from those who do, but there is nothing in it for a pandemic scenario, which manifests itself differently from natural disasters or cyberattacks.
If you don’t have a business continuity plan in place, these basic steps will help get you started:
Get the right team together and identify your goals. Be realistic about what you can sustain and how you should prioritize. It is unlikely that your organization is able to continue business as usual right now. That’s why you need to (virtually) bring together the people who understand your core business competencies well enough to make judgment calls with limited information. Leadership direction must come from the most senior levels (CEO and/or Board of Directors). Then form a steering committee that includes senior representatives from operations, finance, human resources, information technology, and legal as well as input from the heads of your various product or service lines. If you don’t have a plan now, you probably don’t have a business continuity planner on your team. You should identify a member of this core team who can serve in that function, get educated, and lead your process.
Identify the current or potential risks that can adversely affect your organization. Obviously, this includes the current pandemic, and you should think about how you can continue to operate if 35-40 percent of your workforce is out sick. But you should also dig deeper. For example, work from home opens you up to all kinds of cyber vulnerabilities and other technical challenges. And the National Oceanic and Atmospheric Administration (NOAA) Climate Prediction Center announced that they are anticipating a more severe flood season than usual in parts of the U.S. Once you have a list of top risks, assess those risks to determine the potential impacts to your organization, enabling you to determine the most effective use of resources to reduce potential impacts. This process is known as a risk assessment.
Identify and prioritize your organization’s key functions and processes to identify which ones will have the greatest impact if they aren’t available. For example, many of us are currently being forced to test how well we operate without access to our facilities for a prolonged and ultimately unknowable period of time. Once you’ve identified how the current scenario will impact your business, you need to analyze the findings to identify any gaps between your requirements for continuing service levels with minimal disruption and your current ability to deliver those requirements. This process is known as a business impact analysis.
Use the analysis that you’ve just done to decide on a plan of action. You will need to come up with practical, cost-effective strategies to reduce the deficiencies you identified during the risk assessment and business impact analysis processes. You’ve identified what is at risk and how it will hurt your business. Now you can go through and brainstorm how to minimize those risks with the information and resources you have at hand.
Two key takeaways: First, cash is king during a crisis, so protect cash flow to make sure you have a cash runway for some time. Figure out what expenses you can cut and check your receivable position to see what you can collect. Second, don’t assume this will all be over in two weeks or a month. This is likely to be the new normal for some time. Plan for that so that you are prepared no matter what happens. You can come up with a moderate and severe scenario and then monitor to see how your indicators are tracking against them as this crisis unfolds and adjust accordingly.
As a leader, you will need to make tough decisions and keep calm under pressure. But that doesn’t mean you should ignore the deeply unsettling emotional side of this crisis. Do what you can to protect, retain, and support your team as we all work together to face the daunting challenge posed by the spread of COVID-19. Studies show that we trust our own employer above other institutions including the government, media, and business and by a significant margin. Now is the time to show that trust is earned.
Is your business looking for a true banking partner? Check out the solutions we offer that can help you reach your goals.