Running a business means preparing for the unexpected. Still, corporate leaders and private business owners alike were caught off guard by the magnitude of the COVID-19 crisis.
Successfully managing risk is more crucial than ever, and the right processes need to be in place. There was little time for careful consideration and planning leading up to the lockdown, so businesses have had to think on their feet.
The full economic fallout of the lockdown is still not known, but will no doubt be felt for some time to come. As society starts to cautiously open up in the next phase, what can businesses do to prosper, in both the short and long term?
Priorities will vary. Public amenities, retailers and restaurants will need to address issues around supply chains and public safety. Private office environments will rely more on remote staff and virtual teams. The manufacturing and transportation industries may need some procedural overhauls. All sectors will need to focus on employee well-being and complying with safety regulations.
Taking stock of the risks at hand is a necessary first step. Which work processes need to change, and how? In what ways are employee attendance and engagement level affected? What about remuneration during the lockdown? How can a customer base be regenerated? What is the best way to proceed with face-to-face customer interactions? Are some operations stalling recovery? How can broken supply chains be mended? What approach could be taken to marketing and publicity post-covid? How can goodwill with the public be maintained? What community-oriented actions can be taken?
The degree and probability of different risk scenarios can be evaluated with a simple calculation. A matrix diagram can illustrate a) the most probable and most impactful risks; b) the least probable and most impactful; c) the most probable and least impactful, and finally d) the least probable and least impactful. This prioritizes the issues and acts as a blueprint for a risk management strategy.
What specifically can businesses and governments do to mitigate risk? Communication between all organizational levels is essential. A task force with representatives from every level and department can help coordinate work processes and resources. Consulting with clients, customers, vendors and business partners about needs and concerns should be continuous. The task force can outline a full recovery plan detailing the issues and specific actions to help overcome setbacks.
Even when the impact of this pandemic wanes, that does not mean another virus is not waiting around the corner. Formal, detailed policies regarding events like the pandemic are necessary — not to mention other unexpected things that can reap economic devastation, such as a widespread power failure, extreme weather events, economic depression and recession, and supply chain disruption.
With the gradual lifting of restrictions, businesses will face a challenging path getting things back on track. For some it will be a readjustment, others who have closed down entirely will be doing a total restart. Looking ahead, businesses need a strong continuity plan, informed by the principles of risk management that include agile responses and practical solutions. Companies that define a risk strategy are more likely to prosper through the recovery, and live up to their commitment to workers, clients and stakeholders.
To learn more about Risk Management, visit the program page for Schulich ExecEd’s Masters Certificate in Risk Management and Business Performance Leadership (starting Sept. 21, 2020, in the Virtual Classroom).