The coronavirus has led the news agenda for some time and is clearly having negative ramifications on the business cycle. Stock markets globally have tanked – losing a massive £7.3 trillion in value – due to the unease and uncertainty that the outbreak has created. An impending recession now looms over the economy.
The range and complexity of issues companies need to address with this unknown threat are vast. But two stand out: business continuity, especially given the government’s lockdown announcement on Monday, and the importance of effective communications.
Given this is truly unfamiliar territory, what are the business continuity crisis scenarios that companies need to consider and address?
Jonathan Hemus, founder and director at crisis management consultancy Insignia, says: ‘Any responsible organisation wanting to protect its business, its reputation and its stakeholders should have both a crisis management plan and business continuity plan.
‘The distinction between the two is a crisis management plan is an over-arching strategic plan designed to protect the business and reputation in the long term and designed to be used in a strategic way by typically the leaders of the business.’
He adds that the business continuity plan should feed into and support the crisis management plan because its ultimate purpose is ‘to keep the business operating in the event of a major incident: so it is literally continuing business, despite a crisis’.
‘All organisations should have a business continuity plan,’ says Neil Bayley, corporate brand specialist and managing director at PR firm Good Relations. ‘It should outline how the business will continue to operate during an unplanned event that disrupts its operations or service. It should contain plans to cope with disruption to business processes, assets, human resources and business partners.
‘It should also identify the people responsible for key actions or decisions, plus strategies on how business operations can be maintained during both short-term and long-term disruption. Many businesses are required to have a business continuity plan as part or their insurance cover and quality management system.’
Offering another perspective, Richard Stephenson, chief executive of digital communications tool company Yudu, says: ‘Organisations should have a relatively simple business continuity plan. The plan has to be actionable. Therefore, it has to be understandable. And kept up to date. Very large plans are not the right idea. What you need is a series of mini plans that are related to various parts of your business. More like playbooks on what you are going to be doing.’
‘The real test of business continuity plans is their resilience over weeks or months,’ notes Michael Baker, co founder and associate partner at communications agency Eterna Partners. ‘Where organisations test resilience, it’s often an exercise testing an outage over one or two days for a section of their organisation rather than longer periods across the whole business. The coronavirus crisis needs business to be ready for an open-ended, indeterminate period where they cannot run as normal.’
What of the crisis situation where towns and cities are evacuated and in lockdown, as highlighted by the Prime Minister Boris Johnson on Monday – what here are the business risks and challenges? And how can they be dealt with?
If an organisation has a good crisis management plan and a good continuity plan they should be capable of providing a framework for any crisis and any business interruption, asserts Hemus. ‘A good crisis management and business continuity plan will give you the framework from which to successfully manage any situation, including a city lockdown.’
He adds: ‘The crisis management plan outlines a way of working – that is how the crisis management team should operate in a crisis. It will not solve the problem of a town in lockdown. But what it will do is provide a way of working to the crisis management team to make timely and appropriate decisions and plan timely and appropriate communication.
‘A good crisis management plan provides a structure for working purposefully to protect your business and stakeholders in a crisis. What you can actually do operationally is very limited. But at least you will be recognising that fact early and you will be doing whatever you can do to minimise the impact of that.’
‘Very few towns or cities in which major businesses are located have ever experienced quarantine or lockdown,’ notes Bayley. ‘However, based on the experience of Covid-19 in China, I know many businesses have become much more concerned about this and begun to interrogate their plans to ensure they work in this context.
‘In reality, this doesn’t change the situation drastically from a key location being out of action, because staff and operations still need to continue from a remote location. That location can’t be too close – in the same city – and the plan can’t rely on partners or suppliers who are also affected by a quarantine or lockdown of the same location. The current reality is that most businesses have been preparing and planning for their staff to work from home, using technology and systems.’
‘The biggest trap any organisation can fall into right now is hoping for the best or being in denial,’ warns Hemus. ‘So if organisations pull out their crisis management plans to deal with an entire city or country in lockdown, they are planning for the worst case. It is always better to plan for the worst case and anything less than that is more straightforward to deal with.’
But crisis management specialist Donald Steel offers another, more worrying, narrative. ‘As this crisis has developed into a national – and global – emergency, it’s clear that this is no longer simply about business continuity. It’s about business survival. The fear that thousands of small businesses will disappear – and thousands of jobs with it,’ he says.
‘Business continuity is the process of keeping your business going in the face of an emergency. In the current situation, that’s a tough call for airlines and holiday companies as borders are closed and travel has all but ceased, or for restaurants which can expect little or no business for several months. No amount of business continuity planning will save some of them.’
Eterna’s Baker agrees: ‘The idea of a business continuity plan seems to suggest that something approaching normality is achievable. Normally, continuity plans test outages for a relatively short period or a specific area of an organisation. This crisis is indeterminate and multi-dimensional – physical, economic, social and psychological. Perhaps a more accurate description in this context would be a business survival plan.’
There is no doubt that the situation is now extremely hard-hitting for some companies and they will need to think strategically going forward. ‘The challenge for organisations is to decide what will be the focal point for their strategy,’ comments Baker. ‘There are very clear choices to be made between how to protect the ongoing viability of a business. These include drastic steps to lay off thousands of people or drastically reducing everyone’s income instead, as we have already seen with the airlines.’
‘This crisis is human by its nature – not about money or institutions but health and life. That suggests putting people – particularly employees – at the heart of a continuity or survival strategy would provide a lens to make decisions for the long-term health of people and by extension the organisations they work for.’
Therefore, it puts into sharper focus the need for companies to plan for this worst-case scenario. ‘The vast majority of organisations, certainly large organisations, are engaged in serious coronavirus planning,’ says Hemus. ‘That is our experience of the primary focus of heads of communications, business continuity and risk managers right now – they are spending the vast majority of their time doing that. The bigger question is are they doing it in a purposeful, structured and focused manner and are they considering the worst case? There is a lack of structure and direction in some of the planning that is currently taking place’
For Stephenson, the big challenge for companies relates to the unique nature of the coronavirus pandemic. ‘If you look back at surveys done by PwC and others looking at business risk and business continuity you find the top risk is typically cyber terrorism followed by flood then at the bottom would be some type of pandemic. So many organisations will have been dealing with the obvious risks and many of them just don’t have a plan for a pandemic.’
Hemus agrees: ‘What we are seeing a lot of, as a crisis management consultancy, is that many organisations do not have a bespoke pandemic plan. And many of the ones that do, are dusting off ancient pandemic plans to deal with foot and mouth disease. That is not to say these do not have value – they do. But as we start to look to the future, this may be a wake-up call to make sure that the plans you might need one day are complete, current and up-to-date.’
Supply chain challenges
Given the far reaching nature of the coronavirus other business continuity challenges have to be dealt with and addressed. ‘Failures in the supply chain have to be focused on right now,’ notes Stephenson. This has already been highlighted as an issue by some companies and given the intensified situation is only get more problematic. He adds: ‘You may have many different suppliers. And some will be pretty well critical. We have already seen big interruptions from organisations missing components, which is not the cost of the part, but can be the cost of the actual finished product.
‘You may not able to receive that part because you are in lockdown, so you need to have good communications in the supply chain. So there needs to be complete transparency if there are problems. That is good business practice.’
‘Think about the impact this pandemic might have on your business if your customers or suppliers are affected,’ notes Kate Hartley, co-founder of crisis simulation business Polpeo. ‘How might you deal with late payments, for example, or supplies that might be interrupted? Are you reliant on a single source that might be put at risk?’
There are other ways for companies to address wider societal needs during the crisis. ‘We’re already seeing businesses in local communities offer help and support to the people and places where they live,’ notes Baker. ‘Within hours of the prime minister’s announcement that people should avoid going to the pub, stories surfaced of landlords offering to get groceries for people in self-isolation as a service to their community instead. Large organisations have an opportunity to do the same and the strongest will find a way to look outwards to help their stakeholders come through this crisis.’
And working practices are going to change, possibly for some time.
‘What is each person’s ability to work from home within an organisation?’ asks Stephenson. ‘Do they have an environment in which they can work? Do they have the correct IT equipment? Are the routers they are using secure? Are they trained to use secure equipment? This is the perfect time for cyber terrorists and bad actors to operate.
‘Anyone working from home, particularly over the long term, is vulnerable. So there is a certain amount of cyber hygiene that needs to be checked. And this may be done over an extended period of time.’
Some of the matters the working situation throws up are in this way are practical issues, but with far reaching implications. ‘Do you have regular communications each morning with external workers?’ asks Stephenson. ‘People’s mental health is really important when working from home over a period of time and the company needs to think about that.’
Hartley sets out a similar number of points. ‘Can your employees work from home? Think about what this means in practical terms. Do your employees have the right technology and set up to do this? Have you checked that their broadband speed is good enough, and that they have the right hardware? Can they access office systems? Do they have the right security and insurance in place? Who else is at home with them during the day?’
There could be other challenges for companies. ‘There are still huge areas of the UK that do not have adequate broadband to cope with people working from home. This is a government issue, and one that I suspect will become horribly apparent in the coming months,’ she adds. ‘Allow for large numbers of the workforce to be off at any one time, either because they are ill, quarantined, or caring for someone who is ill or quarantined. Does your plan take into account a parent with a child who’s off school, for example, or someone caring for a vulnerable or elderly person? How will you fill their roles, and how will you support them?’
In turn, Hartley warns that the coronavirus is going to be much harder for organisations that rely on footfall and face-to-face contact. ‘Shops, restaurants and so on – will have to rely on strong leadership, advice and financial support from government in order to survive. We saw in the budget that there will be some relief and financial support to small businesses, for example. It’s not clear yet whether this will be enough – these are extraordinary times.’
It is also true that there are vast swathes of workers in the economy that cannot work from home. ‘The key, really, is flexibility,’ says Jamie Robertson, managing director of corporate reputation at PR firm Ketchum. ‘For office-based businesses, if your people don’t need to be in the office, don’t force them to be. Enable people to plan their own time and make sure your technology is up to scratch.’
Similarly, Hartley says: ‘Normal rules do not apply. You might make temporary exceptions to normal rules on things like sick pay, or flexible working. This is going to take strong leadership and decision making.’
Within all this there is an important company reputation narrative as well. ‘We’re still at an early enough stage where we’re analysing where people caught the virus. Who wants to be the business that didn’t do enough, and gets named and shamed for it?’ says Hartley.
‘It’s going to be interesting to see the long-term cultural impact this will have. Flexible and home working will become more mainstream. Video meetings will replace face-to-face meetings in some cases. We’ll rethink how we do things. We’ll see the end of employees braving it and coming into the office when they’re ill. Employee health will be a much greater priority for employers.’
Ultimately, Steel says there is a strong basis to be measured about the current crisis situation. ‘The UK has some of the best crisis communicators and planners in the world. That’s why they’re in demand across the globe. Stay calm, seek help, stay strategic but adapt your approach constantly with a senior managers call first thing every day. Communicate often with your staff. Be candid, never brutal. Above all, look for ways of being kind.’