Planning for Emergencies
The new coronavirus—and the disease it causes, now known as Covid-19—was first reported in Wuhan, China, on Dec. 31, 2019. At the time of writing, there were about 81,000 cases confirmed covering 38 countries. By the time you read this column, there likely will have been many more cases across many more countries, including some significant pockets of the illness in the United States.
However, this column may not be too late to assist you in preparing for such an event. Surely, this is unlikely to be the last health emergency, so it is wise to get better prepared for any future events.
You likely already have emergency preparedness documents covering events such as plant or building fires or supply shortages of some type. I suggest you extend these documents to include a written epidemic or pandemic emergency plan. A useful reference is the Business Pandemic Influenza Planning Checklist, which can be found on the United States Centers for Disease Control and Prevention’s website. I will cover some key elements of this checklist below:
Identify a pandemic coordinator or team with defined roles and responsibilities for preparedness and response planning. The planning process should include input from labor representatives. This is particularly important, as it will provide a key focus for high-level decision-making, resource planning and information dissemination. It will also ensure that decision-making is consistent across the organization, so that, for example, one part of the organization isn’t approving travel to a certain place while another is banning it.
It is also critical that this coordinator or team is responsible for obtaining the most up-to-date information from community and government public health organizations and disseminating it accordingly.
Identify essential employees and other critical inputs—such as raw materials, suppliers, services and logistics—required to maintain business operations by location and function.
Be sure to have plans in place for employees to work from home where this is feasible. Consider what information technology tools are needed in order for employees to work from home securely. Establish policies for employee compensation and sick-leave absences unique to a pandemic, including a policy on when a previously ill person can return to work. Cross-train employees where possible and employ back-ups, such as contractors, where sensible and safe to do so.
Evaluate your supply chain in more detail. Pay particular attention to long supply chains and those with strong dependence on Asia. Certainly, we have seen over the last few years that Asia is the hot spot for supply chain issues due to various factors, including trade war pressures and new viruses, and this is likely to continue for some time. Discuss with your key suppliers whether their supply chains are subject to similar stressors and how they can diversify to provide better security.
Establish policies for protecting employees from spreading the illness. Encourage employees who are feeling ill to stay home. Consider eliminating those “perfect attendance” type awards, as they could encourage the wrong behaviors. Restrict travel to affected areas, and put in place procedures for restricting and approving travel more generally. Consider postponing or cancelling large group meetings.
Stock up on supplies, such as disinfectant wipes, and encourage good hygiene practices like hand-washing and proper coughing and sneezing etiquette. Discuss with your janitorial suppliers what additional actions they can take to ward off the spread of disease and what practices they have in place for protecting their workers’ health. Consider advising employees to at least temporarily stop practices such as hand-shaking and hugging or ”air-kissing,” which can spread disease.
Communicate effectively with stakeholders. Consider having focal points in the organization for communications to each stakeholder group (shareholders, community, employees, customers and suppliers) on a regular basis. Keep shareholders and your top management or board of directors informed of the key steps you are taking with regard to preparedness and initiation of your emergency plans, as well as an ongoing rough estimate of the impact of the situation on employees, fixed and variable costs, demand and revenue, and overall financial plan. Make sure you have a finance person tasked with tracking this information and that functional contacts are supplying this information on a regular basis.
Communication with customers needs to be two-way. Customers may see significant demand pattern changes that will inform your plans, and you need to communicate with customers on any supply chain impacts stemming from raw material issues or logistics problems.
Capture lessons from the process. Certainly you have been through different types of business shocks before, whether due to a specific supplier problem, a plant fire or release, or a weather situation such as a hurricane or flooding. Each situation has similarities, but they always have differences as well, and this provides a great opportunity to identify issues and learn from both what is done well and what is not. Be sure to instruct your organization to document what they have learned, and when the incident is over, share those lessons across the organization and put in place improved preparedness plans.
Don’t declare victory prematurely. You may be surprised at how long it takes to get back to normal. Supply chains that have been disrupted can take months to re-establish, and replenishing inventory across a long supply chain is cumbersome and time-consuming. Leave your teams in place until the situation is really resolved.
Consider that consumer demand patterns could be confusing during and after any crisis and may require continued attention for some time. Consider whether the performance of any of your suppliers and logistics partners during the disturbance merits any redistribution of your business.
Reward employees for a job well done. It always amazes me how many employees put aside their personal and family situations to help out the company in times of difficulty. Have management at all levels keep a watchful eye out for such actions and be sure to acknowledge them, whether through public recognition events or monetary rewards.
I certainly hope that the Covid-19 situation is resolved with minimum loss of life and can be prevented in the future with new vaccines. However, at this point in time, it is best to be prepared for its potential impact on your employees and your business.
Sara Lefcourt of Lefcourt Consulting LLC specializes in helping companies to improve profits, reduce risk and step up their operations. Her experience includes many years in marketing, sales and procurement, first for Exxon and then at Infineum, where she was vice president, supply. Email her at saralefcourt@gmail.com or phone (908) 400-5210.