5 ways to respond to coronavirus fallout as the pandemic grows
April 27, 2020
Authored by RSM Canada LLP
Kirby W. Houle, CPA, CA shared this article
How is your business managing the evolving risks from COVID-19?
INSIGHT ARTICLE |
Note: This article has been updated as the pandemic has grown, in order to provide our most up-to-date insights
The global COVID-19 pandemic has created unprecedented uncertainty and significant operational challenges for many middle market businesses. As this situation continues to evolve, organizations should continuously reevaluate and reassess their systems and processes for adapting to this new environment, mitigating risk and minimizing negative impacts.
Here are some steps businesses can take in this new environment of social distancing, self-quarantining measures and statewide isolation orders. Many of these considerations may also be helpful in continuity planning for other emergency scenarios.
Crisis communication planning: Consistency is key
Consistent and routine messaging is reassuring for employees. At this point in the pandemic, organizations should regularly communicate with employees, even if the messaging contains little new information. Depending on the size and complexity of the organization, this communication may occur at multiple levels—from all-hands bulletins to individual work teams—but the messaging should always be consistent and from the top down.
Regardless of the frequency or style, messaging content should briefly address how the company will continue to meet stakeholder expectations, how services will be delivered, and any operational changes needed to continue essential service delivery while protecting the health and safety of employees.
Key pieces of information businesses may want to address in these communications include:
- Updates on how leadership is actively monitoring events affecting the organization
- Information about meetings to proactively adjust operations given pandemic data
- Effects on employees
- Reinforcement of remote work policies
- Reminders to visit trusted health authorities’ websites
Every organization should also evaluate its external communications strategy to determine whether event-based messaging may be more appropriate than regular interval messaging, and whether to include a mechanism for refining communications based on feedback from clients, shareholders and others.
The essentials: Reassess the risks now and plan for resumption
Organizations should frequently reassess any operational adjustments that were made more than a week ago across key performance metrics. Companies should also reexamine their risk appetite and risk exposure against the performance of current critical functions or processes. Lastly, businesses should identify any additional, short-term risk mitigation strategies that are possible to implement given the company’s current staffing matrix, resource levels and inventories.
Organizations should review the initial identification and execution of essential services to determine if further business processes or functions should be suspended, or if the essential services should be expanded to meet demands. Businesses also need to consider potential changes in the current situation (e.g. rates of infection) and the impact those changes may have on the organization’s ability to deliver essential services. Leaders of essential services should frequently (at least daily) issue status reports that include information such as:
- Key performance indicators (or other metrics)
- Liquidity levels
- Staffing levels
- Processes updates
- Technology updates
Lastly, service, function and process suspension implies eventual resumption; therefore, organizations should begin to develop models for a phased resumption of suspended operations.
Staffing strategies: Explore alternatives
Continual monitoring of the staffing matrix implemented to deliver essential services is critical. The mix of primary and support staff should be monitored and reassessed in order to identify:
- Impact of shelter-in-place restrictions on work and life
- Additional training and knowledge transfer measures required to improve staff availability and to meet current and future needs
- Successes and challenges of remote working
- Difficulties and challenges of reassigned staff
- Availability of mental and behavioral health services
Organizations may also consider alternatives, such as external contracting services, to augment staffing plans and service or product demands. Alternatively, short-term outsourcing of specific business functions or processes may enable the organization to offset certain demand needs and allow employees to maintain operations.
It is important to remember that while tens of millions of people are working remotely across North America, millions also continue to work at their job locations. Organizations should provide a mechanism for essential employees to provide feedback regarding the need for them to be on-site while their colleagues are working remotely. Ultimately, all companies must continually reassess their protocols and procedures in order to provide a safe and healthy work environment for their employees.
Remote working: Stay connected and secure
Businesses should reassess their policies for remote work and amend guidelines for flexible work schedules where possible, given the combination of modified working and personal environments. It is critically important for remote employees to feel connected to their colleagues and teams beyond electronic pathways, especially during the work day.
Organizations may consider designating staff to monitor or track successes, challenges and issues, and ideas to improve the remote working arrangements initially implemented. In addition, companies can consider identifying a mechanism (such as the crisis communication messages) to address provided feedback, which will serve to foster employee connectivity. Additional information can be found in RSM’s recent article, “Shifting 7 business functions to a remote environment.”
As a cautionary reminder, organizations should not relax information and data security practices during this time. Cybersecurity and data protection are more critical than ever with the dramatic increase in remote workers and the additional strain on technology infrastructure.
Vendor dependencies: Increasing diversification
Vendor management and communication will continue to take on added importance as this situation continues to evolve. Best practices include:
- Developing a matrix of essential functions and processes with critical resources and their vendors so operations can be adjusted more efficiently
- Forecasting resupply and the organization’s demands more frequently
- Communicating forecasted resupply needs to all leadership levels in order to maintain a common understanding of resource levels
- Communicating frequently with the most critical vendors regarding resupply needs, expectations and schedules
Companies should also consider what new or different products and services they may need to respond to, and recover from, in this ongoing disruption. That evaluation should account for potential fluctuations in customer demands, modified operations and other possible future changes.
Finally, efforts should continue to further diversify sourcing for key products and services. That might include preemptively evaluating and qualifying potential alternate vendors, negotiating contracts, and increasing and spreading order volumes in order to spread risk and mitigate vulnerabilities.
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Source: RSM Canada
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