COVID-19 has had a real and immediate impact on organisations across Australia. Organisations have had different levels of preparedness and planning. Many decision-makers have discovered their plans had varying levels of fitness for purpose.
The post mortem discussions as to the suitability of risk management and business continuity processes for addressing a crisis like COVID-19 have already commenced. Questions are already being asked as to whether, what are considered standard risk management approaches and tools, are suited to non-linear risks and complex adaptive systems?
Executive management and boards, may be asked why they did not prioritise scanning for existential and systems level risks. COVID-19 will be with Australia and Australian organisations for some time. Rather than contemplating what has been done in the past to examine risks, what can senior decision-makers do now?
Crises have phases. This article offers one view of how those phases evolve and provides a structure, for executives and boards to frame their planning, rather than reacting to the next wave of risks and incidents.
Phases of a crisis1
While the phases are shown in a linear fashion this is not the reality. A crisis is messy. An organisation may move from response to recovery, to pre-crisis, to stabilisation. An organisation may be in recovery for one crisis, stabilisation for another and pre-crisis for yet another.
Figure 1: Phases of a crisis
As the name suggests, this is the time before the crisis occurs. For COVID-19 this phase has passed, or has it? There is a lack of clarity as to how the current situation will evolve. During his press conference of 2 April 2020 Prime Minister Scott Morrison reiterated the time period of six months. However, this may be longer or possibly shorter.
Is your organisation ready for how the next stage of this crisis evolves? Has your board and executive identified, how risk management can and will be improved to consider broader systemic risks, to better situate the organisation to identify new waves of the COVID-19 crisis.
Whilst managing the current situation, how is the organisation scanning for the next crisis? What would civil unrest or general lawlessness mean for your organisation? How is the organisation’s executive positioning the organisation for a natural disaster, a second pandemic, such as flu, or a competitor being able to better position themselves to build market share during or after the COVID-19 crisis?
If, as was suggested in the introduction, current approaches are being questioned, what can be done to build better approaches to identify and prepare for the next phase of the COVID-19 crisis? Additionally, what other crises may be in front of the organisation?
Many organisations are currently in the response phase. However, response and reaction are not the same thing. This is the time to stop, think and plan how the organisation will respond. Knee-jerk reaction including the way in which the organisation communicates allow the crisis to drive the organisation, rather than the organisation managing the crisis.
Few organisations are actually managing the COVID-19 public health crisis. This may seem self-evident, but if the organisation is not directly addressing the public health crisis, it is probably not considering life and death decisions. Therefore, it has some time to think through response actions and undertake some considered planning.
Time spent in planning is rarely wasted. The way an organisation frames a problem or question will influence the responses available and the manner in which they are designed and delivered. Actions taken now will have flow on affects and organisations are well served to consider what these may be. What are the second, third and fourth order effects that may flow from decisions and actions taken now?
Some questions to consider include:
- What are we going to continue doing and for how long?
- What are we going to stop doing and for how long?
- What are the things we need to change the way we do and for how long?
- What will changes require us to do differently, including how do we manage the well-being and health of our staff?
Stabilisation or continuity
Having developed and implemented an initial response, the next phase focusses on stability and continuity. In other words, how does the organisation continue to function? The focus here is on keeping the doors open and the organisation functioning as well as possible.
There may be degraded capability and this needs to be communicated internally and externally. This returns to the question above, what will we stop doing and for how long?
Some initial response actions will need to be modified. This is part of the ebb and flow of continuing the organisation’s operations. Not every decision is going to be the right decision the first time. There is benefit in informing stakeholders that decisions and actions will continue to be revised as conditions change. Be upfront and be honest. While in the initial stages of response, stakeholders may accommodate sudden changes in direction, they will reach a stage where they are seeking and perhaps expecting some element certainty from the organisations.
As an example, if an early response decision was to have all staff work from home, then what does the organisation need to do to maintain this over a period of time? This may require an information technology fix, equally it may require just in time training for managers to ensure they maintain staff well-being, health and safety. If the organisation needs to continue to function under new conditions for six months or more, what needs to be done to ensure this can happen?
There is a question as to what will be continued. Is there any part of the organisation that the executive and the board are considering closing? Are there parts of the organisation that will not be recovered after the crisis ends?
Boards, executives and decision-makers need to be open to new approaches and recognising this may challenge their own ideas and views.
Business continuity and business recovery are often addressed interchangeably, but they are not the same. Continuity is about keeping the doors open and maintaining basic functioning. Alternatively, a business may have made the choice, or had it forced on them, to hibernate.
Recovery refers to the actions required to return the organisation to typical operations. In this phase the organisation starts to gear up. Depending on the event this may involve reopening premises and recommencing recruitment. For organisations that may have limited the services they delivered or the products they produced, this may include returning to full product and service lines.
A current example of moving from continuity to recovery is that of restaurant and cafes, which may operate in a takeaway only mode (continuity). At some time in the future these businesses will be allowed to serve customers eating on premises, more in line with what is expected of such a business. This may be incremental, that is, no more than X number of people per Y square metres.
Return to normality
What is normal after a crisis? In the case of COVID-19 which has been a societal and national event crisis, this is a different question to one that has affected a single organisation. Without getting into a philosophical debate about the nature of normality three simple scenarios that may need to be considered include:
- Bounce back (old normal) — things return to how they were before; the organisation and life goes as it was, without significant change.
- Spring forward (new normal) — the world has changed and organisations need to adapt to the nature of this change. Some organisations will struggle because they did not have the ability or the impetus to adapt to the new world.
- Adaptive systems — there continues to be a series of events and disruptions which requires both society and organisations to continually adapt to ongoing change. Based on other major events in the history of the world the COVID-19 crisis will deliver a different world than that, which existed before it. As an example, COVID-19 has forced organisations to embrace flexible working arrangements whether they wanted them or not. Staff who have long requested to work from home on a regular and ongoing basis may have met with organisational resistance in the past. However, six months of COVID-19 will have required organisations to adapt to having a significant amount of its workforce working away from an office based environment. Many organisations may have to justify why this should not continue.
What is considered normal changes all the time, but can be considered what is typical and what can be expected on a regular basis. In the early days of mobile phones, having a mobile phone was unusual, whereas today it is almost expected and has become normal. This reflects a gradual change of normality and typicality.
Senior decision-makers need to consider that returning to normal does not equate to returning to the past. Typical modes of operating away from the office and working from home, as evolved to meet the requirements of COVID 19, maybe what is considered normal in six months’ time. Equally, humans as social animals and may decide that normal is working in groups in an office. Only time will tell.
Post crisis should be focused on organisational learning. What has the organisation learned? In a long-term crisis, learning may include:
- How the organisation managed the crisis.
- How the organisation manages operations. This may include improved flexible working arrangements including working from home.
- New processes and innovations.
- Risk and business continuity planning.
Ideally, in an event which has lasted for six months or longer, learning should be an ongoing process. Organisations can be expected to modify their operations as the crisis evolves.
Organisations are already extolling how they have become more innovative as a result of COVID-19. However, it is useful to document why certain decisions were made and how they have improved organisational performance. This then positions the organisation to better understand whether these decisions will continue to remain relevant under different operating constraints.
Ideas for the future
As stated above, the way an organisation frames a problem or question will influence the responses available and the manner in which they are designed and delivered. Addressing a major crisis requires people who can think critically and divergently, who bring different views and ideas. Organisations need to find their maverick thinkers, those who will challenge the status quo and open up options for addressing the current and future crisis.
A key challenge for organisations is to accept that what has been done in the past, may not work in the future. Boards, executives and decision-makers need to be open to new approaches and recognising this may challenge their own ideas and views. Being open to new approaches must be authentic and genuine. As an example, key decision-makers may be familiar and prefer to use SWOT or PESTLE, but this does not mean that a more organic approach may not deliver better results.
If current organisational risk processes have not prepared executives, boards and decision-makers for a major crisis, then reviewing them is appropriate. This does not mean abandoning current approaches, but expanding them to include a wider range of approaches and techniques. The use of strategic foresight2 methodologies such as: scenarios; back casting; road mapping and stress testing, all provide structured approaches that assist in developing different frames for managing risk and uncertainty.
Approaches for applying critical thinking and alternative review of problem framing and designing and implementing interventions include:
- The Danish Emergency Management Agency (DEMA) refers to this as a Pandora Forward Looking Cell3. The role of this cell is to support crisis teams through considering near term foresight.
- NATO’s Alternative Analysis4 approach, and
- The United States Army’s Red Teaming5
All of these approaches aim to provide analytical support and review to the crisis team by considering what may happen next, how things may evolve and whether the plan can be improved. However, the right people, with the right attitude need to be available to successfully implement these approaches which may be easier for larger organisations.
Crises are messy, the model above implies a linear series of steps. However, crises are not linear and the approaches applied to tame, well-understood, linear risks, will not serve decision-makers trying to navigate complexity. As organisations move through the above crisis phases, they will need to adopt different risk approaches, including assessing and managing systemic risk.
At its heart, risk is about uncertainty and uncertainty is about lack of information and knowledge. Crisis planners need to work through the possible consequences of their actions including the possible second, third and fourth order effects of their plans. This requires cognitive diversity and critical thinking.
- This is based on a web presentation by Kev Brear in conjunction with the British Standards Institute
- Government Office for Science, 2017, The Futures Toolkit Tools for Futures Thinking and Foresight Across UK Government. https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/674209/futures-toolkit-edition-1.pdf last accessed 2 April 2020.
- https://brs.dk/eng/emergency_management/pandora_cell/Pages/default.aspx last accessed 2 April 2020.
- https://www.act.nato.int/images/stories/media/doclibrary/alta-handbook.pdf last accessed 2 April 2020.
- https://usacac.army.mil/sites/default/files/documents/ufmcs/The_Red_Team_Handbook.pdf last accessed 2 April 2020.