Risk Management
Perhaps it is the identification, evaluation, and prioritization of risks, or shift in industry, or a brand threat. Leaders who champion risk identification more broadly than just compliance can arise to meet the challenges and overcome service interruption stronger.
Risk Management During the COVID-19 Pandemic
All organizations can utilize the basic principles of risk management to shape a path through the COVID-19 pandemic and minimize the lasting negative impacts. Whether you have an extensive Enterprise Risk Management program in place or not, the below principles will assist you with this crisis and beyond:
1. Identify your risks
Organizations use risk management to "predict the unpredictable." To navigate the risks (and opportunities) associated with the pandemic, it is critical to first identify what those risks are. Indeed, the exceptional circumstances surrounding COVID-19 may have brought to light risks you had not yet considered – or may have infused previously identified risks with a new sense of urgency. Whatever the case may be, before moving in any direction, take a moment to catalogue the risks your company may face over the next month, three months, six months, nine months, and year.
To effectively accomplish this, you should:
2. Be agile
Learn from yesterday, live for today, hope for tomorrow. The important thing is not to stop questioning. You cannot escape the responsibility of tomorrow by evading it today.
Do not throw your old playbook away but return to your values and redefine how you will accomplish them. Be ready to be uncomfortable. Navigate this period with flexibility and understanding. Be creative in your approach to moving forward, listen to what your stakeholders want and need, and consider how you can pivot to fill a void.
3. Think people
Human Resources is the mainstay of every organization. Today people are stressed, tired, frightened, and pre-occupied. The organizational risks associated with mismanaging your employees in this time can be significant (Ex: health and safety, financial, reputational, legal, operational, to name a few).
Where then do we start? People generally need to feel heard; they need to be able to trust and have accessible information. Inform and train your employees about your organization’s risk management plan, a business continuity plan, and a crisis plan – and take the time to communicate how they will evolve, while also seeking their engagement and input.
Risk Management works because it fosters and relies on a holistic approach to identifying, analyzing, evaluating, and treating risk. While it must be fully endorsed and supported by all levels of management, it must involve the entire organization to succeed. Risk Management also encourages frequent communication between all levels of the organization, which in turn leads to greater transparency and trust.
As we move through this pandemic, we see that heroes come in all forms – from delivery drivers, to the cleaners, to grocery store clerks, and health professionals. The heroes within your organizations will also come in all roles. When designing your Risk Management Plan consider how you can make employee days easier for them to help the organization physically and mentally. Whether it is implementing flexible work hours or ensuring that they have a computer at their home, it starts with asking them what they need to do their job during these times.
4. Consider business continuity
The purpose of business continuity is to ensure that your business can survive a critical incident. It consists of a series of plans implemented over phases to shorten recovery time and mitigate impact.
Now is a reasonable time to evaluate the impact of COVID-19 on your organization, looking both internally and externally:
The new normal has created the need for new policies and procedures. On the technology side, the remote working world has greatly increased the risk for cyber-attacks and phishing. Employees must be aware of these risks and trained on the new policies pertaining to the use of technology and the transfer of information and funds. If employees remain onsite to work, organizations will need to address health and safety concerns through new and evolving policies. After managing remote staff for years, I can honestly say that you must consider your internal and external communication plan. Updates need to be communicated to stakeholders in real time. The situation is constantly evolving, and appropriate measures need to be implemented such that communication can be disseminated immediately.
5. Consult with advisers
This is the time for everyone to work together. This is not the time to undervalue anyone reach out to:
Last, consider your reputation. The success stories of COVID-19 will be the people and organizations whose reputation was improved with their response to the pandemic.
When this is all said and done, we will remember the corporate trendsetters who gave pay hikes not just bonuses. We will remember CEO’s relinquishing their salaries and donating their salaries to help their employees. We will remember companies who didn’t supply their employees with personal protection equipment until after the spread of COVID-19 affected their co-workers and work environment.
All organizations can utilize the basic principles of risk management to shape a path through the COVID-19 pandemic and minimize the lasting negative impacts. Whether you have an extensive Enterprise Risk Management program in place or not, the below principles will assist you with this crisis and beyond:
1. Identify your risks
Organizations use risk management to "predict the unpredictable." To navigate the risks (and opportunities) associated with the pandemic, it is critical to first identify what those risks are. Indeed, the exceptional circumstances surrounding COVID-19 may have brought to light risks you had not yet considered – or may have infused previously identified risks with a new sense of urgency. Whatever the case may be, before moving in any direction, take a moment to catalogue the risks your company may face over the next month, three months, six months, nine months, and year.
To effectively accomplish this, you should:
- Examine all types of risks – such as, operational, strategic, financial, and reputational.
- Gather information from all employee levels and from a large cross-section of stakeholders (clients, vendors, government etc.) – they might be able to identify risks that you would not think of.
- Look at other organizations like yours and consider what they are facing; their risks might be the same as your organization’s or they have other identifiable risks that could also impact your operations.
2. Be agile
Learn from yesterday, live for today, hope for tomorrow. The important thing is not to stop questioning. You cannot escape the responsibility of tomorrow by evading it today.
Do not throw your old playbook away but return to your values and redefine how you will accomplish them. Be ready to be uncomfortable. Navigate this period with flexibility and understanding. Be creative in your approach to moving forward, listen to what your stakeholders want and need, and consider how you can pivot to fill a void.
3. Think people
Human Resources is the mainstay of every organization. Today people are stressed, tired, frightened, and pre-occupied. The organizational risks associated with mismanaging your employees in this time can be significant (Ex: health and safety, financial, reputational, legal, operational, to name a few).
Where then do we start? People generally need to feel heard; they need to be able to trust and have accessible information. Inform and train your employees about your organization’s risk management plan, a business continuity plan, and a crisis plan – and take the time to communicate how they will evolve, while also seeking their engagement and input.
Risk Management works because it fosters and relies on a holistic approach to identifying, analyzing, evaluating, and treating risk. While it must be fully endorsed and supported by all levels of management, it must involve the entire organization to succeed. Risk Management also encourages frequent communication between all levels of the organization, which in turn leads to greater transparency and trust.
As we move through this pandemic, we see that heroes come in all forms – from delivery drivers, to the cleaners, to grocery store clerks, and health professionals. The heroes within your organizations will also come in all roles. When designing your Risk Management Plan consider how you can make employee days easier for them to help the organization physically and mentally. Whether it is implementing flexible work hours or ensuring that they have a computer at their home, it starts with asking them what they need to do their job during these times.
4. Consider business continuity
The purpose of business continuity is to ensure that your business can survive a critical incident. It consists of a series of plans implemented over phases to shorten recovery time and mitigate impact.
Now is a reasonable time to evaluate the impact of COVID-19 on your organization, looking both internally and externally:
- Internally: This involves identifying critical business functions, equipment, and employees, and determining how, where and by whom critical services are provided. You may consider suspending non-essential work to reduce risk of exposure, to support social distancing and to reduce unnecessary cash expenditures. Ensure you carefully monitor employee availability, health, and safety. As all people are at risk of being personally impacted by COVID-19, a continuity plan must be developed for all business-critical employees that can be easily executed, should they become indisposed. The chain of command must be clearly identified, and alternatives should be put in place for all critical functions.
- Externally: This requires a supply chain analysis and assessment of the possible risks faced by vendors, manufacturers, suppliers, distributors, purchasers and all organizations and stakeholders that you interact with and rely upon.
The new normal has created the need for new policies and procedures. On the technology side, the remote working world has greatly increased the risk for cyber-attacks and phishing. Employees must be aware of these risks and trained on the new policies pertaining to the use of technology and the transfer of information and funds. If employees remain onsite to work, organizations will need to address health and safety concerns through new and evolving policies. After managing remote staff for years, I can honestly say that you must consider your internal and external communication plan. Updates need to be communicated to stakeholders in real time. The situation is constantly evolving, and appropriate measures need to be implemented such that communication can be disseminated immediately.
5. Consult with advisers
This is the time for everyone to work together. This is not the time to undervalue anyone reach out to:
- An outside risk management consultant: We can assist you in identifying, analyzing, evaluating, and treating your risks. If you do not have a business continuity, incident management, risk management or crisis plan, or if the ones you do have are not working, it is not too late to seek advice to review, improve, create or implement.
- Legal counsel: They can help you navigate new and rapidly changing legislation, assist you with managing health & safety, employee, regulatory, essential service, insurance, travel, and contractual issues, to name a few, that present themselves.
- Insurance broker: Can help you understand your current insurance policies and advise whether you have coverage that can assist you and how.
- Financial advisers: Can discuss which financial incentives, loans, government programs, deferrals, etc. are available to you and how can you access them.
- Mental health professionals: Your staff may need support during these times. Finding a way to get that support to them may prove invaluable.
Last, consider your reputation. The success stories of COVID-19 will be the people and organizations whose reputation was improved with their response to the pandemic.
When this is all said and done, we will remember the corporate trendsetters who gave pay hikes not just bonuses. We will remember CEO’s relinquishing their salaries and donating their salaries to help their employees. We will remember companies who didn’t supply their employees with personal protection equipment until after the spread of COVID-19 affected their co-workers and work environment.
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