This won’t be like the usual COVID-19 risk pieces we’ve all been inundated with lately. We’re going to take a positive and practical tone towards risk even while we recognize that organizations are overwhelmed, and drastic measures are being taken. So, let’s put that rally cap on, throw some water on the face, and have an extra strong cup of joe for a minute.
Resilient organizations faring well today are likely following a plan previously put into place for this exact type of scenario by Risk Managers who may have been seen as alarmists at the time. While those Risk Managers can now say, “I told you so,” that doesn’t help those who were not as prepared. What can we learn from hindsight? We’re going to lay out three simple actions demonstrating how to move forward and manage risk to ensure a smooth reboot in the coming months.
Action 1: Establish Strike Teams to Understand Business Impacts
The ship has sailed: Risk has probability. We are dealing with certainty at this point or “Houston, we have a problem”, as Jim Lovell famously put it during the Apollo 13 mission. If you are not clear on the internal business impacts at this point, including upstream and downstream channels, we recommend establishing “red teams” to perform deep dives into targeted business areas and analyze critical impact areas and, more importantly, their sources. Start tracking these impacts and putting controls in place immediately. Be careful and avoid any confirmation bias. Make sure you test all assumptions as a deep understanding of problem areas addressed in this step to give you insights and decision-making information to increase the odds of business recovery (think: KPIs and KRIs). At the same time, it will help you understand any risks associated with exit strategies and prepare for “Action 2.”
Action 2: Assemble Task Forces to Transition Back to Normal
Failing back to normal is often much harder than we expected. Some companies “failed over” to contingency plans and are functioning well as a result. Bravo! Don’t forget that “failing back” to normal business can be unfamiliar territory and carry previously unidentified risks; thus, spending time to understand and acknowledge these risks and roadmap a new future is crucial. While failing over and failing back are topics often associated with disaster recovery of critical IT infrastructure, they are also applicable to policies that may have changed, like work from home, travel, and compensation. In failing back, you will also have to implement new modes of operating, find efficiencies in rehiring employees, and recalibrate reporting models. For any failovers implemented, we recommend that organizations start to assemble transition task forces designed to review the failovers and assess strategies to fail back to normal policies and processes. During these reviews, team members should seek to understand any risks or issues associated with them and develop activities and plans to reduce their impacts to ensure as smooth a transition as possible back to the next normal.
Action 3: Start Looking for Opportunities for the Future Now
The global business field was brought to a standstill and your strategic plans are likely in the mulch pile generating low grade steam. How will the new landscape look for you and how can you take advantage of this to grow and strengthen the business or your personal life? Smart and resilient organizations are already looking at how their industry will change but, more importantly, how they can adapt and grow from the negative impacts of the pandemic. Consider how healthcare technologies and the broader technology landscape will change. Biometrics, artificial intelligence, blockchain, and digital currencies are rapidly shifting to the forefront of business as a result of the pandemic. How will our global relationships change, how much risk is there in your global supply chain, and how much control and resiliency do you need in an environment where each country and region may find themselves impacted again at different times? You’ll want to be on the right side of this disruption.
Establish an independent-minded “green team” to work with internal and external subject matter experts, examine opportunities, plant new seeds, and be strategic. Avoid game theory and paralysis from uncertainty. Now might also be a good time to acquire new lines of business or make strategic mergers and acquisitions. There are some bargains out there. The key will be managing any capital risks you may have like shifting currency valuation.
While there will never be a risk-free world, there will always be opportunity for growth. These three approaches to identifying and managing risk can help you understand areas of vulnerability and which business decisions need priority. As you focus on those critical business decisions, teams like the green team will help provide insights into how your organization can find and take advantage of opportunities. Remember, risk management should support your business objectives and growth strategies, not hinder them. We help organizations embrace risk for upside management and achievement of objectives and strategies that enables them to grow and thrive, even in down markets.