January 31, 2020
The World Health Organization has declared the coronavirus a global health emergency. The fast-spreading disease that originated in Wuhan, China last month has infected more than 20,000 people around the world and killed 427 people (as of Feb. 4, 2020) including the first death outside China.
The outbreak is impacting business continuity globally. Many multinational companies, such as Apple, JPMorgan Chase, Hershey, Ford and Kraft Heinz have halted employee travel to and from China. Several major airlines have reduced and canceled flights to and from China, including British Airways, Air Canada and Delta Airlines.
While the outbreak is still unfolding and it is too early to know the true impact it will have on businesses, business continuity and resiliency experts say the time is now for organizations to look at how prepared they are and make plans to keep operations running amid travel bans and illness. Companies without business continuity plans in place for communicable disease should create one now, and organizations that have not reviewed or practiced plans recently should do so immediately.
“Update and review pandemic preparedness plans,” said Chloe Demrovsky, president and CEO of Disaster Recovery Institute International, which is focused on helping organizations prepare for and recover from disasters. “If you don’t have one, now is the time to write one. It needs to have leadership buy-in and clear objectives, a thorough risk assessment and an analysis of the potential impact to core functions, and it has to have pandemic-specific elements and strategies.”
Demrovsky said because of social distancing mandates in China, many businesses are ordering employees to work from home. It is a feasible solution for many business models worldwide to minimize the spread of the virus, but these kinds of arrangements need to be prepared well in advance of putting them into full practice.
“You need a strategy for prioritizing critical traffic and for making sure that appropriate employees can access your systems offsite,” she said. “You should also be regularly using remote meeting and other communications tools. If everyone practices work-from-home tools regularly, they will be better able to use them during a crisis scenario when they become essential.”
Of course, for certain other kinds of business, such as manufacturers, forcing employees to stay home will directly disrupt operations and the bottom line. Still, there are preparations these kinds of companies can make too, said Demrovsky.
“Manufacturers will have a harder time if factories stay shuttered for a long time, whether yours or an upstream supplier’s factories. Do you have stock at hand, can you create stockpiles now for critical components and/or do you have alternate suppliers?
Above all, communicate to your employees now to calm hysteria and let them know that you care and are prepared to keep them as safe as possible.”
Recommendations for Business Continuity Amid the Crisis
Demrovsky makes the following recommendations for business leaders planning for the safety of their employees and the continued heath of their business as the pandemic unfolds.
- Educate employees about proper hygiene and how to prevent the spread of infection. Check internal stocks of medical supplies including medications like Tamiflu and facemasks, tissues, hand sanitizer, etc. Ensure that any sick policies don’t discourage ill employees from staying home, but be sure to review any changes with the proper counsel.
- Review your business interruption and contingent business interruption insurance policies to see exactly what you are covered for and what might not be covered.
- Review legal protections in contracts for yourself and from suppliers as this will likely trigger force majeure clauses. This could mean your suppliers won’t deliver.
- Check to see if you need to assist with employee evacuations out of affected areas. Impose travel restrictions for employees to affected areas and in general, limit travel at this time as airports and other transit hubs will be incubators. Be aware that restricting travel could have longer-ranging impacts so see what needs to be cancelled and what can be done to change meeting or event locations, etc. to minimize impact.
- Business should be aware that government resources may diverted so there may be some disruption in other critical services like transit.
- Understand how social distancing could affect your business. Can your business continue to operate if 35-40% of your workforce is out sick, won’t come in to work for fear of getting sick or are under quarantine orders?