Is it possible for leaders to plan for 100-year events?

Originally published on New Zealand Management Magazine.

Covid is frequently characterised as a once-in-a-century event, because the last pandemic to spread quickly to seemingly every corner of earth was the influenza outbreak at the end of World War I.

Undoubtedly, this is the first health-related crisis in 100 years to instantaneously affect economies and business operations, tossing the best-laid plans into the air and forcing prime ministers and CEOs alike to consider how best to protect people and organisations in the face of an invisible tyrant.

So, is it possible to plan ahead for something so momentous, which seemed somehow inconceivable before it happened? Well, yes and no . . . but here is what any business leader can do to give themselves and their teams the best shot at coming out the other side of a 100-year event intact.

1. Now we know what can happen, we can do more to prepare.

Greg Foran, who took over as CEO of Air New Zealand just immediately before Covid hit, forcing the airline to convert to mostly domestic services, told a select committee at Parliament that his company was not prepared for the effects of the Covid crisis, both in the plummeting revenues and the volume of calls from customers seeking airfare refunds.

Now, it is not possible for most businesses to build absolute, fail-safe resilience against a crisis of this magnitude, especially when revenues drop to one percent of normal as Air New Zealand’s did at one point – but we can create readiness and a rebounding capacity in business so that when a crisis hits, the organisation springs back like a trampoline. This requires comprehensive preparation. What does that begin with…?

2. Start with a risk matrix specifically tailored to your organisation.

Every board and their CEO, probably with the advice and input of the whole C-suite, should develop a working risk matrix that includes the three or four most likely crisis scenarios for the business plus the handful of extreme, worst-of-the-worst-case scenarios.

For an airline, an expected crisis scenario might be a major medical event on a plane or a serious conduct issue with a pilot or senior executive, and the stories make their way into media, with shareholders and customers looking for an explanation. The worst scenarios are a plane crash, terrorist attack or an event that effectively grounds planes for weeks or months – such as a highly infectious virus or a cyberattack on global airport networks.

Many businesses in New Zealand, both SMEs and office-based ones, and retail and hospitality, are not dealing with such high stakes, but every business’ risk matrix should account for scenarios in which they cannot perform business as usual – customers cannot come into the office/branch/shop/café, and you have to rapidly alter how you provide your products and services.

A risk matrix should be a living document that is updated as the company evolves and based on constant environment scanning – part of a crisis programme is keeping an eye on local and global developments that could affect your business or your competitors or target customer base. It is always better to see a crisis coming.

3. Design your crisis communications for every stakeholder group in your organisation.

This is a crucial offshoot of the risk matrix. Once you have drawn up the table of risk, break it down and work out how you will communicate with everyone who needs to know – staff, clients and customers, shareholders if applicable, and the wider public via the media. What are the reactive/preparatory materials you need to have in place if one of the potential crises lands, and people start calling your business and posting on your social media channels?

What will you tell your customers, and how will you reach them? How will you reassure staff and give them confidence about their jobs and the future of the business? In the case of a 100-year event you won’t be able to answer every question immediately, but you will be able to tell the people who matter to your business that you have a plan and they are at the centre of it. Remember that whatever your communications plan, you will need to be able to scale it to potentially reach thousands of people almost all at once – so it’s important to focus on database maintenance and social media engagement when times are good.

4. Train every incoming CEO (and COO/CFO/CIO as necessary) on how to manage a crisis in the organisation.

We know that many business schools only touch on business crises and how to prepare for them and fend them off, and we also know that many of today’s CEO class hasn’t come through the traditional Bachelor of Commerce or MBA route – in fact, as the digital age progresses, more and more members of the C-suite are coming from IT backgrounds and often don’t have formal management or crisis training.

This is an area of risk for boards to mitigate, and any investment in training a CEO – or upskilling one who has been in place for a while – will pay dividends in the event of a shock to the business. The training programme might also include bringing in advisers or experts from outside the industry to test systems and thinking and put both directors and C-suite through a dry run that challenges their approach to adversity and how they will protect the organisation from the worst.

5. Consider your culture.

Directors and CEOs have to look as objectively as possible at the culture of their organisation – is there the agility and the confidence, bond and trust between teams and their leaders to transition quickly to different ways of working in the face of crisis? In the first COVID lockdown we saw how some businesses were able to shift, such as the cafés and restaurants that moved to Level 3 and temporarily turned wait staff into takeaway delivery drivers so everyone could stay employed until they could open the doors again.

Culture includes operational functions such as technology, and whether a business has stayed up-to-the-moment with IT will partly determine its ability to move fast when needed. Check whether your tech is right-sized for all scenarios – this will involve services such as the cloud, which allows staff to work from anywhere and safely store and share critical documents. Being able to lay hands on any element of your company’s work product the second you need it will make navigating a crisis much less stressful in the long run.

Written by Dwayne Alexander, the global practice leader at Alexander PR.

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