Companies failing to create detailed crisis management and business continuity plans are likely to find themselves at peril, warned the Conference Board.
The avian flu virus, which has spread rapidly in wild and domestic bird and fowl populations through Asia, Europe and Africa, has killed about half the people who have contracted the virus from birds. While the timing and severity of a worldwide pandemic are difficult to predict, the report warns that "to gamble that it won't happen or its impact will be minimal could prove catastrophic for businesses."
The board study proposed that responding to a flu pandemic requires a different kind of business response than natural disasters and other crises.
"Unlike most business continuity planning efforts, coping with a pandemic requires a more holistic response," said Ellen Hexter, director of The Conference Board Integrated Risk Management Program and author of the report. "Most crisis management and business continuity plans are built on the expectation of loss of infrastructure or data, for example. An avian flu pandemic would be nearly the opposite, impacting the workforce in one's own company and throughout the supply chain."
MANAGING A POTENTIAL DISASTER Pandemic crisis management requires a range of tools, from scenario planning to creating global, company-wide strategies to deal with potential disasters, she said. The creation of crisis management and business continuity planning can help transform risk mitigation strategies into business processes to manage extraordinary events.
The development of risk mitigation plans is transferable to other risk management areas and functions. Because a real pandemic would likely cause high employee absenteeism and damage a company's ability to produce goods or services, an avian flu pandemic would have a global rather than a single-area impact.
BALANCING HUMAN NEEDS WITH CORPORATE NEEDS The threat of a severe pandemic has driven many companies to develop detailed crisis management and business continuity plans. While first tending to the human needs of employees, their families and others, companies are now developing plans to deal with periodic and extended business interruptions.
"At the very least, companies ought to consider how to continue when work practices must be altered to reflect the reality of a changed environment," said Hexter. "Meetings, travel, and even office environments can spread infection through an extensive population. Because of this, companies can play major rules in containing the spread of the virus if they plan adequately."
For example, she noted, in October 2005, the Netherlands-based global bank ABN Amro set up a task force to plan company-wide strategy to deal with a potential flu crisis. It created plans to educate all employees about symptoms and appropriate responses; made the decision to not purchase anti-viral medication as a matter of principle; and emphasized ethical considerations of stockpiling drugs in light of their current scarcity. The group also recommended setting up a task force team in each country where the company operates to monitor the health environment.
After considering human needs, managers must face the challenge of assessing risks to the continued health of their businesses. Identifying key people and processes is necessary to sustain business in the face of a pandemic. Many companies are choosing to run scenarios of how to get work done with 20-30% of their workforce incapacitated