Developing a Business Continuity Plan for a Pandemic

The coronavirus outbreak of 2020 brought mass disruptions to many areas of our lives, least of all to business operations across the world. The truth is simply that we were not prepared for a pandemic of this scale.

According to one Gartner survey from March 2020, right before the world went into lockdown, only 12% of 1,500 respondents thought that their business was highly prepared for the impact of COVID-19. Meanwhile, 11% said they were either relatively or very unprepared. Moving forward, businesses need to have resilience and continuity plans in place to help mitigate the impact future pandemics could cause.

What did we learn and not learn from COVID-19?

The world at large was not unprepared for the coronavirus. The SARS outbreak of the early 2000s and the Event 201 tabletop exercise from the Johns Hopkins Center for Health Security in 2019 all warned of the dangers a worldwide pandemic might carry. Despite this, many businesses simply did not appear to have a pandemic business continuity plan in place, leaving them at risk of major disruptions.

We have seen first-hand the devastation and delays that a pandemic can cause. When developing plans for business continuity, we need to include a plan for future pandemics, as such an event could happen again. Next time, it might not even be a pandemic. Natural disasters can also wreak havoc on the world, causing governments to impose travel restrictions and introduce public health initiatives and supply chain protections to keep things functioning as close to normal as possible.

How can a pandemic affect a business?

Pandemics cause major disruptions across many areas of a business. From manufacturing and shipping up to human resources and other people-centric areas of the company, what might seem like a small disruption at first can soon snowball into major disruptions.

Some of the key issues that can arise without proper business continuity planning include:

1. Supply chain disruptions

Pandemics often lead to significant disruptions in supply chains as restrictions on movement are introduced. During a pandemic, we often see limited fulfilment or total shutdowns from manufacturing facilities. This can result in issues the entire way up the supply line, from raw materials to product delivery. Ultimately, costs increase for both manufacturers and the businesses they supply.

2. Operational challenges

A pandemic often facilitates the need for health regulations and measures such as social distancing. Introducing these can be legal requirements that then lead to a significant impact on the business. There might be a need to reduce the workforce capacity, so a limited number of employees can only be allowed in for each shift. Costly but necessary health and safety protocols might need to be introduced, and non-frontline workers may need to be supported in the shift to remote working.

3. A shift in consumer behaviours

As seen thanks to COVID-19, pandemics bring about significant changes to consumer behaviours. We typically see many people choosing to purchase items online, particularly regarding equipment needed for hobbies and well-being. This can cause ripple effects across other industries too. With spending falling in some areas and rising in others, even industries that aren't often used by the general public will feel an effect as economies are threatened by recession or economic slowdown.

4. Financial strain

Revenues can fall, and additional costs can be required to implement new health and safety measures correctly, and all of this can add up. This can cause significant financial strain on businesses. If not properly handled, it can lead to cash flow issues and even potential bankruptcy.

5. Regulatory and legal changes

In addition to the usual regulatory requirements set out in a business's corporate governance policy, management may need to introduce new requirements regarding health and safety and the safeguarding of employees. This can lead to significant changes to operations and could potentially lead to legal risks if not implemented correctly.

6. Technology and innovation

Not every pandemic effect is necessarily negative. There are some positives to arise, with one such being the advent of new technology and innovations. Though these advances might not come specifically from the company's industry, the business could choose to accelerate its own digital transformation, finding new ways to develop products or engage customers at the same time.

7. New market opportunities

Pandemics do pose many challenges, but they also offer the opportunity for businesses to pursue new market opportunities. During COVID-19, health and beauty conglomerate Coty announced that they would move to create hand sanitiser for frontline workers. If there is a product or service that a company could reasonably expand to offer during a pandemic, this could help to increase revenue and mitigate some of the other negative effects the business might be facing.

How can the impact of a pandemic on a business be mitigated?

Of course, companies should be striving to reduce the impact that they may be feeling, even if they have managed to diversify their products or find new technologies to embrace as the pandemic continues. Key areas need to be addressed well in advance of them becoming an issue. Actions that can be taken to mitigate the impact of the pandemic on a business include:

Assess cash flows

Strong cash flows can define whether or not a business can successfully continue or not. Assessing cash flows and their weak points can be a vital step in ensuring resilience during the potential economic downturn a pandemic can create. Conducting cash flow assessments can also help to better manage debts and other pressures that could cause issue as orders reduce.

Securing additional lines of credit or looking into other forms of relief such as government programs can act as short-term buffers if cash flows are seriously compromised. Companies can also consider offering flexibility in payment terms to suppliers and customers so as to not lose business. This can include offering discounts or extending payment terms.

Embrace flexible working and other forms of employee support

The pandemic proved that many workforces can successfully operate on either a remote or hybrid basis and still deliver the same projected results that they might have done from the office.

Investing in technology and infrastructure to help facilitate seamless remote work should lessen the operational stresses that might occur if we have to return to a state of lockdown in the future. It can also lessen some of the mental burden on employees as there is less mental stress on them as they adjust to working from home, allowing them to remain productive and able to fulfil their tasks with full efficiency.

With robust and flexible remote work setups, employees can respond to crises just as they would from the office. Distance between team members should not be an excuse for a drop in communication.

Optimise and diversify supply chains

Ensuring that supply chains remain active can prove to be one of the major factors in whether or not a business can fulfil orders. As we saw in COVID-19, some components may even be diverted to create PPE and other vital products.

Diversifying supply chains now, long before a pandemic stirs again, will be critical. Develop relationships with multiple suppliers now and ensure that you have good levels of inventory to ensure that orders can still be fulfilled even with a diminished capacity caused by a lockdown.

Introduce flexible business models

Set up plans to prepare for a pivot of your business model to meet emerging business demands. As consumer behaviour shifts, there might be opportunities for companies to also change their products and services.

To do so is no easy feat. It could involve retraining staff, adjusting business hours, and potentially setting up new business contracts. However, having a plan ready to roll out can help streamline any changes needed.

Create a business continuity plan

One of the single most important steps to take when trying to mitigate the potential impact of a future pandemic will always be to create a business continuity plan specifically for this scenario.

Key components of a pandemic business continuity plan

Though every business should include business continuity planning as part of their operations (with some industries, e.g. the financial sector, being required to do so by law), a pandemic plan might look slightly different to others.

Risk assessment

The first step in creating a pandemic business continuity plan should be to perform a risk assessment specifically with this event in mind. Companies need to discover some of the unique risks that they might face in the event of a pandemic, such as employee health risks and supply chain disruptions amongst others.

By identifying these specific risks, a company can move on to prioritise the ones that would disrupt their business the most. They can then create a risk management plan that includes resource allocation and adequate monitoring procedures to aid in reviewing and updating the risk assessment as the pandemic proceeds.

Business Impact Analysis (BIA)

With risks established, a business can move on to performing a business impact analysis. Undertaking a BIA will identify those critical functions and processes that will most likely be vulnerable during the unique conditions created by a pandemic. The business can then move to create a plan that will protect these functions as fully as possible.

Planning BC strategies

When creating business continuity plans for specific scenarios like pandemics, businesses should develop BC strategies for key areas of the business as identified by the risk assessment and BIAs. These can include:

Communication plans

Clear communication needs to be established both internally and externally. The comms team may be the first to respond to both external stakeholders and customers while also having to answer questions from rightfully concerned employees.

Creating a communication plan gives managers and the comms team the language they should be using and provides a timeline for when messaging should be sent out.

Health and safety measures

A continuity plan should also include guidelines for maintaining a safe and healthy workforce and environment. This might include new remote work policies for those who would usually be in an office, the introduction of PPE gear, and updated sick leave for those affected by the disease.

Resource management

One important factor will always be ensuring that there are plenty of resources available for critical operations. This strategy could include stockpiling these essential resources prior to the pandemic outbreak and maintaining a good inventory at all times.

This could also feed into plans to diversify supply chains to ensure that the business is not overly affected by one critical supply chain needing to divert or shut down. If critical operations are to continue, management needs a plan to follow that includes adequate resource management.

Supplier and partner coordination

Continuing with the theme of ensuring that critical operations can continue, plans need to be created and coordinated with critical suppliers and partners. Good lines of communication and trust need to be nurtured so that updates can be delivered promptly, and potential disruptions can be handled before they cause major issues.

Implementing the business continuity plan

Once the business continuity plans have been created, they need to be implemented in the company processes. This may be done in stages as some protocols might only ever need to be activated in the event of a new pandemic. Other areas might only require awareness from senior management and the understanding of the next steps that need their attention in the right scenarios.

Implementing the plan, and wider business continuity management, might involve the following:

Training and awareness

Employees will need to be educated on their roles during a pandemic. Some may have to take on additional responsibilities, and some may find their job descriptions shifting entirely as the business pivots in a new direction.

As a result, employees should be given adequate training and awareness to ensure they fully understand the changes the business may be facing in the future.

Testing

Any business continuity plan should be regularly tested to ensure that it is mitigating issues and addressing concerns adequately. This cannot be more true for plans regarding pandemics. Pandemics can last for a few months or for years with effects still being felt long after their official end.

A pandemic continuity plan needs to be stress-tested. Only through adequate testing and adjustment will companies be confident that their activities can continue even into lockdown.

Technology and infrastructure

If not already rolled out, companies should prepare for the introduction of new technology and infrastructure as part of their continuity plan. As employees adjust to homeworking, they might require more support and leeway as they get to grips with new operations and technology.

IT systems also need to be adequately tested to ensure that they can handle pivots or increased loads that might occur as a result of a work-from-home order. Whereas IT staff may be able to fix issues fairly quickly in an office setting, it might take them slightly longer when working remotely.

Legal and ethical considerations

Pandemics can frequently bring legal changes for businesses that need to be obeyed. The government will introduce certain protocols to reduce the spread of infectious diseases, and businesses may have to demonstrate to regulatory bodies that they are compliant with new laws.

A pandemic will also bring about some ethical considerations, and provision for these should be made in the pandemic business continuity plan. The health and well-being of employees should be kept at the forefront of concerns, but a pandemic can often cause this to clash with cash flow issues. Businesses may have to include ethical considerations in their decision-making processes.

Continual review and improvement

As with other business continuity plans, continual review and improvement is a vital part of the plan's creation. New information will become available, and past incident reports could also provide guidance on changes to make in the future. Even if an incident has nothing to do with a pandemic, it can still inform responses and shape the way a business handles different risk scenarios.

Companies across industries need to speak to each other. Best practices should be shared so that everyone can prepare best for the next pandemic or major world incident, whenever it might happen.

Futureproof the success of your business continuity plan for pandemic with Continuity2

Business continuity plans help organisations to be proactive rather than reactive when it comes to major world events that could affect operations. The outbreak of coronavirus taught us just how unprepared the world was when it came to pandemic preparedness. Businesses should invest in comprehensive continuity planning now to safeguard their operations, employees, and customers.

When was the last time your company updated your pandemic business continuity plans? Have you not updated them since 2020?

C2 Meridian BCMS provides organisations with a comprehensive approach to business continuity planning. Business leaders and resilience professionals can fully engage with disaster recovery planning and operations management, allowing the right people to be notified in exactly the right circumstances and ensuring business continuity across the entire company.

Automate and improve your company's business continuity approach and ensure that if the worst should happen, you're best prepared. Book a demo and discover how C2 Meridian can aid your continuity planning today.