Risk assessment and risk management are integral parts of the operation of every business.
Many clients have sought our advice concerning a range of risks which may threaten the continuity of their business. These range from natural disasters, which might be earthquake and weather-induced, through fire, to death or incapacity of the proprietor or key personnel.
Currently the possibility of a pandemic developing if Avian Influenza (bird flu) mutates to affect humans is being well discussed in the media. Some say it is a matter of when, not if, a major flu pandemic hits New Zealand. A business continuity plan (BCP) for such an eventuality is a very important aspect of business maintenance and planning.
Most examples of business interruption envisage an event which is usually sudden and localised and where the recovery period can commence immediately, e.g. earthquake, fire, death etc. In contrast, a pandemic is likely to have a widespread impact, be over a much longer duration, and primarily affect staffing levels, both within the business and within the population, including suppliers and customers with whom the business interacts.
Some scenarios, for instance, mention that during the six to eight weeks of the first wave of a pandemic, 60% may be off work sick, caring for the sick or at home because schools are closed. Up to 33,000 may die. A possible second wave could mean as much as four months of business interruption. It is possible that many businesses will be likely to grind to a halt with a significant number of business failures through the loss of cash flow over that period.
The way in which individual businesses are affected will be many and varied, depending principally on the human factor in their operations. Some, such as primary production, may be quite minimally affected, but those involving people in close proximity in such fields as health, education, entertainment and hospitality, are likely to be much more greatly affected.
Early work on a business continuity plan (BCP) is an essential prerequisite to holding the business together, protecting jobs and investment.
The BCP for each business will vary, in some cases significantly, depending on its individual circumstances, but it is likely to include:
- Short, medium and long-term planning
- Influenza manager
- Medical advisor
- Activation of pandemic continuity plan
- Communication with staff
- How will essential business activities be maintained?
- Identification of core people and core skills
- Business planning for absence
- Knowledge management
- Communications
- How might shortages of supplies affect business operations?
- How can we protect staff and visitors from getting sick?
- Restricted workplace entry
- Personal hygiene
- Workplace cleaning
- Air conditioning
- Social distancing
- Managing staff who become ill at work
- Contact management
- Staff travel
- Personal protection equipment