A practical business approach to managing Coronavirus

Whilst some might be at risk of tiring of the daily headlines in relation to this topic, I have taken my time to understand the problem before putting pen to paper and offering my views. We now know COVID-19 reasonably well. What is less well known is the downstream impacts to business and communities as a result of outbreaks.

From a purely health point of view, the statistics have remained fairly consistent with around 2-3% fatality rate and around 3 people infected by every sick person. This compares with SARS for contagiousness but is only 1/4 as deadly. The reading I have done suggests the virulence may in fact be higher than the documented numbers, and the fatalities as a percentage therefore lower as many will go unnoticed or undiagnosed and so won't form part of the official statistics. Revisiting basic preventative actions such as washing hands regularly with soap and water, not touching your face unnecessarily to reduce risk of transferring the virus from a contaminated surface, covering mouth and nose with a tissue when coughing or sneezing. Coughing into your elbow. Disposing of tissues immediately and washing hands with soap afterwards are all things we tell our kids but don't necessarily mandate in workplaces. Finding the balance between staff not coming to work when feeling off color and wanting staff to come to work and actually do some work will be a challenge faced by many. Culture is key in finding this balance.

In Australia, it is thought that we have around 7 - 10 weeks before likely infections spike with the onset of winter so there is some time to prepare. Previous outbreaks of things like Spanish Flu and MERS resulted in various waves of infection so the likely impact period will consist of a number of spikes. I have read up to 25% of workforce's may be away for periods of time severely impacting productivity and having a ripple effect on supply chains. This is especially so if two and three waves of absence occur on a rolling basis. Inside the workplace, attendance to elevated hygiene and cultural elements not to come to work when sick will be critical in limiting damage internally.

The integrated risk therefore magnifies from the initial medical event, to the markets via uncertainty, interrupted supply chains, loss of confidence and corresponding likelihood of delayed capital expenditure constraining growth. It is this area that I am most interested in which is not to say that the next level with governments coordinating responses across geographic boundaries and institutional responses won't also impact business. Commodity markets are always at risk at times of volatility. Thinking sensibly about forward pricing and locking in parts of production will further assist budgeting and financial management for small business.

Using a simple risk management approach known to most of probability and consequence, supply chains can be stress tested for prudent resource allocation. Cropping clients would be well advised for example to have their critical inputs on hand early just in case as the preparation and sowing is a time critical activity. There is evidence of elderly clients stockpiling some pharmaceuticals just in case there is a run on their daily and weekly needs.

Business clients are testing IT systems and resilience to having a quarter to a half of the workforce attempting to work from home. Contention on the line and IOT (the internet of things) will have IT professionals well engaged in managing both cyber security and keeping as many workers online as possible to assist businesses to be pandemic ready. Ergonomic reviews of home workstations, tag and testing power points and upgrading domestic to business grade plans are further considerations for boards.

Using technology such as Zoom will enable ongoing meetings to occur without being in the same room mitigating both restraint of people movements that may occur and restricting likelihood of cross infections in the peak periods.

Of course, should the entire IT system be offline in an area or due to abnormal demand, disruption may occur even with the very best of planning. Remoting in to networks is very effective on a small scale. When on a mass scale the IT infrastructure very well may not cope. Understanding where tipping points are may help business prioritize within their workforce the critical activity from the non time critical activity that can be delayed if that choice has to be made.

Having gone through the shopping list of potential actions, there is also a need to take a deep breath in this analysis as a board. Often markets overshoot and media sensationalize so not every action is prudent. At the height of the hype there will be some going way beyond prudent into silly territory. We saw this with Y2K which ended up to be a whole bunch of nothing. There will be a lunatic element with this matter just the same as any other. Considering possibilities and then dismissing those that are judged not to be the best use of finite resources will all be part of the business judgement process.

Once the disaster plan and risk management plans are completed in framework, it is then over to line management to implement a systemic and sensible step by step approach to continuously improve organisation weak spots, stabilize supply chains and communicate to staff and stakeholders particularly that you are taking measures to protect people where possible within an organised framework of policy and procedure for remote work and ongoing communication.