As of today, there are reportedly more than 90,000 confirmed cases of COVID-19, with the virus having reached every continent except Antarctica. As corporate America wrestles with the unfolding implications of coronavirus, here are three essential crisis management tips to ensure business continuity:
Designate and empower a small core team to act
As in any corporate crisis scenario, the first order of business is to designate and empower a small, core crisis management team to take decisive actions, supported by subject matter specialists. An effective crisis management team rapidly assimilates large volumes of changing, often ambiguous or complicated information, and acts decisively to get ahead of events. Their primary job is leading the company from the inherently reactive posture of dealing with the incoming aftermath of a crisis to the proactive posture of a company successfully moving through one.
The core crisis management team should be small but diverse and vested with significant authority. Generally, this team is made up of a couple of designated management personnel—such as the chief human resources office, an operations manager, in-house counsel, and outside crisis counsel (whose presence and participation maximizes privilege protections)—as well as either an internal or external crisis coordinator, whose organizational acumen frees the rest of the core team to “see the forest for the trees.” This core crisis response group may report to the executive team or board of directors on the crisis response.
The core team should ensure response activities are consistent with company values and company objectives for epidemic or pandemic scenario objectives—usually, employee safety and business continuity. To ensure they are effective and efficient, the core team can look to as-needed specialists to provide additional bandwidth and supply critical knowledge, expertise and information to the decision-making process. This might include communications specialists, employment law specialists, government relations professionals, technical experts, insurance recovery or risk management professionals, and others. For purposes of privilege, efficiency and timely decision-making, specialists should typically remain outside the cocoon of the core crisis team. They should, however, be expected to maintain the same heightened levels of responsiveness and functionality of the core team until the crisis subsides.
Communication is everything
As in any crisis or potential crisis scenario, regular and effective communication—both internal and external—is key. Communications will be its own, intensive workstream in a dynamic crisis scenario, and it must be integrated around a real-time fact-gathering and analysis function.
Start by identifying the enterprise’s stakeholder groups, whether that is employees, major customers, all customers, suppliers, the board of directors, shareholders, insurance carriers, or other constituencies. Then, systematically ensure regular, coordinated touches with each stakeholder group around a set of concise, consistent messages. Pick the communications mechanisms that make the most sense for each constituency and the changing landscape—whether that is an internal intranet, email, text messages, phone calls, bulletin boards, etc. Seek feedback and adjust as needed.
Protect privilege as the Company responds
Coronavirus is, of course, not in and of itself a driver of corporate liability. However, as with any event that has human resource implications or the potential to threaten business continuity, errors in judgment as to whether and how action is taken and communicated can lead to significant liability if handled incorrectly. For example, a decision about employee travel requirements or restrictions can be later questioned if employees become ill and transmit illness to others.
Though comparisons are being made to seasonal influenza, the fact is that the Centers for Disease Control is treating the Coronavirus differently and the World Health Organization has declared the outbreak a “public health emergency of international concern.” Thus, companies could face serious scrutiny, and potentially liability, for how their actions (or inactions) affect their employees or the public.
Further, business and supply chain interruptions may have direct financial fallout that will need to be managed. Companies are well-advised to proactively assess their risks and analyze at the outset the role that insurance coverage could play in managing these exposures.
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