The coronavirus pandemic has had a terrible impact across the globe, causing disruptions not only to the healthcare system but also to the economic and business ones. This unexpected outbreak has amped up risk management, pushing companies’ executives and workforces to adapt to this unprecedented reality. Working from home, meeting online, learning new technologies, and serving clients remotely have become the new work setting.
Having risk management and crisis management strategies as part of the company’s business plans is crucial. And Covid-19 pandemic has indeed proven this. Worth mentioning that CEOs and managers who strive for a culture of quality within their organizations, must have risk management plans and related processes.
In a webinar entitled “Risk Management Lessons from Pandemic”, Professor Mark Beasley said that Covid-19 has helped more people than before understand that a single root-cause issue can totally trigger risk at an enterprise level that affects everything. The coronavirus is the issue that came up, and enterprises around the world weren’t logistically ready to operate from home. Simply, companies didn’t have a proper risk management plan. So, what are the risk management lessons from the coronavirus?
1. Prepare for Low Probability Events
Thinking about possible risks and utilizing tools like scenario planning, can help to create risk management, crisis management, and incident response plans. To address challenges and serve the scope of crisis and continuity plans.
2. Get the Crisis Under Control
The key objective in crisis management is to avoid re-occurring incidents. A clear sense of purpose coupled with dynamic contingency planning is required to manage the risks that will be faced.
3. Invest in TechnologyTechnologies saved businesses during the Covid-19 outbreak. Data that are saved in could software were accessible to employees from home and businesses were able to resume their operations. Thus, investing in software, data security, automation, and digital technology is found to be essential.
4. Have a Strong Understanding of Risk Management
The pandemic showed the world that people’s understanding of risk management is limited. So, as mentioned previously, developing scenarios, and studying near-misses would allow unexpected risks to be better understood and managed. Therefore, an integrated understanding of risk management is vital.
5. Make Rational Decisions
During a crisis, people tend to make irrational decisions. This can happen to any CEO, manager, and decision-maker inside an organization. Social Phycology and systems theory are closely allied to risk management. Their techniques can be used to identify the risk and analyze its causes, based on scientific data. Therefore, making rational decisions.
Besides the internal risks, attention should be directed towards the external ones. External risks cannot be directly managed by companies, but their consequences can be. Companies survive crises, despite all the challenges, with a good risk management plan. The latter should be aligned with the internal one, to have a fully comprehensive plan.
Written by Ryhana Fadous