If you want to survive, let alone thrive in a post-pandemic world, it’s time to put your business continuity plan under the microscope.
Hitting with a terrible force, COVID-19 and its associated lockdown sent shockwaves through the Australian economy. As businesses scrambled to react, business continuity planning — previously an often-overlooked subject — suddenly became a top priority, as well as a reminder that economic survival can hinge on a single concept: preparation.
“The pandemic has highlighted the importance of having an up-to-date business continuity plan to prepare for any form of crisis or disruption-type event,” says Risk Management Institute of Australasia CEO Jason Smith.
“Every crisis is unique in the way it creates impacts on an organisation: the speed that those impacts ripple through the business, the unforeseen and amplified impacts on other parts of the business, and the overall severity of the combined impacts.”
Of course, COVID-19 was not your average crisis — say, the office phone system falling over, or a break-in — and for Smith it reinforced the need for businesses operating in today’s complex, interconnected environment to expand their scenario planning beyond the obvious.
“COVID-19 was a great example of that complexity,” he says. “It started as a health and safety event but quickly went well beyond that, with seismic impacts. In today’s digitised and globally connected organisations, businesses don’t exist by themselves — they exist within complex economic and societal systems, and within integrated business ecosystems.”
So what exactly should a best-practice disaster planning process entail and how can Australian businesses better prepare for the next shock to the system? Here are your areas of top priority.
One spectacularly visual example of supply chain shock was Australia’s run on toilet paper in March, as supermarkets struggled to stay on top of panic buying. They weren’t alone. Thousands of businesses around the country experienced similar challenges accessing materials and products, as coronavirus wreaked havoc with logistics here and abroad.
To identify and mitigate risks, Smith advises carrying out an end-to-end ‘x-ray view’ of your supply chain.
“Now is a good time to assess whether additional or alternative supplier arrangements are required,” he says. “In the past, many companies were driven by cost efficiencies — in the future, there’ll be a much greater focus on overarching supply chain resilience.”
As the COVID-19 shutdown saw employees in their tens of thousands decamp from their workplaces, it was digital technology — mobile devices, video conferencing and cooperative working applications — that allowed them to work from home, mitigating for many the economic impact of the crisis.
One notable finding from this switch, Smith says, was that companies with cloud computing models typically fared better than enterprises running on-premises data centres and solutions.
Following on from that, studying how technology can support remote working in your business should be a priority, Smith says. “Companies need to continue to make investments in ICT infrastructure that enables their operations to be as agile and flexible as possible.”
That investment in IT goes hand in hand with building a strong, flexible workforce able to adapt to altered conditions and changing customer behaviours, says NAB Group Executive, People and Culture Susan Ferrier.
“Businesses should focus on new ways of working that meet business requirements, allow employees to collaborate from anywhere and support the organisation to keep operating efficiently when adverse events occur,” Ferrier says.
Establishing strong channels of communication is a priority: they’re the key to remaining engaged with your team when a crisis unfolds and during the crucial recovery phase.
At the executive level, maintaining a close-knit cohort who can work through the challenges together and take decisive action is a must.
“Your leadership team must be able to prioritise activities and spending requirements, execute emergency responses, pivot rapidly when required, and undertake continuous contingency planning,” Ferrier says.
“That’s a lot to consider when something happens quickly, so it’s vital to have done the work beforehand — to have strong plans in place, with agreed levels of responsibility and communication lines, that key leaders are already across.”
The term ‘social distancing’ has entered the vocabulary, and frequent hand washing and sanitising are now the norm. Instead of viewing these as pandemic-specific practices, businesses should consider implementing permanent measures to improve health and hygiene in the workplace.
“Policies and procedures may have to be revisited, to reflect the additional risk control measures we now realise we need to keep employees and customers safe,” Smith says. “Some companies may have to improve their cleaning practices or rethink hot-desking arrangements.”
As for the mindset that employees should turn up for work even if they’re dead on their feet — those days are gone, Smith adds.
Many businesses have watched revenue plummet during 2020, while others have simply been unable to trade. This has in turn caused “deeply negative” business conditions, at levels “last seen coming out of the GFC”, according to NAB’s Monthly Business Survey May 2020.
Being ready to meet financial fluctuations can be the difference between sinking and swimming. In practice, this means examining the potential impact of a range of scenarios and reviewing your working capital requirements accordingly.
That may mean seeking business finance, to manage cash flow challenges; having a business overdraft as a source of extra short-term funds; or putting in place invoice finance, which allows you to access up to 85% of approved unpaid invoices. Your business may also be eligible to access government-backed assistance, such as the Coronavirus SME Guarantee Scheme, which provides unsecured loans of up to $250,000 to eligible businesses, or the NAB Business Support Loan, which utilises the Guarantee Scheme.
The COVID-19 crisis also drove a rush from cash, with tap and go transactions instead encouraged to such an extent that “The Royal Australian Mint has seen ‘virutally no demand’ for coins in 2020 as physical retail closed down”, according to The Guardian. As such, having the merchant technology to support electronic payments is essential for enterprises of all sizes and stripes, Smith says.
While a rigorous continuity plan can help business owners cope more easily when a crisis strikes, the process has benefits beyond mitigating damage. A more resilient enterprise will be better placed to take advantage of post-pandemic economic opportunities.
“Every time you undertake a business continuity planning exercise, you learn something new about your organisation,” Smith says. “It’s all about good management — setting yourself up to manage the downside risk and maximise your chances of success as you move forward.”
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For 160 years, NAB has been helping our customers with their money. Today, we have more than 30,000 people serving nine million customers at more than 900 locations in Australia, New Zealand and around the world. As Australia’s biggest business lender*, we work with small, medium and large businesses to help them start, run and grow. We fund some of the most important infrastructure in our communities – including schools, hospitals and roads. And we do it in a way that’s responsible, inclusive and innovative. We’re more than bankers; we’re backers. We back people, businesses, and communities to grow, to change, and to move Australia forward. *NAB is Australia’s Biggest Business Bank according to Monthly Banking Statistics lending data (non-financial corporations) published by the Australian Prudential Regulation Authority as at January 2020.
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