COVID-19 has been a crisis like no other. For many companies, it has stretched their crisis preparation and response procedures to the limit and beyond.
Nearly 40% of businesses across the G20 reported that their crisis plans were insufficient to deal with the pandemic, whilst many found that their pre-existing response plans lacked flexibility and did not sufficiently cover a range of risks.
of G20 companies reported that their crisis plans were insufficient to deal with the pandemic
Of G20 companies expect to re-think their crisis response plans in the next 12 months
Of G20 companies expect to conduct cybersecurity audits in preparation for future crises
INTO THE UNKNOWN
The unexpectedness and severity of the COVID-19 challenge means more companies are proactively identifying potential crises, and 51% of companies said they are assessing their readiness against crisis scenarios. A similar proportion said they would update their crisis response plans.
The pandemic has seen organisations better invest in crisis planning for particular operational areas. For example, 40% expect to conduct cybersecurity audits, which is all the more pressing given the extensive transition to remote working and growing vulnerability to cyber threats.
The COVID-19 pandemic has proved it is impossible to have a plan for every eventuality; as such, 90% of respondents across the G20 agree that their company now has a greater focus on planning in principle for unknown risks.
Industries varied widely in the ability of their pre-existing plans to deal with the pandemic. Despite being at the frontline of the crisis, healthcare organisations have demonstrated remarkable preparedness: over 70% of healthcare respondents considered their crisis response plans to have been effective in the face of the pandemic, a far higher figure than any other industry.
Other industries’ preparations have been found wanting to a much greater extent. Food and beverage companies have performed particularly poorly, with over 45% finding their crisis response plans insufficient to deal with COVID-19, and the average company in this sector has shed over a quarter of its workforce since the start of the pandemic.
The transport and extractives industries were also unprepared for a slowdown in global commerce. Transport is the industry with the most heavily affected bottom line – the average firm has experienced a 16% reduction in profit. A quarter of extractive companies also reported to be in distress.
Both industries found their response measures severely lacking: transportation respondents were amongst the least likely to have triggered their crisis response plans at all (40%), while extractives companies were the most likely to have found their plans to be insufficient.
EXPECTING THE UNEXPECTED
Traditional crisis planning has focused on anticipating given scenarios, with the major drawback that planners are constrained by historical precedent. The global pandemic has taught business that the worst crises emerge from outside the realms of imagination.
Truly resilient businesses are ones that do not rely on contingency planners; they go back to first principles, prioritising flexibility and universality. They focus on accommodating their workforce and facilitating engagement from anywhere. Expansive crisis rehearsals also challenge the company to improve. The end result is that crisis response becomes a reflex rather than a reaction.