A: Establish both a Response Plan and a Business Continuity Plan and designate a team to guide and respond to your business disruption. Your response should consider (at a high level):
Establishing a Response Team (representing key business functions and jurisdictions) to assess potential disruptions, as well as develop and implement response strategies. This team will also be responsible for monitoring daily COVID-19 updates, meeting regularly (e.g. daily) and adapting response strategies as new information emerges.
Develop a Response Plan for classifying and responding to the disruption caused by COVID-19 that is aligned with the potential impact to the business. Actions taken should be contingent on the level of COVID-19 infection and spread within office(s) (and surrounding communities) and should establish escalation levels with commensurate action plans. For example, a level one response may be triggered by an employee having come into contact with someone having the virus and result in that individual’s self-quarantine with limited impact to the broader business. In contrast, a level five response (of a five-point scale) would occur where there is rampant infection of multiple employees across one or many business units and locations resulting in self-quarantine or hospitalization of greater 30 percent of the workforce.
Develop a Business Continuity Plan to manage the broader business disruption.
This involves thinking through what could go wrong and developing strategies to address disruptions and associated impacts. Disruptions and potential response strategies may include:
Disruption to Leadership
Establish a senior management team succession plan to ensure roles, responsibilities and decision-making authority are clear in the event that one or more leaders is unavailable. This may include, for example, providing signing authority for payments or access to third-party payroll providers to additional leaders to minimize disruption.
Develop a protocol for quickly escalating urgent matters and a process for making key decisions, especially in the absence of key leaders.
Establish a communication plan for sharing of critical messages to key stakeholders regarding the impacts to your business (e.g. disruption in the provision of your goods/services, closure of office locations, etc.) and how you are addressing them. This should include who has responsibility for sharing those key messages and should consider the broad range of stakeholders such as customers, employees, vendors, key service providers, unions, contractors, government, regulators.
Leveraging your Response Plan, establish protocols for both closing and re-opening physical office locations including communications to appropriate stakeholders. Consideration should be given for how operations will be redirected during the interim closure and how stakeholders will be notified when operations resume and office locations re-open.
Disruption to Workforce
Ensure contact information of employees, as well as their emergency contact information is up to date and circulated across the leadership team.
Establish a process to report employee illness and infections to the senior management team, including requirements to report (via phone or email) any confirmed COVID-19 cases and how to address increased absenteeism or a refusal to work.
Consider whether team events, meetings or travel should be postponed or cancelled to avoid the spread of the virus, with a view to restricting anything that is not “mission critical.” International travel imposes an additional consideration for developing strategies to deal with employees that may be abandoned in a foreign country due to travel restrictions or quarantined upon their return.
Consider key activities that must be performed onsite and take appropriate precautions to ensure a safe worksite, including more regular cleaning and sanitization, protective gear, etc. For businesses with more than one location, opportunities exist to share / redirect work to alternate locations and team members.
Where possible, consider implementing work at home practices and prioritize the work that needs to be done.
Ensure employees can continue to be paid. For smaller enterprises, this may include having a copy of the most recent payroll register and cheque stock off-site so that they may make payments consistent with the value of the most recent payroll run. Consideration should also be given to how or whether income support is offered to employees who cannot endure an extended interruption to their pay.
Establish a protocol for determining when employees can return to work and the communication of the “return to work” message.
Consider the impact to contractors in relation to any of the above considerations and plan accordingly.
Work with unions to develop appropriate team member response strategies.
Evaluate the need for workforce reductions, or decentralization of your workforce by conducting operations in multiple locations, to lessen the financial impact of the business disruption.
Disruption to Information Technology
Ensure IT infrastructure can support higher volume of work at home arrangements, while also ensuring overall system security.
Maintain system back-ups in the event of an IT system outage.
Disruption to Operations
Consider the impact to the business of a disruption in the supply of goods or services the organization depends upon and determine response strategies (e.g. alternate suppliers, leveraging existing inventories, etc.).
Evaluate the organization’s distribution network for goods and determine whether other / additional distribution channels should be established.
Ensure key vendors and partners (e.g. suppliers, distributors, etc.) have a continuity plan in place for the provision of their goods / services and ensure they address your organization’s key requirements / dependencies.
Anticipate reduced business volumes and plan for the impact to your finances and cash flows. Consider:
- whether there are opportunities to invoice for goods / services earlier
- regularly monitoring collections and staying abreast of ageing receivables and sales to customers that are struggling to pay on a timely basis
- doing a projection / modeling of what happens if your customers pay you 30 days later than normal but you need to still pay your team members
- working capital needs if inventory is harder to purchase and receivables are more difficult to collect
- reaching out to your bank / lender and discussing your concerns, identifying short-term solutions and potential interim financing options.
Consult with your insurance broker to review your coverage. Evaluate how your operations are impacted and consider whether existing insurance policies potentially provide coverage for losses. Ensure there is a clear understanding of how your loss is connected to your insurance policy wording. It is also prudent to know your insurer’s requirements for documentation when submitting a claim for a covered loss
Ensure security protocols are developed in the event your organization must vacate the premises for an extended period of time.
Where the Business Continuity Plan leverages alternate team members or sites, document and share process and procedure information as a training tool.