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COVID 19 Australia: Building organisation resilience during coronavirus pandemic

  • Market Insight 7 April 2020 7 April 2020
  • Asia Pacific

  • Coronavirus

COVID 19 Australia: Building organisation resilience during coronavirus pandemic

As at 6:00PM on 1 April 2020, there are approximately 850,000 cases of COVID-19. The death toll stands at 42,344 and this number is expected to grow in the coming months. Although more than 200 countries and territories have reported COVID-19 infections, the death toll is unevenly distributed as Italy and Spain contribute to almost half this number. Following are the USA and France, surpassing the death toll in China. The Secretary-General of the United Nations has called the pandemic the "worst crisis since World War II" and has warned that it will cause a recession "that probably has no parallel in the recent past".[1]

When global media began reporting on a novel infectious disease in Hubei Province, China, few predicted the pandemic that would ensue. Even fewer predicted that COVID-19 would be an economic disrupter, obstructing global supply chains and strangling economic activity. In the period from December 2019 to February 2020, it was business as usual for those outside the affected regions in China. It was not until March 2020 that the global situation escalated. On 9 March 2020, 'Black Monday I' saw the worst decline in the global stock market since the Global Financial Crisis. Global markets continue to contract and show instability. Australia's Federal, State and Territory governments have committed staggering amounts to mitigate the upcoming recession. So far, the Federal Government's three stimulus packages total $213.6 billion, with a further $11.8 billion committed by the States and Territories.

Few organisations were prepared for a crisis of this magnitude, which has brought domestic and international movement to halt, and prevented many from attending their ordinary place of work. Unemployment has increased as organisations have not been able to continue their ordinary operations in the face of government directives, or serious concerns for the health and safety of their staff. Similarly, organisations that have not yet closed down have taken hits to their business and productivity levels. However, organisations that have been able to respond and adapt have, relatively speaking, fared better than their competitors.

A smooth transition to working from home has become, for many organisations, one of the most important factors in gauging whether there has been a successful response in the COVID-19 outbreak. One clear example of this is Telstra; as early as 13 March 2020, prior to the announcement of heavy restrictions on movement, Telstra ordered approximately 70% of its Australian workers (20,000 people) to work from home. At this time, there were only 142 confirmed cases of COVID-19 in all of Australia. That figure is now 4,707. Telstra's capacity to direct 20,000 staff to work from home at such short notice displays organisational flexibility, and developed IT infrastructure, in contrast to organisations which were forced to scramble to accommodate the strain on their systems from an increase in the number of staff working remotely.

Another example of organisational adaptability is the response to the various orders across the States and Territories for certain non-essential businesses to shut down. For instance, despite the Public Health (COVID-19 Places of Social Gathering) Order 2020 (Public Health Order) in NSW which required pubs, cafes and restaurants to shut down from midday on 23 March 2020, some restaurants have taken to providing contactless takeaway, or selling ingredient kits to their patrons to cook their own meals at home. The popular delivery platform Uber Eats has implemented a 'leave at door' delivery options (which is mandatory and automatically selected in the app in some jurisdictions). Delivery platforms have partnered with local restaurants which were not previously on the app in order to continue serving customers who no longer wish to, or are able to, leave their homes. Further, States such as NSW and Victoria have amended their liquor laws, which some venues have taken advantage of in order to offer takeaway and delivery alcohol.

Another example of the organisational response to COVID-19 has been the movement of in-person services to virtual delivery platforms. Gyms, which were included in the Public Health Order on 23 March 2020, were ordered to close to members of the public in NSW. Accordingly, gyms and personal trainers have continued to deliver services online, streaming classes and training sessions. Other industries have adapted the online platform, where providers are using video conferencing services to provide tutoring to individuals and groups. Healthcare services are also being delivered through phone and video consultations. In recognition of this move, the Federal Government has announced that telehealth and phone consultation items have been added to the Medicare Benefits Schedule and may now be bulk billed, which will most likely increase the uptake of phone and video healthcare.

Manufacturers have also responded to COVID-19 by adapting production to items which are in short supply during this pandemic. Global brands have been involved in this, including luxury fashion houses Chanel, Prada and Louis Vuitton, which retooled to produce protective masks and gowns. Burberry has also begun producing non-surgical masks and gowns. Bundaberg Rum Distillery has focused production on ethanol, to combat a global shortage owing to its use in hand sanitiser. Telsa, which primarily manufactures electric cars and clean energy storage, will reopen its factory in Buffalo, New York, to manufacture ventilators for hospitals in countries which are experiencing a shortage. General Motors and Ford will also begin adapting production to manufacture ventilators.

As illustrated by the above examples, COVID-19 has brought home the lesson that all business need to ensure that they have organisational resilience; that is, the flexibility and capacity to respond to a sudden change in their internal or external environment. As COVID-19 has demonstrated, disruptions to travel and supply chains, or unforeseen threats to the health and safety of workers, can paralyse an unprepared business.

What does organisational resilience look like in practice? The answer is that it varies from organisation to organisation. Helpfully, the International Organization for Standardization has set out the key steps to achieving organisational resilience in its international standard, ISO 22316:2017.[2]

To ensure organisational resilience, businesses must:

  • Develop a co-ordinated approach to organisational resilience. This approach must bring together, and ensure cohesion between, a business' resources, governance structures, implementation systems, and communication systems;

  • Ensure that the vision for organisational resilience is shared by members of the organisation at all levels;

  • Evaluate and monitor the various factors which may necessitate flexibility on behalf of a business, such as the business' interdependencies, and the activities of competitors. The political, regulatory and environmental environment in which an organisation operates is also relevant;

  • Consider organisational resilience when hiring and deploying new staff. A business should not only consider whether a person's knowledge and skills are relevant to a role, but whether they will also allow a person to respond to change. Further, businesses should consider whether they will be able to move staff around and redeploy staff in the event of internal and external changes;

  • Ensure that management disciplines (such as, but not limited to, crisis management, governance, health and safety, supply chain and financial control) can contribute to an organisation's resilience. Moreover, businesses must ensure that the different management disciplines have an approach which is coherent to the overall vision for organisational resilience;

  • Constantly evaluate and improve on organisational resilience. This may be by way of referring to pre-determined criteria and self-auditing. Obtaining some form of data will assist an organisation to identify where there are shortcomings in the strategy for organisational resilience. Where gaps are identified, the organisation must respond appropriately;

  • Report on organisational resilience to senior management, and consider feedback from staff at all levels; and

  • Have a plan in place for certain scenarios. The scenario does not need to be specifically identified, such as 'responding to a pandemic', but broader issues can be planned for, such as a sudden need for large numbers of staff to work from home.

For more information on the COVID-19 outbreak, please visit Clyde & Co's COVID-19 information hub here: http://www.clydeco.com/coronavirus

 

 


[1] https://www.aljazeera.com/news/2020/04/chief-coronavirus-worst-crisis-wwii-live-updates-200331233659496.html.

[2] ISO 22316:2017 Security and resilience – Organizational Resilience – Principles and attributes.

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