Companies Without Disaster Plans Get A Coronavirus Crash Course
For commercial real estate companies that didn’t have a crisis management plan, the pandemic has been a rude awakening. It has also been an opportunity to take notes.
According to BDO USA’s Ross Forman, managing director of corporate real estate advisory services, as many as 50% of businesses globally didn’t have a business continuity playbook in place before the coronavirus, and a large percentage of those that did had not run true exercises or simulation to make sure their plan would play out smoothly.
“They may have checked the box — i.e., ‘Is the generator running?’ or ‘What tools do we have?’ But did they test? Did they train? In many cases, the answer’s no,” Forman said. “It’s kind of like health insurance: We’re healthy, we’re making money, revenue’s growing and we’re focused elsewhere. And it’s all good until you get sick and you find, well, you could’ve used some health insurance.”
A Blank Rome survey found in March that the percentage of companies in the U.S. that lacked a disaster relief or crisis management plan as of the onset of the pandemic was even higher — more than 70% of companies. This means companies are "starting from scratch" in terms of creating an emergency response structure on issues including emergency contact systems, cybersecurity and having backup plans if key employees become sick.
"Companies are beginning to plan knowing they will lose a competitive edge if they are not raring and ready to go,” Forman said.
While the "new normal" is setting in, there are a lot of questions companies are scrambling to answer.
For example, just over eight out of 10 companies in Blank Rome’s survey made changes to their international travel policies on the fly — no pun intended — and nine out of 10 made changes to their domestic travel policies, triggering an immediate need for an overhaul in traditional business meetings and technological competency and equipment for videoconferencing and other stop-gaps. Often, canceled travel plans meant lost money and canceled or postponed meetings meant lost opportunity.
Even when leadership did have a plan for how to amend operations in the event of a major disruption, there may not have been any way to feel prepared for what this spring has brought. One 250-employee proptech company with an emergency remote work protocol in place had time to run a one-day simulation before shelter-in-place orders fully took effect. Everything went relatively smoothly, especially with the opportunity to return to site after the trial and fix what didn’t work.
But then schools closed. That was something their trials never even accounted for.
Businesses have been flipped on their heads by the past three to five months of disruption, but Forman said that this experience and all we can take from it will shed light on what business continuity plans may look like going forward.
He recommended company leaders form a task force, drawing on input from employees, to review and renew their plans; identify gaps and deficiencies; outline the origins of the problems they have encountered or could encounter (timeline of response, lack of infrastructure, labor shortages); and create new guidelines that prioritize resiliency above all else.
One consideration is physical equipment.
"What we’ve truly learned is that the unexpected will happen," he said. "Readiness has come into question as companies of all sizes are realizing the difficulties of mobilizing as a remote workforce. Did we have available large monitors? Were they available or did we have to wait or get them ordered?"
From ergonomic furniture to sound isolation to limiting background noise, there is a growing list of items companies now need to consider if workers need to relocate to a home office for prolonged periods.
Another consideration is digital readiness.
"We’re going to see an acceleration of digitizing the business," Forman said. "As we become less and less reliant on physicality, we’re going to need a better-prepared workforce, mastery of virtual communication tools and a better way to communicate with our clients. Contracts, proposals that have to be executed — the whole workflow is going to have to be digitized. Anything that remains manual is going to become a real issue."
And that, he said, means training.
"Better readiness and training have got to be available on Day One."
BakerHostetler’s recently released "return-to-work" checklists are a good boilerplate with which to create far more considered, customized solutions company to company, from sick leave policies to pandemic-forced customer payment issues, remote cybersecurity concerns to determining whether and how to cross-train employees to reduce impact of employee absences.
"Cross-training could solve all kinds of issues" in a future pandemic scenario, Foreman added.
He recalled companies at which employees were required to pinch hit on offering support to clients to ensure needs were met as the team was first scattered and collecting themselves.
"It was overwhelming, keeping up with the help desk," he said. "This goes back to Day One preparedness."
Infrastructure, competency in collaboration digital tools from the beginning and cross-training that allows teams to work together to accommodate sudden disruptions, unexpected absences, not to mention a whole new world of revised sick leave policies, are just a few points of the amped-up business continuity planning Foreman hopes businesses will come away with — and that he will guide his clients to creating — as leadership takes lessons from this pandemic into the after times.