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Risk Management in Times of Coronavirus

or the first time in modern times, a challenge is being faced by all countries in a similar manner and it is affecting all areas and industries as well as the average citizen. In this article, our experts have gathered a couple of principles from Risk Security and Crisis Management that will help you to cope with its implications.

Risk Management is a recurring topic at IAPPA’s courses and seminars around the world. Mostly in security contexts but the principles are always the same. So, how can risk management help us all in this moment?

The classic tasks of risk management are identifying, evaluating, communicating and managing risk. In a corporate context, Business Continuity Management also plays an important role.

Identifying the Risk

In order to identify risk, you need access to trustworthy information. So make sure that you are checking on the latest news from official sources such as the WHO and your local Health Organization or Ministry as the situation is changing daily. Monitor the situation in other countries, especially your neighbours. Be aware of how other organizations in your industry are reacting in other countries. If your business has to rely on services/deliveries from abroad, follow the developments in those countries closely.

Besides, don’t forget to look at your own organization. Do you have your own emergency and crisis management concepts to be used in this situation? Which workers are in risk and which ones could be potentially dangerous to others (e.g. external sales teams or close protection of people in risk groups). Do you have partners that receive information from other sources?

Evaluating the Risk

Even though the Corona risk does not have its roots in financial factors, its consequences for organizations are mostly monetary and severe. These can be quantified in different scenarios as well as probability.

Alongside with the classical uses of risk management tools, the high risk of infection is one of the factors that has to be weighed in. For instance, if you have a crisis team, what are the odds that having them all in the same room could get them all infected? Even when isolating workers within the organization, how likely are they to get infected outside? Play with scenarios of the consequences of how statistically contagious the Coronavirus is: for customers, official decision-making, employees and vendors.

Communicating the Risk

Keep short and direct ways of communication both internally and externally. Make sure you have the most up-to-date reliable information and be transparent. Promote the exchange of information daily via videoconferences.

Managing the Risk/Crisis

Now, we have the worst-case scenario of risk management which turns into crisis management. Here the first and foremost advice is accepting that there is a crisis and it will last for a while. Denial, desperation, none of this will help you navigate through this tough moment.

Follow all recommendations made by the official organizations. Prevent the dissemination of the virus as well as you can, living social distancing, cancelling all in-peron activities that can be cancelled and looking for alternative ways to keep the business running (e.g. video calls, working from home, strict shift working, etc.)

Also important, for your business continuity you will need to ensure that critical activities will continue to be executed. In case of many employees working from home, network and infrastructure must be improved. In many cases, redundant or non-critical resources can be reallocated to ensure critical ones will continue to work.

Less attractive but maybe necessary, financial security might have to be gained through alternative channels such as applying for a loan, cutting down non-critical costs or outsourcing some activities. So far, most countries appear to be organizing ways of helping organizations suffering from the Corona crisis. Keep an eye on that and on its requirements and make sure you stay healthy.