By Robert Giffin
This week Greece became the first European Union nation to identify bird flu in poultry. As this virus continues to spread across the globe, it’s propensity to mutate into a new strain capable of creating a pandemic continues to increase. The World Health Organization notes that this threat is ‘serious’ and has urged world governments to develop contingency plans in the event of an outbreak.
While the 2003 SARS outbreak was a call to action for many international companies, few organizations are truly prepared to deal with a pandemic that could reach all around the world and affect businesses of all sizes. Avalution Consulting’s Rob Giffin provides some much-needed practical advice on preparing for this threat.
The History of Avian Flu
The type of Avian Flu discovered in Greece is called H5N1 and it is generally considered the most dangerous strain because of its propensity to mutate. Typically, Avian Flu is only transferred between birds, often through contact with bird feces. However, because the flu virus lacks mechanisms for detecting and repairing genetic errors, there is significant concern that the virus could transform into a strain that can be transmitted between humans. The virus’s propensity for mutation is also a concern for health officials seeking a vaccine. Only four drugs are known to work against influenza, and two of them are already showing little effectiveness against H5N1.
Overall, an outbreak of the H5N1 strain that can easily be transferred human to human would quickly spread worldwide through mass transportation systems. Governments will quickly be forced to try and isolate the virus by cutting off transportation and limiting international travel.
The small stockpiles of effective medicines will quickly evaporate, and governments will then rely primarily on voluntary quarantines of healthy citizens, while requiring the isolation of the infected.
The U.S. government`s preparedness plan indicates a major flu outbreak in the United States could kill up to 1.9 million Americans and infect over 50% of the country`s population. This extraordinary increase in need, along with the impact on the health care workforce, will cripple the health care system. Other essential services, including police, fire and infrastructure support, would be equally impacted by a diminished workforce.
Are You Prepared?
This scenario will result in two significant impacts for nearly all businesses:
- Your people will be unavailable (sick, infected, or suspected of being infected) or unwilling to come to work where they may be exposed to the virus
- Your supply chain will be interrupted, especially for businesses that rely on overseas products, materials, parts or people
Existing business continuity plans often fall short because they fail to address workforce and supply chain recovery. Two recent business continuity studies support this conclusion. A study sponsored by Continuity Insights and HP found that people risk mitigation and training are the two primary targeted areas for investment over the next 12 months. The second study, sponsored by Continuity Insights and KPMG, noted that business continuity professionals identify the weakest links in existing plans as those associated with “people” risks, which includes personnel availability and training.
Continuing critical business functions are obviously very difficult when key employees (or even your outsourced staff overseas) are unavailable for work or your organization lacks the critical raw materials to deliver products and services. As a result, simply ‘having a business continuity plan’ does not prepare you for the coming threat of bird flu or any other global pandemic. Recent lessons learned from Hurricane Katrina demonstrate the need to address people and supply chain issues. For example, organizations dependent on products and services from the Gulf coast, particularly critical chemical components, learned that contractual language (the most common risk management strategy) failed to protect them given the existence of “force majeure” clauses. Learning from these experiences will be important because a global pandemic will have a far greater impact.
What Can You Do Today?
- Take an inventory of your “extended enterprise” and the methods of integration with overseas entities 1. Where does your organization source critical products and services? 2. Where do single points of failure exist in terms of your supply chain, to include the people tasked with performing critical support functions overseas (i.e., production, call centers, IT development, etc.)? 3. Do single and sole sourced suppliers exist, and are contingency plans in place in the event of a supply chain disruption? 4. How are critical products, sourced from overseas locations, shipped (and vice versa)?
- Be proactive with your suppliers (and your inventory) 1. Consider increasing safety stock levels for materials from at-risk countries. 2. Ask suppliers for their business continuity plans, specifically making inquiries regarding how they address their supply chain and “people” risks during a pandemic. 3. Develop joint crisis management/recovery plans with key suppliers. 4. Pre-qualify alternative domestic or local suppliers.
- Review your crisis management plans 1. Is a process in place to monitor global health alerts based on the location of your international interests (your suppliers, your outsourcers and your customers)? 2. Is a process in place to communicate with overseas business partners, and track employee travel to high risk areas? 3. Are processes in place to identify developing threats and make decisions? 4. Is a Crisis Management Team (CMT) defined to analyze the threat and make appropriate risk management decisions? 5. Are decision-making criteria and thresholds established to aid in decision- making? 6. Is a process in place to communicate threat assessment conclusions, impacts and decisions to internal and external stakeholders?
- Communicate with your employees * Do you have a process in place to communicate with employees while they are at home? Are you prepared to give every employee in your organization an update every 24hrs in a crisis situation? * Do you have a work at home policy? *How would you track employee availability and identify key employees who MUST come into work? *Is the company willing to make special preparations for employee’s families to ensure the employee is available for work? *Are your employees equipped to work at home?
If your organization does not have a defined, tested business continuity capability, the two most valuable short-term actions recommended are:
- Assess your global availability risks by analyzing your overseas affiliates, supply chain and customer base, with the objective of developing contingency plans for high impact failures caused by a pandemic.
- Define and develop crisis management and crisis communications processes, and provide training to members of the CMT.
Planning for a potential pandemic is important given the potential risk to employees, revenue, market share and reputation. In other words, proactive planning protects the value of your business. However, a short term focus on a global pandemic threat cannot replace a holistic review of how availability risk threatens your business. Current events provide excellent motivation for taking continuity planning seriously, but no amount of short term planning will be effective without a long term commitment to developing resilient business processes.
About the Author
Robert Giffin is a Managing Consultant with Avalution Consulting (avalution.com), a firm specializing in event risk management and business continuity solution design, development, implementation and long-term maintenance. Avalution Consulting excels at rapidly designing business continuity plans and enabling in-house personnel to execute and maintain the plans long term.
Robert can be reached at [email protected] or via phone at 800.941.0381.