“The COVID-19 pandemic is unprecedented. This global crisis was completely unforeseen. It is a true Black Swan event. We could not have prepared for this crisis.”
While we put quotation marks around the remarks above - they are not attributable to a single person. Rather, they are a collection of sentiments heard in the media, online and in the streets.
We will firstly debunk the remarks, secondly provide an example of how a company with imagination and foresight actually, considered such a crisis in October 2019, and finally - ask you to consider an important question.
Unprecedented:
Although the impact of Covid-19 is unprecedented in our time, the fact that this pandemic has occurred should not be an unexpected shock unless we ignore hundreds of years of records of diseases such as the Bubonic Plague, Polio, Smallpox, HIV/AIDS, and Influenza. Ironically, some commentators refer to the occurrence of this most recent pandemic (COVID-19/SARS-nCoV-2/HCoV-19) as ‘unprecedented’ while at the same time comparing it to the 1918 influenza pandemic. Pandemics have occurred before, so as such, are not unprecedented.
Unforeseen:
Even with respect only to epidemiology; we can consider the point above and recall quite recent responses to Bovine spongiform encephalopathy (aka ‘Mad Cow Disease), the 2002-2004 SARS-nCoV-1 (or SARS) epidemic and 2009-2010 Pandemic H1N1/09 Influenza (aka “Swine Flu”), and the ongoing concerns of H5N1 Avian Influenza, MERS-CoV.
Perhaps those quoted as referring to this pandemic as being unprecedented refer to the economic and societal effects of this pandemic, its’ global reach as well as to the tragic death figures
In anticipation of a future pandemic, Australia and New Zealand’s governments had a pandemic plan which included a whole of government response. New Zealand’s plan also considered industry participation and described work streams including health, economics, food, and transport. No doubt the government will review and update their plan as they consider the effectiveness of it in response to the current situation.
Black Swan:
By definition, a so-called ‘Black Swan’ event is one that is completely unexpected and unforeseen.
Some in emergency, crisis and business continuity management fields have started using the term ‘Grey Swan’. The motivations and expected benefits behind the creation of such a descriptor are not known. Given human history and the prevalence of disease, a global pandemic is likely to occur relatively frequently.
How can this COVID-19 pandemic be correctly considered to be a true ‘Black Swan’ event when many Governments, including Australia’s, have been undertaking some planning and creating regulations at least since the SARS pandemic? Some business continuity practitioners, now using the term ‘Grey Swan’, have been discussing pandemics since before Swine Flu.
A more correct statement:
COVID-19 is the latest pandemic which was reasonably foreseeable and amenable to pre-planning. Many governments and corporations, nevertheless, appear to have been caught unprepared or underprepared. They are now responding in real time to that which they previously avoided examining theoretically - either deliberately or through lack of knowledge.
The example:
Our company - Tigertail Australia created an exercise for the Executive Team of a financial services organisation of around 4000 staff across Australia and New Zealand. When other organisations were focused on data security and cyber breach related crisis exercises, this organisation decided to evaluate and test its pandemic plan. When we queried the theme we were informed that the CEO thought it appropriate.
Tigertail’s exercise was conducted in Australia during October 2019 and in New Zealand during November 2019. Corrective actions agreed with the CEO and Executive Team were timed for completion in January 2020. By early February 2020, that organisation had addressed areas to sustain, improve or fix issues identified through the exercise. Importantly, in response, the organisation enhanced its technology to enable all 4000 staff to work from home.
The initial scenario phase of the exercise considered:
Staff who had visited workplaces, customers’ businesses and trade shows while infected, but still asymptomatic, with a highly infectious disease acquired during a recent overseas study tour.
Involvement of various State (NSW and VIC) and National (NZ) health authorities
The assembled crisis management team (CMT) focused on these primary elements:
Immediate staff safety
Immediate customer safety
Reputation
Continuity of business
In the first phase a group of ‘Primary’ CMT members participated, and an ‘Alternate’ group observed.
The exercise was halted and the CMT was split into two teams. Each team had a mix of Primary and Alternate members. The exercise scenario was ‘fast forwarded’ by six months – the infectious disease had now become a pandemic. Despite their best efforts, the impact of the pandemic on their staff aligned to the wider community experience.
In the subsequent second phase, the two CMTs operated concurrently. Neither was permitted to speak with the other. That constraint was explained as “Either they are sick or have succumbed to the pandemic”.
The scenario had been developed to reflect:
A pandemic with a significant infection rate, disease reproduction rate and case fatality rate
Significant stock market index falls and loss of value
A double-notch decrease in the country’s credit rating
Potential of a decrease of the organisation’s credit rating
Significant stress on customer’s borrowings and increasing applications for relief under hardship rules
Significant stress on customers’ primary industries
A class action from the customers whose businesses had been disrupted at the outset of the exercise by the organisation’s infected staff
Staff entitlements to leave dwindling rapidly and some exhausted
In the debrief we facilitated the whole CMT identified that they had:
Learned that health and well-being of their staff is one stream of many in response to a pandemic
Noted that using data from their Business Continuity Management System assisted decision making regarding the prioritisation of resources
Seen the benefit of creating work streams to develop and manage short, medium, and long-term responses for staff, customers, community, regulators, and reputation
Noted that creating work streams offered time for the Executive Team to consider the strategic issues rather than becoming immersed in the operational response
Identified that while a pandemic response should become an important item on the agenda care should be taken to ensure that is not the entire agenda
That debrief was robust and the Chief Executive Officer and Chief Operating Officer overtly sponsored the agreed actions. When Tigertail met with the organisation again in February 2020 it was clear that the knowledge gained in October and November 2019 was driving informed questions focusing on what they may have missed.
The Question:
What are you going to do to ensure that you, your CEO, and your organisation are match-fit and crisis-ready?
Imagine being the CEO above; prepared and able, in February 2020, to brief your Board, industry peers, customers, staff, and regulators on pandemic preparations that had commenced in October 2019 – rather than telling them that “the crisis was completely unforeseen - a true Black Swan event – for which we are unprepared.”
Working with Tigertail would better enable your CEO to be able to state that:
“Yes [X Crisis] is unprecedented. However, through our ongoing diligence we have foreseen something like this happening and what was reasonably foreseeable was amenable to deliberate planning and preparedness. Of course, some of our plans will need to change. We are, however, ready to respond.”
Protecting your people, operations, assets, and reputation is paramount in a crisis or emergency. Tigertail Australia has the background and experience to equip your organisation with the skills to confidently and effectively manage risk, crisis, and emergencies. The Tigertail team has more than 150 years of combined experience. We cover everything, from prevention and preparedness to response and recovery. The team includes Crisis and Emergency Management Leaders, Business Continuity Specialists, Risk Management Advisors, Planners, and Trainers.
Author: Craig Moroz, Senior Associate, Tigertail Australia
W: www.tigertail.com.au T: +61 (0)408 481 931 E: answers@tigertail.com.au
TIGERTAIL AUSTRALIA: CONFIDENCE / CLARITY / CONTINUITY
