If an organisation fails to make suitable preparations for a pandemic, CEO credibility may be the first victim. Gaye Spencer tells CEO how the Marsh-Albright Group report is providing sound planning advice.
Influenza pandemics are inevitable; they are regular events in world history, and experts, including the World Health Organization (WHO), believe the next one is overdue. One thing is certain – an influenza pandemic will have a catastrophic impact, such as the pandemic of 1918-19 which killed around 30 - 50 million people. Death and illness could result in mass absenteeism from the workplace, with estimates of forty percent or more of the workforce affected in some countries.
Mitigating risks on this scale demands concentrated and concerted action, yet many senior management teams are complacent or confused about how they should prepare. Some are even in denial about the reality of the threat.
According to a recent report on Corporate Pandemic Preparedness by leading insurance broker Marsh and The Albright Group LLC: "Without a ‘one-size-fits-all’ approach or planning guide, organisations have been paralysed by the seemingly overwhelming scope of their pandemic planning and response efforts."
Since pandemic influenza seems to be a relatively infrequent event, and one that cannot be predicted, it is tempting to put preparation low on the corporate priority list. But, with 40 years having passed since the last event, and experts warning that we could be on the verge of the next pandemic, this looks like an increasingly risky policy. Former US Secretary of State, Madeleine Albright and principal of The Albright Group, sees this as a major concern. "We cannot afford to develop a sense of complacency around this particular risk," she says.
The true quality of top management is often only revealed in the face of extraordinary events. Dealing with a major crisis demands real vision and dedication to the long-term success of the business. Simply following routines and reacting to problems as they happen is not an adequate response to the prospect of a pandemic.
Astute managers are already making full use of information resources available on the possible impact of pandemic influenza and the means of protecting their business and employees. The Marsh-Albright Group report is one such resource, clarifying the challenges and examining best practices for building a more resilient enterprise.
James C O’Brien, principal of The Albright Group and an author of the report, urges businesses to build resilience into their organisations and supply chains. "The response to the prospect of a pandemic must include careful planning and the establishment of mitigation measures. So far, too few businesses have acted," he says.
Globalisation of business has made planning even more critical to survival, as supply chains are often dispersed internationally. Transmitted from person-to-person along global transportation nodes, a disease such as influenza could reach every continent within two weeks.
Supply chains may also be broken. As manufacturing, software and services industries increasingly outsource to Asia, they become vulnerable to disruption by diseases originating in this region.
Avian influenza in Asia is identified by the WHO and the Marsh-Albright Group report as a possible precursor of a pandemic. Mutant strains of the virus that are transmitted from human-to-human could quickly close down unprepared local suppliers.
Madeleine Albright advocates that companies should pre-qualify alternative sources for vital components, services and materials as there will be no time to do this once a pandemic has started. She also emphasises the need for companies to look at pharmaceutical interventions, including the stockpiling of antiviral medicines, which form a critical pillar to any pandemic plan. "Corporations need to spend money ahead of time and build this into their business plan," she says.
Fundamental to these preparations is acknowledgment that the challenge is not too big to handle. Management must recognise that there are many practical steps they can take to deal with disruption to their business and its supply chain. A set of best practices is emerging worldwide that demonstrate a reasonable approach to an unprecedented risk. These allow companies to develop a plan robust enough to build confidence in their approach while allowing for any necessary changes.
Sound planning will help businesses maintain a course in the stormy water of uncertainty as a pandemic unfolds. A good plan will also serve management well in calmer times when the crisis is over and their decisions are reviewed.
If accountability is imposed in hindsight, CEOs must be able to show they acted in a reasonable and effective way to minimise losses.
It is also possible they may have to do this in adversarial environments. CEOs could face litigation seeking to allocate some responsibility for the national impact of a pandemic to multinational corporations.
Reviewing and revising human resource policy is the key to pandemic planning. Unlike other natural disasters, widespread disease damages people rather than property, so ‘human capital’ must be the focus of an effective response. Inevitably, prioritising measures to protect employees will require careful planning and making some tough decisions.
By protecting employees and their families, businesses can support governments in their responsibility to protect the population as a whole. It is, however, important to establish where the division lies between public and private sector responsibilities.
The Marsh-Albright Group report characterises the situation facing businesses as follows: "Most companies are not in the business of health care, they are not set up to provide prescription medications or other interventions to their personnel; this has the potential to result in logistical, ethical and legal problems."
Dilemmas about how many antiviral and vaccine treatments should be stockpiled, and which staff should receive them, must be resolved in advance. Finding the best solutions demands clear, objective thinking backed by authoritative legal advice. Once the pandemic has started, there will be no time to complete this process properly - and decisions made in haste may be regretted at leisure when the crisis is over.