Risk in the New World of COVID-19Posted on March 24, 2020
In January, the World Economic Forum released the 2020 Global Risk Report highlighting its top-10 list of global risks in terms of likelihood and impact – for a total of 20 high-ranked risks. We reviewed the report in a recent article for Schulich ExecEd (“Environmental Concerns Top Risk List for 2020”).
The report showed the risk of infectious disease ranked as #10 on the impact list while it did not make it to the top-10 on the likelihood list. That was January and here we are now, just a few weeks later in March, with the World Health Organization (WHO) declaring COVID-19 a pandemic and many countries around the world declaring a state of emergency to combat the virus. Daily, we get news reports on the growing number of infections worldwide. Some have projected that the virus could infect a majority of the world’s population. In light of these developments, the risk of ‘infectious disease’ will surely make it to the top of both lists of the Global Risk Report in its 2021 edition.
Hindsight brings perfect knowledge. Looking at the uncertainty ahead is always more difficult. Add to that the fact that we are human and subject to cognitive biases and there you go, the environmental and climate change risks at the top of the 2020 Global Risk Report were a reasonable guess at the time. SARS, H1N1 and MERS were all distant memories and no longer top of mind. The spread of infectious disease seemed more remote. We also never envisaged the velocity of this risk – the speed at which COVID-19 could exponentially spread in addition to its reach around the world. It’s everywhere.
COVID-19 brings a myriad of risks. It is a threat to the health and well-being of the general population but also for organizations around the world. COVID-19 is affecting our health and safety. It is straining an already stretched healthcare system. It is challenging organizations in many ways as they attempt to go about their everyday business in the face of overwhelming adversity, or, even make the hard decision to temporarily close. It is impacting the global economy. Governments are doing their best to deal with all of this. This is our new future.
What can we do? This is not a time to be passive. It’s a time to be active and engaged. From a personal, family, organizational, national and even global basis, we need to understand the risks to set priorities and take appropriate action.
Personally, we should heed the advice of health professionals and our respective governments. We need to work together to flatten the curve so as to not overwhelm the healthcare system while we wait for a vaccine. It’s a different way of life but it’s essential. Many are doing their part admirably. Sadly, others are not and we are hopeful they will be dealt with swiftly as they recklessly endanger others and in particular the most vulnerable members of our population.
From a business perspective, organizations should be prepared for this. They should have pre-existing plans to deal with crisis management and business continuity. Situations like this reinforce the need for well-developed and testing plans. Crisis management and business continuity plans should clearly articulate designated roles, plans for communication and coordination, decision-making protocols, and emergency action plans. It’s time to put these plans into action and adjust them for the new reality. What’s different with COVID-19 is that it affects the entire organization and organizations everywhere. It has the potential for a very broad reach affecting employees, the supply chain, go-to-market, delivery, access to customers, etc. on a global scale in an interconnected world.
From an organizational perspective, strong leadership is essential. This is when grounding in culture and values really matters. Risk is intricately linked to strategy and performance. Organization need to rethink their strategy – dealing with the short term at hand but with a view to the long term.
These will be challenging times. There are risks to be prioritized and managed but there might also be opportunities beyond the short-term. We should be prepared to weather the storm but also consider how to manage post-pandemic scenarios to seize the opportunities they may bring.
Carmen Rossiter is Program Director for the Schulich ExecEd’s Masters Certificate in Risk Management and Business Performance Leadership, a 13-day three-module program (the next module starting September 21, 2020 with more modules in 2021). To learn more about the program visit the program website or contact Senior Education Adviser Taran Kaur.