According to experts, including the World Health Organisation (WHO), an influenza pandemic will be a global catastrophe – and it is inevitable. The pandemic will spread along supply chains and could stifle global business. The prospect is daunting, but best practices are emerging so that businesses can be prepared, giving them the best chance to protect their employees and their businesses.
One report, released on 27 September by The Albright Group and Marsh, is a wakeup call to those who have not yet addressed the risk of a pandemic. Avian flu in Asia is the possible precursor of a pandemic that would spread through key nodes in global transportation. The Marsh-Albright Group report predicts that a strain of bird flu transmitted from human-to-human could reach every continent within two weeks. A quarter of the world population may eventually be infected when a pandemic hits.
It is possible to prepare, however. We know a great deal about how the pandemic will spread, and models of the speed and scale of its impact on business are available. With that knowledge, we can predict specific effects of the illness on the workforce and learn from the best practices that are emerging for minimising these impacts.
Governments are moving forward with plans to mitigate the impact of a pandemic on the public. The WHO, led by Dr. Margaret Chan, has implemented an improved surveillance system – the international health regulations (IHRs) – which requires governments to cooperate with the WHO and immediately report potential pandemics. Dr. Chan has also announced plans to create a global stockpile of avian flu vaccines. She deserves credit for moving national governments and international organizations to prepare aggressively.
In the face of public sector activity, private enterprises are now recognizing that they too have obligations to their stakeholders to limit the damage a pandemic will have on their supply chain, their employees and, ultimately, their businesses.
What are the roles and responsibilities of CEOs before and during a pandemic?
The effects on society may be complex and far reaching, but the critical issues that companies must acknowledge boil down to just a few.
Taking the First Step
CEOs must acknowledge that pandemics are inevitable and that their effects will be catastrophic. Only then can they start to develop and implement strategies to manage the challenges that the pandemic will present, such as mass absenteeism and disruption to vital business processes.
It is important not to panic or go into denial at the prospect of a pandemic. The business world has had to deal with it before – immediately after World War I, when the Spanish flu pandemic killed 20-40 million people, more than the number killed in the war; and again in the late 1950s, when the Asian flu epidemic, affecting 10-35 percent of the population, killed approximately 100,000 people.
Businesses responded to depletion of the workforce in the 1919 pandemic by reconfiguring their operations. They introduced more automation and recruited from a female population that had previously stayed at home. Within a relatively short time the business economy regained its momentum and new thinking that was forced on management during the crisis began to pay dividends.
Today, the full impact of a pandemic will be felt far more quickly than in 1919. Globalization of business means that supply chains can immediately be disrupted by outbreaks in other countries. Added to this, global travel for business and leisure will spread the disease across the world at great speed. The trade and transportation networks that deliver the life blood of global business will also provide pathways along which viruses will travel.
Testing Times
In developing and testing their plans, businesses in Europe can take a lead from ‘Winter Willow’, a UK exercise earlier this year involving 5000 employees from government, industry and the voluntary sectors. This exercise tested responses to a major crisis by simulating the effects of a flu pandemic in London and other UK cities. It provided a wealth of information on the suitability and effectiveness of the plans and provisions that had been made. It has also led to important improvements in these preparations.
Worldwide, the public sector has been advancing rapidly in its preparation for a pandemic. US state and federal governments, for example, have bought 43 million treatment courses of the antiviral Tamiflu and aim to raise this figure to 81 million.
Governments’ priorities are to safeguard critical infrastructure and public services. But they also recognize that all parts of society must mobilize and coordinate efforts to meet the pandemic challenge. By protecting employees and their families, businesses can support government in its responsibility to protect the population as a whole.
To be effective, public/private partnership must be built on close coordination. Mechanisms to avoid duplications or omissions in the joint effort must be established well before the event. To this end, the public and private sector should hold discussions in advance to determine what each can expect from the other and how they can work together.
Profiling Vulnerability
Like governments, businesses need to keep critical processes running. All mission critical aspects of the organisation, including maintenance of essential electronic systems, need to be incorporated in the company’s vulnerability profile. Using this profile as a basis, suitable alternative supply chains, logistics and working practices can be specified and pre-qualified.
Specific actions may include implementing and testing technology to provide tele-working options for key staff. Communication and collaboration with supply chain partners can be improved, on-site materials stock levels can be reviewed and backup utilities up-graded.
A dialogue should also be opened with firms that produce treatments. These firms, with years of experience in producing and distributing medicines for pandemics, have an invaluable store of knowledge on how pandemics will progress and strategies that are most effective in improving the effectiveness of medicines.
Securing Supply Chains
As well as its own employees, a business should make the security of its supply chain a priority when preparing for a pandemic. Pandemic fatigue in some countries has kept suppliers from preparing effectively. As late as 2006 in Asia, where the perceived urgency of this risk is greatest, less than 25 percent of businesses had pandemic plans in place.
If any company in a supply chain still believes that pandemics are unlikely, or too unpredictable to prepare for, the whole supply chain is at risk. There is no effective risk transfer mechanism for a pandemic, so planning and mitigation activities are the first and last lines of defense. All partners in a supply chain must work together to give it the resilience it must have to survive when the worst happens. Ideas of best practices in planning and mitigation are already well developed. Since the SARS outbreak, some businesses and governments have begun to implement practical, effective measures to protect business models. A full range of key stake holders including materials, service and utility suppliers are accounted for, as well as employees. Alternative sources, supply chains and ways of working have been developed and anti-viral treatments stockpiled.
Measures such as these will allow a business to continue its operations during and after a pandemic. Delay in implementing them, in the face of an impending event that is accepted by governments and health authorities as inevitable, is a failing in corporate responsibility.
The effects of a pandemic could be felt within a matter of days; preparations to deal with it will take many months, so there should be no delay in starting the process. This is not a time for heads to be buried in the sand, nor can confusion be allowed to paralyze the planning process. Strong leadership from the top is critical in the face of this impending crisis and there is no better opportunity than this for CEOs to show their determination.
James C. O’Brien is a Principal of The Albright Group LLC, a global strategy firm, and of Albright Capital Management LLC, an investment advisory firm focused on emerging markets. He has nearly twenty years of high-level experience working with international businesses, governments and nongovernmental organisations.