Crisis Management Framework For Businesses: How Should Businesses Respond In Wake Of Coronavirus (COVID-19)

Crisis Management Framework — Coronavirus (covid-19)
  1. Respond: These are the company's actions to manage the current situation and sustain itself.
  2. Recover: Businesses learn from the crisis and try to emerge stronger.
  3. Thrive: Companies prepare themselves for the “new normal.”
  4. How To Use The Framework

Phase 1 — Respond

  • Focus on operational changes and external environment factors that require quick business decisions.
  • Re-evaluate risks by challenging business assumptions, reviewing unit costs, performing financial aggregations.
  • Develop risk mitigation plans
  • Build a communication channel to ensure all the stakeholders are on the same page.
  • Identify and manage the issues related to data security and privacy in remote working arrangements.
  • Identify the potential risks, such as IP infringement and identity theft due to remote access to the official data.
  • Identity, collect, and manage data relevant to contracts.

Phase 2 — Recover:

  • Upgrade and strengthen your procurement policies to ensure quality and speed.
  • Ensure effective vendor onboarding procedures.
  • Re-evaluate the contracts and data retention policies.
  • Identify key contractual clauses, such as Force Majeure, liquidated damages, and termination rights.
  • Monitor the magnitude of loss to business due to failure to meet obligations.
  • Use compelling hypotheses on historical and recent data to make informed decisions.
  • Frequently assess outcomes using analytics and prediction methods to make the necessary correction.

Phase 3 — Thrive

  • Renegotiate contracts wherever necessary.
  • Seek appropriate safeguards to future-proof contractual obligations.
  • Gain business transparency on process and transaction areas for effective customer engagement, financial impacts, and trends.
  • Create rapid response teams.
  • Gain operational and process insights: Continuous evolution of business processes and practices is only possible through regular assessment of improvement areas and process deviations using advanced data science measures. The management has the added responsibility to consider the three phases of the framework concurrently and allocate resources accordingly. Resilient leaders can take specific steps to make this framework more effective as their crisis management plan, reducing their impact. In a way, this crisis allows us to become more resilient, upgrading our business practices, and building more strong values.

Phase 1 — How to Respond?

  • Identify the vulnerabilities in your business that are at risk of non-performance of obligations such as supply chain interruptions and demand shortfall.
  • Assess your business partners who have underperformed on their obligations, such as not meeting SLAs or reduced supply.
  • Try to communicate with all the concerned parties appropriately.
  • Try to document the timeline of events and their impact.

Phase 2 — How to Recover?

  • Assess the magnitude of losses or damages to the business due to failure to meet obligations.
  • Evaluate all the available mitigation options in the form of insurance cover or any contractual damage claims.
  • Review all the contractual documents to establish a factual position.
  • Initiate appropriate action to invoke any litigation, prepare, and submit insurance claims.

Phase 3 — How to Thrive?

  • Re-evaluate the contractual relationships for the suitability, decide whether to negotiate or terminate the contracts.
  • Build contract management procedures for the protocols to be followed during the contract life cycle.
  • Buy appropriate insurance coverage, if any, to future-proof your business.
  • Maintain documentation as we now know the importance of evidence gathering required during any crisis.
Crisis Management Framework — Coronavirus (covid-19)
Crisis Management Framework — Coronavirus (covid-19)
Crisis Management Framework — Coronavirus (covid-19)
Crisis Management Framework — Coronavirus (covid-19)

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