Readers will recall our alliance partner, Decision Inc’s article speculating on the progress of vaccinations, cases numbers and the date/s for the easing of lockdown restrictions. The focus of the article was New South Wales with its high case numbers at the time. The article is here for those that wish to revisit it.
Pleasingly, the analysis conducted by the Decision Inc team looks to have been pretty accurate with NSW predicted to reach 70% double dose vaccinations on the 15th October (actual 7th Oct) and 80% double dose on the 20th October (actual 17th Oct).
This should increase our confidence with the prediction to hit 90% double dose vaccination in NSW by 19th November.
Whilst we can draw some comfort from the numbers and the increased freedoms we are now starting to enjoy, there are still risks to consider as we transition to the ‘living with Covid’ phase – and these are global rather than specific to NSW. As we know, risk is defined as the effect of uncertainty on objectives, remembering that this uncertainty can have both positive and negative effects. So, what are the uncertainties?
The Australian Institute of Company Director’s Chief Economist Mark Thirlwell recently hosted a webinar on the recovery from the pandemic and posed a series of risks for organisations to consider. Below, each of those risks is listed along with commentary from us at ABM Risk Partnership:
1. The uncertainty around the timing & scope of re-opening – we saw this play out in Australia after the initial strain of Covid-19 hit. Just when we thought we were able to plan for a more certain future, the Delta strain arrived to wreak havoc on many businesses. Many may not survive these unclear and constantly moving opening targets – those that do will be the ones that recall that a key step in the risk management process is to always adjust for changes in the context of the risk – that is, to remain agile in their response.
2. The logistics of re-opening / return to the office / worksite – one of the upsides of the pandemic was the rapid resolution of the problem of enabling people to work from home – in one company we work with they said they had done in one weekend what had previously been kicking around unresolved for 3 years. Now, organisations need to contemplate where and how work will be performed, balancing staff, management, and client interests with overall performance. Engagement and transparency with your people will be key.
3. Staff recruitment and retention – as business rebuilds in the wake of the pandemic, not only does capacity need to ramp up but so does capability. Organisations needs to assess and understand the additional skills sets required for the new operating environment. On top of this, some research (and in fact lived experience in the US) points to an increase in the number of staff intending to leave their current employer – referred to as the ‘Great resignation’. Businesses need to rethink their attraction and retention strategies as a result.
4. Rising costs (wages, raw materials etc.) – in the ‘new normal’, business will also be faced with pressures on profitability through the escalation of input costs, namely wages and raw materials. The impact is exacerbated by a shortage of supply in both. Organisations need to consider the short, medium, and long term in developing their responses to cost fluctuations.
5. Supply Chain disruption – if it wasn’t bad enough that there are shortages in key inputs, there are also many deep-seated issues in global supply chains. Most organisations will have felt the impact of the chronic shortage of computer chips – and if they haven’t, their customers certainly will have. Other events such as the grounding of the container ship Ever Given in the Suez Canal and the rapidly escalating costs of oil point to the vulnerability and fragility of our supply chains. Considerations for business will be the future of a ‘Just-in-time’ sourcing approach and manufacturing capability closer to home.
6. Uncertainty about future demand conditions – what will the world’s consumption look like once we learn to live with Covid? For instance, airline travel basically stopped, and business shifted to online meetings. Will business travel return to its pre-pandemic highs? This is just one example of the uncertainty that requires all organisations to adapt their recovery strategy in almost real time. The pandemic has caused clients / customers to reflect on the way they live and engage with businesses so it would be wise to be flexible in response and regularly and openly engage with the customers.
7. Cyber security threats – the bane of most people’s (and organisation’s) lives now are countless spam emails, text messages and phone calls attempting to gain access to our information systems and the data within. Whilst working from home has increased the threat vector for many organisations, the skills and diversity of schemes hatched by malevolent hackers is also multiplying rapidly. Organisations can’t turn a blind eye to this risk – the good news is that there are some excellent resources available to help those prepared to focus on and invest in the solutions.
This list was never meant to be exhaustive but rather a thought starter for organisations now seeing some light at the end of the long lockdown ‘tunnel’.
As we transition to recovery, there will of course be other challenges – some specific to an organisation or industry and others at the global or national level. And it must be remembered that all the risks the organisation faced at the start of the pandemic are still there – sure, they may have been de-prioritised for a while, but it is highly likely that they didn’t go away.
It is perfectly understandable for some organisations to feel overwhelmed as we transition to living with Covid. Managing their responses to the multiple, and regularly changing, government requirements whilst keeping watch on their own specific risks is challenging. Add on top of that the need to keep an eye on the plethora of external risks and it can seem insurmountable.
What will happen with interest rates? Can they stay low in the medium term?
Can we live with the current levels of debt being incurred by governments, businesses, and individuals?
How will the economy cope as the government weans us off stimulus payments?
Will the geopolitical tensions that seem to be getting worse be put aside for the things we must succeed at together such as climate change and protection of our species and the natural environment?
And will it all be for naught if the estimated 7% of the population who say they will never get vaccinated cause an enduring cycle of lockdowns and restrictions?
The good news is that organisations have access to the tools, techniques, and frameworks to help identify, analyse, and prioritise the threats and opportunities (i.e., the risks) that are a part and parcel of doing business.
Lots of organisations have done well during the pandemic to not only serve their customers in new and innovative ways, but also to look after their team members and their business partners. As we now transition to recovery and living with Covid, and new set of threats and opportunities will arise.
Get in touch to discuss how we can help you turn your challenges into a point of difference that makes your organisation stand out from the rest. Reach us via our website www.abmrisk.com.au or contact the author Anthony.Wilson@abmrisk.com.au