The COVID-19 pandemic effect is far more significant than any other pandemic or epidemic in recent human history. It has affected the lives of billions, and the economic damage is unprecedented. Business leaders around the world are concerned that their companies need to recover and ultimately thrive again.
As there is no “one size fits all” crisis management solution to tackle this situation. Regardless of how badly the pandemic has affected an organization, we believe that such a typical crisis can be addressed using the following framework:
Respond: These are the actions that the company needs to take to manage the current situation and sustain itself.
Recover: Businesses learn from the crisis and try to emerge stronger.
Thrive: Companies prepare themselves for the “new normal.”
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.
Let’s put this framework to practice.
We have discussed an example where this framework can help you bounce back and eventually use the learnings from this crisis to move forward.
As the world continues to make efforts to contain the coronavirus pandemic, companies are facing unprecedented disruptions. One of the dominant issues that businesses are experiencing is the inability to meet contractual compliance, leading to a rise in litigations or arbitrations over the short-to-medium term. Therefore, the financial impact of these disruptions might include the invoking of legal provisions, costing money and time.
Let’s use this framework for preparing for contract failures arising out of COVID-19.
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 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.
Here are a few crisis management templates you can use to showcase this framework-
As the whole world is making efforts to contain the pandemic, organizations are also figuring out how to recover from the crisis. As there is no ‘fit-for-all’ crisis management mechanism, this framework can help businesses recover and thrive again.
Now you don’t have to scour the web to find out the right templates. Download our PowerPoint Templates from within PowerPoint. See how?