The COVID-19 pandemic has led to the biggest crisis many companies have had to face in their corporate lifetime. Few companies anticipated that something of this scope and size could happen, and most were not prepared for it.
Companies reacted to the outbreak either by adapting whatever crisis or continuity plans they had in place, or by starting from scratch, trying not to get caught too far behind their peers. Many companies have been granted a bit of leeway for their response by the public, media and stakeholders, highlighting the “we’re all in this together” sentiment. But no company should expect that to last forever.
In a prolonged crisis, as this is proving to be, we often see waves of activity separated by a period of calm—like flying through a hurricane. Many companies are currently in the eye of the storm, but stakeholders—employees, consumers and investors—will expect them to do better in the next wave and beyond.
Forward-looking companies are taking steps now to be better prepared for when the next crisis hits. These companies are dedicating time to an in-depth review of their response to the first wave. They are evaluating their actions, incorporating lessons learned into their response plans and building their capability to meet the next challenge.
The starting point for this effort is doing a critical review of what did and didn’t work. The review should cover not only the substance of the response, but also the response process. It should also take a look at the response from the perspective of the company’s stakeholders, as well as what competitors did and didn’t do. The outcome of this effort should be an improved response plan that will be ready when the company needs it.
It also can be valuable for management to get an external, objective assessment of the company’s crisis response for a different perspective from those that participated in it. As savvy companies are investing heavily in redesigning their business strategy in this new environment, they are also recognizing the value of investing in crisis preparedness to protect it.
In a recent PwC survey, most directors rated their company’s response to the COVID-19-related business impact and management’s handling of internal operations as good or excellent. But companies and boards should recognize that the bar will be raised—and they shouldn’t miss the opportunity to learn from their recent crisis response and react accordingly. Continuously improving crisis preparedness will build resilience for when the next crisis hits.
Boards should also look at themselves and consider whether their governance structure has been effective for dealing with the current crisis. They should evaluate whether communications among board members or between the board and management could be improved, and how they should change going forward. Boards can also consider whether a special committee or the full board would be more effective at dealing with crises. Finally, it would be prudent for the board to discuss temporary succession planning—is there a director who could step in to temporarily lead the company if necessary?
Companies can learn from their response to the coronavirus pandemic. They should take action now to cement the elements that worked and eliminate those that didn’t. Doing so will result in a company that is better prepared, more agile and responsive and better able to lead with confidence whenever the next crisis or disruption presents itself.