Contingency planning

Rajiv Meewakkala

Acrisis is an occurrence that is disruptive and unexpected, which impacts business operations and stakeholders. As such, crisis management should be built into the overall planning cycle and institutionalised within organisations – and enable board level visibility through the risk management process of the business.

Rajiv Meewakkala states: “The first ingredient is to have top management commitment and appreciation of this important area so that they’re stakeholders in managing this process.”

“There’s scepticism that comes with the normal push back of ‘these things cannot happen,’ so there has to be strong awareness created among the senior team so that they understand the importance, scope and benefits to the organisation. The buy in of the senior team is crucial to embed this skill set in the DNA of the enterprise.”

Next is to visualise the different types of crises ranging from internal man made accidents to environmental and social disruptions. If the organisation can map out possible permutations, in certain cases preventive action may even be possible. It should be noted that not all crises may be averted – for example, the pandemic or an environmental disaster – he points out.

Meewakkala elaborates: “Post mapping the possible events, a crisis management framework should be set up within the business, and a crisis team appointed at senior level for guidance and decision making, together with an operational team nominated under the senior team to carry out containment tasks and activities. This will ensure that there is no knee jerk reaction to situations and action will be taken swiftly.”

An organisation should also conduct simulations to see if the plans are synchronising well. Finally, it’s important that the crisis and operational teams undergo professional training in crisis management as it involves a specialised skill set.

When this type of continuous review process is inbuilt into the organisation’s operations, even unprecedented incidents such as a pandemic can be managed more efficiently as the organisational framework would be positioned to respond better.

Business continuity plans are a cornerstone of running a successful organisation but many companies may not yet have such contingency plans in place.

He explains: “It should be noted however, that no one would have envisaged the pandemic and its impact. On the other hand, the current economic crisis could have reasonably been visualised a year ago – and as such been included in the company risk register and contingency plans put into place.”

“The scale could have been misjudged but the risk of the event happening was high, and senior teams and boards should have been discussing and evaluating mitigating actions.”

Cash flow management is another crucial aspect, and having a plan in place will bring in quicker results – for example, in case of the need to raise short-term financing. “Not just organisations but even countries should set up a framework for handling crisis management. At a country level, a pandemic could be a likely scenario. It is very important that the learning from and response to the pandemic be documented, and a process and system be put in place to handle such eventualities in the future,” he adds.

He states that Sri Lanka has a disaster management ministry but it only addresses environmental eventualities such as floods. The crisis management process should be more holistic, covering security and health in addition to the environment.

In summing up, Meewakkala remarks: “I think the pandemic should be a stimulus for all organisations and Sri Lanka to ensure that crisis management is inbuilt into the organisation and country planning frameworks. The more we map it out and work out mitigating actions, the better we will get at it.”

Rajiv Meewakkala is a Director and the CEO of Lion Brewery (Ceylon)