Leveraging ERM principles to better respond to the COVID-19 crisis - GRM Institute

Leveraging ERM principles to better respond to the COVID-19 crisis

 

By Subham Mohanty (PGDRM Jan’20-21)

 

The evolution crisis caused by the COVID-19 pandemic is wreaking disturbance on a global scale for organizations of all types and sizes and their most important asset, their human capital. The novel coronavirus represents a single root-cause event that has triggered an ever-expanding range of risks threatening all aspects of most enterprise operating models. Business leaders are scrambling to get a handle on the most critical risks affecting their core businesses in an effort to survive and recover from this tragic pandemic. To make progress, business leaders have to find a way to rapidly obtain a top-down, more holistic view of the risks triggered by COVID-19 from a big picture, enterprise-wide perspective so they can determine which risks need to be managed first as they address the rapidly evolving crisis.

 

In all emergency situations, together with the impact of COVID-19 on a business, the foremost critical assets are the people – they have to be located and secured first. Once they are safe and protected, they will help in navigating the situation and they will be the ones who would sort through the rubble on the back end. Most organizations are asking their teams to work remotely for an unknown period of time. Some organizations have got to stay open in order to provide vital services (e.g. banks, groceries, healthcare organizations, etc.) have created staggering work times so some are at home while others are in the office. That is why culture and leadership are the foundational elements of an ERM process. Effective risk management requires leadership and focus on people.

 

In this present-day disaster, business leaders need to moreover use a strategic lens to identify and then prioritise dangers brought about by using the COVID-19 pandemic. To broaden this strategic lens, commercial enterprise leaders want to pinpoint those core value drivers which can be crucial to the enterprise’s survivability. What are the most crucial drivers of fees for the business? That might be vital services or products that the employer sells, it might be the corporation’s online ordering platform that needs to be up and strolling particularly now, it is probably the employer’s R&D activities, or it would be the excessive-touch customer support, amongst many opportunities. Once enterprise leaders pick out the only or two most crucial fee drivers for their agency, they must make those the focal point of their attention proper now. With those crown jewels in thoughts, they can then use that strategic view in their enterprise to begin figuring out and assessing the impact of dangers to their business brought on by means of COVID-19.

 

Business pioneers need to concentrate on imparting data to central participants who need to realise that the association has an arrangement and that its heads are attempting to get things levelled out. That correspondence with key partners – workers, clients, providers, speculators, accomplices, and so on – should proceed as things unfurl on a step by step premise. When the quick pandemic is levelled out, business pioneers will need to make an elevated level evaluation of the harm before they move to the modifying stage. One of the biggest benefits of an ERM process is the fact that ERM requires people from all across the organization to come together to engage in rich conversations about how risks are affecting multiple aspects of the enterprise. Having business leaders from different parts of the business think through the impact of risks to the entire organization helps prioritise the best way to respond to risks – hopefully in a more coordinated way. That should lead to greater effectiveness in managing risks and hopefully greater efficiency by responding to a given risk in a more efficient manner.

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