The impact of COVID-19 is unprecedented. Most countries were not ready to deal with an event of this magnitude and most businesses could not have anticipated the social and economic upheaval that the pandemic has inflicted.
In 2019’s Aon Global Risk Management Survey, the number one risk according to Risk Managers globally was seen as the risk of an economic slowdown to their business, closely followed by damage to reputation/brand, and accelerated rates of change in market factors. Pandemic risk rated a lowly 60th place. How that risk perception will have changed.
No going back
As our Aon report Decision Making in Complex & Volatile Times: Keys to Managing COVID-19 finds, “For many business leaders COVID-19 will be the most disruptive, world-changing event in living memory.” One thing is clear from this pandemic: there will be no going back to how the world was before COVID-19. For example, we’re seeing fundamental changes in consumer behavior that are likely to continue long after the global health emergency ends.
Businesses will have to adapt to meet the changed demand from their buyers, but will also have to take a fresh look at how they organise themselves, how their workforce operates, and at their critical vulnerabilities such as the supply chains that have been found wanting during this crisis.
Dealing effectively with this disruption and ongoing uncertainty means that decision-making has become more important than ever for business leaders. But it must be decision-making firmly rooted in genuine insight, knowledge and a structured response framework that will, as Aon’s report says, “guide decision-making and shore up vulnerabilities while identifying opportunities to make the organization more agile and resilient for the future.”
A framework approach
One approach is to use Aon’s Black Swan Decision Framework which can help leaders process the information they receive and make the decisions that need to in a crisis. Containing several components such as the need for first steps like the creation of a crisis team, to the undertaking of regular situation assessments, and the development of a problem-solving approach, this framework also contains some key advice around the critical nature of clear, concise and transparent communication to meet the needs of an organisation’s stakeholders from employees to Clients, suppliers and the regulator. As a leader, communication is more important now than ever.
React and respond, recover and reshape
With the Black Swan Decision Framework in place, businesses can implement a Crisis Management Model to provide leaders with the structure and flexibility they need to respond effectively. This includes three distinct timeframes: react and respond; recover; and, reshape. The reshape stage in particular, reflects the need for leaders to get their businesses ready for a different future than they may have been expecting pre-pandemic.
The final element drawn from Aon’s Decision Making in Complex & Volatile Times report are considerations around Business Impact Actions and Priorities. This stage looks at the five key areas of: protecting people and assets; protecting the balance sheet; maintaining or increasing revenue; managing costs; and revisiting business strategy. By focusing on the insights and data from each of these areas, leaders and their teams will ultimately be in a much better position to make the right decisions.
Moving back towards growth
It’s that ability to get the decision-making right that will be critical both now and in the longer term. Leadership, communication and action are vital, and these frameworks will help give organisations and businesses the best chance of both getting through the immediate crisis and moving beyond the pandemic by protecting their people, assets, and balance sheets, and ultimately thinking about how they can grow the business once again.
Read the full report and find out how Aon’s Decision Making in Complex & Volatile Times: Keys to Managing COVID-19 Decision Making In Complex & Volatile Times: Keys to Managing COVID-19 can help your business.
DISCLAIMER: This document has been provided as an informational resource for Aon Clients and business partners. It is intended to provide general guidance on potential exposures, and is not intended to provide medical advice or address medical concerns or specific risk circumstances. Information given in this document is of a general nature, and Aon cannot be held liable for the guidance provided. We strongly encourage readers to seek additional safety, medical and epidemiologic information from credible sources such as the World Health Organization. As regards insurance coverage questions, whether coverage applies or a policy will respond to any risk or circumstance is subject to the specific terms and conditions of the insurance policies and contracts at issue and the relevant underwriter determinations. Whilst care has been taken in the production of this document and the information contained within it has been obtained from sources that Aon believes to be reliable, Aon does not warrant, represent or guarantee the accuracy, adequacy, completeness or fitness for any purpose of the report or any part of it and can accept no liability for any loss incurred in any way by any person who may rely on it. Any recipient shall be responsible for the use to which it puts this document. This document has been compiled using information available to us up to its date of publication 15.05.2020.