COVID-19: Implications for business

Covid-19: briefing note #100, april 13, 2022, as covid-19 becomes endemic in much of the world, we turn our focus to sustainable and inclusive growth..

On March 2, 2020, just over a week before a global pandemic was declared, we published COVID-19: Briefing note #1. Our plan was to publish an update on the virus’s implications for business for as many weeks as the news felt urgent. We did not expect to continue for more than two years, nor to ever publish briefing note #100, as we have today.

It’s painful to reflect on these 100 editions, on the millions of lives lost, the suffering and grief, and the myriad disruptions to lives and livelihoods. But in what is perhaps a hopeful sign, we now feel the time is right to stop. COVID-19 news seems less urgent than at any time in the past two years. All of McKinsey’s published work now intrinsically accounts for the pandemic, even if it is not directly mentioned. COVID-19 has gone from being a fresh emergency to a fact of life.

In a few weeks, we will relaunch this weekly report with links to the latest McKinsey publications. Our new theme will be sustainable and inclusive growth. After more than two years of reporting on a destructive force, we look forward to sharing our research and thoughts on how people and organizations can build a better world.

McKinsey is already exploring how to achieve sustainable and inclusive growth, the topic of the inaugural episode of the new Future of America podcast . McKinsey Global Institute director and senior partner Kweilin Ellingrud and senior partner Greg Kelly discuss how leading companies can use the pandemic recovery as an opportunity to accelerate prosperity  for more Americans. Customers and consumers want to be associated with companies that are making a positive difference. Companies can accelerate inclusivity and sustainability by having real awareness, committing to change, rewarding the change, and providing coaching and development to make the change happen.

After more than two years of reporting on a destructive force, we look forward to sharing our research and thoughts on how people and organizations can build a better world.

Much near-term growth will arise from a once-in-a-lifetime wave of capital spending on physical assets  between now and 2027. This surge of roughly $130 trillion in investment will flood into projects to decarbonize and renew critical infrastructure. But few organizations are prepared to deliver on this capital influx with the speed and efficiency it demands. Companies should consider implementing a portfolio-synergistic strategy in which planning is top down, a major business challenge requiring savvy stakeholder management, capital markets expertise, and an understanding of complex approval processes.

Sustainable, inclusive growth will require changing the workplace to maximize the contributions of all people. In the COVID-19 era, women across all sectors have shouldered more household responsibilities, and more women report feelings of burnout. These problems can be more acute for women in healthcare, who have fewer opportunities to work remotely and report feeling greater pressure to prioritize work over family. In spite of these challenges, healthcare continues to outperform other sectors in the representation of women , who make up more than two-thirds of entry-level employees and 53 percent of employees in roles at the senior-manager level or above, which is 18 percentage points higher than the average across all sectors.

Each sector, industry, and function will have to reinvent itself to achieve maximum growth and sustainability. Procurement leaders, for example, are facing one of the toughest market environments of their careers. Procurement organizations need to take a leading role in protecting enterprise margin and growth , invest in proven technology and process automation, and build deep expertise in supply market dynamics, among other fundamental changes. A pair of articles featuring McKinsey and outside experts explore how the CFO’s role is also rapidly evolving —expanding in scope, requiring new capabilities, and demanding greater collaboration with C-suite peers. Among the most significant changes to the role is the demand for CFOs to help promote capability building and talent development  within their organizations.

Here are other key findings from our research this week:

  • Lithium is needed to produce virtually all batteries currently used in electric vehicles (EVs) as well as consumer electronics. We believe the world will secure enough lithium for the EV revolution , as long as new mining technologies and potential mining sites receive funding and end users communicate upcoming needs so that lithium miners have enough time to react.
  • Our interactive explores how fashion is finding ways to participate in the metaverse .
  • McKinsey’s methodology can be used to prioritize investments in innovations based on the economic impact of the health improvements they deliver to society .

Our latest edition of McKinsey for Kids   explores how programmers use games to teach computers how to think, ultimately developing AI. Kids can read, take quizzes, and watch animations to learn about how the human brain and computers are both alike and different and about a cornerstone of AI programming called “reinforcement learning.”

In our latest edition of Author Talks , neuroscience expert and Cognitas Group cofounder Dr. Laura Watkins discusses her new book (coauthored with Vanessa Dietzel), The Performance Curve: Maximize Your Potential at Work while Strengthening Your Well-being   (Bloomsbury Publishing, November 2021). Using insights from neuroscience, adult development psychology, yoga, and behavioral therapy, the book proposes practical ways to improve work performance without sacrificing mental or physical health.

This briefing note was edited by Katy McLaughlin, a senior editor in McKinsey’s Southern California office.

COVID-19: Briefing note #99, April 6, 2022

Some pandemic effects will take a long time to cure..

COVID-19 appears to be moving to endemicity in some parts of the world. But even in these places, some of the pandemic’s damaging consequences are only now being assessed and understood. This week, McKinsey studied the degrees of learning loss suffered by students around the world. We also looked at the pandemic’s lingering effects on the airline industry and on labor markets and examined how long it might take for some things to go back to how they used to be and why others never will.

On average, students globally are eight months behind  where they would have been absent the COVID-19-pandemic, but the impact varies widely (exhibit). Within countries, the pandemic also widened gaps between historically vulnerable students and more privileged peers. We estimate by 2040, unfinished learning related to COVID-19 could translate to annual losses of $1.6 trillion to the global economy. Educational systems could consider a tiered approach to support reengagement, with more support (including social and emotional) for the highest-risk students.

The COVID-19 pandemic caused airline revenues to drop by 60 percent in 2020, and air travel and tourism are not expected to return to 2019 levels before 2024. Challenges vary across the global aviation landscape. In particular, airlines need to bolster their resilience  by increasing their cash reserves, which would reduce the need for bailouts every time a crisis hits, and by improving their ability to reduce supply quickly and cost-effectively when demand abruptly falls. McKinsey’s latest survey of more than 5,500 air travelers globally  revealed a potential long-term challenge: the share of respondents who say they plan to fly less to minimize their environmental impact rose five percentage points since 2019 to 36 percent, and more than half of respondents said that aviation should become carbon neutral in the future. “Flygskam,” or shame about flying, plays a role. Leading airlines that build a brand promise on sustainability will likely attract a growing share of business.

In a current episode of McKinsey Talks Talent , McKinsey talent experts Bryan Hancock and Bill Schaninger discuss the power workers have gained as an indirect effect of the pandemic . Although there has been some high-profile organizing activity, the real source of worker power comes from the current high demand for labor and because remote workers have a wider-than-ever range of job choices.

In our latest edition of Author Talks , Todd Rose, a former Harvard University professor and the cofounder of the think tank Populace, discusses his latest book, Collective Illusions: Conformity, Complicity, and the Science of Why We Make Bad Decisions   (Hachette Book Group, February 2022). The book explores why people are likely to buy into fundamental misunderstandings of what most people think.

Also in Author Talks , we spoke with Amy Zegart, a senior fellow at the Hoover Institution and the Freeman Spogli Institute at Stanford University, where she is also a professor of political science. Zegart discussed her new book , Spies, Lies, and Algorithms: The History and Future of American Intelligence   (Princeton University Press, February 2022). The book explores the current state of intelligence, why the government is behind on adopting new technologies, and what the public misunderstands about the spy business.

COVID-19: Briefing note #98, March 30, 2022

One of covid-19’s health effects is the transformation of healthcare..

The COVID-19 pandemic devastated the world’s health but may leave a lasting legacy of improving how the world addresses healthcare. The effort to develop and distribute vaccines demonstrated how much can be achieved with global collaboration, lessons that can be applied to ambitious improvements in well-being. This week, McKinsey explored how the pandemic changed healthcare approaches, including expectations, delivery, viral-vector gene therapy, investment, and consumer attitudes.

Humanity mobilized against COVID-19 at a speed and scale previously unseen. While far from perfect, the undertaking’s successes should inspire the world to challenge the view of what is possible. Over the past century, life expectancy has dramatically increased in most parts of the world, but the portion of life that human beings spend in moderate and poor health hasn’t changed (exhibit). The McKinsey Health Institute believes humanity could add roughly six years per person on average of higher-quality life  by making six major shifts in how the world approaches health.

Even when COVID-19 becomes endemic, healthcare delivery in the United States will continue to transform rapidly . McKinsey’s 14th annual healthcare conference explored the next wave of industry evolution and how healthcare organizations must innovate to thrive. The future of care delivery is evolving to become patient-centric, virtual, ambulatory, in the home, value based, and risk bearing. It will be driven by data and analytics, enabled by new medical technologies, and funded by private investors.

COVID-19 accelerated viral-vector gene therapies . Some of the earliest viral-vector-based therapies targeting rare diseases required companies to produce only about 1,000 doses across development, access programs, and two years of commercialization. In comparison, the unprecedented demand and funding for COVID-19 vaccines enabled a ten- to 100-fold increase in production when adjusted by dose amount, with over two billion doses of the AstraZeneca viral-vector-based vaccine already produced. Keeping pace with increasing demand requires the consideration of challenges, the potential for standardization, and strategizing for accelerating patient access.

In light of growing opportunities, private investors are pouring into healthcare. That becomes clear throughout McKinsey’s annual Global Private Markets Review , which delves into the data and details of a wide range of private markets asset classes, including private equity, debt, real estate, and infrastructure investing. Healthcare is a recurring theme in this year’s report: in 2021, the healthcare sector had the fastest deal-volume growth globally since 2016. Of the largest ten private equity deals in 2021, three were in healthcare, and the largest deal involved a manufacturer and distributor of healthcare supplies. Many of the top 20 private equity firms have dedicated teams for healthcare, which speaks to its growing importance within the asset class.

The number of vaccinated US respondents in McKinsey’s Consumer Health Insights Survey  has remained about the same since November of 2021, when 77 percent reported that they were vaccinated. Approximately 75 percent of respondents to the February survey reported that they’d been vaccinated; in addition, 63 percent of vaccinated respondents plan to stay current on COVID-19 vaccinations as recommended by healthcare leaders. Consumers are increasingly comfortable testing for COVID-19 at home; in fact, it now ranks as the most preferred testing location. Additionally, more than half of respondents indicated that they would prefer a health plan with virtual-health benefits.

In our latest edition of Author Talks , Tessa West, an NYU associate professor of psychology, talks about her new book, Jerks at Work: Toxic Coworkers and What to Do about Them   (Portfolio, January 2022). If anyone in the C-suite embraces jerk behaviors, it’s going to trickle down through the company because jerkish behavior is contagious at work, she says.

Also in Author Talks , science journalist Catherine Price discusses her new book, The Power of Fun: How to Feel Alive Again (The Dial Press, December 2021). People can improve their mental and physical health by getting in touch with what is really fun for them and making it a priority—rather than just vegging out in front of a screen, she says.

COVID-19: Briefing note #97, March 23, 2022

Uncertainty returns—but this time, the cause is not covid-19..

The COVID-19 pandemic created short-term disruptions and provoked long-term changes in how the world lives and does business. Russia’s invasion of Ukraine is now doing the same. This week, McKinsey published on what we know about the war and some of its possible global consequences. Among them are likely impacts to supply chains and how companies think about preparing for crises, two of our other topics this week. Another article provides a hopeful look at the investment pouring into decarbonization and renewal of infrastructure.

We, like many others, are shocked by the unfolding humanitarian tragedy resulting from the Russian invasion of Ukraine  (exhibit).

As a result of the war in Ukraine, the era of not looking too closely at supply chains, trusting suppliers, and optimizing for cost is probably over. Those behaviors, already made suspect by new tariff regimes and the COVID-19 pandemic, are now likely to be consigned to history. Our latest research finds that despite progress over the past several years, companies are still struggling to build the capabilities that their emerging digital supply chains  need. The most effective capability-building programs invest in foundational, end-to-end supply chain knowledge building, coupled with advanced functional, technical, and leadership training.

As in any conflict, uncertainty is high, although it is already certain that global consequences will include disruptions to energy and food markets, testing many companies’ resilience. McKinsey’s annual global board survey of approximately 1,500 corporate directors found that a mere 7 percent of respondents gave their boards the highest rating for risk management, and only 40 percent say their organizations are prepared for the next large crisis. On the Inside the Strategy Room podcast, McKinsey senior adviser Nora Aufreiter; senior partner Celia Huber, who leads McKinsey’s board services work in North America; and associate partner Ophelia Usher discussed how boards can improve how they handle big crises .

The world will see a once-in-a-lifetime wave of capital spending on physical assets  between now and 2027. Roughly $130 trillion will flood into projects to decarbonize and renew critical infrastructure. But it won’t be easy: constructing and justifying the cost of a physical asset such as a manufacturing plant is much more difficult than it was decades ago, given inflation, rigorous sustainability requirements, and rapid changes in technology and regulations.

Our latest edition of Author Talks features Reshma Saujani, founder of Girls Who Code and an activist for women’s economic empowerment, discussing her new book, Pay Up: The Future of Women and Work (and Why It’s Different Than You Think) (Atria/One Signal Publishers, March 2022). Working mothers are overburdened and exhausted, so companies that want them to come back to the workforce need to help with childcare, paid leave, and mental-health support.

Also in Author Talks , retired Navy SEAL commander Rich Diviney talks about his book, The Attributes: 25 Hidden Drivers of Optimum Performance (Random House, January 2021). Diviney dives into how we can—and should—assess and develop our own attributes, equipping ourselves for optimum performance within our lives and throughout our careers.

COVID-19: Briefing note #96, March 16, 2022

On the second anniversary of the covid-19-pandemic, we reflect on what we’ve learned..

Just over two years ago, the World Health Organization declared a pandemic. Since then, one in every 1,300 people alive in 2019 has died from infection with SARS-CoV-2. Two years on, it is easy to forget how remarkable the development of COVID-19 vaccines was: moving in just 326 days from a genomic sequence to the authorization of a vaccine shattered all previous records.

For this anniversary, we reflected on ten core lessons of the pandemic  (see sidebar), some of which exposed fault lines in our society and others that demonstrated amazing capabilities. A separate initiative compiled two years’ worth of research on pandemic impacts, while a third article examined how the pandemic set input prices rising and what to do about it.

Ten core lessons of the pandemic

As part of our examination of where the pandemic took us and what’s next, we’ve gathered interviews and articles about COVID-19 from the past two years . Interviews with General James Mattis; Steven M. Jones, co-inventor of the first Ebola vaccine; and McKinsey senior partner Shubham Singhal addressed the crisis as it occurred. Packages of articles examining the pandemic’s effects on areas including healthcare, operations, and sustainable and inclusive growth show how industries have been shaped by the experience and how leaders are looking toward the future.

The aftershocks of the COVID-19 pandemic continue to rock the global economy. Following the shutdowns of 2020 and the supply chain challenges of 2021, another wave of disruptions is now breaking over businesses around the world: rising input prices . Accurate cost models and advanced digital operations help organizations respond to rising costs and equip them with the tools and capabilities they need to thrive when prices fall.

This week, McKinsey senior partners Carolyn Dewar, Scott Keller, and Vik Malhotra launch their new book, CEO Excellence: The Six Mindsets That Distinguish the Best Leaders from the Rest (Scribner, March 2022). The authors spoke about their interviews with 67 CEOs as part of our Author Talks series and how they identified the traits that separate the best leaders from the pack.

COVID-19: Briefing note #95, March 9, 2022

Another global crisis is now overshadowing covid-19..

For the first time in two years, concerns about another global crisis overshadowed the COVID-19 pandemic: the Russian government’s invasion of Ukraine and the humanitarian tragedy it is causing. Implications for the world economy will become more visible in the coming weeks and months; this week, McKinsey identified some immediate global economic impacts. Coincidentally, our other major publishing initiative this week is a deep dive into insurance—an industry that exists, in essence, in case things go wrong.

The Russian government’s invasion of Ukraine is causing a humanitarian crisis and economic risks. Our Global Economics Intelligence executive summary  for February discusses how the invasion of Ukraine has mostly set energy prices surging. The oil price (Brent) was near $60 per barrel on December 1 but climbed steadily thereafter, touching $100 in late February. The price of natural gas and coal has similarly climbed during this period (exhibit). Prior to the invasion, the US dollar was depreciating slightly against most major currencies; it is now rising in value. Other immediate economic effects were spikes in the prices of gold, crude oil, and natural gas, as well as stock market losses.

As part of our celebration of International Women’s Day 2022, 20 female McKinsey partners offer insights in a series of interviews on the insurance industry . Topics include operations, growth, claims management, underwriting, product innovation, digital business building, and motor insurance. Further interviews examine women’s representation in the insurance industry and look at the broader issue of diversity in insurance.

New customer expectations, low interest rates, and new sources of competition (such as leading tech companies, insurtechs, and third-party capital) are putting pressure on insurance carriers to be more innovative . It’s not easy: successfully profiting from innovation is a complex, company-wide endeavor, and most insurers have not yet consistently cracked this code. Steps for building innovation into the way an organization works include shifting resources from core business tasks to breakthrough innovation initiatives and developing distinct product-development pathways and processes.

Insurers should consider programmatic M&A : systematically acquiring small to midsize businesses, services, and capabilities and integrating them as new businesses or capabilities. Insurers can use this approach to tackle issues including sustaining growth in core life and annuity businesses and enhancing property and casualty presence in growth markets.

In this edition of Author Talks , Deepa Purushothaman talks about her new book, The First, the Few, the Only: How Women of Color Can Redefine Power in Corporate America (Harper Collins, March 2022). Drawing on more than 500 original interviews, Purushothaman examines work life for women of color and what needs to change to improve their experiences.

COVID-19: Briefing note #94, March 3, 2022

The covid-19 pandemic may finally be ending..

A new variant may yet trigger another chapter in the COVID-19 pandemic, and societies must be prepared to respond if and when that happens. But for now, the pandemic phase looks to be ending. With a possible conclusion in sight, this week McKinsey focused on how postpandemic workforces can be supported with expanded opportunity, digital tools, more equitable promotions, and better office design.

In the latest edition of our “ When will the COVID-19 pandemic end ?” series, McKinsey examined scenarios that would lead to either reigniting a pandemic-level crisis or further steps toward endemicity. As long as Omicron remains the dominant variant, there is reason for relative optimism; in the United States, for example, hospitalizations would remain low (exhibit). By and large, the six-month outlook in many countries is brighter than at any time in the past two years. The main risk to the transition to endemicity is a significantly different and more severe new variant that replaces Omicron as the dominant strain.

The latest episode of the McKinsey Global Institute’s Forward Thinking podcast features David Autor, the Ford Professor of Economics at the Massachusetts Institute of Technology . Autor identifies pandemic paradoxes, which include that many thought US poverty and joblessness would skyrocket, but the opposite occurred when poverty rates plummeted to unprecedented lows and the United States ended up with a labor shortage. Leaders should think about ways to expand opportunities, including by being honest with themselves and the labor market about which jobs truly require a college degree.

On McKinsey Talks Talent , HR expert David Green speaks with McKinsey talent experts Bryan Hancock and Bill Schaninger. HR leaders can use people analytics  to identify big-picture attrition patterns, illuminate how office space is being used, and automate parts of the recruiting process, including finding diverse candidates.

In technical roles, only 52 women are promoted to manager for every 100 men, according to McKinsey’s Women in the Workplace 2021  report, coauthored with LeanIn.Org. Companies can improve women’s promotion rates  by providing equitable access to skill building, implementing a structured promotion process that seeks to remove bias, and building a strong culture of support for women via mentors and sponsors.

Diane Hoskins, co-CEO of Gensler, a global design and architecture firm , has been thinking about effective workplaces for decades and is now helping her clients navigate the next normal. In a conversation with McKinsey Real Estate Practice leader Aditya Sanghvi, Hoskins discusses how COVID-19 made it even more essential to design offices around organizational strategies, leadership models, operational frameworks, and potential outcomes of a company.

In this edition of Author Talks , Whitney Johnson, the CEO of tech-enabled talent agency Disruption Advisors, talks about her new book, Smart Growth: How to Grow Your People to Grow Your Company  (Harvard Business Review Press, January 2022). Mastering new skills follows an S-curve, where there’s a difficult introductory phase, a “sweet spot” where you’re enjoying applying new knowledge, and an end part of the curve where boredom can set in. Leaders need to understand where their teams are to create the right supports for each phase, Johnson says.

COVID-19: Briefing note #93, February 23, 2022

The covid-19-pandemic accelerated our need for a new kind of growth..

The COVID-19 pandemic served as an accelerant in multiple ways. This week, McKinsey looked at how the pandemic spurred the adoption of telehealth and e-commerce, exacerbated pressure on nurses, and made company operations more complex. In the big picture, it increased the urgency for a new vision of global growth, one that benefits more people and leaves our planet healthy.

Crises such as COVID-19 can become watersheds of policy and strategy. In an editorial published in Fortune , Klaus Schwab, the founder and executive director of the World Economic Forum, and Bob Sternfels, McKinsey’s global managing partner, propose pursuing a sustainable, inclusive growth agenda  that supports the health of the natural environment while improving the livelihoods of wider population segments. Leaders can shape a resilience agenda by addressing the interrelationships between climate, healthcare, labor needs, supply chains, digitization, finance, and inequality and economic development.

To build a better future, the emphasis must now shift from defensive measures and short-term goals to a sustainable, inclusive growth agenda.

The pandemic ignited telehealth: as of mid-2021, utilization was 38 times higher  than before the pandemic. However, McKinsey’s most recent Physician Survey showed that most doctors don’t love telehealth as much as patients do . Most expect to return to a primarily in-person delivery model over the next year, and 62 percent said they recommend in-person over virtual care to patients.

The pandemic essentially forced consumers to try e-commerce and to increasingly rely on product ratings and reviews to give them the confidence to make purchases. The total number of global reviews roughly doubled in the year after COVID-19 started. On The McKinsey Podcast , McKinsey partner Dave Fedewa and McKinsey senior expert Chauncey Holder discuss how companies need to adapt to the new world in which reviews matter more than ever .

Healthcare workers and their organizations continue to face unparalleled demands stemming from the COVID-19 pandemic. Thirty-two percent of registered nurses surveyed in the United States in November said they may leave  their current direct-patient-care role, according to McKinsey’s latest research. Healthcare organizations can consider a number of medium- and longer-term strategies to support their workforces.

As companies look at areas to automate, they need a clear, complete picture of service processes . The complexity of services, which often involve coordinating multiple functions in nonlinear ways, makes bad handoffs a perpetual problem. Add to these factors the burgeoning number of customer touchpoints and the accelerated move to remote working since the start of the COVID-19 pandemic, and the challenge looms even larger. An approach we call process insights—which marries technology tools and analytics in a disciplined, three-stage process—shows promise.

While our theme this week is the pandemic’s accelerating effects, we also looked at the opposite: how COVID-19 can spur lightning-fast pullbacks. Although consumer confidence is growing, desire for travel has shown a faltering recovery due to sporadic COVID-19 outbreaks. Our examination of China’s tourism industry  showed that a predictable pattern is emerging where desire for travel recovers roughly two months after a decline. Furthermore, travelers’ preferences are shifting, with implications for travel companies.

This week in Author Talks , Ruchika Tulshyan, an award-winning inclusion strategist and speaker, discusses her new book, Inclusion on Purpose: An Intersectional Approach to Creating a Culture of Belonging at Work (MIT Press, March 2022). She explores the bias behind terms such as “lean in” and “culture fit” and proposes that inclusion efforts target the needs of women of color.

This briefing note was edited by Katy McLaughlin, a senior editor in the Southern California office.

COVID-19: Briefing note #92, February 16, 2022

As omicron reminded us, health is everything..

McKinsey focused on health this week, starting with a discussion of how Omicron has played out so far and what is likely next in the pandemic’s trajectory. An article on women’s health explores the remarkable tradition of viewing it as a healthcare niche, rather than a core concern of half the world’s population. Technology is increasingly merging with healthcare, so we extrapolated this theme further to examine how to keep companies’ technology healthy.

In this episode of The McKinsey Podcast , Shubham Singhal, senior partner and global leader of McKinsey’s Healthcare and Public & Social Sector Practices, reflects on where Omicron has taken us so far and where we go from here . Omicron spread so fast because it evades prior immunity and is more transmissible, allowing it to out-compete the previously dominant strain. Society will begin viewing COVID-19 as endemic when we’re comfortable getting on with life even though the risk of disease is not zero (and for the unvaccinated, it remains high).

Half of the world’s population is women, and women account for 80 percent of consumer-purchasing decisions in the healthcare industry. Yet women’s health has been considered a niche market  and a mere subset of healthcare. A particularly illuminating statistic: only 1 percent of healthcare research and innovation is invested in female-specific conditions beyond oncology. Changing how the industry thinks about women’s health is an important step toward identifying value-creating opportunities for meeting women’s healthcare needs.

It is not a light switch event to get to an endemic phase, because it is as much about the behavior and psychology that we all exhibit as it is about the epidemiology of the virus itself.

FemTech is an emerging category consisting of tech-enabled, consumer-centric solutions addressing women’s health. Depending on scope, estimates for FemTech’s current market size range from $500 million to $1 billion, and forecasts suggest opportunities for double-digit revenue growth. Our analysis of 763 companies indicates that the dynamics underlying FemTech are accelerating and that public awareness, company formation, and funding are surging.

When employees feel understood and supported by their employers, they tend to be happier, more effective, and more likely to stick around. Companies can use the power of AI and machine learning to coach employees . An AI-driven system can be designed to identify key moments when employees would benefit from a “nudge” that guides them toward positive actions, including improving their health, accessing training, and trying a different performance approach.

To protect the health of our work environments from ransomware , everyone from the board and C-suite to down the line must work to ingrain security into an organization’s DNA. Ransomware costs are expected to reach $265 billion by 2031. Supply chain attacks rose by 42 percent in the first quarter of 2021 in the United States, affecting up to seven million people, while security threats against industrial control systems and operational technology more than tripled in 2020.

In this edition of Author Talks Amy Webb, a leading futurist and business adviser, talks about her recent book, The Genesis Machine: Our Quest to Rewrite Life in the Age of Synthetic Biology (Hachette Book Group, February 2022), coauthored by microbiologist Andrew Hessel. The book explores a new field of science that combines engineering, design, and computers with biology, enabling the engineering of living cells. Webb says that synthetic biology—the ability to reprogram the fundamental units of life—is going to change industries such as healthcare, agriculture, and industrial materials.

COVID-19: Briefing note #91, February 9, 2022

The ceo job description just got a bit longer..

CEOs have always carried a heavy workload, but the issues they confront today add several fresh layers. Climate change requires a new way of looking at asset value that models the potential impact of various types of risk. COVID-19 and its aftermath means leaders must engage empathetically in topics relating to their employees’ well-being. This week, McKinsey examined how the pandemic and other world events have added to leaders’ list of most important tasks.

Climate change and the risks it imposes upon assets and markets is one of the biggest challenges confronting CEOs and other leaders today. The real-estate industry is already facing the need to build new capabilities that allow it to assess how climate-change risks alter values and what subsequent actions to take. Part of capability building involves understanding both physical risks and transition risks stemming from regulatory, social, and market reactions to climate change (exhibit). Once real estate and other leaders understand value impact, they can proceed to decarbonizing and finding new sources of value throughout the climate transition.

COVID-19 brought on a new set of employee pressures , including trying to take care of work and children at a time when school doors close suddenly, and managing the 24/7 nature of working from home. These burdens also imply a new set of pressures for CEOs and other leaders as they attempt to support overburdened workforces. On the McKinsey Talks Talent podcast, McKinsey talent experts Bryan Hancock and Bill Schaninger discuss how leaders must engage in employees’ lives and well-being in ways they seldom did in the past.

We’re in one of the most bewildering labor markets  in a generation, said Asutosh Padhi, McKinsey’s managing partner for North America, in a CNN Business Perspectives commentary. CEOs can respond by expanding recruitment efforts to people who have work experience but don’t have degrees; supporting more “gateway jobs,” or stepping-stone positions that provide an income boost; and by challenging their organizations to embrace a more inclusive, skills-based approach to hiring and talent management.

Across industries, product-development functions are encountering a perfect storm of supply chain issues  arising from the pandemic, the current labor mismatch , and evergreen themes of managing cost, quality, and time. Rather than becoming part of the much-bemoaned war for talent, companies can develop the capabilities of their existing workforce  to fill skills gaps.

As the economy continues to reel from the effects of COVID-19, consumer-packaged-goods companies are under more pressure  than ever. Prices for food and packaging commodities have increased by more than 22 percent. Manufacturing wages and labor costs rose in 2020 from 5 to 20 percent of total costs. To respond to these rapid, sweeping changes, companies need to transform their operating models to the new reality.

Given that economies are expected to shift away from stimulus spending and other policy supports, forecasters and economists generally project a slower pace for global growth in 2022—but one that is still faster than prepandemic levels. January’s Global Economics Intelligence executive summary  focuses on how inflation is playing out around the world, efforts to control it, and its impact on growth and employment.

In this edition of Author Talks , Neil Hoyne, Google’s chief measurement strategist, discusses his new book Converted: The Data-Driven Way to Win Customers’ Hearts (Penguin Random House, February 2022). Data alone is not the answer for companies trying to grow, Hoyne says. Instead, companies can find growth by creating the right data strategy, leadership, and processes.

COVID-19: Briefing note #90, February 2, 2022

The postpandemic world calls for fresh leadership ideas..

Organizations increasingly recognize that modern leadership means knowing how to make the most of digitization and technology, diverse talent, and the opinions of a range of stakeholders. This week, McKinsey dug for the details. Articles and an interactive explore how companies can take advantage of advanced-intelligence technology and become truly data driven. A new interview series illuminates how three Black leaders developed their leadership styles, while further articles explore casting the idea net wider.

Leading industrial and manufacturing companies are using machine-intelligence technologies to move the needle on a broad set of performance indicators, achieving three or four times the impact of average players. The full scale of the opportunity is set to continue as more use cases evolve from simple dashboards to greater levels of autonomy.

What exactly does it mean to be a data-driven enterprise , and what would such an organization look like by 2025? Our interactive helps executives envision success by defining seven characteristics of a data-driven organization, how each would differ from what we typically see today, and how to achieve each step. Companies able to make the most progress fastest stand to capture the highest value from data-supported capabilities.

McKinsey created the Connected Leaders Academy to equip Black, Hispanic, Latino, and Asian leaders with the network and capabilities to achieve their professional aspirations. In our new interview series , My Leadership Journey, participants from the private sector, academia, the arts, and other walks of life reflect on their formative experiences and leadership styles. Jason Wright, president of Washington’s football team, the Commanders , told McKinsey about getting cut nine times from the NFL and talking his way back to opportunity by honing a narrative about what he could contribute. Stephanie Hill, executive vice president of Lockheed Martin’s Rotary and Mission Systems , discussed the importance of accepting uncomfortable challenges to build a career. Barry Lawson Williams, founder and former managing general partner of Williams Pacific Ventures , who has also served on 16 major public-company boards, spoke about how he built a network that helped position him for lucky breaks.

What does an army veteran who has returned from deployment five times have to teach a McKinsey organizational expert? Plenty, as a letter and conversations between Adria Horn, executive vice president of workforce at Tilson, a national telecom provider, and senior partner Aaron De Smet revealed. Horn reached out to McKinsey after reading about how companies can reengage employees postpandemic . She shared her view of parallels between soldiers returning from war zones and employees coming back  to the office after living through the COVID-19 pandemic. The resulting conversation explores the alienation of return and how employers can work from a place of empathy.

Brainstorming is supposed to result in conversations like the one between Horn and De Smet. But too often, the value of casting the net wide for opinions is undercut by participants feeling pressured to conform. A structured approach that guides a group through anonymous brainstorming  and silent voting removes some of the risks that can thwart honest discussion.

Even the most seasoned professional was a neophyte at some point, a fact celebrated in our My Rookie Moment video series, in which McKinsey colleagues discuss the first time they had to deal with a particular challenge. The latest edition features stories about “leaps of faith,” in which partners had to do something for which they felt unprepared. Yarns include a tale of on-command public speaking and the recollection of facing a client who demanded different conclusions.

COVID-19: Briefing note #89, January 26, 2022

Tackling the other big global crisis..

Since March of 2020, we have focused this weekly update on sharing research into the health emergency facing the world. This week, we took a break from the COVID-19 pandemic to zero in on the other crisis that poses threats to lives and livelihoods: climate change, and the need to transition to a net-zero world. Additional articles looked at pressing issues including why the loss of US manufacturing has increased inequality, and how the Great Attrition is playing out in nursing.

A new report from the McKinsey Global Institute  looks at what an economic transformation to net-zero emissions would entail . The transformation would affect all countries and all sectors of the economy, either directly or indirectly. In six sections of the report, we assess economic shifts for 69 countries and changes in sectors that produce about 85 percent of overall emissions, as well as provide estimates for what it will all cost (exhibit).

The report includes an examination of effective decarbonization actions , which include shifting the energy mix, increasing energy efficiency, and enhancing sinks of both long- and short-lived greenhouse gases. Another section illustrates the economic and societal adjustments that would enable a successful transition  to net-zero emissions by 2050, focusing on demand, capital allocation, costs, and jobs. We examine which sectors of the economy are more exposed to a net-zero transition , and how the transition could play out in various countries and regions . A section about actions for stakeholders  explores what companies, financial institutions, and governments and multilateral institutions can do.

Also this week: revitalizing US manufacturing could be fundamental to resolving inequities  while driving sustainable, inclusive growth. Today, the manufacturing sector represents just 10 percent of US GDP and jobs but drives 20 percent of the nation’s capital investment, 35 percent of productivity growth, 60 percent of exports, and 70 percent of business R&D expenditure. Strengthening the sector could also address the pervasive supply chain issues wreaking havoc all over the world, easing short-term disruption caused by the pandemic while improving global competitiveness in the midterm to long term.

During a time of unprecedented need, what can employers do to prevent losing nurses , the backbone of the healthcare workforce, to the Great Attrition ? The McKinsey Podcast speaks with senior partner Gretchen Berlin, a registered nurse, about the need to pay nurses adequately and to ensure that there’s sufficient staffing, respite, and gratitude.

In the latest edition of our Author Talks series, John Koenig, author of The Dictionary of Obscure Sorrows (Simon & Schuster, November 2021), discusses how and why he invents new words for emotions and sensations. From “kenopsia” (the eeriness of places left behind) to “suerza” (a feeling of quiet amazement that you exist at all), Koenig’s made-up words pinpoint universal experiences and demonstrate how creative human language can be.

COVID-19: Briefing note #88, January 19, 2022

Fallout from the pandemic demands targeted action..

For much of the COVID-19 pandemic, leaders have tried to prepare for what might unfold. Today, some of those possibilities have arrived as undeniable challenges that demand new ways of operating. This week, McKinsey looked at fallout, including inflation, young peoples’ mental-health struggles, a pattern of “jolting” growth, and the demand for government agencies to improve customer service.

Not since the 1970s has inflation been such a central issue for companies, so finding creative ways to mitigate price increases  is a dormant skill in many organizations. McKinsey experts offer a series of steps supply-chain leaders can use to determine whether a price increase is fair, starting by identifying the main cost inputs that have the highest level of change, estimating the percentage of the total cost these inputs make up, and calculating an acceptable price-increase range (exhibit). Response strategies include using a strong fact base for win–win negotiating and exploring new suppliers.

A series of McKinsey consumer surveys and interviews indicated unprecedented behavioral-health challenges facing Generation Z  and stark differences among generations. Gen Z respondents were more likely than other generations to report having been diagnosed with a mental-health or substance-use issue, as well as more likely to have sought no treatment for the problem. Gen Z respondents were also two to three times more likely than other generations to report thinking about, planning, or attempting suicide in the 12 months spanning late 2019 to late 2020.

There could be a postpandemic boom on the horizon, but it will likely depend on business leaders’ ability to respond to productivity and growth “jolts”  caused by the pandemic. The onset of COVID-19 brought a set of discontinuities that drove the first jolt to growth and productivity. Now, near-term uncertainties pose risks to growth; however, responding effectively could translate to a second jolt. The potential third and final jolt may be the largest as companies reshape their long-term strategies to reflect—and define—the next normal.

On the McKinsey on Government podcast, McKinsey partner Tony D’Emidio and associate partner Marcy Jacobs discuss how the pandemic forced many government agencies to modernize the customer experience  (CX) amid high demand for unemployment and healthcare assistance. Transparency has improved, but there is more work to do so that when citizens fill out applications or forms, they get status updates instead of just wondering what happened. Another insight: better CX brings costs down because satisfied customers call with fewer questions.

What makes a CEO great? In this edition of Author Talks , McKinsey senior partners Carolyn Dewar, Scott Keller, and Vik Malhotra discuss their new book, CEO Excellence: The Six Mindsets That Distinguish the Best Leaders from the Rest (Scribner, March 2022). The authors interviewed 67 CEOs worldwide who met their criteria for excellence and diversity of both background and approach and identified keys to excellence that can provide lessons for any type of leader.

COVID-19: Briefing note #87, January 12, 2022

People are the fuel that will power the next industrial revolution..

Amid the Omicron surge, it’s perhaps poignant to note that all the advanced technology in the world means nothing without a population capable of adopting it and creating with it. COVID-19 vaccines are a good example of a technology that depends on people’s acceptance. This week, McKinsey explored how people in various industries and sectors relate to technology and the power of these interactions.

The McKinsey Talks Operations podcast brings together the CEOs of Flex, Protolabs, and Western Digital to discuss why the Fourth Industrial Revolution will be people powered . Digital manufacturing and production will change how the world makes goods but only if there is training and development to teach workers the skills to use these technologies. With the current labor mismatch in many countries, now is the time to further engage workers for a digitally enabled future.

With Fourth Industrial Revolution technologies in the hands of a workforce empowered with the skills needed to use them, an organization’s digital-transformation journey can move from aspiration to reality.

A pivot to telemedicine, remote work, and other technologies helped a leader in pediatric medicine manage the onslaught of COVID-19. Boston Children’s Hospital president and CEO Dr. Kevin Churchwell  calls for more innovation to cope with a sharp rise in children and young adults with behavioral- and mental-health issues. This generation of kids is being reared under physical distancing, lockdowns, and school closures. Churchwell believes that those presenting with mental-health issues would benefit from a tech-enabled continuum of care that encompasses the family, the primary-care pediatrician, the school system, the hospital, and the state.

Sarah Bond, Microsoft’s corporate vice president for game creator experience and ecosystem at Xbox , describes how recognizing that game playing is a fundamental human trait helped Microsoft create its “ubiquitous global gaming ecosystem.” Investments in cloud gaming, the Game Pass subscription service, and cross-platform play allow gamers to participate anywhere, anytime, on any device.

Tulsa Remote, a program that enabled Tulsa, Oklahoma, to attract 1,300 remote workers to the area, also prioritizes the human need for connection. In addition to giving relocators $10,000, the program provides membership to a local coworking space and assists in finding housing. Events, both virtual and in-person, are intended to mitigate the potential isolation of remote work. The initiative has attracted 50,000 applicants and is making a meaningful impression on the local economy.

In a typical organization, only a specific department and designated functions are accountable for quality in design, development, operations, and even postmarket activities. But in a smart-quality organization, everyone owns quality . Pharmaceutical and medtech companies can create value by redesigning key quality processes along these principles.

What makes a CEO great? In a recent edition of Author Talks , McKinsey senior partners Carolyn Dewar, Scott Keller, and Vik Malhotra discuss their new book, CEO Excellence: The Six Mindsets That Distinguish the Best Leaders from the Rest (Scribner, March 2022). The authors interviewed 67 CEOs worldwide who met their criteria for excellence and diversity of both background and approach and identified keys to excellence that can provide lessons for any type of leader.

Also in Author Talks , Tareq Azim, founder of Empower Gym, trainer of NFL greats, and creator of the Afghan Women’s Boxing Federation, talks about his new book, Empower: Conquering the Disease of Fear (Simon & Schuster, January 2022), which was coauthored with Seth Davis. Azim discusses how he created a place for women to practice the most male-dominated activity in the most male-dominated society of all time and how anyone can find inner strength.

COVID-19: Briefing note #86, January 5, 2022

Omicron demands renewed focus on familiar pandemic themes..

A new year is here, but COVID-19’s latest surge feels so very last year—not to mention the year before that. To kick off 2022, McKinsey looked at issues that many people thought would have started to resolve as the virus died down, but which instead require renewed engagement. Topping our list this week are employee burnout and hits to tourism. But there is positive news as well: reports on the state of mobility and pharmaceuticals reflect that pandemic-inspired changes are leading some industries in new directions.

Compared with nonparents, employed parents are more likely to miss days of work because they are experiencing symptoms of burnout  (exhibit). Companies need to understand what the compound pressures of employment and parenting during a pandemic are doing to these workers and consider a list of interventions to counteract their experience of burning the candle at both ends.

Women also are reporting higher-than-average rates of burnout. In a new episode of The McKinsey Podcast , senior partners Alexis Krivkovich and Lareina Yee discuss results from the recently released Women in the Workplace 2021  report. Forty-two percent of women report being burned out , a percentage that is higher than it was last year and higher than it is for men. Reasons include the fact that one in three women, and 60 percent of mothers with young children, spend five or more hours a day on housework and caregiving.

Early January is when many of us go on a diet and re-up at the gym. Here’s another tune-up option: take our “Can you turn attrition into attraction?” quiz  to test how good you are at combatting burnout, rewarding employees in meaningful ways, and strengthening bonds with your teams.

Our “ year in review ” recap of 2021 highlights themes that many were hoping to leave behind, including the pandemic and the Great Resignation, as well as aspirations, such as inclusive growth and digital transformation, that will only grow in importance. The “ year in images ” collection showcases the most evocative art we published last year, while the “ year in charts ” collection tells visual stories about virus cases and vaccination rates, diversity targets and employee experiences, and how sustainable growth might be attained.

Another consequence of COVID-19 is the devastation wrought on tourism markets worldwide. We looked at a key US market and found that the financial impact of the pandemic on New York City is six times that of the September 11 attacks, costing the city $1.2 billion in lost tourism-related tax revenue. New York can reinvigorate its tourism industry  by encouraging domestic travel and by reimagining business travel.

McKinsey reflected upon how the pandemic has affected mobility and where the sector is headed . Among the findings: half of the consumers in our recent Global COVID-19 Automotive & Mobility Consumer Survey stated a clear preference to travel less than they did before the COVID-19 pandemic. Among the forecasts: by 2035, in an accelerated scenario, the largest automotive markets in the world (that is, China, the European Union, and the United States) will be fully electric.

The pandemic has also reshaped the pharmaceuticals industry , and changes are still under way. We conducted a survey of senior executives in commercial roles at global pharma companies and found that more than 80 percent think that companies will fully embrace agile ways of working, and 66 percent believe that companies will move away from the traditional sales rep model because of restricted access, virtual interactions, and perceived low return on investment.

Here are some of this week’s other key findings from our research:

Two books in our Author Talks series address the workplace issues so prevalent in our research from this past year. Joan C. Williams, distinguished professor of law and chair of the Hastings Foundation, discusses her latest book, Bias Interrupted: Creating Inclusion for Real and for Good (Harvard Business Review Press, November 2021). Jennifer Moss, Harvard Business Review contributor and nationally syndicated radio columnist, shares her recent work, The Burnout Epidemic: The Rise of Chronic Stress and How We Can Fix It (Harvard Business Review Press, September 2021).

For McKinsey’s 2021 perspectives on the business impact of COVID-19 , visit our archive of several dozen briefing notes published throughout the year.

Matt Craven is a partner in McKinsey’s Silicon Valley office;  Linda Liu is a partner in the New York office, where Matt Wilson is a senior partner; and  Mihir Mysore is a partner in the Houston office.

This article was edited by Mark Staples, an executive editor in the New York office.

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Business continuity management lessons from the pandemic.

Forbes Technology Council

Head of Market Lab Operations at  Ericsson .

Until a year ago, operations managers charged with business continuity predominantly focused on natural disasters, human error, cyberattacks and insider threats. In 2017, for instance, the top reasons cited for a business continuity plan were: minimizing downtime, protecting what's important, communicating with confidence, resuming operations and ensuring full recovery — all of which superseded the imperative to ensure employees' physical and mental well-being over an unprecedented period of time.

With a jolt and scarce previous experience, 2020 brought the sharp need to manage a pandemic and its potential impact of large-scale global business disruption.

A year into the Covid-19 pandemic, the havoc to lives continues to take its toll, and we are finding ourselves continually re-defining normalcy of business operations while prioritizing the well-being of company employees. While there is controversy in comparing this pandemic to WWII , the sense of what we are experiencing in the global community is that every one of us will eventually know firsthand of casualty and loss — be that a family member, friend or colleague.

Undoubtedly, in years to come, we will learn more to help businesses be better equipped to deal with a global pandemic. This article is an aggregation of firsthand experience and observations over the past year, intended to provoke thinking toward a more refined and structured approach to business continuity management (BCM) during a global pandemic.

As the pandemic grew worldwide, business operations had to quickly minimize potential impacts while rapidly enabling a remote workforce and implementing safe practices. Because of these shifts, physical access controls had to be doubled-up and synchronized with country and local regulations. In the midst of information (or lack thereof), decisions on mitigation steps had to be rationalized in the context of what, at best, minimized the risk of infection. Machine redundancy became secondary to ensuring each employee with critical skills or roles had a backup and were physically isolated.

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Management required quick and practical training on how to keep their employees healthy, as well as how to communicate appropriately. The need for real-time and parallel interdepartmental communication became paramount. Close internal engagements with human resources, security and environment, health and safety functions became the priority. Traditional external partnerships with suppliers had to be augmented with more engagement in interest groups looking at common challenges, such as deep cleaning solutions for technical environments and long-term effects of cleaning methods on sensitive equipment. Connectivity became king, and a mobile workforce was no longer optional. 

In this environment, volume partnerships with communication providers ensured uninterrupted productivity for remote workers. Clear, frequent and transparent communication and reporting have never become more essential or required more consistency. Written words often lend themselves to multiple interpretations while answers to questions lead to a plethora of sub-questions. Real-time group and individual engagements preempt the weaknesses of multiple interpretations of mass emails.

Nothing has made the world a smaller place than this pandemic. Awareness and detailed knowledge of the differences in intra-country and global regulations have become a priority wherever any aspect of the business had interdependencies outside its immediate geography. Operating decisions for the short- and long-term called for gathering perspectives in discussion groups along with using instinct and insight for dealing with unknowns. As many of us experienced firsthand, dealing with conventional disasters using associated documentation left large gaps between the questions of "what to do?" and "how to do it?"

Because of this experience, organizations need to rethink their approach for BCM with focus on at least the following elements:

• Infrastructure enhancements and security hardening for large-scale remote working

• Process development for physical access with appropriate restrictions in the workplace

• Synchronization of regular and emergency communications for extended periods of time

• Workforce lifeboat analysis and development of competence redundancies

• Detailed short-term and flexible succession plans to maintain "command" and "control"

• Development and inclusion of external partnerships in the areas of health science

Modification of BCM documentation to handle multiple disasters given the pandemic has been in a continuum, and businesses have had to also manage through disruptions, for example, as those caused by severe weather events.

As for any type of business disruption, the cost of preparation and minimization of impact could be driven by cost-benefit analyses. We should always remember that the impacts are protracted over an unknown extended period and that the benefits of prioritizing our humanity are not so easy to quantify. Adding more machine and technical redundancy solutions does not take care of the human requirements. Our resilience as humans has never been put more to the test or required more mutual support than during this time.

The views in the article do not represent or reflect Ericsson and are the sole views of the author. 

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5 risk management lessons from the coronavirus pandemic

5 risk management lessons from the coronavirus pandemic

The coronavirus pandemic has amped up risk management, forcing executives and employees to adapt to remote work, learn new technologies, and find different ways to serve clients and customers.

In a webinar and follow-up interview on risk management lessons from the pandemic, Mark Beasley, CPA, the KPMG Term Professor of Accounting and director of the Enterprise Risk Management Initiative at North Carolina State University in the US, said executives are still learning important takeaways from the pandemic. He said he hopes they will realise planning ahead for risks is crucial to a company’s success. 

“COVID-19 has helped more people than before understand that a single root-cause issue can totally trigger risk at an enterprise level that affects everything,” Beasley said.

How to keep risk management on track

Beasley outlined five principles businesses should adopt when it comes to risk management: 

Put people first. The coronavirus pandemic has forced many office workers to set up their laptops in kitchens, dining rooms, or home offices, where they attend virtual meetings and complete tasks online. Weeks and months of working remotely have highlighted the challenges of turning a home into an office, particularly in families with children in which both parents work from home.

A lot of people are stressed, Beasley said. As employees adjust to working from home, some are dealing with the extra challenge of young children being out of school and learning virtually. Companies must recognise that and support their workers.

“I think so much of it is messaging, particularly from the C-suite — acknowledging that the workforce has been thrown into an uncertain world and acknowledging that it’s not easy,” he said.

Remote working also offers opportunities and could help industries rethink their hiring strategies.

“I think the huge opportunity for us is [that] we can open up our vision on how to attract talent,” he said. “I can have talent working for NC State, and they live in California. Why not?”

Identify the “main thing”. Beasley said it’s more important than ever for businesses to narrow their focus to what he calls the “main thing”, whether it’s selling or making a product or offering a service essential to the business. Anything nonessential could be sacrificed to cut costs.

He used a recent no-frills hotel stay as an example. Pre-pandemic, Beasley said, the hotel had breakfast, happy hours, and automatic daily cleaning. But this time, a simple breakfast was served in a plastic container, happy hour was cancelled, and his room was cleaned only at his request.

Identify risks. Dealing with the health and economic impacts of the pandemic is creating new risks. Business leaders must identify and prioritise them, Beasley said.

For example, he said, as a college professor he has been preparing to teach online classes this fall. The risk of switching to online classes is that instructors might not have the technology in place by the start of the semester, and students might not have reliable internet access or the bandwidth to use certain programs.

Businesses find themselves in similar situations with the number of new risks skyrocketing during the pandemic. Beasley said businesses need to ask themselves, “What could keep the main thing from happening?”

Multiple uncontrolled risks are on steroids, he said. “Pre-pandemic, a single one may be on steroids — not all of them at the same time.”

Respond to risks. Once risks are identified and prioritised, leaders need a plan of action. They should be realistic, especially in situations such as a global pandemic, Beasley said.

“We’re so used to doing things so well that we might fall prey to perfection tendencies,” he said. “In this COVID-19 environment, responding to risk is, ‘Let’s respond the best way we can, but let’s not wait until we can get the perfect response.’”

Planning ahead can be the key to responding effectively. Some business leaders used to be hesitant to plan for worst-case scenarios, Beasley said, but the pandemic is changing that.

“Executives were saying, ‘That’s not going to happen. We don’t have time for this. We’ve got more critical things to work on today,’” he said. “I think they’re realising, ‘Ooh, it would have been really helpful had we done that.’”

Monitor and communicate. Risk strategies might need adjustments at times, Beasley said, cautioning against making plans for years ahead.

“There’s still so much uncertainty that we as leaders need to not be too fast to start looking too far out into 2021,” he said. “Because the crisis is still so real. The uncertainty is changing so rapidly. We’re very short-term right now. And that’s probably OK and probably appropriate.”

Some things may change once the pandemic is over. Strategic planning sessions, for example, are better in person than online.

Other things may stick, Beasley predicted. Some companies will likely continue remote work even after the pandemic is over, he said. “Approving a budget, things like that, we can do remotely.”

Companies may also keep new practices that customers have embraced during the pandemic. Beasley points to his 85-year-old mother’s newfound appreciation for grocery pick-up. 

“She’s pretty savvy on technology stuff,” he said. “She’s figured out doing her grocery order online. She’s like, ‘I should have done this a long time ago.’”

— Sarah Nagem is a freelance writer based in the US. To comment on this article or to suggest an idea for another article, contact Sabine Vollmer, an FM magazine senior editor, at [email protected] .


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Effective Risk Management in Context of the Pandemic

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Michael Rasmussen Speaker, Author, and Advisor

This is a guest post from Michael Rasmussen of GRC 20/20 .

The COVID-19 pandemic has caught a lot of organizations by surprise. But, should it have?

We have had pandemics in the past—history teaches us this over and over. The World Economic Forum has regularly reported pandemic risk on their global risk reports over the years. Political and business leaders have warned us of pandemics. 

So, why has it caught so many organizations off guard?

The problem: an unbalanced view of ERM

The reality is that organizations have not had a balanced view of enterprise risk. Too many enterprise risk management programs (including corporate risk management and operational risk management) have been focused on highly visible risks, such as IT security, while not paying attention to the significant, but low-likelihood, risks like a pandemic. 

Risk management will fundamentally change because of the COVID-19 pandemic. We will see a lot of enterprise risk management (ERM) programs become more balanced and monitor a broader array of risks that can impact the organization and its objectives. As a result, we will see greater focus on environmental risks such as climate change, health and safety risks, quality risks, third-party supplier risks, and more.

There is, and will continue to be, a growing breadth of enterprise risk management and risk ownership by executives and business operations. We will see a growing number of organizations expand and invest in enterprise risk management programs coming out of the pandemic.

Staying resilient in light of challenges

Another significant change in risk management will be a greater focus on operational resiliency. Before the pandemic, the United Kingdom has already been leading the world in operational resiliency regulation with the combined effort of the Financial Conduct Authority (FCA), Prudential Regulatory Authority (PRA), and the Bank of England (BoE). Organizations can expect that there will be global interest in operational resiliency regulation across industries and jurisdictions to ensure that organizations and entire industries are prepared for the next crisis.

Operational resiliency requires an integrated approach to risk management, particularly operational risk management, and business continuity management. I have been stating for 15 years that risk and business continuity management need to come together and be under one function and not continue to operate independently of each other. 

Too many business continuity programs were caught off guard by COVID-19, as they were nothing more than IT disaster recovery functions and did not prepare organizations for a crisis like we now face. Business continuity will grow, expand, and mature because of the pandemic and will become an integrated part of risk management programs to deliver operational resiliency to organizations.

The outcome of the pandemic

The overall outcome of the pandemic on risk management will see organizations adopt stronger strategies for governance, risk management, and compliance (GRC). OCEG defines GRC as a capability to reliably achieve objectives (governance), address uncertainty (risk management), and act with integrity (compliance).

The use of technology for GRC, and in the specific context of risk management and operational resiliency, will expand in organizations. Organizations will look for technology that enables an enterprise view of risk that is linked to objectives of the organization.

Technology should enable organizations to plan for risk scenarios and monitor an enterprise view of risks. All organizations should strive to stay agile for the next crisis, to be able to monitor risks as they develop, and to model the impact of the risk on objectives so the organization can plan and remain agile in the midst of uncertainty. 

Bonus content: free COVID-19 templates from AuditNet and Workiva

To help your organization avert risk, no matter what software you use, we collaborated with AuditNet to create four critical templates, covering risk management, business continuity, preparedness and planning review, and more.

Download them now , and keep your organization running smoothly despite the risks of COVID-19.

For more information on making sense of what’s happening in the world of risk and how to keep your team on track, visit our Handbook for the New Normal of Accounting, Finance, and Risk .

Michael Rasmussen

Speaker, Author, and Advisor

Michael Rasmussen is an internationally recognized pundit on governance, risk management, and compliance (GRC)—with specific expertise on the topics of enterprise GRC, GRC technology, corporate compliance, and policy management. With 22+ years of experience, Michael helps organizations improve GRC processes, design and implement GRC architecture, and select technologies that are effective, efficient, and agile. He is a sought-after keynote speaker, author, and advisor and is noted as the “Father of GRC,” being the first to define and model the GRC market in February 2002 while at Forrester.

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  • Running a business

Managing risks in your business

Pandemic and health event risk management.

  • Business continuity planning
  • Identifying and managing business risk
  • Incident response plan
  • Developing a recovery plan
  • Recovery checklist
  • Business insurance
  • Managing risk when starting up
  • Surviving an economic downturn

Managing risk in supply chains

  • Online risks and IT security
  • Crime prevention and security
  • Intellectual property for Queensland businesses
  • Avoiding business scams
  • Manage environmental risks and other climate risks to your business
  • Natural disaster resilience and recovery
  • Pandemic and health events
  • Workplace health and safety
  • Mental health and wellbeing

A decline in the health of people and animal communities can also affect the health of your business.

Preparation and planning can ensure business continuity.

What is a pandemic or health event?

A pandemic is a worldwide outbreak of a disease or illness that spreads quickly and widely among human or animal populations.

Pandemics can pose a global threat bringing difficulties and disruptions to the lives of people and businesses. An epidemic is similar, affecting a locality rather than the whole world.

A health event may be a pandemic, an epidemic, or any other outbreak or instance that affects the health of humans or animals. Each has the potential of disrupting part or all of your business operations.

Risks to your business include:

  • illness and absences within your workforce
  • interruptions to logistics and suppliers
  • financial stress and potential loss of income
  • reduction in customer footfall to your premises
  • inability to trade and periods of lockdown.

Identifying the risk a pandemic or health event could have on your business, and developing a plan to reduce the impact, will help your business recover quickly.

To assist in identifying risks and developing a recovery plan use the resources at writing a business continuity plan .

Thumbnail of business continuity planning Word template

Download the business continuity plan template

This template includes a:

  • risk management plan section
  • business impact analysis section
  • incident response plan section.

Use this page to consider your risk of a health event and complete these sections of the template.

Download the business continuity planning template .

Pandemic illnesses in humans and animals

Pandemics occur when a disease, virus, or new variant of an existing virus spreads worldwide.

An event like this can significantly change the way businesses operate with some impacting specific industries more than others.

For example, swine flu mostly impacts the livestock and food industry.

Potential pandemic human health threats

  • There are 3 main types of the flu virus (A, B, and C).
  • Only type A viruses are known to cause pandemics.

Learn more about influenza .

  • The COVID-19 pandemic began in 2019.
  • A number of variants with different profiles have emerged since.

Find out more about Queensland COVID-19 health alerts .

  • Most swine flu viruses do not infect humans or do so mildly.
  • The H1N1 virus of 2009–2010 was an exception.

Learn more about swine flu and other viruses .

  • Avian flu is caused by a virus that affects wild birds and poultry.
  • There have also been human infections.

Learn more about avian influenza .

  • In the past, outside Africa, animal-to-human transmission of monkeypox has been rare.
  • Generally, outbreaks occur when an infected animal has been imported and then infects local animals.
  • Human-to-human transmission is possible.

Learn more about monkeypox .

Identified a specific health threat?

If you are concerned or suspect that you may have identified a specific health threat, the following phone numbers will provide you with assistance.

For health emergencies, call 000 .

For medical advice, call 13HEALTH (13 43 25 84).  This service is available 24 hours a day, 7 days a week and provides health information, advice or referral services.

Potential pandemic livestock, poultry and animal health threats

  • Affects poultry and other birds.
  • Can present with little or no signs of the disease.
  • Can spread rapidly throughout bird populations.
  • Can mutate into highly pathogenic avian flu.

Read about Australian outbreaks of low-pathogen avian flu .

Learn more about low-pathogen avian flu (US Centre for Disease Control).

  • Affects poultry, pigeons and other birds.
  • Viral infection often present in, and spread by, pigeon populations.
  • Affected birds can die within 3 days.
  • Outbreaks are reportable to Biosecurity Queensland.

Learn more about avian paramyxovirus .

  • Affects horses, dogs and humans.
  • Periodically present in flying fox populations.
  • Believed to be able to be transmitted from flying foxes to horses, and from horses to dogs and humans.
  • Mortality rate of infected horses is 80%.

Find out more about Hendra virus .

  • Affects bees.
  • Major threat to honey bees and crop pollination.
  • Not yet established in Australia.
  • High impact on almond, apple, cherry and other crops that rely on pollination, as well as honey bees, if established.

Learn more about the varroa mite .


Biosecurity is one of Australia's most important lines of defence and prevents many serious diseases from infecting plants and animals.

Learn more about biosecurity .

Business continuity planning for a major health event

Use your business continuity plan to consider, manage, and recover from disruptions to your business.

  • Download the business continuity plan template .
  • Find help writing a business continuity plan .

The information below identifies risks to your business, potential actions you could take and resources you can assess for information and assistance.

Risk, potential action and resources

Potential action

  • Instigate remote working/work from home.
  • Improve workplace health and safety procedures.
  • Provide personal protective equipment (PPE), training and equipment.
  • Communicate to your staff and test where relevant.
  • Business health and safety resources for coronavirus (COVID-19)
  • Personal protective equipment (PPE) from WorkSafe Queensland
  • First aid and emergency plans from WorkSafe Queensland
  • Working from home from Safe Work Australia
  • Small business planning tool – COVID-19 from Safe Work Australia

Online ordering/home delivery (and possible zero contact) of products and services.

Websites, social media and digital marketing

Potential actions

Seek assistance from small business or rural financial advisory services.

  • North Queensland rural and small business financial counselling
  • Southern Queensland rural and small business financial counselling
  • Check government websites and contacts regularly.
  • Use kits and websites developed in response to the pandemic.
  • Contact key industry associations for communication kits and advice.
  • what is happening
  • what is being planned
  • where they can obtain more information
  • what they need to do, and when.
  • communicate with suppliers.
  • Queensland Health contacts

Obtain external advice and support services

Mental health and wellbeing resources for businesses

  • Communicate with existing suppliers.
  • Seek alternative suppliers.

Follow government requirements, seek assistance, and restock when able.

National pest and disease outbreaks

Planning and preparation can minimise the impacts of a pandemic.

Learn about major health event preparation for small business .

Pandemics are external factors out of our control but by planning and preparing, your business can reduce the potential impacts.

Also consider...

  • Learn more about major health event preparation for small business .
  • Find advice on writing a business continuity plan .
  • Find tips and advice on managing risk in supply chains .
  • Last reviewed: 24 Nov 2022
  • Last updated: 24 Nov 2022

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  • Wiley - PMC COVID-19 Collection

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Pandemic risk management; protecting people while ensuring business continuity

James sneddon.

1 Risktec Solutions (Canada) Ltd., Calgary Alberta, Canada

Associated Data

Data sharing is not applicable to this article as no new data were created or analyzed in this study.

The COVID‐19 pandemic swept across the globe in the latter half of 2019, throughout 2020 and into 2021. In response, many organizations implemented work from home policies, while others stopped operations entirely in an effort to limit the spread throughout their workforce and supporting communities. This containment strategy was not universally viable; long‐term shutdowns impacted the economic viability of companies, and some industries were designated as an “essential service” and thus continued operations. These employers faced the proposition of balancing the needs of the business and the community with a continued responsibility to provide a safe workplace for employees. This paper demonstrates how the application of common risk management methodologies, such as bowtie analysis combined with an appropriate assurance and verification process (e.g., the lines of defense model), can help the risks associated with a resumption or continuation of in‐person operations in a pandemic to be better understood and ensure the measures in place to manage said risk are appropriate and effective.


Since its appearance in December 2019, the SARS‐CoV‐2 virus (COVID‐19) has continued to spread, touching almost all corners of the world. The progression from outbreak to pandemic was soon accompanied by the swift imposition of lockdowns in many countries.

In support of the various restrictions imposed upon their communities, many organizations implemented work from home policies, while others stopped operations entirely in an effort to limit the spread. There were, however, industries where this approach was not viable, either because they provided an essential service or because of economic necessity. Now, more than a year on from coronavirus initially upending daily life and work, this situation remains.

Employers requiring their employees to remain in, or return to, an office environment, work site or operating facility face the ongoing proposition of balancing the needs of the business and the community with a continued responsibility to provide a safe working environment for their employees.

Common risk management methodologies, such as bowtie analysis combined with the lines of defense (LOD) model, can be adapted to help employers better understand the risks involved with a resumption or continuation of in‐person operations, ensuring the measures they have in place to manage this risk are appropriate and effective.


2.1. introduction to bowtie analysis.

Risk assessment lies at the heart of any form of risk management, and one of the most powerful of these techniques is the bowtie method. Its strength is that it goes beyond the usual risk assessment “snapshot” and highlights the links between controls, assurance and verification activities, and the underlying management system; a valuable trait when assessing the constantly evolving nature of a pandemic.

Bowties originated as a method for assessing operational risk, with the earliest mention of such an approach appearing within an adaptation from the ICI plc HAZAN Course Notes 1979, presented by The University of Queensland, Australia. 1 The Royal Dutch Shell Group was the first major company to integrate the bowtie method into its business practices 2 , 3 , 4 and is credited with developing the technique which is widely used today.

The bowtie method provides a readily understood visualization of the relationships between the causes of business upsets, the escalation of such events, the controls preventing the event from occurring, and the mitigation measures in place to limit the business impact (see Figure  1 ).

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Bowtie framework

A description of the different components of the bowtie, and the method for building such a diagram are well‐documented, 2 , 3 , 5 hence this paper focuses predominantly on its specific application within a pandemic risk management setting. Select definitions, within this context, are provided in Section  2.2 , below.

2.2. Application of bowtie methodology to pandemic risk management

The application of bowtie methodology can be shifted from its more traditional use in high‐hazard industries to assessing the risk to an organizations workforce during the COVID‐19 pandemic in a relatively straightforward manner. Through graphical representation, bowtie analysis can map threats that may impact worker safety, identify and assess the safeguarding in place to prevent or mitigate different scenarios, and readily highlight any deficiencies or non‐conformances.

A representative example of how the bowtie methodology can be applied in the assessment of “worker safety” is provided in Figure  2 , with select key definitions and accompanying examples outlined in Table  1 .

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COVID‐19 worker infection example

Bowtie definitions


Bowtie analysis is not a panacea for managing risk in the current environment. It must be integrated within a wider risk management framework, enabling barrier implementation to be controlled and the risk profile for the organization to be consistently monitored.

The adoption of such a framework is of special significance to large organizations who face the following challenges:

  • How do we coordinate our response in a consistent manner across multiple facilities and offices?
  • How do we provide a large and geographically diverse workforce with readily available information on our response and the resources available?
  • How do we map and track compliance of safeguarding to ensure conformance and identify any deficiencies?

The following features of bowtie analysis, and its application within a robust risk management framework help address these challenges.

3.1. Pandemic response communication

The bowtie is an excellent communication tool for the coordination of response. Dissemination of key information to the workforce can be actively managed via targeted outputs from the bowtie diagrams.

Information for each barrier on the bowtie diagram can be easily and swiftly communicated to the workforce in a one‐page summary (Figure  3 ), ensuring a coherent and well‐informed response, covering questions such as:

  • What is the barrier?
  • What does it do?
  • How does it perform?
  • How is it tested?
  • Where do I find documents with further information?
  • Who should I contact for further details?

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COVID‐19 safeguarding summary

3.2. Barrier/safeguarding assurance and verification

In order to track how well prevention and mitigation barriers are performing, assurance and verification criteria must be defined as benchmarks to measure success. Such criteria are commonplace within high hazard industries in the form of Performance Standards. However, a more appropriate approach for managing the COVID‐19 response is the three LOD model.

The LOD model is typically deployed in an internal auditing function. 6 LOD modeling is a method used to gauge performance, enhance clarity regarding risks and controls, and help improve the effectiveness of risk management systems. It is based around three broad concepts (Figure  4 ):

  • LOD1: Self‐verification that activities have been completed as prescribed. Barriers are effectively controlling risks and are delivering planned performance;
  • LOD2: Independent functional assurance of conformance to requirements and quality of operating activities; and,
  • LOD3: Internal, external and regulatory audits to confirm compliance.

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Lines of defense model

The LOD model can be applied to the prevention and mitigation barriers identified within the bowtie in the following manner:

  • Identify assurance and verification activities for each barrier;

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Self‐verification (LOD1) checklist example

  • Collate responses within the auditing function of the bowtie software used (e.g., BowTieXP); and

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Key performance indicator (KPI) dashboard example

3.2.1. KPI dashboard

The application of the LOD model to COVID‐19 response enables a real‐time view of the health of barriers, ensuring all non‐conformances and deficiencies are highlighted, together with a risk profile for each facility, office, or entity under consideration.

KPI's, are defined as a quantifiable measure used to evaluate the success of an organization, employee, and so forth in meeting objectives for performance. KPI's are traditionally applied to “Safety Critical Elements” within the process industry and help ensure that said equipment is being tested, maintained, and inspected at an appropriate interval, and remains robust through life. The assurance and verification activities for typical COVID‐19 prevention and mitigation barriers are relatively more straightforward and can be represented via a simple traffic‐light designation which can serve to easily and effectively highlight how the identified barriers are being adopted across an organization;

  • Green : Barriers are fully implemented, with all self‐verification activities complete.
  • Amber : Partial implementation of barriers. Self‐verification activities indicate some deficiencies which can, and will be, resolved.
  • Red : Barriers not implemented / multiple deficiencies identified.

A representative example of a KPI dashboard is depicted in Figure  6 .


COVID‐19 continues to present a unique and challenging environment for society and industry alike. As organizations continue operations, begin return‐to‐work preparations, or simply prepare for the everchanging restrictions placed upon them, the need to manage the risks inherent in such activities is paramount.

Bowtie analysis, and its application within an integrated risk management process, can help us better understand and manage these risks by:

  • Ensuring that the key hazards have been identified and appropriately assessed; including correct identification of threats, consequences, and both preventive and mitigative barriers;
  • Developing, implementing, and tracking a set of assurance and verification tasks, in line with the LOD model, to ensure performance of the identified barriers;
  • Highlighting any deficiencies in safeguarding, or non‐conformances with the developed assurance and verification tasks, and
  • Ultimately providing assurance that the identified risks are being managed / mitigated in a manner which is considered to reduce this risk to an acceptable (or As Low As Reasonably Practicable—ALARP) level.

Sneddon J. Pandemic risk management; protecting people while ensuring business continuity . Process Saf Prog . 2022; 41 ( 1 ):8-13. 10.1002/prs.12302 [ CrossRef ] [ Google Scholar ]

This article was prepared for presentation at American Institute of Chemical Engineers 2021 Spring Meeting and 17th Global Congress on Process Safety, Virtual, April 18‐22, 2021.


How COVID-19 Changed Risk Management and Strategic Planning

business pandemic risk management plan

Diligent Institute conducted extensive interviews with over two dozen experienced directors from different sectors, geographies, and backgrounds on how modern governance practices and behaviors are changing in response to the pandemic and its impact, which boardroom changes might be permanent, and directors’ most important lessons learned. This second segment provides a compilation of director responses to questions about the pandemic and what it means for modern governance going forward, specifically relating to the future of risk management and strategic planning.  Read the full report here.

How Has COVID-19 Changed the Future of Risk Management and Strategic Planning?

No board director could have successfully predicted the magnitude of the COVID-19 crisis. However, unprecedented side effects of the pandemic have forced directors to focus on how risk management and strategic planning are evolving in a world that changes pace at the blink of an eye.

  • Phyllis Campbell:  JPMorgan Chase & Co. (Pacific Northwest), SanMar, US-Japan Council, and Allen Institute
  • Anna Catalano:  Willis Towers Watson, Kraton Corporation, HollyFrontier Corporation, Frontdoor, Inc., and Appvion
  • Rajive Johri:  ConAgra Brands
  • Brad Neilley:  Princeton International Technology
  • Mohamed Radwan:  Platinum Partners
  • Sonia Villalobos:  Telefonica Vivo, LATAM Airlines, and EcoRodovias
  • Danesh Varma:  Anglesey Mining plc, Buchans Resources Inc., Canadian Manganese Corporation, Minco Exploration plc., Xtierra, Brookfield Investment Corporation, Crowd For Angels and Nine Point Senior Credit Fund
  • Donna Wells:  Mitek Systems (MITK), Apex Technologies (APXT), Betterment and Happy Money

Changing Risk Matrices and New Elements of Operational Risk

The scale and scope of the pandemic has changed how directors are thinking about operational  risks  and risk matrices.

“For us, the biggest thing that changed on this front was how we looked at operational risk. It was important to take a fresh look at every risk dimension to see how it has changed. What does the new systemic risk look like? How do we know? How are we monitoring it? These are the questions we need to be asking .” -Phyllis Campbell “Many of the risk matrices we had looked at as a board were not useful when the pandemic hit. We had not planned, even nonspecifically, for a situation in which we did not have access to our employees. Specifically, regarding risk matrices, older, more experienced directors tend to make the boards focused on old risks, which are basically operational: What will happen if a platform explodes? What will happen if trucks stop working? The risks of today are completely different.”  -Sonia Villalobos “It was paramount for us to activate the role of the risk committee and reevaluate how that committee is functioning and doing risk management assessments. The pandemic hit us the hardest when we looked at how we used to evaluate and mitigate risk. Our risk matrix will be changed forever because of COVID-19. It shined a light on the fact that our old risk management processes had not filtered down all the way through the organization.”  -Mohamed Radwan “People are going to take business continuity exercises much more seriously in the future. We now understand, at a visceral level, how much more fragile our strategic and operating landscape has become over the past 20+ years. We’re living the impact that social justice issues, public health issues, climate change issues, and more, can have on shareholder value. Boards are expanding their oversight of these potentially existential threats … and demanding more management focus … than they were before the pandemic hit.”  -Donna Wells

Supply-chain issues exposed.

The pandemic also illustrated the extent of supply-chain gaps around the globe and how disasters like  COVID-19  can quickly and drastically interrupt businesses even when one supply location is compromised.

“We didn’t realize what would happen when parts of the world were cut off from us. From a strategic standpoint, this will cause boards to reexamine supply chain and logistics in terms of the risks we’re willing to take. If inventories go down too much and you can’t get product in from another source, you’ve got an enterprise risk situation and you need to decide if you want to assume that risk or build more flexibility in your supply chain.”  -Anna Catalano “Whichever administration succeeds this one in the United States, they will both follow the direction of focusing internally on America, especially after COVID-19. It has made the vulnerability of American supply chains more exposed. When the pandemic hit, we had no masks and no ventilators because nothing is manufactured here. This will not be forgotten anytime soon, and it will bring an emphasis on self-reliance and taking care of Americans first.”  -Rajive Johri

Cyber risk looms ever closer.

Virtual meetings  and moving entire workforces to conduct business remotely have made many directors realize they need to do more to keep up with technological disruption and cybersecurity as risk factors.

“The systemic risk of businesses has changed dramatically, and directors need a fresh lens on this. How are we looking at systemic risk today? It has morphed in its dimensions, particularly in the realm of cyber risk. When you live in a virtual world, cyber criminals are much better at using it. How are directors keeping their fingers on the pulse of this risk?”  -Phyllis Campbell “We had not looked enough at cybersecurity, which became a much greater risk with everyone working from home. It also showed me that many of the kinds of people on boards today are no longer the best people to manage current risk horizons. Eighty to ninety percent of board members are out of their depth with cybersecurity.”  -Sonia Villalobos

Public health concerns come to the forefront.

A  public health crisis  as extensive as that of COVID-19 has shown directors that, as a result of our global and interconnected society, steps must be taken to mitigate public health risk in the corporate world.

“This has taught us to expect more pandemics and disasters that mean we have to work from home. Keeping people working at home makes it easier to pivot in the future.”  -Brad Neilley “Virtual meetings will be good moving forward. The overlay here is public health. The average person and business are ill-equipped to know what to do going forward. Part of risk management has to include having a medical advisory or public health board. Hygiene is now a CEO-level matter from the First Aid Room, just like cybersecurity from the IT department earlier.”  -Danesh Varma

>>Continue to Part 6 of 7:  What Response to COVID-19 Makes You the Proudest of Your Organization?

>>Return to Part 4:  Boardroom Culture and Onboarding New Directors

>>Return to  Diligent Institute .

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business pandemic risk management plan


Risk Management

women point at a graph on tablet

Has the business continuity plan been properly tested before being mobilised? What actions should be taken now versus in six months time, and are there alternative ways of managing risk? Independent risk assessments, crisis management planning, scenario testing, financial feasibility studies and outsourcing non-operations functions are some of the ways to help mitigate and manage an organisation’s risk throughout the pandemic lifecycle.

Pandemic stage

Pandemic international outbreak

Business continuity plans

Liability risk management, pandemic rapid response advisory.


Post-event response

Pandemics can damage an organisation’s business operations, financial performance, employee health and wellbeing, supply chains, stakeholder confidence, and can even drive a company out of business.

Insurance programs can help reduce financial impact, but should not be relied upon as the only source of protection. Organisations need to build insurance as a part of a comprehensive risk management strategy. For example, by focusing on pandemic business interruption risks and strategies designed to reduce and mitigate the impact of such potentially highly disruptive risks, Marsh Risk Consulting (MRC) can help organisations improve their business resiliency and protect their brand. This can be done through:

For more information, or to arrange a conversation with our  Risk Consulting team, please contact your broker.

With the outbreak of a pandemic, companies potentially have new liability exposures that they may not have previously anticipated. In order to manage these new exposures, an organisation needs to first identify and understand these risks. It will then be well positioned to develop loss control and mitigation measures to reduce its liability exposures, mitigate losses, and ultimately protect its brand reputation.

Some of the increased liabilities that may arise due to a pandemic include:

Marsh Risk Consulting (MRC) can provide risk management advice on how to effectively control these risks and reduce their impact on an organisation. In the current environment, organisations may wish to consider conducting a  COVID-19 Risk Assessment  as an initial step.

For more information, or to arrange a conversation with our MRC team, please contact your broker.

Typically, there is no longer time for preparedness once we are in the middle of a pandemic outbreak, as companies strive to make decisions live in response to a rapidly evolving situation. These decisions can have significant impacts on employees, operations, shareholders, customers and the future viability of the business.

During this period, Marsh Risk Consulting (MRC) can provide Pandemic Rapid Response advisory. We will place “boots on the ground” to help you develop a 30 day action plan. Leading or becoming part of your business continuity / crisis management team, we will provide data and insights to assist decision making, draft communications and ensure that you have the full resources of Marsh at your disposal to navigate through the pandemic. 

For more information, or to arrange a conversation with our Marsh Risk Consulting team, please contact your broker.

Outsourced WHS and workers compensation solutions

As companies seek to reduce costs and respond to the financial implications of the pandemic, ultimately a decision needs to be made around what roles are essential to ongoing operational viability, versus what roles or functions can potentially be outsourced to reduce costs while still maintain functionality.

Whilst not core operational roles, functions such as injury management, return to work, workplace health and safety (WHS) and wellbeing are still essential to ensure injury prevention and effective workers compensation outcomes. These roles can be outsourced to a service provider who specialises in these areas and can manage and deliver these functions to the business, allowing organisations to free up resources and focus on their core business operations.

Our Recovre team currently delivers outsourced  WHS and workers compensation services  to a number of businesses that have realised the benefits and flexibility outsourcing arrangements can deliver.  One of the key benefits of an outsourced arrangement is that you get access to a team of specialist resources with diverse skillsets and experience as opposed to an individual. Outsourced arrangements can also be more cost effective, providing employers with the ability to ramp up or down without recruiting and retraining.

For over 30 years, Recovre (Marsh’s in-house safety, rehabilitation and return to work specialists) has been known as a leading Australian provider of customised workplace health & safety and workplace rehabilitation service solutions to help individuals and organisations realise their full potential.

For more information, or to arrange a conversation with the Recovre team, please contact your broker. 

Following a pandemic, companies have an opportunity to diagnose the effectiveness of their response, the causation behind any losses and identify what lessons were learnt. This can be valuable data that can inform the Business Continuity Plan, and better prepare an organisation for the next crisis that might occur.

Marsh Risk Consulting can conduct a  COVID-19 Debrief Workshop  and interviews with key staff to:

These workshops can be tailored to your organisation’s specific situation and needs. For more information, or to arrange a conversation with our Marsh Risk Consulting team, please contact your broker.

We are here for you

As COVID-19 continues to affect how we all do business and interact with one another, we are committed to continue to deliver timely and relevant information to our clients and broader community. If you have any questions or would like to have a conversation about the impact coronavirus is having on your business, please reach out to your Marsh representative. You can also  follow us on LinkedIn  to stay abreast on our latest updates. 

Resources and tools

Download the Practical Guide to Returning People to the Workplace Safely

As the economy begins to reopen, how confident are you in your organization’s readiness for bringing people back to work? In this free guide, Marsh’s risk and safety professionals have drawn upon our extensive knowledge to identify immediate actions for your organization to consider as you prepare, implement, and manage a return to on-site work.

business pandemic risk management plan

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Risk management during the COVID-19 pandemic: Checklist to recovery

All organizations can use the basic principles of risk management to shape a path through the COVID-19 pandemic and minimize the lasting negative impacts. Whether you have a robust Enterprise Risk Management (ERM) program in place or have not yet turned your corporate mind to risk management, the principles outlined below can help you move through this crisis and beyond:

business pandemic risk management plan

1. Identify your risks

Organizations use risk management to "predict the unpredictable." To navigate the risks (and opportunities) associated with the pandemic, it is critical to first identify what those risks are. Indeed, the exceptional circumstances surrounding COVID-19 may have brought to light risks you had not yet considered - or may have imbued previously identified risks with a new sense of urgency. Whatever the case may be, before moving in any one direction take a moment to catalogue the risks your company may face over the next month, three months, six months, nine months and year.

In order to accomplish this most effectively, you should:

Dig deep into this exercise before you move on, and return to it often over the next year, two years and five years so that you can update your risk profile as the world progresses through these unprecedented times.

2. Be agile

Albert Einstein said "learn from yesterday, live for today, hope for tomorrow. The important thing is not to stop questioning." The world is collectively questioning everything as we navigate a new normal. The plans that you had two months ago are no longer appropriate, feasible or realistic for today.

Do not throw your entire play-book out but instead return to your values and redefine how you will realize them. Be ready to be uncomfortable. Navigate this period with flexibility and understanding. Be creative in your approach to moving forward, listen to what your stakeholders want and need and consider how you can pivot to fill a void.

3. Think people

The backbone of every organization lies in its people. Today people are stressed, tired, taxed, scared and pre-occupied. The organizational risks associated with mismanaging your employees in this time can be significant (health and safety, financial, reputational, legal, operational, to name a few).

Where then do we start? People generally need to feel heard, they need to be able to trust and they need to have information. Let your employees know that you have a risk plan, a business continuity plan, and a crisis plan - and take the time to communicate what each plan entails and how it will evolve, while also seeking their engagement and input.

ERM works because it fosters and relies upon a holistic approach to identifying, analyzing, evaluating and treating risk. While it has to be fully endorsed and supported by top management, it must involve the entire organization in order to succeed. ERM also encourages frequent communication between all levels of the organization, which in turn leads to greater transparency and trust.

As we move through this pandemic, we see that the heroes come in all uniforms - from the delivery drivers, to the cleaners, to the grocery store clerks, to the health professionals. The heroes within your organizations will also come in all roles. Consider how you can make their days easier in order for them to be more physically and mentally able to help you. Whether it is implementing flexible work hours or ensuring that they have a computer at their home, it starts with asking them what they need to do their job during these times.

4. Consider business continuity

The purpose of business continuity is to ensure that your business is able to survive a critical incident. It consists of a series of plans implemented over phases to shorten recovery time and mitigate impact. For more information regarding business continuity, please see Gowling WLG's article "Business Continuity Planning in COVID-19."

Now is a reasonable time to evaluate the impact of COVID-19 on your organization, looking both internally and externally:

Amid government restrictions and instructions to "stay home," the use of technology is exceptionally important for many organizations. Most have already mobilized an infrastructure to support remote working. To increase productivity and reduce interruption, ensure that employees have the necessary hardware, software, equipment and internet connectivity to work safely and efficiently from home. Also ensure that your IT infrastructure can support the increased pressure from a significant portion of your team working from home.

The new normal has created the need for new policies and procedures. On the technology side, the remote working world has greatly increased the risk for cyber attacks and phishing. Employees must be aware of these risks and trained on the new policies pertaining to the use of technology and the transfer of information and funds. If employees remain onsite to work, organizations will need to address health and safety concerns through new and evolving policies.

Consider your internal and external communication plan. Updates need to be communicated to stakeholders in real time. The situation is constantly evolving and appropriate measures need to be implemented such that communication can be disseminated immediately.

5. Consult with advisers

This is the time for everyone to work together. Consider reaching out to:

6. Consider your reputation

Last, consider your reputation. The success stories of COVID-19 will be the people and organizations whose reputation was improved with their response to the pandemic.

When the dust settles, we will remember the Marriott CEO relinquishing his salary for 2020, his executive team taking a 50 per cent pay cut and the Lyft cofounders donating their salaries to help their drivers. We will also remember the many companies that re-deployed their entire workforce and production capabilities to create and produce personal protective equipment for frontline workers, hand sanitizers for health professionals and technology to help track the spread of the disease.

For those organizations that take a short-sighted view of the pandemic, by price gouging or supply hoarding, the long-term negative reputational impact may far outweigh the short term benefits experienced.

Stay true your organization's values and take the higher ground. It will pay dividends in the long-run.

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These are the top risks for business in the post-COVID world

business pandemic risk management plan

A man descends a ladder before immersing into the icy waters of the Irtysh River on the opening day of the winter swimming season in Omsk, Russia December 6, 2020. Image:  REUTERS/Alexey Malgavko

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Enterprise Risk Management Initiative, Poole College of Management, North Carolina State University

Providing thought leadership, education and training on the subjects of enterprise risk management, managing risks during covid-19 key insights.

August 13, 2020 | Enterprise Risk Management Initiative Staff

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Mark Beasley, director of the Enterprise Risk Management (ERM) Initiative and KPMG professor of accounting, and Frank Buckless, Stephen P. Zelnak Jr. Dean of Poole College, hosted the inaugural Virtual Thought Leadership Series event, Strategies of the New Normal: Lessons from Risk Management.

Beasley and Buckless initially broke down the definition of ERM as an additional view on risk management that is designed to be a top-down, holistic strategic view of risk. The discussion took a look at the impact COVID-19 pandemic and how companies can implement ERM processes into their business plans to navigate huge volumes of risks as they look towards a post-COVID world.

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business pandemic risk management plan

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What to Consider in a Pandemic Business Continuity Plan

How can businesses and shareholders think about ensuring their survival in an evolving pandemic? Business continuity plans have gone out of the window. How can they be adapted to survive the current situation?

What to Consider in a Pandemic Business Continuity Plan

By Natasha Ketabchi

Natasha transitioned to venture capital after a career in banking built in prestigious firms such as JPMorgan and ESM.

We are facing a time of unprecedented disruption to daily life and business. In the current pandemic, many countries have introduced severe restrictions to the movement of people for the protection of public health. How can businesses and shareholders think about ensuring their survival in a situation that is constantly escalating and could protract for a long period of time?

By definition, in risk management, it is difficult to anticipate something that has not yet happened. Current Business Continuity Plans (BCPs) tend to focus mostly on physical disasters, cyberattacks, and supply chain disruptions. The companies’ current BCPs are unlikely to hold water in the present time.

So what goes into a solid BCP and who is in charge of implementing it? We created a practical guide to Business Continuity planning for pandemics.

We focus primarily on Business Continuity planning that covers the procedures and arrangements necessary for the successful continuation of business operations when they cannot continue as normal. Disaster Recovery (DR) plans, on the other hand, focus on the aftermath of a destructive one-time event, either natural or human, such as an earthquake or a terrorist attack.

What Happens When Current Plans Have Gone Out the Window?

What lessons can be learned in a pandemic? What happens when the current plan does not match reality? BCPs are not a static set of rules, but rather living documents within an organization. They should continually be adapted to reflect new information on the state of the world. They are most effective when they are seen as such and are the product of a continuous, data-driven, open flow of information.

It is obvious that now, for most companies, pre-COVID-19 plans are insufficient. Business Continuity has gone from being a contingency plan to being the main order of action, truly part of a company’s core business. This does not, however, mean that all work that has been done before is worthless—a good understanding of the process and its importance can make the difference in whether a business can survive a prolonged period of distress. The key priority will be a reassessment of business impact and redrawing the possible scenarios. This is best done through reliance on best practices, integrated risk management, and efficient communication at every level, starting from management and staff and including board members, shareholders, and creditors.

In this uncharted territory, what are the next steps to take?

The first order of priority should naturally be reexamining business assumptions and discussing them in depth with area leaders to see whether they still hold true in the current pandemic. The output will be a set of new scenarios that include the pandemic risks and potential economic costs. Second, mitigants and contingency plans need to become part of daily business planning and management (and board) reporting.

Understanding the Business Impact of a Pandemic

The starting point for a sustainable strategy is understanding the business risks, mapping out key processes, and involving all key internal stakeholders in forming the most accurate picture possible of the impact of any identified risk, as well as discovering ramifications of risks that may have not been fully considered in the planning stage and then comparing them to the existing business plan .

This process is iterative and collaborative and relies heavily on open and clear communication.

Business Impact Analysis Template

Business Impact Analysis Template

The ultimate goal of the business impact analysis is threefold:

This output is then the critical input in the planning for the mitigation of these risks:

How Can the Impact of a Pandemic on My Business Be Mitigated?

In this section, we give some practical guidance on how to practically implement a new strategy by suggesting questions (unfortunately incomplete by definition) and a business continuity framework for thinking that may be relevant when identifying pandemic risks for each of the mitigation steps.

1. What Are the Key Steps to Take for Pandemic Preparedness?

The key question here is to think of all (foreseeable) implications and to try and anticipate them:

2. Who Is Responsible for the Implementation?

What is crucial is that internal responsibilities are distributed and understood:

3. How Do We Ensure That Staff Feels Safe, Useful, and Can Stay Productive During a Pandemic?

Employees are human capital. A business without human capital is not viable, not even in AI or robotics. How can they be protected?

4. How Much Will This Cost?

The key here is planning several scenarios and being prudent and accurate in estimating each:

5. What Resources Are Needed?

What resources are available to the company, have they been exhausted? Have we sufficiently prepared when calling upon them?

Whose Responsibility Is Business Continuity?

Strictly speaking, Business Continuity planning falls under the remit of the risk management function within a company. This is, however, a static and partially incomplete view as BC involves every aspect of a business, therefore:

Business Continuity Management Within the Corporate Governance Framework

Business Continuity Management Within the Corporate Governance Framework

The presence of a strong Business Continuity plan and its correct communication and implementation is key to the company’s survival and is thus in the interest of shareholders. Adequate Business Continuity planning and management is also the responsibility of the board. It falls under their remit and should be seen as part of the fiduciary duties that they hold toward shareholders. After all, appropriate planning for the future of a business in a time of distress is the responsibility of those who have a duty toward employees and shareholders. To ensure that all are aware of their role and responsibilities, constant communication is crucial, particularly when those plans need to be acted upon.

Investors such as private equity and venture capital funds have a vested interest in protecting their shareholder rights. As such, they can—and do—take an active role in supporting their portfolio companies toward ensuring business continuity, providing advice, and influencing the board through their appointed board members. There is both empirical and academic evidence that solid DR/BC planning reduces company and societal costs of such an event. Finally, creditors, particularly those that hold short-term liabilities, can, and should, be part of discussions to maintain business operations. While they enjoy more protection, they are also better off if business operations continue. Having strong lines of communication with them can make the difference between life and death.

Anglo-American Model of Corporate Governance

Anglo-American Model of Corporate Governance

What Now? How Do I Pivot?

Anecdotally, most creditors and (active) investors are well aware of the pain that management is currently enduring because of the pandemic and would be willing to work together to find solutions. For private equity, this means assisting portfolio companies in implementing and designing new Business Continuity plans. For venture capital, time may be spent optimizing burn rates and determining alternative funding sources. Business operations experts can help those businesses that do not have such investors.

Ultimately, the key to the success of a pandemic Business Continuity plan—as far as possible when everything else is unpredictable—will be having clear communications and shared expectations with all who have a stake in the business: shareholders, management, creditors, and employees.

Understanding the basics

What is the purpose of a business continuity plan.

Business Continuity planning covers the procedures and arrangements necessary for the successful continuation of business operations when they cannot continue as normal. Disaster recovery planning is a subsection of Business Continuity.

What is included in a Business Continuity plan?

A Business Continuity plan begins with a Business Impact Assessment. In this document, all risks to the business will be assessed and measured to calculate the potential financial impact. The BC plan, then, will contain mitigation strategies and communication and action plans.

Who is responsible for Business Continuity planning?

Strictly speaking, Business Continuity planning falls under the remit of the risk management function within a company. This is, however, a static and partially incomplete view. As BC involves every aspect of a business, all decision-makers need to be part of the planning process.

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business pandemic risk management plan

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