“….we fall to the level of our training”

The full quote, attributed to Greek philosopher Archilochus, is “We don't rise to the level of our expectations; we fall to the level of our training”.

Once upon a time an executive team might have days, possibly weeks, to ponder a problem and develop a response. In the 21st century they have minutes to identify the problem, push out a holding statement and start responding. They need to provide updates to staff, customers, shareholders, markets, and regulators who demand that action is decisive, swift, and precise. Expectations are high.

Being decisive, fast and precise under pressure comes from practice. We fall to the level of our training.

What is the delta between the expectation and the proven level of training in your organisation? Here’s a clue: if you hear people say “In the real crisis our start is always a bit disorganised, but we do scramble well” it is possible that confidence exceeds capability.

A useful model for developing your organisation’s capabilities is Plan/Prepare/Respond/Recover.

Let’s look at planning and preparation.

You’re an experienced risk manager who’s analysed your organisation’s risks. Controls have been established to reduce the likelihood and/or consequence of a realised risk to as low as reasonably practicable – but not zero.

What happens when the risk is realised? Now what?

A response is required. The plan you developed will help.

Or will it?

How do you know it will work? Did the assumptions you made in planning hold true? Will the resources you planned for be available? If you are not there, will anyone know what to do?

The critical bridge between “Plan” and “Respond” is “Prepare”. Preparation is the glue that holds the plan, and the people using it, together.

Deloitte published a useful paper in 2018 titled Stronger, Fitter, Better: Crisis Management for the resilient enterprise.  

Perhaps the most pertinent observation is that while executive teams reported confidence in their ability to respond, the rate of exercising to confirm that preparedness was low. Interestingly, the most obvious risks with the most obvious solutions were the ones people practised.

For example:

1.      IT System failure: 90% of respondents confident in their response and 50% had undertaken simulations

2.      Cyber-attack: 89% of respondents confident and 53% had undertaken simulation

In comparison, 88% of respondents stated they were confident to handle a corporate scandal. But only 17% of respondents had conducted an exercise using such a scenario. Similarly, the results for regulatory/policy change were 89% confidence but only 25% had practised managing such a crisis.

Deloitte posit that confidence outstrips preparedness. We agree.

Is your organisation practising the easy stuff, like problems where there’s an obvious, technical solution? Compare your organisation’s risk profile to its recent crisis exercises. Are your exercises related to the risk register?

The Deloitte study suggests that executives are more comfortable participating in an IT Disaster Recovery-related crisis or a cyber-breach response. Why are they less comfortable to participate in a corporate scandal scenario?

Perhaps they think such a crisis is a Black Swan. Some of our clients have said their executive is uncomfortable or believes it’s too difficult to deliver these scenarios in an exercise.

To the first point: Yes. It is (and should be) uncomfortable. If it is on your organisation’s risk profile it is something of concern. Would your CEO and Executive Team prefer to be uncomfortable in an exercise or under-prepared for reality?

With respect to being difficult to deliver, that is why you use an external provider like Tigertail. Designing plausible and realistic exercises requires special skill and experience. In our collaboration with you we develop:

• opportunities for your crisis management team to practise using procedures and tools in the context of a complex problem

• a safe environment to practise using procedures and tools

• a collaborative environment for your executive and subject matter experts to test assumptions, recognise and manage biases

• an exercise that is as controlled or dynamic as you choose

• assessment criteria to inform an exercise report and assure the Risk and Audit Committee

Well-developed and run exercises validate your plans, reinforce good practice, refresh memories and rehearse responses. Your people, and your bottom line, will benefit.

Tigertail Australia has the background and experience to equip your organisation with skills to manage risk, crisis, and emergencies confidently and effectively. The Tigertail team includes crisis and emergency management leaders, business continuity specialists, risk management advisors, planners, and trainers with more than 150 years of combined experience, covering prevention and preparedness to response and recovery.

Author: Craig Moroz

W: www.tigertail.com.au T: +61 2 8907 1900 E: craig.moroz@tigertail.com.au

TIGERTAIL AUSTRALIA: CONFIDENCE / CLARITY / CONTINUITY

SA Water Executive Team Crisis Management Training and Exercise

Pandemic Preparedness: Black and Grey Swans

“The COVID-19 pandemic is unprecedented. This global crisis was completely unforeseen. It is a true Black Swan event. We could not have prepared for this crisis.”

While we put quotation marks around the remarks above - they are not attributable to a single person. Rather, they are a collection of sentiments heard in the media, online and in the streets.

We will firstly debunk the remarks, secondly provide an example of how a company with imagination and foresight actually, considered such a crisis in October 2019, and finally - ask you to consider an important question.

Unprecedented:

Although the impact of Covid-19 is unprecedented in our time, the fact that this pandemic has occurred should not be an unexpected shock unless we ignore hundreds of years of records of diseases such as the  Bubonic Plague, Polio, Smallpox, HIV/AIDS, and Influenza. Ironically, some commentators refer to the occurrence of this most recent pandemic (COVID-19/SARS-nCoV-2/HCoV-19) as ‘unprecedented’ while at the same time comparing it to the 1918 influenza pandemic. Pandemics have occurred before, so as such, are not unprecedented.

Unforeseen:

Even with respect only to epidemiology; we can consider the point above and recall quite recent responses to Bovine spongiform encephalopathy (aka ‘Mad Cow Disease), the 2002-2004 SARS-nCoV-1 (or SARS) epidemic and 2009-2010 Pandemic H1N1/09 Influenza (aka “Swine Flu”), and the ongoing concerns of H5N1 Avian Influenza, MERS-CoV.

Perhaps those quoted as referring to this pandemic as being unprecedented refer to the economic and societal effects of this pandemic, its’ global reach as well as to the tragic death figures

In anticipation of a future pandemic, Australia and New Zealand’s governments had a pandemic plan which included a whole of government response. New Zealand’s plan also considered industry participation and described work streams including health, economics, food, and transport. No doubt the government will review and update their plan as they consider the effectiveness of it in response to the current situation.

Black Swan:

By definition, a so-called ‘Black Swan’ event is one that is completely unexpected and unforeseen.

Some in emergency, crisis and business continuity management fields have started using the term ‘Grey Swan’. The motivations and expected benefits behind the creation of such a descriptor are not known. Given human history and the prevalence of disease, a global pandemic is likely to occur relatively frequently.

How can this COVID-19 pandemic be correctly considered to be a true ‘Black Swan’ event when many Governments, including Australia’s, have been undertaking some planning and creating regulations at least since the SARS pandemic?  Some business continuity practitioners, now using the term ‘Grey Swan’, have been discussing pandemics since before Swine Flu.

 A more correct statement:

COVID-19 is the latest pandemic which was reasonably foreseeable and amenable to pre-planning. Many governments and corporations, nevertheless, appear to have been caught unprepared or underprepared. They are now responding in real time to that which they previously avoided examining theoretically - either deliberately or through lack of knowledge.

The example:

Our company - Tigertail Australia created an exercise for the Executive Team of a financial services organisation of around 4000 staff across Australia and New Zealand. When other organisations were focused on data security and cyber breach related crisis exercises, this organisation decided to evaluate and test its pandemic plan. When we queried the theme we were informed that the CEO thought it appropriate.

Tigertail’s exercise was conducted in Australia during October 2019 and in New Zealand during November 2019. Corrective actions agreed with the CEO and Executive Team were timed for completion in January 2020. By early February 2020, that organisation had addressed areas to sustain, improve or fix issues identified through the exercise. Importantly, in response, the organisation enhanced its technology to enable all 4000 staff to work from home.

The initial scenario phase of the exercise considered:

• Staff who had visited workplaces, customers’ businesses and trade shows while infected, but still asymptomatic, with a highly infectious disease acquired during a recent overseas study tour.

• Involvement of various State (NSW and VIC) and National (NZ) health authorities

The assembled crisis management team (CMT) focused on these primary elements:

• Immediate staff safety

• Immediate customer safety

• Reputation

• Continuity of business

In the first phase a group of ‘Primary’ CMT members participated, and an ‘Alternate’ group observed.

The exercise was halted and the CMT was split into two teams. Each team had a mix of Primary and Alternate members. The exercise scenario was ‘fast forwarded’ by six months – the infectious disease had now become a pandemic. Despite their best efforts, the impact of the pandemic on their staff aligned to the wider community experience.

In the subsequent second phase, the two CMTs operated concurrently. Neither was permitted to speak with the other. That constraint was explained as “Either they are sick or have succumbed to the pandemic”.

The scenario had been developed to reflect:

• A pandemic with a significant infection rate, disease reproduction rate and case fatality rate

• Significant stock market index falls and loss of value

• A double-notch decrease in the country’s credit rating

• Potential of a decrease of the organisation’s credit rating

• Significant stress on customer’s borrowings and increasing applications for relief under hardship rules

• Significant stress on customers’ primary industries

• A class action from the customers whose businesses had been disrupted at the outset of the exercise by the organisation’s infected staff

• Staff entitlements to leave dwindling rapidly and some exhausted

In the debrief we facilitated the whole CMT identified that they had:

• Learned that health and well-being of their staff is one stream of many in response to a pandemic

• Noted that using data from their Business Continuity Management System assisted decision making regarding the prioritisation of resources

• Seen the benefit of creating work streams to develop and manage short, medium, and long-term responses for staff, customers, community, regulators, and reputation

• Noted that creating work streams offered time for the Executive Team to consider the strategic issues rather than becoming immersed in the operational response

• Identified that while a pandemic response should become an important item on the agenda care should be taken to ensure that is not the entire agenda

That debrief was robust and the Chief Executive Officer and Chief Operating Officer overtly sponsored the agreed actions. When Tigertail met with the organisation again in February 2020 it was clear that the knowledge gained in October and November 2019 was driving informed questions focusing on what they may have missed.

The Question:

What are you going to do to ensure that you, your CEO, and your organisation are match-fit and crisis-ready?

Imagine being the CEO above; prepared and able, in February 2020, to brief your Board, industry peers, customers, staff, and regulators on pandemic preparations that had commenced in October 2019 – rather than telling them that “the crisis was completely unforeseen - a true Black Swan event – for which we are unprepared.”

Working with Tigertail would better enable your CEO to be able to state that:

“Yes [X Crisis] is unprecedented. However, through our ongoing diligence we have foreseen something like this happening and what was reasonably foreseeable was amenable to deliberate planning and preparedness. Of course, some of our plans will need to change. We are, however, ready to respond.”

Protecting your people, operations, assets, and reputation is paramount in a crisis or emergency. Tigertail Australia has the background and experience to equip your organisation with the skills to confidently and effectively manage risk, crisis, and emergencies. The Tigertail team has more than 150 years of combined experience. We cover everything, from prevention and preparedness to response and recovery. The team includes Crisis and Emergency Management Leaders, Business Continuity Specialists, Risk Management Advisors, Planners, and Trainers.

Author: Craig Moroz, Senior Associate, Tigertail Australia

W: www.tigertail.com.au   T: +61 (0)408 481 931 E: answers@tigertail.com.au

 TIGERTAIL AUSTRALIA: CONFIDENCE / CLARITY / CONTINUITY

Creeping crises–does resilience fit?

BCAW2019 - Investing in Resilience - by Rick Stone

I was flying over Warragamba Dam a few weeks ago and was struck by just how low 55% capacity really is.  Sydney Water says that levels across 11 dams in Greater Sydney are dropping faster than they have in decades.  Every week the city is using 0.4% of the storage (11 billion litres or enough to fill 4,400 Olympic pools).  The desalination plant has been turned on to supplement the city’s supply.  Rain over the Sydney basin in March means the city is green; but the catchment largely missed out.  So Sydney, along with most of the rest of the state, is suffering one of nature’s most insidious creeping crises—drought.

How is the concept of resilience relevant to a slow-burn or chronic hazard, like drought?  Organisations like to talk about being resilient, but what does this really mean?  Many businesses think a resilient organisation is one that successfully navigates disruption or chaos.  The focus is usually on acute impacts, such as flood, fire, fraud or flu.  Organisations attempt to prevent the problem, cope with it if it occurs, and adapt to a new normal (if they survive).  But it’s hard to measure the success of these programs: did the organisation survive because it had really good preventative strategies, or were they just quick on their feet with a response, or have just been lucky?

Another concept of resilience is “adaptability”.  Resilient organisations can be adaptable to shocks – the traditional acute impact; and they can also be adaptable to slower, less obvious stresses.  Farming is a good example—a resilient farmer needs to be able to adapt to the impact of a bushfire (acute) and a drought (chronic).  The challenge is to recognise the slowly evolving stress and respond early enough to minimise its impact.  These are difficult decisions—does the community invest in building an expensive water pipeline when “it might rain tomorrow”?  The Resilient Cities initiative, pioneered by the Rockerfeller Foundation, recognises the importance of adapting to both stresses and shocks.  Cities including Sydney and Melbourne have adopted resilience strategies that embrace this concept.  Businesses and other organisations can benefit from a similar approach.

Our communities, and the natural and economic environments on which they depend, face significant stresses.  As resilience practitioners, we need to ask ourselves; are we paying attention to the slowly evolving risks and politically complex challenges, such as climate change?  Or are we staying in the comfort zone of planning and practising for acute impacts?

The beauty and terror of Australian weather

“I love a sunburnt country, 
A land of sweeping plains, 
Of ragged mountain ranges, 
Of droughts and flooding rains. 
I love her far horizons, 
I love her jewel-sea, 
Her beauty and her terror
The wide brown land for me!”

From My Country by Dorothea Mackellar

Summer weather risks are widespread across our great southern continent. Bushfires, drought, severe storms and tropical cyclones can disrupt communities and businesses in regional, rural and remote Australia. Cities are also vulnerable to risks including too much water, too little water, extreme heat, severe storms, bushfire on the urban fringe and infrastructure failures such as power, water, gas and telecommunications.

Bushfires often receive the lion’s share of media coverage, which is understandable as they can arise quickly and sometimes involve large loss of life. And the seemingly inbuilt fascination humans have with fire keeps this threat front of mind.

However, floods, severe storms, hailstorms, earthquakes and cyclones are, in many ways, more destructive than bushfires each summer. Recent data suggests most insured building losses are spread across the range of severe weather categories. While in terms of fatalities, extreme heat is responsible for 55% of natural hazard deaths, followed by tropical cyclone (15.6), flood (14.8%), bush/grassfire (10.5%), landslide and lightning (1% each) with other storm types plus earthquake totalling just over 2%. Uninsured (or uninsurable) losses are largely due to flooding and are significantly higher than insured losses. 

All this means that natural hazards mitigation must cover a grouping of those events most likely in your location. Research, analysis and advice is vital to determine and rank which hazards your family or business should be focused on.

For regular weather updates, the Bureau of Meteorology will keep you across relevant information for your area. In a time of crisis you can keep on top of important information at your local ABC radio station, Twitter (@ABCemergency), ABC emergency website and apps such as EmergencyAUS and Fires Near Me.  In addition, each state and territory has its own emergency management portal:  ACT, NSW, NT, Qld, SA, Tas, Vic, WA.

Families and businesses can prepare for all these hazards. Extensive guides are available from emergency services for individual hazards in each state and territory. The Red Cross has a national all-hazard disaster preparedness guide for families.  You can also visit the fire agency and State Emergency Service websites in your state or territory for specific information about fires, storms (including cyclones) and floods.

The most important thing is to spend time discussing your options before the crisis emerges. Families and businesses should have a plan to follow when disaster strikes. Waiting until severe weather strikes to consider evacuation, asset protection and other factors can end in disaster.

Businesses need to understand their vulnerabilities and how key suppliers and customers might be affected by natural disasters. Tigertail helps businesses assess their key risk areas, build effective plans for times of crisis and runs training workshops to get the whole team up to speed.

The federal government has developed a template to help organisations prepare for all weather related risks this summer. Working with Tigertail, your business can understand, complete and improve upon this template. Crisis preparedness improves resilience in supply and delivery chains, flexibility in employment relations and companywide efficiencies.

Summer is a time for all Australians to relax. Our whole year is seemingly spent getting ready for those few hot months where most of us slow down and enjoy some quality family time. Whether you’re at the beach, in the bush or in town, you’ll enjoy this time of year even more if your family and/or business is prepared for anything our sometimes-harsh country can dish out.