RSM Resources

While surveys show that a majority of health-careleaders agree it’s just a matter of time before the world faces a modern-dayflu pandemic, experts say that belief has not been enough to acceleratedisaster planning in most midsized companies.

According to a December 2005 study released by theERISA Industry Committee — a not-for-profit association that studies employeeretirement, health and compensation issues — 57 percent of senior businessexecutives believe the prospects for a pandemic are a real threat to the UnitedStates. However, in the same survey, two-thirds of those same leaders saidtheir companies were not prepared to handle the ripple effects of such adisaster.

Reacting to the announcement, former U.S. Healthand Human Services Secretary Tommy Thompson said businesses need to step upawareness of how a catastrophic flu outbreak would affect employees, operationsand the bottom line.

"Corporate America is like everybody — theyread about and see [news about a possible pandemic] on television, but theyreally can’t completely digest it," he said. "All segments of societyhave a role to play in making sure we are prepared to cope with a pandemic fluor any public health emergency, and that includes the business community."

At issue is the advent of the H5N1 virus, or"bird flu." This form of avian influenza has spread rapidly throughdomestic poultry flocks in Asia, and healthofficials have killed hundreds of millions of birds in an attempt to containthe disease. While the virus has not yet spread easily to people, the WorldHealth Organization (WHO) recently reported two key factors that already couldtrigger a pandemic: little or no human immunity to the H5N1 virus, and theability of the virus to replicate in humans.

To help companies prepare for a potential flupandemic, several U.S.universities have hosted forums with business leaders and medical researchers.At one such meeting, convened by the University of Minnesota’s Center forInfectious Disease Research and Policy (CIDRAP), experts said even a"mild" pandemic could result in 75 million cases of H5N1 infection inthe United States with as many as 100,000 deaths. Adding economic fallout tothe direct human costs, the Congressional Budget Office, which assembled thoseprojections, said that scenario could lead to a 1.5 percent drop in grossdomestic product (GDP).

CIDRAP Director Michael Osterholm was more direct,saying a significant outbreak would have devastating effects on business supplychains and global commerce.

"Please understand that planning for this isnot an optional activity," Osterholm said.

While all market sectors face significant threatsfrom a pandemic, one of the most vulnerable is the food industry. Jay Schwarz,vice president of information systems with Alex Lee, Inc., a midsized groceryand food services company in Hickory, N.C., says his firm began workingon pandemic-related business continuity plans last summer.

"Our company has had a relationship with Dr.Osterholm for several years, and that gave our senior management team theopportunity to learn the straight facts about the H5N1 threat," he says."After that, we realized it was necessary to think through how we mightprepare for this kind of potential disaster."

Last summer, Alex Lee created a 16-personpandemic-planning team, which represented all of the company’s key businessfunctions. The team was charged with identifying potential threats andassessing how those issues could affect key focus areas, such as employees,consumers or suppliers. Then, the team conducted intensive brainstormingsessions on how the business could prepare for pandemic-related crises. Thatprocess led to more than 100 ideas, which participants and company leaders arenow winnowing down into priority action lists.

"Over the years, we had put a lot of workinto developing emergency procedures and processes, but we discovered thatplanning for a pandemic is very different," Schwarz says. "It isprobably a big mistake to think you can take your business continuity manualsand adjust them a bit to include the pandemic issue."

Many large companies have robust businesscontinuity plans that cover, or could easily incorporate, a pandemic. However,midsized companies typically have less developed disaster recovery plans, particularlywith respect to the complex issues a pandemic outbreak could present. If yourmidsized company has yet to prepare for such an outbreak, consider thefollowing tips:

Start now.While scientists cannot say with absolute certainty that a pandemic will occur,history suggests it is just a matter of time before an outbreak. And, withtoday’s highly global transportation systems, isolated pockets of a diseaseleft undetected could spread rapidly worldwide.

"In the last 300 years, pandemics hit, onaverage, every 24 years," Schwarz says. "Since it’s been around 36years since we’ve seen one, it is reasonable to conclude that pandemic planningis a smart move for any organization."

Review internal and external threats. As part of a pandemic crisis plan, experts say companiesmust consider how an outbreak will affect key issues, such as businesscontinuity, finance and operations. However, a well-done plan also willconsider external forces, such as significant downtime with suppliers or anoutbreak in a nearby community that may not immediately affect a company’sinternal operations. This process should be supported by a communications planand practiced with periodic mock drills to evaluate effectiveness.

Become familiar with local or regional pandemicplans. A critical mistake in pandemicplanning is making assumptions about available emergency services. For example,if your company’s pandemic plan calls for busing workers in and out of yourfacilities during an outbreak, are you sure that plans developed by localauthorities will allow buses to enter the city under those conditions? Have youconsidered the likelihood that neighboring jurisdictions where your companyoperates may have different plans?

Prepare alternative staffing plans. Should a pandemic occur, it’s likely that many employeeswould fall ill, have family members become sick, or need to rearrange personalschedules because of school or daycare closures. A crisis plan should accountfor these contingencies by providing telecommuting or transportation backupplans to ensure work can continue. In a manufacturing or production setting,where telecommuting is not viable, planning should focus on flexible shifts or,assuming an outbreak is regional, contract operations in another part of thecountry.

By taking these first steps, you can betterprotect your business, employees and bottom line should an outbreak occur.

Who’s prepared for a pandemic?
The following table shows the percentageof respondents from various sectors who stated that their organization’sbusiness continuity plans already include preparations for pandemic impacts:

• Public sector (government) — 42 percent
• Computing — 40 percent
• Transportation — 33 percent
• Banking — 30 percent
• Financial sector — 26.5 percent
• Health care — 20 percent
• Insurance — 17 percent
• Telecoms — 17 percent
• Utilities — 14 percent

Source: ContinuityCentral.com survey, November 2005