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Leading To, And Leaning Into, The ‘new Normal’ – Corporate/Commercial Law | #riskmanagement | #security | #ceo | #businesssecurity | #



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We have been through this before — on company, industry,
national and global levels. It is difficult to imagine that as we
experience and react to the human and economic challenges of the
COVID-19 pandemic. Pausing to reflect, however, on the challenges
since the Vietnam War — from massive ones such as the Oil
Shocks of the 1970s and the Financial Crisis of 2008 and 2009, to
the 9/11 Terrorist Attacks, the Stock Market Meltdown of the early
2000s and Hurricane Katrina to the collapse of Enron and the impact
on Union Carbide of the Bhopal disaster — shows it to be
true. While the specific nature of this crisis is different and due
to technology the speed of change feels unprecedented, the path
forward is well trodden — and indeed can offer opportunities
to improve and accelerate change and growth.

Below we will answer some of the questions that you may have as
you find your way on this path.

What is the path?

The path is essentially defining goals and creating a process to
identify the needs and prerequisites to achieving those goals,
developing the necessary plans, executing on and monitoring
achievement of those plans, and continually adapting and improving
as new issues and opportunities are identified and external and
internal conditions change.

Goals mean surviving, of course, and growing to some target
— defined in terms of something relatively specific such as a
number, amount or type of facilities, products, services or the
like. Goals also mean defining what kind of organization you want
to be — not a vision or mission statement, but more of an
attitude towards one or more relevant communities or
stakeholders.

Can you provide more insight on developing the goals?

When developing those goals, you will likely identify a range of
needs and opportunities, such as:

  • Complying with government directives and assessing observance
    of government guidance;
  • Addressing immediate challenges to liquidity and capital
    resources;
  • Addressing immediate challenges to the workforce, the supply
    chain and customers;
  • Building broader and longer term resilience;
  • Re-imagining the “new normal,” including the new
    governmental and health-related environments in which we may have
    to reside; and
  • Developing a plan to return to or integrate into that “new
    normal.”

How do we manage workflow?

First, establish a core response and planning leadership team
— to drive identification of issues, needs and opportunities
and to surface possible solutions, prioritize solutions and drive
development of implementation plans, approve plans and then
monitor, adapt and revise. The team need not (and probably should
not) undertake all those activities itself; rather, it should draw
on all experienced resources within the organization. It should
also draw on outside resources, including ones that may not be
typically considered such as epidemiologists as well as
supply/logistics and sales/marketing chain partners (and the usual
team of lawyers, bankers and accountants).

Second, establish an effective internal communications plan
among the team and the various resources. Not just meeting times
and means, but also procedures for managing email
distributions/chains, efficient conference calls and the inevitable
ad hoc communications.

Third, recognize that, for many, working remotely will be a new
experience. In addition to ensuring that the communications
technology functions as needed, it is essential to maintain
effective interpersonal connection with all employees, whether
working from home or on-site, to determine what is working, what is
not and to ensure that each employee knows his or her role, feels
valued and recognized and remains motivated and engaged.

How would that kind of a process work?

To best manage workflow, break down your business processes into
manageable pieces such as:

  • Marketing/sales; and customer/client engagement and
    retention;
  • Sales/orders to accounts receivables; and accounts receivables
    to cash;
  • Procurement RFP/bidding to purchase order; and purchase order
    to payment of accounts payables;
  • Logistics: Sales customers; Purchase Order inventory;
  • Production: Inventory processing inventory;
  • Services: R&D, customer support, etc.;
  • Functions: Law, accounting, tax, HR, treasury/cash management,
    risk/insurance, planning/business development, etc.;
  • Capital resources and liquidity; and
  • Governance and Stakeholder reporting.

It may be helpful within each of those pieces to have the
relevant team undertake a SWOT analysis, so opportunities are
surfaced as well as issues and a return to the “next
normal
” is planned.

What are some of the pitfalls?

Losing sight of the goal is likely the fundamental risk, but
there are several other keys such as:

  • Information overload, through focusing on the goals and the
    critical path for achievement should help.
  • An attitude that solutions have to be “built here,”
    even though others are available or demonstrated externally.
  • Losing a balanced approach to adapting plans — doing so
    either too slow or not fast enough.
  • Lack of clarity/transparency in communications: what we’re
    doing, why and what could change.
  • Being too focused on the internal issues, and missing
    fundamental changes in the external conditions, markets, drivers,
    and the like.

To quote Ludlum, “sleep is a weapon.”

Can we seamlessly move most operations to the cloud and provide
employees with remote access?

Most large enterprises have already moved to the cloud; for
others and for many smaller firms, this crisis will be the tipping
point. The cloud is much more than an efficient way to store data.
With proper planning and execution, cloud computing boosts
productivity, enhances accessibility, group collaboration and
customer service and creates a mobile-friendly environment. It is
less expensive than a physical computing infrastructure and limits
physical clustering — and it does not require large upfront
capital investments to purchase equipment and buy software licenses
on the ongoing costs of maintaining and updating the infrastructure
and the expertise to do so. From productivity enhancing
applications, reducing hardware failure/power interruption risk to
data security and backup to liability management to disaster
recovery, many aspects of the cloud environment provide cost
effective benefits, freeing internal resources – – and
it can be a “green” lower carbon footprint solution as
well.

In the current environment, the “rub” is achieving
“proper planning and implementation.” Cloud providers and
consultants can help, but ultimately each cloud environment is
tailored to a particular business to greater or lesser degrees. If
not already cloud-based, focus your efforts on the immediate needs
(likely communications) and make analysis/planning of fuller
migration one of the opportunities considered in work flow
planning.

Will staffing be permanently reduced?

The “new normal” is likely to require you to
prioritize roles, determine which roles can be performed remotely
and which ones require presence in an office and which roles should
be internal and which external. Overall, the workforce may not
decrease (and may in fact increase) but the composition of the
workforce is likely to change materially

If some roles need to be permanently eliminated, determining how
to lawfully and ethically, conduct reductions in force
will be imperative – – from workforce retention and
motivation to brand maintenance and growth to capital raising and
other viewpoints.

What are the legal implications?

The legal environment is evolving in real time, even as courts
are largely closed. Notwithstanding, important issues to consider
include:

Contracts: Because of disruptions to supply chains,
declines in demand and the like, businesses globally may be unable
or unwilling to fully perform their contracts, may assess early
termination, or may just breach. Businesses should review their
contracts, including property lease agreements, to understand
protections or remedies regarding non-performance, modification or
termination as well as applicability of concepts like force majeure
and commercial impracticability. Businesses should approach future
contracts, renewals and extensions with the learning from this
crisis in mind.

Property and Casualty Insurance: Insurers and
policyholders are attempting to navigate challenges posed by
current business disruptions. Many businesses have P&C
insurance coverage for business interruptions, and those policies
could potentially cover losses resulting from communicable
diseases. However, many such policies are limited to direct
physical losses and damages, and some insurers are already denying
COVID-19 business interruption claims on the grounds that
COVID-19’s economic effects are not the result of direct
physical losses or damages. Businesses should carefully review
their policies for opportunities and issues, including timely
notice requirements, and be prepared for insurers to seek to deny
coverage.

Director and Officer Insurance: As CEOs, directors and
other business leaders react rapidly to challenges, they may
subsequently find themselves the subject of claims related to their
professional capacities. Although D&O insurance typically
covers typical claims, D&O policies may contain exclusions or
coverage limits for illness-based claims, workplace health and
safety claims, breach of contract claims, or other claims that
insurers might argue apply to COVID-19 claims.

Public Statements: As is always the case during times
of financial stress, CEOs and managers seek to project calm, h3 and
thoughtful leadership. Transparency as to what is known, not known,
planned or hoped, as well as the key risks thereto, is key. Those
statements will be viewed in hindsight, and legal exposure can
arise from securities laws and common law causes of action.
Businesses should carefully consider all public statements with
that in mind.

What are the technical implications?

Successfully getting to the “new normal” will require
great agility, necessitating more reliance on cloud technology,
remote access, and adoption of new technologies to support
continuity and growth of operations. “Work from anywhere”
capability requirements include:

Having the proper technology: Make sure your employees
have a reliable computer, email, phone conferencing and high-speed
internet access, whether they work from home or a public
location.

Using a secure connection: Remote workers should have a
secured Wi-Fi network and work with a trusted virtual private
network (VPN).

Implementing communications programs: Stay in touch
with employees who work from home via Microsoft Teams, Zoom, Skype,
Slack and other messaging services.

The emerging technologies of artificial intelligence (AI), the
Internet of Things (IoT) and blockchain represent exponential
opportunities for the “new normal.” Today, even the most
advanced technologies are usually reactive rather than proactive.
Think of virtual assistants such as Siri, Alexa, and Cortana
— give a command and they respond. But when powered by
transformational technology, these virtual assistants become much
more proactive. For example: virtual assistants might observe some
pattern detrimental to your business; IoT data from cloud
processors and sensors might determine that a critical resource is
running low; machine learning (ML) might work out necessary changes
to your supply chain; and blockchain can ensure that transactions
are processed securely. In the “new normal”, enterprises
capable of exploiting these technologies will use them to optimize
and enhance existing processes, create new business models and
develop innovative products and services. The intuitive ability of
IoT combined with the cognitive power of AI and ML and the
immutable memory of blockchain will ultimately disrupt business
models in every industry.

This article was originally published by
CEOWorld Magazine on April 13, 2020.

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.



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