Blueprint for survival

Manufacturers benefit from crisis planning

Posted on Sep 14, 2020 :: Cover Story
Posted by , Insight on Manufacturing Staff Writer

The federal government declared a national emergency due to the COVID-19 pandemic on March 13, and even then, not everyone foresaw how the pandemic would impact workers, daily operations or supply chains within Northeast Wisconsin companies.

Crisis management is all about planning ahead. While a pandemic was one of those unlikely events that few could have plotted out on paper, manufacturers know they may face crises of all kinds. And now that companies have experienced the reality of a major disruption, thinking ahead has become even more vital.

Experts agree: The No. 1 most important step manufacturers can take in crisis management is to simply have a plan.

George Bureau, vice president of consulting for WMEP Manufacturing Solutions, says manufacturers should consider key questions in developing this plan: “Who heads up the crisis management team? What are the communication channels? How do you release information?” he says. “Recognize that it’s important to move quickly, particularly in communicating what’s happened, where things are and what’s the plan going forward.”

In the absence of communication, misinformation quickly fills that void, he says. “Spend the time and write it down and say, ‘Here’s what we’ll do.’ Because whether it be a tornado, whether it be a COVID type of virus, whether it be a fire … it gives us some stability,” Bureau says.

Generally, a committee with a designated leader can manage this plan. The leader can serve as a spokesperson to streamline the messaging and provide a consistent speaker during the crisis.

“When you think about times of crisis, we’ll look to our senior leaders for direction and particularly the confidence and the reassurance,” Bureau says.

Mark Stevens, principal for manufacturing and distribution at Wipfli, says getting that team in place is critical, as well as assigning multiple roles in case one or more of the team members becomes unavailable.

“We’d like to see a minimum of two or maybe even three people assuming the same roles and/or task during an emergency so that you have it all covered,” Stevens says.

Additionally, navigating unanticipated change means developing a plan that encompasses multiple angles, including knowing the trigger points — when you will implement the plan and how.

Lisa Cruz, president and owner of Red Shoes Inc., a communication, marketing and public relations firm in Appleton, says it’s vital to develop a clear message before a crisis occurs because you’re not thinking as clearly in the middle of one.

“When a crisis occurs, it’s all hands on deck. It’s very stressful and that’s not the time you should be trying to think about the (right) words,” Cruz says.

Instead, companies should assemble a cross-functional team ahead of time — not leaving the sole responsibility to the communications team — but including key department heads, the human resources director and possibly a legal consultant, she says.

Planning for the worst

In working on a crisis management plan, companies should think about the unthinkable, the potential events that keep executives awake at night. Examine those “what if” questions. Cruz suggests brainstorming your top five worst-case scenarios and talking through them, such as what happens if a member of the executive team comes down with COVID-19?

Companies also might consider what they’d do if there were an outbreak at their facility. “What will be the next step? Who will we communicate with, how and how much?” Cruz says. With the coronavirus pandemic, companies should consider issues such as health confidentiality rules and consult with experts as needed to formulate plans.

Firms such as Red Shoes can help companies walk through that process of setting up a crisis management plan.

“We do this all the time, in terms of getting everyone around the table and having that discussion,” Cruz says. “Nine times out of 10, we come up with questions that the company is not thinking about.”

One factor that businesses sometimes overlook is how to communicate a crisis-related message when it needs to be sent out in a hurry.

“Everyone’s so focused on social media channels or emails, and we’ll say, ‘What about your communication channels to the public. Is there a good old-fashioned phone line?’ Now might be the time to put that in place,” Cruz says.

Mike Schlagenhaufer, manufacturing consultant for Acuity Insurance, says manufacturers should consider alternative communication methods — even if they’re unconventional.

“Motorola got a lot of calls during Hurricane Katrina for two-way radios,” Schlagenhaufer says. “They couldn’t make them fast enough.”

Think about it: In a storm, maybe the cell towers aren’t working. Maybe the power’s out, he says.

“Pre-plan and take it seriously,” Schlagenhaufer says. “And don’t think that you’re impervious to a crisis.”

Bureau says being open and honest — as well as getting the message out quickly — can help calm nerves both internally and externally. Companies want to instill confidence within their employees and with the public, providing assurance that they recognize there’s a crisis and they have a way to manage it.

“‘We’ve put together a plan. Here’s what our plan is. Here are next steps and here’s how it will impact you,’” Bureau says. “And most importantly, in this case, they offer you safeguards and some peace of mind.”

Take care of your team

Job No. 1 in a crisis is making sure your team is safe. There are so many events no one wants to think about: An accident causes a severe injury or death in your facility. An active shooter has injured or killed employees. Maybe there’s been a fire or a spill. Or a pandemic.

“Make sure everyone’s safe first and bring the external resources you need as quickly as possible,” Bureau says. “In fact, err on the side of precaution.”
Even sudden changes such as a top executive or key worker abruptly departing — or dying — can leave the employee team feeling unsettled.

“Nobody wants to be talking about that, but that should be part of the overall succession planning conversation and the communications that go along with that,” Cruz says. “That’s always a tough one, because you feel like you’re putting that down on paper, and that’s just touchy and very sensitive. But that should be thought through as well.”

Employees will process and deal with information differently and will grieve in different ways, Bureau says.

“Recognize that you can’t just communicate once and be done, that you may need to give time and also potentially assistance to employees to help work through the situation and talk it through,” Bureau says.

Stevens of Wipfli highlights the importance of establishing a system of psychological-social support within the company. With an ongoing crisis like the pandemic, the ripple effects on mental well-being can endure. Some workers have suffered from the long periods of isolation and disruption to normal daily life, and that can take a toll in the form of depression and anxiety.

“The social isolation does do very different things to our minds,” Stevens says. “And it can have not only family challenges, but it can also create work conflicts. We just really have to recognize this is all part of what’s happening around us. This is the quiet storm that’s brewing right now.”

Bring in reinforcements

Steve Baue, CEO of ERC: Counselors and Consultants in De Pere, says the manufacturing industry tends to take on a grin-and-bear-it mentality during tough times, but leaders must recognize the potential for the unseen impact on employees.

“You could say, ‘Well, but I’m not hearing anything, it appears morale is pretty good,’” Baue says. “You’ve got to remember that 75 percent of employees are dealing with something every day. Twenty-five percent of those employees would benefit by talking to a counselor, and only a third of them will actually indicate to a coworker that they are struggling.”

Harry Deets, senior EAP counselor for ERC, says the uncertainty about the pandemic is compounding stress for many workers, who are dealing with changes from multiple directions, such as trying to do Zoom meetings with their kids in the background, managing political polarization, weathering isolation and experiencing growing relationship troubles.

“There’s just so many unanswered questions,” Deets says. “People don’t know what to expect in terms of school for their kids in the fall. People are concerned about their jobs, their finances, so that’s an issue.”

Companies that offer employees an EAP benefit should remind employees of its availability, and they can consider calling in counselors when there is a sudden, immediate crisis. Critical incident responses have shifted to a more educational approach, sharing facts about what happened to dispel rumors and offering pathways to assistance, Deets says.

“What we really want to do is give them some information about what they can expect,” Deets says. That might include sleep disturbance, physical distress or an upset stomach, to name a few. “We want to give them some information that helps to normalize it for them, so that when it does happen, they don’t think, ‘Oh my god, what is happening to me?’”

Continued pandemic planning

It’s a new world where we know more. Now that we’ve experienced the global impact of a pandemic, we can plan for scenarios that have worldwide reach.
“I think one thing that people need to keep in mind is, this is a global community,” Schlagenhaufer says. “Whatever happens in one tiny little corner of the world can happen to us.”

In Wisconsin, some manufacturers might have underestimated the potential impact of the pandemic.

“They might have been essential business, but now they have to send people home because they have no goods coming in because their supplier was impacted,” Schlagenhaufer says.

Whether a pandemic is likely to happen again or not, it’s important to plan for the big events, says Scott Singer, president of CyberNines, a company that formed from the cybersecurity group of 5Nines, which partners with WMEP. Natural disasters can impact companies or their suppliers, and that kind of large-scale planning can help reimagine important pathways.

“You talk through it on a tabletop: What would you do in here?” Singer says. “How would you deal with this situation? But by doing that, it helps you prepare for the unforeseen situation. Like a pandemic.”

Establishing your own contingency plans and policies can help avoid those key disruptions in supply chain activity, Stevens says, but it goes beyond that.

“Obviously, it’s pretty important to know who the key inputs and key outputs are and visibility into your inventory,” he says. “But more important, what are the contingency plans of your key suppliers?”

Additionally, some companies may begin to rethink their ideas about inventory, possibly adding suppliers to avoid relying on just one or deciding that the cost of storing extra parts and product might be worth avoiding the work stoppages some saw during the pandemic.

“Many manufacturers, the large OEMs shut down, not because they didn’t have demand, but because a supply chain wasn’t dependable enough and the parts weren’t coming or the kits weren’t coming to where they need them,” Stevens says. “Quite a few companies are looking for alternative suppliers so that in the event that they find themselves in this situation again, they will have kind of a plan B.”

COVID-19 has been an unusual, externally driven crisis that few could have imagined. But how companies manage it now is largely internal, in terms of protecting employees and visitors, Bureau says. Does a company allow travel? What does the company do when an employee becomes ill?

“The more we can define that ahead of time and have a plan, the faster we can react in a very level-headed fashion,” Bureau says, “if and when that does happen.”

Crisis plan should include cybersecurity

The pandemic sent many workers home, and even those manufacturers that kept most of their operations running in their facilities saw some executives and office staff working remotely.

The overall reality is that many plants have begun relying more on artificial intelligence, cloud systems, and web-based systems and operations. The potential for a cybersecurity breach is real, and it should be included in any company’s crisis management plan.

“Just because it’s a company device and you’re logged into your company website from home, if it’s not a VPN (virtual private network), that doesn’t mean you can be careless,” says Mike Schlagenhaufer, manufacturing consultant for Acuity Insurance.

Employees have a responsibility to be mindful of protecting company information, and companies must ensure proper safeguards are in place. Breaches can result in costly consequences, including company closures.

The National Cyber Security Alliance found that up to 60 percent of small- to mid-size businesses that experience a cybersecurity breach close within six months. The Deloitte analysis “Beneath the Surface of a Cyber-Attack” showed numerous and hidden costs of a hack, including an impact to reputation and trust that’s difficult to recover.

Widespread remote access opens up a new set of concerns, says Scott Singer, president of CyberNines, a company that recently formed out of the cybersecurity group of 5Nines, a WMEP Manufacturing Solutions partner.

While some companies already had systems in place to allow employees to work remotely when they were sick or traveling, few were prepared for hundreds of employees working from home at once. Singer, who was working at PaR Systems in Shoreview, Minn., when the pandemic hit, says the company had to scramble to increase its number of VPN software licenses.

“And we had to increase the size of the network pipes coming into our data center because they weren’t sized to (help) everybody working from home,” Singer says.

To help protect the system, employees weren’t allowed to log in using home computers — which meant the company needed to buy a lot of laptops all at once — and those endpoint devices also were protected. There weren’t enough laptops available at first, so some employees were lugging their work desktop computers home.

Manufacturers must include information technology in their disaster plans and know how they will recover data and their systems quickly if there’s a crash or a breach. They should have a plan to operate without those systems, such as taking orders by hand.

Companies must assume their network is not secure — a system of “zero trust” — and send everything through VPN security, Singer says.

“You normally think about a building and the people working inside the building, and you have a firewall and everybody’s sitting in their cubes or offices,” he says.

“That’s the old model of protecting the network. Well, that’s all gone now.”