6 minute read
Aaron Poentis
Assessing Virus Risks Operational Risk Management offers a decision-making tool used to identify, assess and manage risks by reducing the potential for loss.
The rapid spread of the coronavirus has caused significant concerns over how to prepare for the possibility of having an infected individual impact your commercial or residential property. COVID-19 has caused thousands of fatalities around the world. It is a relatively new disease and information about COVID-19 is constantly evolving.
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Currently there is no cure or vaccine available.
It is spread primarily person-to-person, and evidence exists that a person can become infected by touching their mouth, nose or eyes after contacting a contaminated surface. Every state has a confirmed case of COVID-19, and most states, including Hawaii, have issued mandates that people shelter in place or stay at home.
All businesses rely largely on person-to-person interaction. If you are in an industry that relies on significant per
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sonal interaction, there is a greater risk for your employees, customers and business being impacted by COVID-19.
One basic operational principle of business is to assess financial risks with reward of financial gain. A business response to a COVID-19 incident must be viewed as a risk assessment and analysis, commonly referred to as Operational Risk Management. ORM is a decision-making tool used to identify, assess and manage risks by reducing the potential for loss. Using ORM increases the probability of a successful business operation during a crisis such as COVID-19. It encompasses the activities involved in identifying hazards and evaluating risk to a business throughout the life cycle of a task or operation. ORM functions to assure that risks to a business, employees and customers are controlled within the business’s risk tolerances. The correct application of an ORM process enables businesses to make informed decisions that will reduce losses and associated costs and, as result, will lead to a more efficient use of resources.
The first step in conducting an ORM is to identify and understand the COVID-19 hazard and its potential impacts to customers, employees and operations. An assessment of the COVID-19 hazard is then conducted where a determination of risk in terms of probability and severity is made. In basic terms, the following questions should be addressed:
• Would the business be impacted by limiting an extended close and prolonged exposure to potentially infected individuals? • Are employees at risk from the existing business operations? • If the business is COVID-19 impacted, can it continue to operate, and will customers continue to have a good experience?
Once the hazards have been identified and assessed, the business must evaluate the risks against potential benefits with the hopes of maximizing success. Balancing costs and benefits is a subjective process and some hazards may be acceptable without any actions. Therefore, experienced personnel at all levels of the business operations or task must be engaged when making risk decisions. If through this evaluation the risk and potential impacts to the business is substantial, controls must be developed and implemented to mitigate this risk.
The form of these controls can be structural or non-structural. Structural controls are typically physical and can represent features such as barriers, walls or roped-off areas. Non-structural controls include education, social distancing or self-quarantine. These controls can affect long-established business models. As an example, if a fine dining restaurant is being forced to stop having patrons eat in the establishment and is being instructed to provide take-out only, should they adjust to try and accommodate the instruction, or should they close completely while the mandate is in effect? This is a complex issue where closing for the duration of the mandate may be more cost-effective than providing take-out meals at a fine dining establishment not efficiently suited to do so.
Lastly, while implementing the controls, the business must continually evaluate its effectiveness and incorporate any adjustments as appropriate.
An important aspect for the success of ORM is early planning and anticipating risks to enable effective management. Integrating risk management into planning efforts at all levels and as early as possible provides the greatest opportunity to make well-informed risk decisions and implement effective risk controls. This enhances the overall effectiveness of ORM and generally yields the greatest cost efficiencies. Comprehensive planning should identify associated hazards and the appropriate steps necessary to ensure business flexibility and success.
The concerns related to COVID-19 are real, constantly evolving and demonstrated to have tremendous business impacts. Early preparation to address proactive, routine general disinfection as well as a reactive response to a confirmed COVID-19 incident is critical to business success. The severity of business impacts from a COVID-19 incident is directly related to the business’s proactive and reactive response. How a business reacts to adversity enables it to instill confidence in both its employees and customers through its foresight to predict, plan and execute protective measures. Implementing ORM in response to this pandemic is essential to ensure businesses are provided the best opportunity to succeed during these challenging times. ❖
Aaron Poentis is senior vice president, civil/environmental engineering, of Interstate Hawaii. As a member of the Interstate Restoration Hawaii team, Poentis leverages over three decades of professional environmental engineering experience, formerly working for the Hawaii Department of Health and the U.S. Environmental Protection Agency. Prior to that, he was employed by the Naval Facilities Engineering Command, serving the last 15 years as program director and senior environmental engineer for the Navy Region Hawaii, and the Naval Facilities Engineering Command, Hawaii. Reach Interstate at www. interstaterestoration.com or 484-4095.
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