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Weather risks are some of the most common cause of disruption to businesses in all regions of the world; and like all risks, the actual impact is related to how well the risk is managed. Ann Pickren provides some useful advice…

When risk management professionals hear that the Polar Vortex is collapsing, they aren’t simply worried about how cold it will get; they are focused on the impact to business operations. The risk manager needs to engage the proper functional groups in the organization to make sure their strategies for dealing with operations across the business during severe weather conditions properly address the risk, without introducing new risks. Requiring employees to commute into work in unsafe conditions or failing to communicate with the workforce about impending extreme and severe weather in a timely fashion can elevate human and business risk.

The stakes are higher than ever for businesses that fail to account for weather risk: natural disasters and extreme weather resulted in approximately $160 billion worth of damage last year, and reinsurance company Munich RE forecasts this figure will be surpassed in 2019. What’s more, The World Economic Forum Global Risks Report 2019 identified ‘extreme weather’ as the top risk in terms of likelihood over a 10-year horizon, and it ranks third in potential impact over the next decade.

The business of weather is not lost on the C-Suite, which is beginning to view weather risks as being as impactful as traditional threats (cyber security, geopolitical, financial markets, etc.). As a result, risk management leaders can work with HR and management to develop a plan to protect people and property from growing weather risks and ensure the strategies and policies for the company avoid the introduction of incremental risks. Core to these efforts is putting in place the right strategy to rapidly communicate with workforces and other stakeholders before, during and after a significant weather event occurs. Below are a handful of strategy components to consider:

CXOs must be invested

CXO buy-in remains critical to a successful risk management plan for weather. And while executives are more attuned to the risks, research suggests that most businesses continue to underestimate the economic impact.

A 2018 study that examined more than 1,600 corporate adaptation strategies related to climate change suggests businesses are not taking the threat seriously enough and making only ‘narrow and incremental’ changes to managing risks. The study also identified ‘significant blind spots in companies’ assessments of climate change impacts and in their development of strategies for managing them’.

Executive buy-in should encompass weather risk prevention, management and recovery - and central to these efforts is being able to quickly and accurately communicate with employees. Even the most elaborate risk management plans for weather can be undone if an employee receives instructions that are counter to corporate policies or, if a notification arrives too late; the wrong employees receive notifications; or if inaccurate information is shared. Risk management professionals must make a strong business and financial case for incorporating a mass notification system into the risk management plan, as there will be an important role for executives to encourage participation and engagement among the workforce.

Understand your weather risks

Risk management means you’re prepared for an event and have procedures in place to limit impact, but you have to know what you’re facing and be prepared with a response. In case of bad weather, risk management is often emergency preparedness. Do you know your severe weather risk?

First, check location-specific concerns based on historical patterns as well as mid- to long-term severe weather forecasts. If you’re in the US Midwest, you likely know that tornado season is March – June. Similarly, coastal states should check hurricane and typhoon seasons. Make a list of threats and how often incidents occur. But don’t forget lesser-thought-of risk events like polar vortexes, severe thunderstorms, dust or hailstorms, flooding, wildfires and blizzards.

Second, look at risks to your supply chain. Weather disruptions to any component of the supply chain can cause ripple effects across entire operations. Supplier risks are your risks, and having a plan to route around severe weather is critical.

Finally, expand your perspective on weather risk touch points. One reason that businesses tend to understate weather risks is that many take too narrow a view of operations that can be impacted. It isn’t just traditional offices and workers - or even supply chains - but also key partner facilities, employee business travel, and under-the-radar parts of the business. If a power outage hits your call center, you’ll have angry customers on perpetual hold. If a tornado hits your distribution center, you’ll be unable to send out packages customers expect. Take an inventory of your operations and how severe weather could impact them. Then order them by possibility and impact. Power outages during storms are more likely than a flood in most cases, but a flood could be more devastating.

Tailor your workforce communications strategy

Knowing the unique risks to your organization should guide the communications strategy and, in turn, how the emergency mass notification system is set up and used for weather events. This is a key way to make sure that when extreme weather does hit, everyone involved is as prepared as possible.

When it comes to getting pertinent information out to employees, customers and suppliers, traditional communications methods only go so far. Phone trees, for example, rely on people to be ready and willing to make calls quickly and inevitably some contacts are left out of the chain. A more effective method includes an emergency mass notification system (EMNS), which can use multiple methods of communication to get in touch with people including voice calls, text messages, desktop alerts and social media. Multimodal alerting not only ensures that notifications are delivered quickly, but it also increases the chances that your messages reach intended audiences.

It’s also important that this EMNS is capable of two-way communications, especially during severe weather. Two-way communication is a great tool to ensure that all employees are safe and accounted for. An effective way to do a check is to collect responses and report the results so the rest of the emergency team can monitor who still needs to be contacted and who has not yet responded. Another way to use two-way communications is to monitor weather conditions. Because workers commute from varying places, two-way communication is a way for employees to inform of icy roads, fallen trees or power lines, or weather-induced traffic situations to name a few examples.

It’s also critical to be able to target groups of employees, customers and suppliers by their geographic areas. Because weather-related situations often vary in severity based on the region, the most effective notification systems are able to target certain groups with tailored information so as to not cause confusion, panic or chaos by unnecessarily casting too wide or narrow a net.

Finally, baking automation into your workforce communications strategy is critical. The more time administrators spend manually creating messages when emergency events arise, the more chaotic the emergency response process will be. Removing as many manual steps as possible by automating alerts based on predefined rules and event triggers is a good first step. Automated notification enablement requires a process for messaging that identifies who should get the notification, what the message should say, when it should be delivered and when escalation might be required. Key to effective use of automated notifications is the ability to tailor the automation based on appropriate recipient groups, nature of the event, and other rules your organization construct to make sure the right individuals get the right message at the right time.

First and foremost, the business of weather is about employing risk management strategies that protect people and property. Once that is done, ensuring the business can continue to operate without disruption and do so efficiently protects the bottom line. An effective workforce communications plan for severe and extreme weather should be a key component of any business’ risk management strategy.

The author

Ann Pickren, President, OnSolve.

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