05/18/2020

BY GEORGE HYDE, SENIOR MANAGER AND TAYLOR WARRING, ANALYST

Growing up in Florida, hurricanes were a part of life, with major events planned with hurricane season in mind.

Texans, like Floridians, plan around storm season and have documented contingency plans for severe storms and tornadoes. Generally, when major weather events occur, the state, and even sometimes the country, rally around the communities affected. For example, when the Texas coast, notably Houston, was struck by Hurricane Harvey in 2017, neighboring states sent help and resources to impacted communities.

When the whole country, and arguably the entire world, is faced with a disaster such as COVID-19, the paradigm shifts. There is lessened ability to share resources and rally behind affected communities because all communities are impacted.

This, along with stay-at-home orders and social distancing guidelines set forth by local, state, and national governments, create a difficult environment for utility companies to continue operations. As critical infrastructure providers, utilities ensure hospital ventilators continue to run and provide water to every household so individuals can wash their hands.

A new challenge utility company leaders now face is how to continue providing these critical services safely to both employees and customers, while also ensuring cyber security and business continuity. As parts of the country begin to emerge from shelter-in-place orders, utilities must be deliberate in preparations to operate in this new world.

While keeping in mind their top priority of ensuring safety of the workforce, customer, and maintaining operations, there are some important steps utilities should consider.

A new challenge utility company leaders now face is how to continue providing these critical services safely to both employees and customers, while also ensuring cyber security and business continuity.

Identify Critical Functions and People

When news of COVID-19 first broke, utility companies went through the complex process of identifying critical people and job functions. The definition of “critical” and who fit the criteria spurred spirited debates.

As businesses return to some semblance of normalcy, this list should be carefully analyzed to understand what single points of failure exist within the company.

While there are still a large number of employees in the field supporting the electric grid, as in the case of an electric utility company, considerations persist related to employees who more regularly work out of the office. Having only one employee trained or knowledgeable in a certain functional area, or a critical operations role only performed in one location, are good starting points for evaluation to determine if another employee could be cross-trained or if another location should be constructed in alignment with business continuity standards.

Additionally, a process should be implemented to review the list of critical people and functions quarterly, so it is accessible and ready for use in the event of another crisis.

Enable the Workforce

With the majority of the workforce working remotely, utility companies have been faced with two key questions:

  • How do we enable the workforce to deliver at a velocity equal to when most were working at the office?
  • How do we mitigate the risk of cyber threats?

Critical infrastructure providers are at an increased risk for cyber attacks due to the nature of the services they provide. Even though the world is in a crisis, scammers, hackers, state, and non-state actors still pose a threat. With more people remotely connected to the network, there is an increased cyber risk.

The first step is to procure collaboration software that allows employees to communicate via chat, call, and video. In addition to vetting this software properly for security vulnerabilities, it’s also critical to communicate to the workforce what constitutes acceptable use of these platforms (e.g. in some cases, sensitive content is better left off these mediums).

A key consideration for CIOs in the coming months will be how to integrate these new tools into the company’s operating model. Consideration should be given to keep and maintain well-adopted tools in the environment proven effective in enabling the workforce so they can be leveraged quickly in the event of another crisis.

Organizational Change Management

Change management is often thought of in the silo of project and program implementation. However, organization change management is necessary for ensuring the success of any large-scale change or transition from a current state to a future state.

One such example where this is necessary is transitioning the workforce to remote work, and another will be when employees begin returning to the office.

There is classically a performance dip in response to change that can occur at any time before the future state is achieved. However, with effective change management, companies can minimize this dip and enable a higher likelihood of change adoption.

The first step is evaluating and anticipating the organization and its stakeholders’ readiness, ability, and capacity to transition to a future state. This includes evaluating the change and its impact on the organization and individuals. These assessments enable change practitioners to scale and customize change management strategies, plans, and activities.

Successful change occurs when stakeholders are engaged before, during, and after the change process. Individuals and stakeholders need information, leadership support, training and coaching, reinforcement, and time to engage in and accept change.

Successful change occurs when stakeholders are engaged before, during, and after the change process.

Evaluate and Mitigate Risk to the Supply Chain

In a globalized world, even local-based businesses have a supply chain link that is global. While production may be slowing, utility companies must continue to provide a critical service to its customers.

To ensure customer demands can still be met, companies should assess:

  • Bottlenecks
  • Location risks
  • Opportunities to move away from single sourcing
  • Relationship with critical suppliers

Though the short-term effects of the supply chain slowdown will no doubt be painful, this situation creates a unique opportunity to conduct a stress-test. The suppliers that went the extra mile to deliver on-time should be kept in mind for future sourcing events. Conversely, when suppliers were unable to meet demand, utilities should look to source from multiple vendors to mitigate risks.

Re-evaluate the Business Continuity Plan (BCP)

The COVID-19 outbreak is the perfect use-case for why utilities must have a robust Business Continuity Plan (BCP), as often required by state regulators.

This plan should be reviewed regularly for relevance and ‘blind spots,’ or disasters and scenarios for which the business is currently not planning. The disaster a company plans for is not nearly as important as the ones that it does not. The response to unplanned disasters will test its ability to respond quickly, be flexible in its processes, and maintain stability through difficult times.

If a BCP does not exist for the business or, at a minimum, the critical people and functions previously identified, one should be developed. If there is an existing plan, processes to continually re-visit this plan and update it with new technology, scenarios, and lessons learned should be applied and implemented.

Major storm events tend to follow seasons and weather patterns; however, pandemics are completely unpredictable. More than ever before, the COVID-19 outbreak has demonstrated the criticality of business preparedness and contingency planning – knowing your critical functions and people, being prepared to enable your workforce quickly, managing change, mitigating supply chain risks, and maintaining a business continuity plan.

We might not be able to predict or prevent the next disaster, but we can be better prepared.

The disaster a company plans for is not nearly as important as the ones that it does not.

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