The COVID-19 pandemic has taught the real estate sector that businesses with comprehensive continuity plans in place are more likely to overcome challenges quickly in the face of a major crisis.
Jason Griessel, who heads up strategic risk management at Broll Property Group, says when COVID-19 was just a murmur, no-one realised the profound impact it would have on the way people do business.
“The pandemic didn’t fall into what we would normally term an emergency response framework. It was ultimately a business continuity and resilience exercise. People had to figure out how to scale their businesses to enable communication – both upwards and downwards. After all, without managing, communicating and practicing a duty of care over your employees and – in some instances – your vendors, you don’t have a business.”
“Notably, in interfacing with client portfolios, we have discovered that businesses are more prepared than ever to put comprehensive business continuity plans into place,” he adds.
He says resilience and continuity are the holy grail of sustained business success. “For resilient businesses that have the correct resourcing to continue operating and servicing their portfolios, crises can present unparalleled opportunities for growth in the market.”
When the pandemic hit South African shores, businesses that were better prepared for emergencies started to gain market share. This was also evidenced during the KwaZuluNatal riots: some vendors and service providers were unable to deliver, creating a gap for others, who were better prepared, to thrive.
Griessel says COVID-19 was unique because the business had to manage the increased sensitivity of employees while maintaining the integrity of facilities. “I haven’t met anybody who enjoys getting screened, vetted, probed or fingerprinted. Going into COVID-19, we had to address the psychology of how to make it easier to comply while not reducing the level of security and risk.”
Looking more broadly, Griessel is not sure that the cost of precautions going into the pandemic was beneficial to the wider population. “Going forward, I think we need to learn from the lessons of lockdown and its catastrophic impact on the economy and society, especially in respect of the accelerated rates of suicide, divorce and gender-based violence.”
Once continuity plans are in place, Griessel says businesses need to identify, train and support the people who are going to operate the plan, as well as conduct testing and reviews. “Employees are every business’ most important tool in managing crises. No artificial intelligence can manage crises, which often require personal and interactive inputs and processes.”
Going forward, property owners who own the cold chain distribution centres that power the country’s justin-time medical and food deliveries to commercial hubs need to consider national key point standards when they develop new builds. This is to be able to sustain an attack by the civil population. “Security and safety considerations need to supersede aesthetics,” notes Griessel
He says businesses need to ensure their emergency frameworks and business continuity planning is kept up to date. “COVID-19 was a long version of a crisis, which gave rise to multiple mini crises. This was compounded by abnormal environmental systems, for example, we had two 100-year events, drought and flooding took place in 2022, an anomaly for us.”
Business continuity planning has become the cost of doing business in higher risk emerging markets like South Africa. “Globally, there is an acceptance that you need to provide resourcing for a black swan event within an organisation. Instead of lip service to fire and emergency evacuations and pandemic readiness, people are taking them seriously. There is greater willingness to look at proactive risk management to be able to come out ahead,” adds Griessel.
He says more work needs to be done on identifying and forecasting risks across the sector. “There is enough data for forecasting: by anticipating risks, the industry can look at innovative solutions for solving them. Solutions are only going to be achievable at scale. One or two portfolios aren’t going to be able to do it by themselves.”
“We need to look at the impact of the pandemic on the likes of the South African Special Risk Insurance Association (Sasria) in terms of special risks and insurance costs. These are all costs that are already getting passed to the consumer. If we can’t put better solutions together to manage the risk, the costs will keep climbing and that will be detrimental to the economy.
Importantly, the pandemic has taught organisations that if they do not have some form of continuity planning and crisis management in place ahead of crises, it is almost impossible to put one together in the midst of a crisis. This type of reactive response can triple or quadruple costs and render the business ineffective.