Covid-19

When ‘prudent over-reaction’ makes sense

Newsroom asks three of the most coronavirus-prepared companies in the country - two large and one small - what they are doing to protect their business, their staff and their customers from Covid-19.

Z Energy chief executive Mike Bennetts has been in the oil industry all his working life. It’s a dangerous sector - things can explode, poison and devastate the environment. 

You learn to over-react, he says.

“You don’t sit around and say: ‘Oh, it looks like there’s a fire starting. I’ll go get a fire extinguisher’. You call out the fire brigade.”

The coronavirus outbreak is no different, Bennetts says. The company activated its four-stage crisis management plan at the end of January, as the virus started to spread outside China, but before even the New Zealand Government got its citizens out of Wuhan.

“Prudent over-reacting is the way we are phrasing it,” he says.

Take the 10-person crisis management team, which meets - increasingly virtually - at 8am every day. There isn’t just one team; there are two, alternating week on, week off.

This gives the members a break, Bennetts says, but also ensures there’s a back-up for every position in the team. 

And if both got sick?

Actually, there are three back-ups for many of the 10 positions, he says. “People sufficiently trained in crisis management that they would know what to do if they got called in.”

The crisis plan goes from code white to code red. Z has been on orange since the World Health Organisation gave Covid-19 pandemic status last week, and Bennetts “fully expects” to go to code red - the top alert level.

Being prepared

It’s not new. Z Energy has had pandemic business continuity planning for a few years. The last time it got activated was in 2014 with the Middle East Respiratory Syndrome (MERS). 

But it’s not as easy as dusting off the folder, Bennetts says. Each pandemic is different, and Z has at least three very separate parts of its workforce - 400 people in its three corporate offices, 80 or so working at the port-based fuel depots, and 2200 service station staffers who aren’t employed by Z, but are a critical part of the network.

Protecting depot workers

Bennetts says the company has just finished a risk profiling exercise for Covid-19 in its workforce and identified the highest risk came with employees in their 50s and 60s, mostly men working in small teams at the company’s eight fuel terminals.

You can’t just send these guys home with a laptop, Bennetts says. They are physically turning valves, working on pipes. 

Instead Z has given the teams a deadline this week to come up with protocols which will hopefully keep them safe, while staying at work. By Friday, all the teams will have to have adopted the rules.

“They need to look at the risks. For example, each site has a little office, but we’re asking them not to sit around in the office, or in the lunchroom.” 

It’s about protecting staff, Bennetts says, but also the business and the customers that need petrol to get to the pumps.

“There are specialist skills in these teams. We can’t afford half of them not to come to work one day.”

Still, if staff get sick, or have to self-isolate, Z will pay them, Bennetts says. No matter how long they have to stay at home. 

“We are extending sick leave, and I doubt we would put a limit on it, as it’s not clear you can’t catch the virus twice.”

Paying people to stay home and not work might sound crazy, but it makes complete sense, he says. 

“If people are behaving well and being responsible for their community, we shouldn’t punish them. If you say ‘I’m not going to pay you’, then people will come to work, and it’s potentially going to cost you more.”

Office staff

There may be more people working in Z’s offices in Auckland, Wellington and Christchurch, but implementing “social distancing” is easier there, Bennetts says.

We have to have at least 50 percent of staff working from home.

“Two weeks ago we asked half the staff to work from home on a Tuesday and the other half on the Wednesday. We learnt a lot as a company and as individuals.

“From Friday last week we have to have at least 50 percent of staff working from home.”

That means staff not sitting too close to each other at work, at least one empty chair between people at meetings, and Z cancelling all corporate events and gatherings of more than 10 people. 

Both domestic and international corporate travel has been “severely curtailed”, Bennetts says, which is hard on him, as he lives in Auckland, but works in Wellington.

By Tuesday, Z will have divided its executive team into two distinct halves and the members of one half won’t be allowed face-to-face contact with members of the other half - rather like the Queen not travelling on the same plane as key members of her family.

“If someone got sick and infected the others in their half, we still have another team.”

Retail outlets

Preparing for a pandemic at the Z petrol stations is different again. As well as increased disinfecting and hand washing, Bennetts says the company is keen to discourage cash (“bank notes are good at carrying germs”) and get staff to handle all food, rather than allowing customers to serve themselves.

If the virus starts spreading in the community, Bennetts says Z could limit the number of people it allows in store at any one time, or even shut its doors completely, making people pay at the pumps and get their muffins and coffee through night security slots. If a lot of employees got sick, the company would look at closing some stations and consolidating healthy staff at a small number of outlets, he says.

Managing the supply chain 

Meanwhile, Z has contacted its most critical suppliers and asked for their business continuity plans, Bennetts says. 

“How are you managing risk? What are you doing about social distancing? What if your bosses get ill? What’s your backup plan?”

Some suppliers had already got their contingency plan in place, he says. Others less so.

And that’s a problem.

"No exceptions"

Ports of Auckland decided early on in the Covid-19 outbreak it was going to take a super-cautious approach - going beyond the Ministry of Health guidelines in some cases - and copping flak in some cases when it refused to let a ship into port, or put workers into protective suits to deal with cargoes and crew from China.

CEO Tony Gibson says his top tip for companies is “no exceptions”. 

Every visitor and supplier coming to port is vetted, he says.

“We ask them where they have been in the last 14 days, and if they have come from overseas we don’t want them on site.”

Ports of Auckland has set up a central pandemic team which meets every day and any visitors or suppliers are vetted by the team.

“We had a guy fly in from Holland to support the Go Live automation project. I was asked could I make an exception and I said ‘No. He can work from his hotel room'. 

“We have to keep our people safe.” 

Magnitude, not probability

“This is moving fast,” Bennetts says. 

The trouble, says pandemic guru Wendy McGuinness, that some companies and parts of Government aren’t moving fast enough. 

McGuinness has spent her career looking at information flows, risk management, and the challenges facing New Zealand in the future. Most importantly pandemics and climate change.

The think tank she runs, the McGuinness Institute, has published two reports on New Zealand’s preparedness for virus outbreaks:

Managing the Business Risk of a Pandemic: Lessons from the Past and a Checklist for the Future (2006)

Lessons From the West African Ebola Outbreak in Relation to New Zealand’s Supply Chain Resilience (2015). 

She says until now many business leaders have tended to think in terms of probability, but not magnitude.

They argue the risk is very low (the “you are more likely to get the flu” argument), so they relax and do nothing, she says. 

Panic is a good thing - it’s what our ancestors used to react urgently to issues. 

“But they need to also make decisions based on ‘magnitude’ - what would be the worst case scenario if 50 percent of their key staff are sick and/or 2 percent die?”

While the Government hasn’t imposed restrictions on companies (distancing, disinfecting, having a supply of masks etc), companies can’t be complacent, McGuinness says.

“I’m really grumpy when people say ‘don’t panic and keep calm’. Panic is a good thing - it’s what our ancestors used to react urgently to issues. 

“No one needs to be perfect on day zero, but companies need to start work now on making their business models more durable and provide more certainty to their staff, consumers and suppliers.”

Practical measures for an SME

As well as decades spent thinking about pandemic preparedness, McGuinness has also had 15 years running an SME. The Covid-19 outbreak has given her the chance to put her pandemic ideas into practice. 

Step one, she reckons, is to get older staff members out of the office. And that includes the bosses. A third of patients on ventilators in Italian hospitals are 50-64 year olds. And that’s sucking up a lot of ICU and ventilator resources - something New Zealand could run short of if the pandemic struck big time.

“How do we stop the health system collapsing [as it has in Italy],” McGuinness asks. “Everyone over 60 should be self-isolating.

“If I was the Government I would mandate it, and I’d encourage it for people 50 and over.”

By and large, young people are getting through the pandemic unscathed, she says. And modern technology means often not everyone needs to be in the office.

“The oldies are the wise heads, they should be empowering the young. Senior leadership can be working from home, and young people going through this will be in stronger leadership roles.”

McGuinness says just this one step would make a big difference. 

“It’s amazing what that would do to relieve pressure on the health system; flatten the curve.” 

There are some other simple things businesses can do, McGuinness says. Like buy thermometers, so staff can check whether they have a raised temperature, and go home if they do. The institute has several thermometers.

McGuinness also bought “fever packs” for all staff, with basics like paracetamol, throat gargle and wipes. She argued that would allow staff who were sick but not needing hospitalisation to go home without having to go via a chemist.

This isn't an excuse to stop work.

Logistics

In the early days of the virus, the McGuinness Institute also bought three laptops for staff who didn’t have them, and four small printers, so everyone could work from home if necessary. McGuinness surveyed all staff about their use of public transport, and encouraged everyone to walk or bike to work if possible.

Then there are “fever days”. 

“One staff member was worried that if he had a fever and stayed at home he wouldn’t get paid, and then how would he pay his rent. The normal number of sick days wasn’t going to be enough, so we’ve added another 15.

“They do not need to give me evidence they are a confirmed case - a fever is enough. If you have a fever you stay at home.”

If your flatmate has a fever? Well, you stay at home - but you work, McGuinness says.

“This isn’t an excuse to stop work - in fact often you are working harder. This gives time for strategic reflection, talking to suppliers and customers, building relations.”

A Covid-19 business diagnosis tool

Meanwhile, pandemic researcher and consultant Roger Dennis has teamed up with design and tech studio Rush to develop a Covid-19 business diagnosis tool. "Plan-C" uses analysis from the 2015 post-ebola report to analyse an individual company's readiness for Covid-19 and identify areas of potential weakness.

The tool is free for companies with fewer than 500 staff.

Supply chain

McGuinness says manufacturers need to make sure they have the critical goods and parts they need for their business - on the premises. Your supplier might tell you a product is on the way, but don’t count on it until it’s in the warehouse, she says. If necessary, go and pick up what you need yourself. 

Just in case, rather than just in time.

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