Executive Briefings

Part 1 -- Pandemics: Getting Ready for the Worst     

Globalization is a mature reality of risk. Goods, services, people-and diseases-travel quickly and along the same routes. Avian flu already is endemic in Asia, raising the risks of greater human infections. Furthermore, in recent years the world has seen billions of dollars in damage from pandemics such as SARS, tuberculosis, hoof-and-mouth disease, and influenza.

The scientific consensus is that a global influenza pandemic is due, even overdue. When it happens, about 25% of the world's population will fall ill and worker absenteeism could exceed 35%, according to conservative estimates by the World Health Organization. It could also kill tens, if not, hundreds of millions of people.

Preparations Lag in Industry

However, acknowledgement of risk has not translated into preparations. A recent poll conducted on behalf of Marsh in the United States found only 4% of executives from Fortune 1000 companies believe a pandemic disease is "very likely" to occur during the next 10 years, and 41% say they have taken steps to prepare. Even in Asia as of late 2006, where the perceived urgency of this risk is greatest, less than 25% of businesses had pandemic plans in place.

Some companies appear to regard pandemics as unlikely, others as so unpredictable as to render planning useless, and still others as just another risk for which insurance or general recovery plans will have to do. The public sector is preparing, but these plans leave gaps, placing even more pressure on businesses to be ready.

Preliminary analysis of historical data and mathematical modeling suggests that the early, coordinated application of multiple interventions may be more effective in reducing transmission than the use of a single intervention.

Emerging Best Practices

Examining the actions taken by businesses who are preparing for a pandemic, one sees an emerging set of best practices. For example, leading businesses in the area of pandemic preparedness have been already or are currently:

  • Treating a pandemic as a catastrophic event versus a manageable disruption
  • Establishing pandemic planning committees, supported by an actual budget, to combine strategic planning, operations continuity procedures, human resources, and health services to adopt event-specific measures in anticipation of an influenza pandemic
  • Incorporating their entire global supply chain-including critical suppliers, customers, and other key stakeholders- into the organization's threat and vulnerability profile
  • Identifying critical products and services and preparing to protect those, even at the expense of other important elements of a business model
  • Developing a plan that considers response, recovery, restoration, and resumption in the event of the pandemic
  • Identifying critical supplies and procuring them now for their stockpiles
  • Focusing deeply on human resources issues, reviewing existing policies and procedures and, in most cases, updating them in an attempt to provide reasonable accommodations for this special circumstance
  • Including a communications strategy as a critical element in the pandemic preparedness plan
  • Estimating and planning for post-pandemic changes, including shifts in demand patterns, in the availability and morale of staff, and in infrastructure, both locally and to vendors

The list of best practices provides an outline of steps to take, but leaves unaddressed some underlying issues that will color how societies react in a pandemic. These issues will be addressed in Part 2 of this article.

This multi-part article is based on a report, Corporate Pandemic Preparedness: Current Challenges to and Best Practices for Building a More Resilient Enterprise, which was prepared by Marsh and The Albright Group. To download the report, complete the registration page at http://global.marsh.com/risk/pandemic/pandemic2/index.php 

Melissa Hersh is a vice president in Marsh's Supply Chain Risk Management Practice. She has served with the United Nations and the World Health Organization, focusing on areas such as global health security and the intersection of trade, geopolitics, arms, and export controls, as well as customs requirements for ensuring safety and security throughout the supply chain.

Globalization is a mature reality of risk. Goods, services, people-and diseases-travel quickly and along the same routes. Avian flu already is endemic in Asia, raising the risks of greater human infections. Furthermore, in recent years the world has seen billions of dollars in damage from pandemics such as SARS, tuberculosis, hoof-and-mouth disease, and influenza.

The scientific consensus is that a global influenza pandemic is due, even overdue. When it happens, about 25% of the world's population will fall ill and worker absenteeism could exceed 35%, according to conservative estimates by the World Health Organization. It could also kill tens, if not, hundreds of millions of people.

Preparations Lag in Industry

However, acknowledgement of risk has not translated into preparations. A recent poll conducted on behalf of Marsh in the United States found only 4% of executives from Fortune 1000 companies believe a pandemic disease is "very likely" to occur during the next 10 years, and 41% say they have taken steps to prepare. Even in Asia as of late 2006, where the perceived urgency of this risk is greatest, less than 25% of businesses had pandemic plans in place.

Some companies appear to regard pandemics as unlikely, others as so unpredictable as to render planning useless, and still others as just another risk for which insurance or general recovery plans will have to do. The public sector is preparing, but these plans leave gaps, placing even more pressure on businesses to be ready.

Preliminary analysis of historical data and mathematical modeling suggests that the early, coordinated application of multiple interventions may be more effective in reducing transmission than the use of a single intervention.

Emerging Best Practices

Examining the actions taken by businesses who are preparing for a pandemic, one sees an emerging set of best practices. For example, leading businesses in the area of pandemic preparedness have been already or are currently:

  • Treating a pandemic as a catastrophic event versus a manageable disruption
  • Establishing pandemic planning committees, supported by an actual budget, to combine strategic planning, operations continuity procedures, human resources, and health services to adopt event-specific measures in anticipation of an influenza pandemic
  • Incorporating their entire global supply chain-including critical suppliers, customers, and other key stakeholders- into the organization's threat and vulnerability profile
  • Identifying critical products and services and preparing to protect those, even at the expense of other important elements of a business model
  • Developing a plan that considers response, recovery, restoration, and resumption in the event of the pandemic
  • Identifying critical supplies and procuring them now for their stockpiles
  • Focusing deeply on human resources issues, reviewing existing policies and procedures and, in most cases, updating them in an attempt to provide reasonable accommodations for this special circumstance
  • Including a communications strategy as a critical element in the pandemic preparedness plan
  • Estimating and planning for post-pandemic changes, including shifts in demand patterns, in the availability and morale of staff, and in infrastructure, both locally and to vendors

The list of best practices provides an outline of steps to take, but leaves unaddressed some underlying issues that will color how societies react in a pandemic. These issues will be addressed in Part 2 of this article.

This multi-part article is based on a report, Corporate Pandemic Preparedness: Current Challenges to and Best Practices for Building a More Resilient Enterprise, which was prepared by Marsh and The Albright Group. To download the report, complete the registration page at http://global.marsh.com/risk/pandemic/pandemic2/index.php 

Melissa Hersh is a vice president in Marsh's Supply Chain Risk Management Practice. She has served with the United Nations and the World Health Organization, focusing on areas such as global health security and the intersection of trade, geopolitics, arms, and export controls, as well as customs requirements for ensuring safety and security throughout the supply chain.