First and foremost, we would like to send a special thanks to Retired Commander Dana De Coster of the US Navy SEALs for providing much of the information presented in this article.
Most credit unions, as well as other businesses and individual households, found themselves in triage mode as they worked through the new realities of mandated stay-at-home orders, social distancing, and other strategies to mitigate the spread of COVID-19. In the case of credit unions, many had to scramble to obtain laptop computers and other technology necessary to deploy their workforces remotely. Call centers rapidly deployed remote agent capabilities. Overloaded WebEx portals and conference bridge lines necessitated workarounds to ensure that communication was maintained, and that information could be shared in remote meetings.
Human resource departments must grapple with new responsibilities – the human resource aspect of most employees working remotely, the implications of the new CARES Act, and the potential for increased leave time for employees who become ill. Other areas face issues that are beyond their control. It may be difficult to perfect liens in a timely manner as some state offices may be closed, at least for part of the week. Obtaining appraisals is difficult due to social distancing. Indirect auto dealers may not be able to provide some paperwork timely due to reduced staff.
Challenges remain, but many clients report that, at least for some business units, it’s “business as normal as can be under the circumstances.” We all are learning to cope with this new normal as best we can, and we’re finding new ways to do what needs to be done. This is a testament to our ingenuity, our agility, and our resolve in ensuring that we continue to meet our members’ and employees’ needs.
This outbreak will end, whether as a result of seasonality, effective containment, herd immunity or some combination thereof. However, there will still be a new normal – and there should be. The lessons learned and measures implemented in this situation have left us in a position to be far better prepared for future business continuity events, whether it be another pandemic, the usual flu season, a storm that prevents employees from reaching their normal workplace, or a natural disaster. How well we transition to that place will depend on how we use the lessons learned from the COVID-19 response.
Perhaps the most unique characteristic of the situation in which we find ourselves is its fluidity. And when it comes to dealing with new, unexpected and fluid situations, perhaps no group is better prepared than the Navy SEALs. The SEALs use a disciplined approach to assessing the risk of an operation. But it is what they do following an operation that is of most value to credit unions in transitioning from chaos to calm. This is because we didn’t plan to embark ourselves upon this mission; we found ourselves thrust into it and had to respond in real-time.
The SEALs use a “Risk Management Learning Loop” that is of value to all organizations. The loop uses the lessons learned from an operation to inform future planning. The steps are as follows:
- Mission Planning: formal planning for the mission to be undertaken, incorporating the risk assessment and formal and informal tools described above. This key step includes determining personnel needs (numbers, roles and skills), support needs (air, ground, communications, etc.) and other important considerations.
- Actions-On: this step represents informal information gathering as the mission begins and initial actions are taken (e.g., landing at the mission site and assessing the situation on the ground).
- Hot Wash: both formal and informal, this step is an initial debrief taken at the mission’s conclusion. It addresses the questions of what worked and what didn’t, providing important feedback for future planning.
- Operational Summary Report: this is a formal feedback step based on the Hot Wash provided to higher levels of command and might be analogous to a Risk Management Committee (RMCO), executive management, or board report at a credit union.
- After-Action Reports: another formal feedback step, these reports incorporate feedback from the Operational Summary Report, and are shared with all Naval Special Warfare commands and units. The credit union analogy here might be reporting on key findings to operational and support business units.
- These steps and the feedback obtained from them loop back into future Mission Planning.
Based on where we are today, credit unions should be in the Actions-On phase. It is critical to record what is being done, how it’s being done, challenges encountered and how they’re dealt with, mistakes made (and there will be mistakes), and other information. For example, one credit union installed Plexiglas shields at its teller stations, but found that they were not measured for properly, and thus they were only effective if the teller was standing and was under six feet tall. Another credit union avoided this situation by ordering prototypes and comparing them for best use before deploying them.
Once mandated stay-at-home orders end and credit unions return to something closer to the “old” normal, it’s time for the Hot Wash. Each team should conduct a debrief, and risk managers should coordinate with business unit owners to compile the information from those debriefs into summary reports that should be provided to the RMCO, executive management and the board. From those, After-Action reports should be developed to determine additional actions to be taken to ensure preparedness for future events, steps to be taken to avoid future mistakes, and any necessary investments in technology or other mitigating tools.
Finally, all this information should feed back into future mission planning – i.e., it should be incorporated into the credit union’s Pandemic Plan and Business Continuity Plan. This will leave credit unions better prepared for future events that may disrupt their business, their members, their vendors and other entities that are part of their “supply chain,” such as government agencies.
Credit unions with robust enterprise risk management (ERM) programs may be better positioned through this period, in that they take an ongoing, systematic approach to considering, planning for and mitigating risk. However, all credit unions can use the lessons learned from this unprecedented situation to better inform future planning and decisions. If necessity is the mother of invention, invention should be the mother of preparedness.