SARS a wake-up call for business? While public health or bio-terrorism threat management is beyond the scope of most business leaders, this should not be an excuse for inactivity. A crisis management consultant argues that taking proactive steps can better prepare companies for survival.

• Author: Connolly, James M.
• Position: International business

Given the current environment, it's reasonable that we all probably have some degree of concern about threats to our personal health and safety. And, while terrorist threats (including weapons of mass destruction, or WMD), random violence (Washington, D.C., and West Virginia snipers) and contagious diseases (Severe Acute Respiratory Syndrome, or SARS) concern most people, the degree of concern and effect on behavior is largely a function of how they perceive risk.

Individuals usually underestimate known risks, such as vehicle accidents, but often overestimate individual risk when it involves unknown types--the "devils we don't know." The D.C.-area sniper incident last year was a largely unknown and unfamiliar risk. Once the sniper's pattern began to develop, decisions made by individuals and organizations were potentially an overreaction, although emotionally understandable.

Schools were closed and events were moved or cancelled. Some parents kept their children home from school--protective actions perceived to be a safer alternative. Yet, an objective analysis of the sniper threat might show that children were more likely to die in a home fire or vehicle accident or suffer some form of violence in their neighborhood, when compared to the very low individual risk of being the sniper's target.

Lesson for Business: Planning Gaps

What is the lesson for business? Faced with an unknown risk that they do not understand, employees will likely focus on their personal and family security first, be overly conservative and likely take time away from work --which can hurt productivity.

Why should management take a new perspective to current risks? While about 50-80 percent of companies have considered the risks to their business and have developed a variety of contingency plans, many of those plans are based on the world that existed prior to 9/11 or the world as we hope it will be following a successful war on terrorism.

Often, the plans underestimate the likelihood of a catastrophic event, citing it "likely, but it won't happen to our company." Most of the plans are focused on recovering processes and facilities, with less attention to protecting or recovering the most important asset--people.

Even those companies that recognize the exposure to their employees often plan for a specific contingency, but perhaps not the contingency that is going to cause the most severe consequences.

While contingency-specific plans (hurricane/earthquake preparedness)...