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Adapting to the emerging ‘current normal’

The Covid-19 pandemic is not a single, significant event. It is not an earthquake or a major fire: it is an evolving situation. Nevertheless, the impact of the crisis on the mid-tier networks and associations is clearly following the pattern of a more ‘traditional’ disaster, and different alliances appear to be reacting in different ways, comments James Mendelssohn, director at Global Alliance Advisory Services (GAAS)

Any business continuity plan will involve three distinct phases. The terminology may vary, but those three phases cover, initially, the emergency response; this is followed by the crisis management stage; and then the process moves on to business recovery and future-proofing.

It is clear that most networks and associations have handled the emergency response phase extremely well, in terms of moving to remote working, cancelling conferences and meetings, and delaying quality control and recruitment trips.

But as they move to the crisis management phase, different priorities are beginning to emerge. At the outset of the crisis, many groups went public about the need to work with and support all their member firms, believing that their alliance would be the first port of call for any member firm struggling in the current crisis. Today, alliances are taking a more selective view.

Alliott Group COO Giles Brake says: “Managing member firm relationships is critical … but we face the challenge of not wanting to ask too much of anyone’s time when clients’ needs have to be the priority.” He goes on: “How we can practically help member firms presents a challenge, as each member firm faces a unique situation.”

A similar message comes from Nexia CEO Kevin Arnold: “We recognise the huge differences in the needs of our member firms, and we are working towards providing bespoke support.”

This approach reflects a growing feeling that an alliance’s role in providing information on technical and country-specific issues – for example, government support measures for businesses – is limited. That is better accessed by the local member firm in their own jurisdiction.

Greater value can be provided by facilitating discussion between specific and often local groups of, say, managing partners, who are all facing similar issues and benefit from sharing their experiences with others in nearby jurisdictions.

Terry Snyder, president and CEO at Allinial Global, has elaborated on the concept, saying: “We have organised our membership into groups of eight to 10 firms and they speak each week, with a facilitator, to discuss their problems, solutions, best practice and clear thinking during this crisis.”

VIRTUAL ENVIRONMENTS

Those alliances with a more devolved structure are in a fortunate position. Prime Global CEO Steve Heathcote explains that his team were already working in a virtual environment, spread around the globe, before Covid-19 struck. They too have put in place regionalised virtual discussion groups for managing partners.

Heathcote says: “Our firms have a critical leadership role to play, and we need to maintain their positivity. We are presenting a positive message to our firms under the theme of Leading the Recovery.”

While understandably focusing on member firms’ needs, it is all too easy for alliances to overlook the legal implications of the new business models that they are operating. As Jane Howard, commercial litigation consultant at Reed Smith LLP, warns: “Disruption is likely to be far-reaching.”

Cancelled contracts are clearly an issue, with some alliances relying on force majeure. But Howard also cautions that where a group relies on such a clause, “that might also mean that a business-interruption insurance policy does not respond.”

With staff working from home – probably for a prolonged period – alliances need to address issues of confidentiality, data protection and the care of firm property. And as employers, alliances also have a duty of care to provide support to their staff members, including ensuring that they have a safe home working environment, as well as systems in place for supervising the quality of work and monitoring performance.

Returning to the three phases of the business continuity plan, experience shows that levels of performance diminish at each stage. Human nature is such that leaders cope in a crisis. The risk is that too much time is spent firefighting, or accepting the business model adopted to cope with the initial crisis, and not enough time is then spent reviewing and establishing the best ‘new normal’.

Most groups are doing well in the crisis management stage. The successful ones will be those who can now plan, evolve and adapt for the months ahead.

 

 

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