Maximum Foreseeable Exposure...how bad can it get?

An component of any business continuity analysis is considering the disruption situation (such as COVID-19) from 3 perspectives... optimistic, expected and pessimistic. Maximum foreseeable exposure is a term used when contemplating the scenario from a pessimistic perspective.

Considering the current COVID-19 situation, in my many years experience dealing with large scale catastrophic disruption events in Asia, of the three perspectives, maximum foreseeable exposure should be the basis of most business planning. 

Using the extensive 2011 Thailand flooding as an example, I found many organisations erred on the side of optimism. Known as the Pollyanna Principle, positive bias towards a disruption event impacts planning, budgeting, resourcing and being mentally ready. I observed that organisations that were pessimistic about the event and expected it to impact harder and/or last longer and planned accordingly were better prepared that those that were more optimistic.

In the case of COVID-19, planning for 12 months of disruption but actually experiencing 6 months is likely going to lead to a better result than planning for 6 months but experiencing 12 months of disruption.

If you haven't already, take some time to brainstorm maximum foreseeable exposure with management, work colleagues and industry associates and develop likely worst case scenarios. Avoid pressure to be optimistic and make a list of all the negative impacts (including economic, market, compliance, resources, etc), then start developing realistic plans to deal with each.

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