COVID-19: Operational update

17 Apr COVID-19: Operational update

Overview 

The restrictions put in place in countries across the world to deal with the Covid-19 outbreak, present operational challenges to those engaged in intelligence-gathering for advisory firms. Maintaining integrity and respecting the duty of care we all have to suppliers and associates should be the first priority; best practice should always be pursued; alternative solutions should also be developed; and, client expectations managed accordingly. 

At Causeway Partners, we believe that some alternative solutions may even represent an opportunity for increased value and commercial advantage, longer term.

The challenge

The restrictions that have been put in place to manage the Covid-19 outbreak around the world have two main adverse effects on the ability to gather intelligence ‘on the ground’ in certain jurisdictions:

1. Courts, property and corporate registries are likely to be closed in many countries, and physical searches should likely not be undertaken even if they are possible.
2. Many sensitive information-gathering exercises in high risk countries need to take place person-to-person. This is either not possible or should be considered undesirable from a duty of care perspective.

It is very likely that attempts to continue “business as usual” in these regards would put colleagues and associates under increased physical and/or legal risks. In our view, they are also more likely to face integrity risks: not least demands for facilitation payments or other operational bribes. Apart from the immediate risk and a need to maintain a duty of care, this sets an unacceptable precedent for when “business as usual” resumes. 

We should also expect that these risks will exist for some time after social distancing or lockdown protocols are lifted, as businesses and institutions will take time to return to normal resourcing levels and operations.

Best practice and adapted solutions

Best practice for engaging with suppliers and associates in normal times should still be applied at the moment. At Causeway Partners, we recommend a 5-step TRACE process which optimises your interactions with suppliers at all times: 

Time – ensure you have enough time for multiple interactions with suppliers and your ultimate client, to ensure that objectives and expectations are aligned. At the moment, it is likely that you will need more time than normal to ensure optimal results.

Risk assess – make a short, sharp risk assessment of your project and the tasks a supplier will need to undertake, a routine part of your work. This should cover the likelihood of operational risks occurring across the scope of work, as well as any other threats to the overall objectives that the client has. Think about putting more structure around this step than normal; undertake a pre-emptive capability assessment across your supplier base; consider using it as a tool for managing client expectations. 

Adapt – no two projects are the same; some adaptation to processes or resourcing requirements is always required. Consider more radical adaptations, including alternative or hybrid approaches (see below).

Clarity – ensure that agreed tasks are communicated as clearly as possible and that communication lines are as open as possible between you and your supplier. If you think that operational risks are heightened on projects at the moment, put thought into how you can increase clarity with your suppliers (closer collaboration, different communication techniques, and paying attention to the softer aspects of relationship management are all useful levers, for example).

Expectations – Badly managed or unreasonable expectations – with your clients as well as your suppliers – increase the likelihood of suboptimal outcomes (most often, amplified by pressures on cost and timing). It is our collective responsibility to be clear and honest with each other throughout any task. This has not changed but it has become more important; don’t stop thinking about it and how you can ensure alignment across all parties involved in any task. 

We seek to apply this process in our own work, and encourage our clients to do the same. 

Adapting to the reality

The current situation also creates an opportunity to explore adaptations to how this sort of work has been done traditionally. This opportunity should be welcomed and, we believe, may end up helping the adoption of working methods which are more proportionate and better suited to some clients’ needs. 

Examples that we have seen in the last four weeks that we think work well and are worth exploring include:

• Expert networks – build your own or work with your suppliers to identify and engage experts more directly. With appropriate agreements in place this can deliver significant value.
• Risk-base your work – for example, where intelligence-gathering capability is limited, consider working with sector and country analysts to inform a wider reputational risk assessment of your subjects. Done properly this approach can be integrated into other risk assessment processes that your client is likely undertaking, unlike more traditional reputational due diligence.
• Adapt your research scope – securing greater resources from a client for open source research means that you can take a different approach to assessing risk factors: comparative analysis with market peers; deeper research into the connectivity of subjects; ask clients to seek greater disclosure to open up more avenues for research-based enquiries. 
• Make a market – think about how you can put mechanisms in place for deeper, more effective “market-making” amongst suppliers. You should be looking to tap institutional memories and knowledge bases, and perhaps to combine insights across a broader supplier base than is usual.

These adaptations – on their own or combined as appropriate – can help clients to think differently about how our work can be proportionate, valuable and more resilient. We think that clients who embrace opportunities for change like this are likely to be best-positioned to capture greater opportunities as markets return.

About Causeway Partners

Causeway Partners was established in 2019 to provide value-added services, resources and solutions to advisory firms.
For any enquiries please contact enquiries@causewaypartners.co.uk