Crisis Planning
August 2003
Power cuts in the USA - is preparing for a crisis worth the effort?
Noah built the ark before the rains came and obviously for good reason – perhaps this is the first recorded case of crisis management. True, he did have divine intervention which let him know that disaster was imminent, however, in today’s uncertain world no one knows what is around the corner. Despite the impact of 9/11, it is still reckoned that up to 90% of SME’s (Small Medium Enterprises) still have no form of business continuity plan.
Business Continuity
Having just retuned from the East coast of the US, ironically visiting a client’s disaster recovery site, just before power outages wiped out electricity to a significant part of the country, it demonstrates that terrorism is not the only issue on the agenda that can bring a company to its knees. With reports that in the UK we could face supply restrictions this winter, now is the time more then ever for companies to start taking 'crisis management' and 'business continuity' more seriously.
The process need not be complicated nor prohibitively expensive. In the words of the Business Continuity Institute, the goal is to “anticipate incidents which will affect critical functions and activities of the organisation and ensure response to any such incident in a planned and rehearsed manner”. The areas that need addressing can be broken down into 3 core areas of systems/data, people and facilities. The business continuity process can then be divided into 5 main stages:
- Understand your business using risk assessments and a business impact analysis – identifying the critical business elements.
- Look at improving your risk profile by honing your operations, look at financial measures (insurance) and other areas of due diligence.
- Develop continuity strategies based on the impact analysis and cost benefits of the identified options.
- Develop a written plan that covers all eventualities and all areas. Don’t forget looking after your customers / staff and address both internal and external communications aspects.
- Educate and raise awareness within the organisation and stakeholders, including employees, customers, suppliers and shareholders of the business continuity process.
- Develop a response team, test the plans and keep the process alive!
By doing the above your organisation could gain form a number of benefits including:
- Protecting your brand and reputation.
- Your key executives and staff will be trained in how to respond in the most effectively way.
- You may reduce litigation when things go wrong. It is well documented that some people litigate not because they want financial compensation, but because the faceless corporation did not respond in a ‘caring and compassionate’ manner – remember in a crisis ‘people before profits’.
- You could reduce your insurance premiums.
- You will have the marketing edge over your competitors.
All in all it just makes good business sense to protect your business by adopting a ‘holistic’ approach to business continuity and crisis management. Even if you never need to invoke your plan, you will still have gained a number of advantages. Following a recent study by Marsh Consulting, investing in contingency planning makes good financial sense. The study showed that for every one pound invested in crisis preparedness returns seven pounds in averted losses.
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