Business interruptions can take many forms. Recent examples in the news have included natural disasters such as the earthquake and ensuing tsunami at Fukushima, Japan; port congestion due to a labor dispute on the U.S. West Coast; a health crisis requiring segments of a population to be quarantined, and social unrest and wars around the world. My own experience includes a number of challenging situations:
- The time following 9/11, when I had to chase down a guy in a pub in the Czech Republic to get him to open his dock so my truck could pick up our parts.
- The time when the volcano eruption in Iceland shut down all air traffic over the entire European continent.
- The Loma Prieta (World Series) earthquake in 1989, when all the freeways closed.
Each of the situations that I personally encountered represents either a failure that I learned from or a shining example of how great contingency planning and execution can save the day. The moral of each story is that disaster planning is absolutely essential to business continuity.
Business is always unpredictable, as are markets. Unexpected events that impact business are increasing in number as well as severity. In an ideal world, when an incident takes place the response is a planned, well thought out, focused and rehearsed plan executed by a team that was specifically chosen to manage the crisis. Unfortunately, that’s rarely the way that things work out, as not every contingency can be predicted or planned for. This is why business continuity planning must include a huge nod to — and acceptance of — resiliency.
Resiliency is the capacity to recover quickly from difficulties and to spring back into shape. Regardless of the type of interruption that is encountered, business continuity demands that managers protect the brand and company by resuming “normal” operations as quickly as possible, with a minimum amount of disruption to the company.
When a business continuity plan is implemented, vital resources such as cash, people and facilities are diverted to ensure the long term viability of operations. Having these discussions prior to a developing or ongoing disaster — before the emotion and confusion of a crisis — is much easier then doing so when a business is in the thick of protecting itself. Many managers have no experience of operating in this type of environment – their exposure comes as an exercise of survival once disaster strikes. Others have learned from repeated incidents over time.
Business continuity literally covers every aspect of a company. The initial steps for building a business continuity process is to do a self-assessment that starts with examining the company’s tolerance for risk through its People, Processes, and Tools. The questions that should be asked include:
- What defines a crisis that would trigger the formation of a response team?
- Who would be on this team?
- How does the team communicate and to whom do they report the details of their activities?
- If a disaster occurred would the company be resilient and continue operations, or would it limit its losses via insurance and/or just pick up and move?
- Finally, are the systems agile and scalable to support changes in operations, or would a disruption put the business back in manual mode?
With the answers to these questions, a basic framework can be created for managing under crisis.
Disaster Preparedness
There is nothing more frustrating than having to quickly find contact information for team members and suppliers during a crisis. A contact document must be created at the outset a business continuity process, and updated regularly. Call logs should be kept, with meeting minutes and status checks sent after all meetings, so that information is understood and shared by all participants. There are no secrets – everyone would be in the crisis together, so in addition to resiliency, transparency is needed. Further activities are updated and distributed at least once per day.
Two types of communication are provided as a business continuity plan is administered:
- Technical experts and practitioners managing the process
- Leadership updates
Leadership
All too often, companies do not have the time or resources to foresee the impact that a disruption might have on their business. They wait until an event or disturbance occurs, then reactively manage the situation. This lack of preparation can turn what could have been a small disruption into a full-fledged crisis.
A business might have the processes and tools to manage through a crisis, but if the leadership team is not actively engaged, or is constantly second-guessing the frontline managers’ ability to execute the plan, all can be quickly lost.
The fundamental role of a business leader is to support their team by providing time, money and manpower, but beyond that, the leader’s job is also to provide the cover needed for the team to remedy the crisis. Specifically, this means:
- Distributing accurate information as quickly as possible
- Responding to incorrect information in a timely manner
- Triggering appropriate processes to keep employees, the public and shareholders informed on an ongoing basis
Business continuity is a company wide imperative that starts with firm and visionary leadership from the top.It is important to note that a leader must have previously established trust within the organization in order to make and implement these tough decisions in a way that ensures the company’s survival.