What’s Your Contingency?
Businesses survive on their ability to … carry on doing business. What happens, though, when through no fault of their own, they’re prevented from doing this?
A business needs to sell products or services to its customers to survive. We hear stories of businesses “going under” due to lack of demand for their product/service, or because a competitor muscled in or because a bank pulled their credit lines. But what of when something else happens that is beyond their control?
By this, I mean something like inability to access premises, or a major contagion outbreak. Let’s talk about inability to access premises. Usually, businesses carry on their trade from offices, warehouses or (in some cases) a room at home in the case of a business of one. We take for granted that we’ll arrive every morning, work and leave at the end of the day. One day, however, we may arrive to find that we can’t get in because of a:
- Gas leak
- Fire (either on our premises or a neighbour’s)
- Explosion
- Accident blocking the local access road
- Inclement weather making roads impassable
These are “Acts of God” beyond our control. However, our customers, staff and other stakeholders still rely on us, so the real test is in how we respond. Businesses who can handle a crisis arising from unforeseen circumstances are generally those who will survive because of the way they handle things.
The question then becomes, “Do we have a Contingency (or Business Continuity) Plan?”
Every business needs a plan (even if it's only on one sheet of paper). The bigger or more complex the business, the more we may need to include. An important or large buyer may also ask to see our Contingency Plan as part of their due diligence. Typical contents would cover:
Every business needs a plan (even if it's only on one sheet of paper). The bigger or more complex the business, the more we may need to include. An important or large buyer may also ask to see our Contingency Plan as part of their due diligence. Typical contents would cover:
- What the business does and how;
- Where it does it (premises);
- Vital equipment and/or records;
- How premises are accessed;
- Utility supplies;
- Communications infrastructure;
- Location of emergency services (police, hospital, fire brigade);
- Staff;
- Records;
- Assembly points;
- Contingency Site (CS);
- Communications (staff, suppliers, buyers, regulators, banks, insurance, other stakeholders);
- Suppliers;
- Buyers;
- Response Team and duties.
A vital feature is to test the plan to see if it works and what needs improving. In one of the areas I worked, our Contingency Plan included flying two staff to another country, accessing systems remotely and communicating with us by satellite phone.
The objective of a Contingency Plan is to achieve two goals:
First Goal: “Recovery Mode”
- Business as Usual (BAU) premises not available; staff working from home/at the CS.
- Staff/systems/equipment/infrastructure functioning at sub- “normal” levels or one or more elements not functioning at all.
- Only “essential” functions are being performed, not necessarily at “normal” levels.
- “Damage Control” and/or “Firefighting” are the main activities at this stage.
- Communication with staff and stakeholders is key.
Ultimate Goal: “BAU Mode”
- Staff/systems/equipment/infrastructure functioning at “normal”.
Ideally, the business should have “target times” to achieve recovery and then BAU. Remember that the second goal may require us to locate, rent, refit and equip brand new premises…
Labels: Crisis Management, Customer Care, Leadership, Productivity, Strategy, Teamwork
posted by William Martin @ 11:08
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