2020 has been the poster child for disruption. From global pandemic to localized rioting, business owners and managers have faced situations they’ve most likely never seen before. These events and the fallout from them have magnified the importance of a solid business continuity plan.
Let’s jump into the exercise.
Operations pivot on people and on the skills they bring to the workplace. To mitigate people risk in the context of business continuity –
- Identify any processes that are not thoroughly documented. If a current employee becomes unavailable, it’s imperative that the processes surrounding their job are accurately and thoroughly recorded. Document not just what they do, but why it is done, when it is done (including deadlines) and to whom the finished work product is distributed. During this week’s thirty-minute exercise, you won’t be able to complete the documentation itself, but you want a complete list of all undocumented or under-documented processes in the organization.
- Identify options for completing critical work if a large percentage of your workforce is unavailable (as we saw with COVID-19).
- Can work be completed by other personnel?
- Are those personnel cross-trained and do they have access to the process documentation from the previous step?
- Can you access contractors, temp workers, or consultants to complete critical work?
- If so, who are those people and how quickly can you mobilize them?
- If your workforce if formally organized (unionized), work proactively before a work stoppage to engineer an agreement that allows the company and the unionized workers to benefit from the company’s success.
- Make training an ongoing part of the company’s employee development process so that all workers are continually honing their skills and building a broader base of expertise.
Clearly, some businesses, like a hotel, are location dependent and remote work is not an option, but for many other businesses, work can be portable. Depending on the nature of the event that triggers use of the business continuity plan, there are multiple options.
- If onsite work is required and the primary location is destroyed or inaccessible, a “hot site” can be activated. Typically, hot sites are abbreviated replicas of a primary location complete with equipment and tech. In the event of a disaster, the hot site is activated and workers report to the new site and begin work. Cloud-based systems are accessed from the hot site location and business continues as usual. Obviously an expensive solution, but sometimes necessary.
- If your business is multi-location, consider moving operations to what would normally be a branch office.
- If the need will be longer-term (maybe due to something like a fire or flood), consider a coworking space for temporarily housing your operations.
- In a world of ubiquitous broadband internet service, cloud-based systems and video conferencing, working from home is a more-than-viable option. If you don’t have a work from home policy, work from home procedures or tech that supports work from home, add the development of those things to your to-do list during this week’s exercise. Once you have those things in place, schedule some practice work-from-home days to make sure everything functions as it should.
There are multiple critical-path resources in a business. The absence of any of them can diminish or destroy the organization’s value creation activity. Effective business continuity planning puts those resources back in play as soon as possible – ideally without any interruption to value creation activities.
- If your organization is dependent on specialty vehicles or other large equipment for which rentals are not available (e.g. tow trucks), craft a plan with a competitor for a shared business continuity plan. You’ll be each other’s back up and you’ll do a pre-negotiated revenue share.
- If your organization uses specialty tools and those tools become damaged or destroyed, identify multiple sources for replacement tools.
- Identify multiple vendors for raw materials. Craft agreements with primary, secondary, and even, tertiary vendors for essential items. Nurture the relationships so that each one represents a win-win for both parties. If a primary vendor fails, make it easy for the other vendors to respond quickly. Always track vendor performance in pricing, quality, and service.
Even a brief business disruption can have an oversized impact on sales revenue. Unchecked discretionary spending can quickly deplete cash reserves. Activating the business continuity plan might have its own built in costs (rental charges, overtime), so acting quickly is a necessity.
- Build a cash reserve much like you’d do for your household. Three to six months of fixed costs, plus all “automatic” business continuity expenses is a good start.
- Quickly assess the severity (and anticipated length) of the disruption. If necessary, quickly stop all discretionary spending.
Create a communication procedure as part of the business continuity plan. Where do team members go to get the most up-to-date and best information. Who do they contact if they have questions?
One Final Tool
For the final part of this week’s exercise, I’d encourage you to conduct a “pre-mortem”. We know all about post-mortems from every episodes of CSI (or one its spinoffs) that we’ve watched. When someone dies, the coroner examines them closely to determine the cause of death. A pre-mortem is similar, except, for purposes of this exercise, we propel ourselves into the future and pretend that our business continuity plan has failed miserably. Then we ask, “What did we miss?”, “What fell through the cracks?”, “What procedure broke down?”, “Who was unprepared and why?”, “How did we fail the customer?” You get the idea. It’s looking backward at the event from an imagined failed future state. Anything that helps us create another perspective of our response to the disruption is beneficial. Take the results of the pre-mortem and work them back into business continuity plan.
After you have the plan in place, review it with your team and put a reminder on your calendar to review it every six month to make sure everything still makes sense.