Happy New Year! Now that 2012 has arrived, business owners and key managers should be looking ahead with an eye toward weathering what looks to be another tough one. Along with the general consensus that the economy will continue to be sluggish, you have the added responsibility to protect the enterprise in the face of the unknown. And these days, there seem to be a bevy of possible unknowns that could wreak havoc on your well-laid plans.
In business, as in life, planning is everything. As you look forward to 2012 and make plans for sales, growth and strategic initiatives, there’s a key area that must not be overlooked: Business Continuity Planning. Many people have a sense that continuity planning– commonly called disaster planning– is primarily concerned with natural disasters: fires, floods, tornados, etc. This misnomer has led to a common misconception that a plan is unlikely to be needed, making the continuity plan the most often overlooked part of running a successful organization.
That’s why I feel that “business continuity planning” is a much better description of both what it is and why it’s important. It means that you’re preparing for anything that might interrupt the normal flow of business and planning to enable the operation to continue in spite of what happens. In today’s environment, this might be having the phone system go out, or having the server that runs the web site crash, or having an employee say the wrong thing on Twitter that causes a firestorm of bad press and ill tempers, or even having a key employee arrested.
Just thinking about it for a few moments, there are several stories from the past year that come to mind, in each case continuity planning could have made a huge difference in the outcome. Here are a couple examples:
- After the earthquake in Japan, a large auto company had to stop producing black trucks because their only supplier of black paint was located in Japan.
- FedEx had to respond to a public relations nightmare after one of their employees was caught on tape throwing a package over a 6-foot fence. The package contained a brand new computer monitor. Within a few days, the video had been seen nearly 8 million times. (You can watch the video on YouTube.)
Why is planning so important? Statistics show that nearly 85% of all companies that suffer some form of interruption fail within two years. Having a plan for what might happen and, more importantly, being able to immediately respond to any threat, can be the difference between success and failure. In most cases, you will know what needs to be done, but planning for it removes the delay in your response, ensures clear communication among key personnel, and enables the business to reach a new normal as quickly as possible.
- If your business is internet based, what would you do without phone lines or access to the internet? What would you do if your web site crashed because your hosting provider lost power… for three days?
- If your business is heavily reliant on one key supplier, how would you cope if they went out of business… tomorrow?
- If you run a service business that relies on a large workforce, how would you cope with an outbreak of avian flu that kept 60% of them home for week?
Considering and answering these types of questions is the foundational tool for building a workable business continuity plan. Knowing what questions to ask, where to find the answers, and how to communicate those answers to the right people is what makes the plan successful. One of the best business continuity and disaster planning tools I’ve seen is Survivor or Statistic. This software as a service application will lead you, step by step, through the questions and help you develop the answers that will work for your business. It then stores the answers in an easily accessible manner and gives you the necessary tools to build an emergency response plan.
Listen, you’re the boss. People expect you to have their backs, regardless of what comes your way. Planning to survive is the best way to improve your chances.
Great post. I had no idea business continuity planning was so important. I am not much of a planner. I should be but I’m not. I would like to think if I owned a business I would be better at planning. Thanks for the great information. I wasn’t really sure what business continuity planning was until I came across this post. Very helpful!