Expect the Unexpected
Continuity in business is critical. If you’re in business for yourself – if you are the boss, then you have to be prepared; more so than mere employees.
Employees have a safety net. They know that, no matter what happens, their employer will be there to pick up the pieces, get them back on their feet, and put things back in order. They don’t worry about money; the employer will take care of that. They don’t worry about other resources – people, materials, tools, or software applications – because the employer will take care of that.
But what if YOU are the employer? How do you ensure everything will be okay? How do you give your employees, vendors, customers, and stakeholders the assurance they need to get through the hard times? How do you get things back to normal when the unexpected happens?
And when I say unexpected, I’m not just talking about natural disasters like hurricanes, floods, earthquakes, or tornadoes. Those are certainly unexpected and could prove devastating to your business. But what about something simple… like you, the business owner, is incapacitated. What if your top employee is involved in an auto accident and has to spend several days or weeks in the hospital?
What if a major vendor or supplier goes out of business? What if your business experiences a data crash or a data breach?
What is the impact on production and quality? What happens to customer satisfaction? What does this do to your business?
This is Part 1 of a two-part series on Contingency and Continuity Planning.
My Emergency Landing
If you’ve read any of my previous posts, you know that I am a private pilot. As a pilot, there are lots of things we have to know and memorize. For everything else, there is a checklist. We are taught that in the event of an emergency, we may not always have time to pull out a checklist, so we are taught acronyms that help us remember the steps to take in an emergency.
I remember flying with my certified flight instructor (CFI) when he casually said, “What’s that off to your left?” I turned my head to look at which point the CFI pulled back on the throttle essentially killing the engine.
I turned to him and said (actually, I probably screamed in a high-pitched panic), “Why did you do that?” and he answered calmly: “You’ve just lost engine power. What do you do now?”
After a moment’s hesitation, I remembered my training and the mnemonic: ABCDE
- A = Airspeed for best glide. By maintaining the airspeed recommended by the aircraft manufacturer, I could stay aloft longer and locate a safe landing site.
- B = Best Field; find a good open field or location for an emergency landing
- C = Checklist; follow the appropriate checklist for engine restart, dealing with fire, etc.
- D = Declare; switch the radio to the emergency frequency and announce your situation. D is also sometimes listed as “dialog” which includes explaining to any passengers what is happening and preparing them for the emergency landing.
- E = Execute the emergency landing
By having an emergency plan in place, I didn’t have to think. I just followed my training and completed all of the tasks in the proper order. Fortunately, I didn’t have to make the emergency landing that day, but I proved that I knew what to do and would have easily survived that emergency.
The Need for Continuity
I’m a big believer in systems. By a system, I mean a set of steps, processes, or procedures to accomplish a certain task. For instance, your company has a telecommunications system that allows you to make and receive calls, collect and store messages, retrieve those messages, etc. You don’t have to figure out how to do all of those separate things when you need to contact a customer, you use the system you have in place.
If you have a solid system in place and then work that system, the results are expected, measurable, and repeatable. That’s the beauty of systems; you put them in place, teach everyone to follow the system, and the business more-or-less takes care of itself.
One of the most important systems to consider putting into place for your business is for risk management. A system that outlines your company’s continuity planning and contingency planning. These are plans for what to do if – or when – the unexpected happens and how to ensure the business continues to operate during that event and the contingencies or alternatives you have to getting back up to full power.
Continuity plans are put in place to ensure the business continues to operate while dealing with an emergency or unexpected event. The plan makes sure your employees, customers, suppliers, vendors, and major stakeholders are taken care of while you get your company back on its feet.
There are three key metrics you want to keep in mind when putting together your continuity plan:
- Recovery Time Objective – the RTO defines the amount of time your business can be down. How much breathing room do you have (cash on hand, available credit) before you must be back up and running? The RTO is the amount of time you think it will take to recover from the disaster.
- Recovery Point – How much time has elapsed between the disaster and the last full back-up of your data? When was the last time you did a back-up of your company’s data? How much of that data is at risk if a disaster were to happen now?
- Level of Service – What services are essential for your business? What services can remain down while the essential services are recovered? You probably need your financial systems back at 100% before planning and forecasting systems.
To start putting your plan together, you should involve your leadership team and possibly one key employee from each department in your business. You need to review each department’s business processes and do a thorough risk analysis. What are the weak points in the process? Where could something potentially go wrong? What would be the impact to the business if that process was interrupted?
After you do your task analysis and impact analysis, you need to document the steps required to rectify the situation. You should plan on testing your system periodically to ensure everyone knows what to do in the event of an emergency.
In the next article, I’ll look at Contingency Planning and why it’s essential in business to have a “Plan B.”