The pitch from business continuity planning experts is simple: Companies need to prepare so they can minimize the amount of lost business in the event of an interruption – whether it’s from a prolonged power outage, a natural disaster or some other unforeseen problem.
But how often do such plans really make a difference?
William K. Austin, of Austin & Stanovich Risk Managers in Providence, points to two recent examples: Y2K and the Sept. 11 attacks.
In the former case, many feared chaos would ensue if, on Jan. 1, 2000, computers that couldn’t recognize more than a six-digit date thought it actually was Jan. 1, 1900, and they crashed.
“Organizations worked diligently on both hardware and software issues so the world would enter the 21st century with 100-percent data integrity and all systems go,” Austin said. And indeed, the feared crisis never occurred.
And after 9/11, Austin noted, while banks and other companies hadn’t planned for a terrorist attack, they did have emergency plans that enabled them to get back to business quickly.
“The various stock exchanges closed for several days following 9/11, and on the first Monday post-event all stock exchanges and financial services were 100-percent operational in not only the greater New York City area but nationwide,” Austin said. “Business continuity planning worked.”
Lori Adamo, president of Code Red Business Continuity Services in Cranston, says all organizations should have a business continuity plan.
“A business must be able to ramp back up in order to recover, versus not having the capability to operate normally,” she said.
“Fifty percent of businesses that do not have a plan never open their doors again after a major disruption,” she added; “44 percent of businesses that suffer from a fire close their doors and never reopen; 33 percent that do open fail to survive within a two-year period. Good continuity management can make the difference and, in the long run, make businesses more profitable.”
Adamo recommends, at the very least, that organizations:
* Understand what hazards or threats they are most vulnerable to, then develop a plan to lessen the impact of the threats.
* Have a complete and effective emergency response plan. The plan should encompass communications, evacuation, shelter and vital records retention, among others.
* Test the plan and make sure it works and meets the expectations of the company. Usually a company has a safety team responsible for this. A company must test before a real incident as they do not want to find out the plan fails during an emergency.
Thomas A. Gaitley, of Copper Harbor Consulting Inc. in Needham, Mass., recommends that companies establish an eight- to 14-person crisis management team, with alternates for each member, and representing all major functions of the organization.
The team should have multiple locations where it can meet, he said, so if communications are cut off and the primary location is inaccessible, members know where to go next.
Other tips from Gaitley include:
* Establish an emergency notification call list, or “calling tree,” of crisis management team members and other key staff, critical vendors, etc. who can be notified day or night if needed. Get cell numbers, vacation numbers, home and work e-mail addresses and other pertinent contact information, such as a spouse’s cell phone number.
* Set up a permanent conference “bridge.” Every team member should have this number and access code with them at all times, and upon becoming aware of any incident – including fire or evacuation drills – dial into the bridge. Each member should use the “host or chairperson” code rather than as a “participant,” in case the person who initiated the call is disconnected. The bridge should be tested to ensure it can handle multiple hosts.
* Reinforce media/communication guidelines to all employees.
* Set up a toll-free employee emergency/incident information line. The crisis management team should immediately and regularly post status messages on this line for all staff. It should be a one-way message, but can direct staff to ways that they can ask questions. Even if an organization doesn’t have a formal continuity plan, Gaitley said, at the very least key management should brainstorm significant functions and recovery time objectives. That way, should a disruption occur, an organization will be in a much better position than if it had to start from scratch.
“Bottom-line, in any incident or crisis, and regardless of whether or not a plan has been created, if management can talk to each other, to employees, and make decisions, then good things will follow,” Gaitley said.
“It is very similar to the way a venture capitalist views an investment opportunity,” he added. “It is always better to have a Grade A management team and a Grade B plan than the other way around.
“In a crisis, if the management team can quickly come together – either physically or virtually – assess the situation, make decisions and communicate those decisions, they will be in a much better post-incident position.”
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