Strategy April 7, 2020

What is a business continuity plan?

What is a business continuity plan

We’ve all heard the saying ‘fail to plan, plan to fail’. While it rings true in most aspects of life, it’s perhaps most pertinent in business. 

As we know only too well in our current climate, life is unpredictable. Your business might be growing rapidly, your profit margins might look amazing, everything could be rosey - but it can all change in an instant. So, how do you prepare for the unexpected? How can you give your business the best chance of survival in the most tumultuous of times?

While there’s no way of controlling external events, there is a way of mitigating disaster, and ensuring your business is resilient: business continuity planning. A business continuity plan is effectively the difference between steering a rowing boat or a ship; a rowing boat is fine as long as the seas are calm, but as soon as the water gets choppy, you’ll wish you had something sturdier. 

Here’s why you need a business continuity plan, and how to create one…

Why you can’t afford to ignore business continuity planning

Business continuity planning is something which every business needs. Irrespective of size or industry, every business needs a tailored plan in order to navigate difficult times and help them bounce back quickly. If you lose 50% of your customer base or 50% of your staff, will you even be able to recover?

"The challenge for all businesses is to remain competitive."

Rain or shine, the challenge for all businesses is to remain competitive - no matter what’s happening in the world. In order to survive, businesses need to retain customers, maintain their output, and, ideally, continue to grow their customer base. 

In 2001, The Business Continuity Institute defined business continuity management as:

‘A holistic management process that identifies potential impacts that threaten an organisation and provides a framework for building resilience with the capability for an effective response that safeguards the interests of its key stakeholders, reputation, brand and value-creating activities.’

So how do you do it?

Identify the scope of the plan

What are you preparing for? While there are events that we may not even be able to imagine, there are plenty which we can. Try to be specific about the scope of your plan. What types of events could create problems for your business? 

In order to answer this, you need to fully understand all of the operations within your business. What types of interactions take place within your organisation? What about the interactions between your business and your customers? What about the complex network of suppliers?

The best way to ensure you have all the facts is to speak to individuals across your business, in all the various functions. Once you’ve examined the workings of your business, you can assess the risks. An effective way of doing this is by asking the right questions. 

‘What if…’ questions are a good place to start. For example, ‘what if our telephones went down?’ Or ‘what if our documents were destroyed in a fire?’ ‘What if we had staff casualties?’ ‘What if there was a terror attack?’

Each of these questions raises two further questions: how likely is it to happen, and what effect will it have on your business? Answering these questions will help you determine the scope of your plan: what you need to include and how to prioritise the threats.

Identify key business areas & critical functions

Every business is different, and that’s why you need a specific, tailored plan. If you’re a tech or IT company and your IT goes down for a week, what are the implications? If your business has a huge telesales department and your telephone networks fail, what will you do? How much money will you lose, and how long can you survive?

Identifying your key business areas and functions will allow you to see exactly what the worst possible incidents could be for your company. Once you’ve identified your critical functions and key areas, you can create the best possible protection for them. What has the potential to bring your operations to a grinding halt? Which areas of your business are paramount to survival? What could threaten them?

Identify key business areas and critical functions

Thinking of the worst-case scenario is an effective technique for creating a robust business contingency plan. If you have a plan that can help you deal with the worst possible situation for your business, it will help you navigate lower impact events much more easily. 

And what about your people? Who is indispensable? This isn’t about ego, seniority or profile. While everyone’s role is important, in a crisis, some roles may be more vital than others in helping the business survive - and it may not be the ones you think. Determining which functions and individuals need to be up and running as a priority, is a crucial part of creating an effective continuity plan. 

Identify dependencies between various business areas and functions

Preparing for the very worst will also help you identify potential chains of events. Although we delineate departments and functions within businesses, as soon as something goes wrong, we become acutely aware of how interlinked they are. Ultimately, no business function is an island.

What may look like an incident that affects one aspect of your business, could in fact be something that causes a catastrophic series of events. 

To use a close to the bone example: a pandemic = market uncertainty, lockdown and self-isolation = breakdown of supply chain, fewer staff = unable to supply your customers = loss of customers = financial loss and bad publicity = damaged reputation = an exploitable situation for your competitors. 

In this scenario, the pain point is the breakdown or loss of the supply chain and reduction of staff. But of course, it has a knock-on effect on the entire operation.

An effective business continuity plan should clearly set out how you would deal with each part of the domino effect - and how you can anticipate rather than react. What alternatives do you have for your supply chain? How quickly can these alternatives be set up? How will you share the workload if you suddenly lose 30% of your staff? What are the fundamental areas that need to be covered? Are your employees cross-trained and able to work across functions? 

It’s easy to see from the chain of events how addressing these issues (which come after the initial shock of the event), is critical for the survival of a business.

Determine acceptable downtime for each critical function

A big part of continuity planning is accepting that you will take a hit. When an unforeseen event or incident takes place, some functions within your business might be temporarily halted. 

"Identify who needs to do what, where, and when in the immediate aftermath of an incident."

Determining an acceptable amount of downtime for each of your critical functions will help you ascertain which ones are priorities, and how to get them back up and running as quickly as possible. It will also help you identify who needs to do what, where, and when in the immediate aftermath of an incident.

Creating a time/function matrix is a simple way to illustrate how quickly different functions need to be up and running after an event. This matrix should also include what each person needs to do and when. 

For example, if your business cannot function at all without IT, it’s likely you would set the acceptable downtime for IT at hours, rather than days. Conversely, you might decide your acceptable downtime for payroll or HR is weeks or even months. In the meantime, there’s little point in the marketing team being on site until your IT problem is fixed. 

Again, the downtime for critical functions will depend on the particulars of your business and industry.

Create a plan to maintain operations

Ultimately, the point of a business continuity plan is to maintain operations as best as possible. Your business is unlikely to look structurally identical or function in the same way as it was pre-crisis, but your plan should facilitate its maintenance and survival throughout the turbulence.

One of the most important things to remember is that your plan needs to be accessible to everyone within the business. Make your language unambiguous and non-technical to ensure everyone can understand it. Here are some key elements to consider when creating your plan:

  • Write clear, detailed instructions about what needs to happen in the first hour after an incident. This time is crucial if you want to mitigate disaster as much as possible. Who needs to do what? Who takes responsibility for each action? 
  • Apart from stipulating who needs to do what, ensure you have deputies for each key role as a back-up.
  • An easy way for people to ensure they’ve done everything they need to do is by including an easy-to-follow detailed checklist. 
  • Keep instructions clear. If people have to trawl through pages of instructions in an emergency, valuable time will be lost. 
  • Plan for the very worst-case scenarios. You can’t plan for every eventuality so it makes sense to prepare for the worst. If your plan details how to handle a full blown crisis, it will help you navigate smaller incidents with relative ease.

A business continuity plan is as crucial as a five year business plan. In an increasingly unpredictable and globally connected world, you should always expect the unexpected and prepare for hard times, even - and especially - in the midst of success. When the unimaginable happens, having a continuity plan that was carefully and strategically created to cater to your business’ needs will be a life saver.

Coronavirus Resource Centre

Images via AdobeStock (Brian Jackson), Unsplash

 

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