Why you need to plan now!
Companies never expect to have a disaster play out right before their very eyes. Certainly, BP never expected the Deepwater Horizon oil spill, which unleashed 4.9 million barrels into the waters and onto the beaches of the Gulf of Mexico. Barilla Pasta never expected its CEO’s remarks on an Italian radio show about homosexuals to cause sales to plummet half a world away in the United States, and it probably never dawned on TV chef Paula Deen that some racial slurs uttered years ago would shake her multi-million empire to its very core.
While these companies or individuals may not have been able to see the specific crisis coming their way, they could have been prepared to respond to it far more effectively if they had performed some due diligence, considered the possibilities, and had a crisis plan in place to address the situation proactively.
As part of your plan, you should –
- Identify every potential crisis that could affect you, no matter how remote it may seem.
- Determine what can be done to minimize the risks of it happening in the first place, or if it were to happen, minimize the damage it could do.
- Create a business continuity plan that you can follow in times of crisis to guide you through the process.
- Test the plan at least annually and make any changes to it based on your drills, remembering to keep responses flexible since no two crises are ever alike.
A carefully crafted, comprehensive crisis plan will help you know what to do next in a crisis. Think of crisis planning in the same way you would firefighting. With a fire, you do everything in your power to keep it from breaking out in the first place. If it does break out, at least you know where the fire extinguishers are. It’s nearly impossible to fight a fire while you’re still trying to figure out how to approach it. If you try, you’ll more than likely get burned.
Here are just a few events that can interrupt your operations or even put you out of business:
- Natural disasters – These are the most well-known crises, including earthquakes, wildfires, winter storms, landslides, etc. Natural disasters can also include flooding caused by burst water pipes or a collapsed roof that couldn’t hold any more water in a storm. In one Gallup poll, 30% of businesses surveyed reported that they had been closed 24 hours or longer in the last three years because of a natural disaster.
- Theft or vandalism – Theft can be monetary, but it can also be the loss or disabling of data or intellectual property.
- Fire – Fire can be caused by a short in your building’s wiring, arson, a power line knocked down during a windstorm, or a tool or appliance left on.
- IT failure – This can include computer viruses, hacking, system failures or even a seized hard drive you never bothered to back up. According to the U.S. Bureau of Labor Statistics, 93% of businesses that suffer significant data loss go out of business within five years.
- Restricted access to your place of business – This can happen when there’s a gas leak or an on-site fatality. How will you operate your business remotely during an event that restricts access to your location?
- Loss or illness of key staff – This can include the unexpected death of the company’s founder in a car accident or a senior management team member who is incapacitated by a stroke or serious illness.
- Outbreak of disease or infection – The food industry regularly handles salmonella or e.coli outbreaks, but this can also include an employee who was diagnosed with hepatitis or the measles.
- Terrorist attack – Yes, this can happen to you. Remember the Oklahoma City bombing, or 9/11? Even if you aren’t the direct target, your business can be affected, either by collateral damage or lack of access to your facility in the aftermath.
- Supplier or customer crisis – What events could keep a supplier from providing products or supplies to you? What happens if your customer or client can’t get to your place of business to buy your products or services, or couldn’t call you because the phones were dead? And how would you handle a product recall, even a recall of a product you only sell, not manufacture?
- Disparaging media coverage – An article doesn’t have to be true to damage your business. What would you do if you were blasted in the press or a letter to the editor? Should you respond? And if so, how should you respond? And how do you handle the spread of negative or malicious information in the age of social media and 24-hour news cycles?
A word to small businesses and startups…
You may be reading this and think to yourself, “But I’m just a one-person operation working out of my house or have just a handful of employees who work part-time for me. Why would I need to do all this work?”
The simple answer is, because you’ve put a lot of effort, money, time and resources into creating and building your business. All those months, even years of work, can be swept away in a single, unexpected moment. Creating a crisis plan, even a simple one, will guide you through the tough times so that you can emerge from a crisis, no matter how large or small, still intact.
You don’t have to go crazy in creating a plan or even do a drill. But you do want to know where those fire extinguishers are, from having duplicate copies of insurance, incorporation documents and account numbers stored safely away from your place of business to knowing how to contact your employees in a crisis to find out if they are safe, and let them know when, and if, they can return to work.
What would be the point of starting a business if you don’t plan to protect it, and more important, keep it going come hell or high water?
Table of Contents
2. Why You Need to Plan Now!
3. The Four Stages of a Crisis
4. Assessing Impacts
5. Assessing Probabilities
6. Putting It All Together
7. Plotting the Results
8. Rinse & Repeat
9. Developing an Effective Plan
10. Plan Components
11. Crisis Response Modules
12. Decision Trees
13. Resuming Operations
15. Templates & Resources