Smaller companies often struggle, not knowing where to turn or having the budget to develop a robust business continuity plan.
Most people would expect a company that contracts with the American Red Cross on emergency preparedness programs and is headquartered in St. Louis, Mo., a region of the country prone to severe weather, to be prepared for pretty much anything.
But E.J. Brewer, president of Golamac, Inc., acknowledges that wasn’t always the case. “A couple years ago we weren’t sure that we were as ready as we could be,” he admitted. “But we did know that we wanted to walk the talk not only with the Red Cross, but with all of our clients.”
Businesses face a number of emergencies that could disrupt their operations, ranging from natural disasters such as tornadoes, hurricanes, and floods to outbreaks of illness, such as the flu. Yet the Journal of Accountancy reports that 62 percent of small U.S. businesses have not established a formal plan for responding to a natural disaster or another emergency.
The danger of not planning ahead means that many businesses don’t ever bounce back after a disaster. The Insurance Institute of Business & Home Safety estimates that 25 percent of businesses do not reopen following a major event, and others, including the U.S. House of Representatives’ Committee on Small Business, believe that figure could be even higher.
Companies often send out an all-staff email if bad weather is predicted, but would employees really know what to do in a serious emergency, be it related to nature or man-made? Does the company have a plan about how to carry on some level of business operations if a weather event disrupted power, water, office operations, or other services? And while some employees might be able to telecommute, what is the plan should they be forced to shelter in place at the office, separated from their own families during a time of duress?
Erika Voss, lead senior business continuity manager for Microsoft Corporation, believes that events can become catastrophic when the people working them do not get in front of the event and address it very quickly, calmly, and with a specific timeline on how the event will be handled. “The irony is that we are trained to communicate first, but if you don’t have a plan of what and how you are going to continue for the business, then how can you communicate in the crisis what is going to take place next?” she added.
The phrase “business continuity” is very much self-explanatory: the ability to “continue” the business regardless of the event. Developing a business continuity plan involves a deep understanding of one’s business, one’s environment, and what is critical to the leadership team. It is knowing what and where the breaking points are inside an organization and building a plan to respond, recover, and continue to do business. This includes identifying people who will be part of the response team and having the right support structure in place to recover.
Large companies such as Microsoft employ business continuity experts such as Voss to help them plan and prepare for myriad disruptive events. Smaller companies often struggle, not knowing where to turn or having the budget to develop a robust plan. Even after Hurricane Sandy devastated the New York metropolitan area in 2012, the Spring 2013 Small Business Owner Report found that less than half of New York business owners said they had a plan in place to deal with unexpected events.
Developing a Plan Tools exist that offer guidance on the process, enabling businesses and organizations to measure how ready they are to deal with emergencies. The self-paced Red Cross Ready Rating program, for example, begins with an assessment of whether a business or organization is prepared to handle a disaster. Sponsors support the free program, which currently services more than 12,000 members, the majority of them small businesses.
Ready Rating participants score themselves on how prepared they are and receive steps they can take to improve their readiness planning. The assessment covers items from hazard vulnerability to continuity of operations and employee readiness. Small companies can complete a tailored 25-question assessment; a more comprehensive, 60-question assessment earmarks larger businesses. Based on the responses, the program gives customized feedback on how to improve. The program is also consistent with the Private Sector Standards developed by the Department of Homeland Security.
“Continuity planning can help save lives as well as livelihoods when disaster strikes,” said Dom Tolli, vice president of the Preparedness and Health and Safety Services division within the Red Cross. His words echoed a 2013 survey of Ready Rating companies that had experienced a disaster or emergency in the previous year. In their responses, 67 percent indicated the actions they took as a result of the Ready Rating program helped them reopen their business more quickly.
Once a business continuity plan is in place, experts recommend that the plan be supplemented with regular drills for different types of emergencies. These could be as simple as quarterly fire drills and evacuations, to something more focused, such as holding practice exercises for staff who are trained in first aid, CPR, and AED use and can serve as first responders in the event of an emergency.
The Roles of Business Continuity and Crisis Management Business continuity experts observe that many companies mistake crisis management and business continuity as the same thing. In fact, they are two different pieces of a puzzle that need to interlock seamlessly at a frantic moment in time. Business continuity addresses potential interruptions upfront, ensuring that there is a plan built around people, process, and anticipated infrastructure. Crisis management is defined as the direct, hands-on experience dealing with an incident, disaster, or catastrophic event, regardless of size, complexity, or nature.
Because most companies designate separate units for business continuity and crisis management, they then fail to put the teams together to review the plan on a regular basis, a practice that is gaining in popularity, Voss said. Organizations must be clear on defining the roles and responsibilities for team members; once the pillars are in place, the partnership can then be built so that the first time these critical respondents come together is before an emergency, not during it.
Integrating Social Media and Apps Within the past decade, businesses and response organizations alike have had to adapt to and incorporate social media into planning. Social media channels and smartphone apps will only grow in popularity as younger, tech-savvy generations rely on these tools to communicate. Companies must learn to build response efforts around channels such as Twitter and Facebook because they will continue to serve as a major source of news and information. Further, reactions and feedback, already rapid on social media and apps, will only grow in reach and speed.
The importance of business continuity and emergency planning is succinctly summed up by Brewer of Golamac, Inc.: “I have a responsibility to my employees and my customers to put a plan in place to keep this company going after a disaster,” he said.
This article originally appeared in the July 2015 issue of Occupational Health & Safety.