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| Small Business Planning Confidence on the Rise By Laurie Taylor-Hamm
Many business owners and/or managers accept the risk of running their organizations without a business continuity plan. This type of manager, who I refer to as “Slugger,” is comfortable knowing the computer back-ups – which may or may not be current – are on top of the CPU in their office. Their client and personnel files reside in a cabinet next to the computer. They see contingency planning as an activity reserved for pessimistic people and large corporations. My previous research was reported in the Spring 2002 edition of Disaster Recovery Journal. At the time, I was surprised to find that “Slugger” was confident his or her business would survive a disastrous occurrence without a business continuity plan. In contrast, Slugger’s counterparts with formal plans in place actually had lower levels of confidence in their organization’s ability to recover from a negative event. This may be due to the fact that they are more acutely aware of the complexities of business recovery. As a reformed “Slugger,” I understand all too well the consequences of false confidence and how it can decrease motivation to create a plan. As a small business manager myself, I had the unhappy experience of navigating through the pandemonium of my own disaster. Our business was clipping along at a
phenomenal growth rate until the computer crashed. This was no problem,
I naively assumed. We did, after all, create back-ups of our main computer
system nightly. I never imagined all our back-up files were corrupt. That experience almost put us out of
business. We were lucky. We survived.
In order to more fully understand the rationale for failure to plan, respondents were asked to indicate their agreement with numerous statements explaining their failure to implement business continuity plans. The response most often given for lack of planning was, “Business continuity planning is for large corporations with vast resources.” Certainly, the implications of this attitude are fundamental to determining and overcoming the roadblocks to planning. Unless we can find a way to change this attitude, it will be difficult to increase the use of planning within this environment. Current findings indicate these decision-makers believe their organizations do not need business continuity plans. Misconceptions, regarding the need for, and benefits of, business continuity plans are still present. They indicate that organizations are “too small” for planning and that computer back-ups provide enough protection. They clearly do not understand the scope of business continuity planning nor do they understand the value it provides. Another roadblock to planning is the general denial that a problematic event will, in fact, occur. I asked respondents if they felt a disastrous occurrence was more likely to occur in their business or a similar business across town. The survey results suggest that decision-makers believe their organizations are less likely to be affected by negative events. Respondents indicated that a disastrous occurrence is more likely to affect a similar organization “across town” than their own organization. This result is consistent with existing research by Plous and Weinstein, which indicates that people generally predict negative outcomes for others while predicting positive outcomes for themselves. It would stand to reason that underestimating the probability of disastrous events would decrease the perceived necessity of business continuity planning. It would appear that time has also influenced respondent confidence levels with regard to organizational recovery. The recent survey found that confidence levels were significantly higher among those with a business continuity plan compared to those without a plan. This result is opposite the effect demonstrated in the previous study. More interestingly, there is a significant relationship between confidence levels and plan omprehensiveness. Those with a more comprehensive plan are more confident in their organizations’ ability to survive an event, than those with a less comprehensive plan, or no plan at all. One would expect that respondents with current, accurate, and comprehensive plans should have higher confidence levels with regard to their ability to recover from a disastrous event than their counterparts who have a less comprehensive plan or no plan at all. Research supports the fact that those organizations with a well-documented plan have increased probability of surviving a disastrous event and, in fact, will recover more quickly. So, the “Sluggers” in this environment are reporting lower confidence levels than previously reported. Do these reduced confidence levels change planning behavior? Did this shift in confidence motivate and/or increase the incidence of planning? Unfortunately, it did not. One would hope that lower confidence levels among decision-makers without a plan would stimulate an increase in planning. (Certainly, there was no hope for such change among this population as long as they retained a “false confidence” in their organization’s ability to survive an event.) However, although confidence levels are lower, there remains no detectible motivation to actively plan among this group of decision-makers. It is notable that confidence levels among those with a plan have increased. It could be that confidence levels have been influenced by the recent media coverage of various “high profile” disastrous events. It is possible that recent events motivated respondents with a plan to become even more proactive. It is also possible that at the time of the previous study participants had not reviewed or updated their plans. Current events could have motivated them to update and maintain their plans thereby increasing their confidence levels over previously reported levels. Conversely, those without a plan have become more aware of the potential risks involved in operating their businesses. Although they may not be motivated to plan because of the perception of minimal risk, they are still aware of the potential for an event, which decreases confidence levels. The final analysis finds there has not been a significant increase in the percentage of businesses reporting they have a business continuity plan in place. It is disappointing that recent media coverage and the abundance of information available has not effectively increased the incidence of planning among this population. Overall, 34 percent of respondents reported that they do have a plan. However, of those respondents reporting the existence of a plan, only 17 percent indicate their plan is in writing. The good news is that the percentage of written plans is significantly higher than the previous study (up from 11 percent). The fact that a larger proportion of respondents report they have written plans is encouraging. However, these gains are minimal, at best. In general, small business managers in Central California indicate they do not need to worry about or plan for disastrous events. After all, there are no tornadoes, hurricanes, or blizzards in California. When the next disastrous event occurs it will hit next door, around the corner, or across town. Most acknowledge they have already experienced equipment failures, computer viruses, employee sabotage, data storage room floods, or other similar disastrous events. Many managers have experienced one of these “events” but fail to recognize it as such. Most even agree that recovery would have been smoother if they had had a business continuity plan at the time. Yet, even when armed with this knowledge, most indicate they do not intend to allocate time or resources to business continuity planning. Overall, my findings should be considered
positive signs indicating the potential for change. Clearly, we need
to convert more “Sluggers” and help them understand the
benefits of planning. We must somehow publicize that planning is not
just for “big business.” The unresolved mystery is how to
motivate these decision-makers to access the available information and
use it to generate planning activity. Laurie Taylor-Hamm is an adjunct professor at the Craig School of Business, California State University-Fresno, and a business consultant. This article is based on her master’s thesis. ©Copyright 2005 Systems Support Inc. All rights reserved. Reproduction in whole or in part in any form or medium without the express written permission of System Support Inc. is prohibited.
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It
is hard to imagine any business operating in today’s environment
without some form of business continuity plan. Yet, in the small business
environment of Central California, those with a plan are unique.