Businesses have come a long way in the process of continuity planning and planning for disasters. Although these plans are meant to be a living and dynamic process, many have developed impressive contingencies that promise to ensure the longevity through the worst incidences, that lately, have seemed to occur more and more frequently worldwide.
In more recent years, an old nemesis of “economic fluctuation” has reared its ugly agenda and placed even more pressure to not only trim the proverbial fat but now to decide which muscle layers in which to carve. In the past, industry leaders did not focus so much on business continuity or preparedness because the response to disasters was an unrecognized priority. The fact is, there have always been disasters, and businesses have always had to recover from them.
Another fundamental truth, however, is that there have always been economic changes that have severely impacted businesses either financially or through other assets such as human capital. Just as unpredictably predictable as a disaster is, so are the peaks and troughs in the nation’s financial stability.
According to recessions.org, the modern economy has endured recessions all throughout history. Since the Great Depression the nation has seen an average of at least one recession every seven years. This cyclical event happens for a variety of reasons and in many cases is necessary to decompress the economy. One thing remains constant in that because it is cyclical, it is predictable. So the question is why isn’t the economy considered a potential disaster?
Framing the Hazard
No matter what specific location, in one year’s time the west coast will probably have wildfires then mudslides, the Midwest will probably have tornadoes in which at least one will decimate a rural town, flooding will occur in at least a dozen cities throughout the nation, earthquakes will shake at least another dozen, blizzards will paralyze large and small communities, and the southeastern states will probably see a hurricane of some magnitude.
In one year’s time the nation will see at least one peak or one trough, if not both, in the economy, probably more frequently during election years.
Why then is the economy not a part of a comprehensive all-hazards analysis? Isn’t the loss of hundreds, thousands, even millions of dollars a hazard that could potentially become as damaging as, say a pandemic? Could the sudden collapse of a financial infrastructure cause as many unemployed, homeless, and starving families as an earthquake in Haiti?
Being unprepared for an obvious hazard places the business in a very compromising position if that hazard happens and can cost the business time, money, personnel, assets, and most importantly its customer base. The same holds true for leaner economic times. People or positions are scaled back, tasks are reassigned, and employees are expected to do more with less.
In general, being prepared for an obvious hazard places the business in a position to move swiftly and quickly during the incident with minimal down time and a rapid recovery. That is exactly what continuity planning and disaster recovery are all about and why it should include the bottom line. Perhaps it is time to rethink the economy as being a potential hazard.
Framing the Preparation
With this newly defined “economic disaster” being identified, the next step in planning is mitigating its effects. Put simply, what tactics can be utilized to eliminate, reduce, or soften the blow caused by financial instabilities? Specific financial strategies will be largely determined by state and local statutes and regulations and therefore beyond the scope of this article. The point being stressed is that businesses should take an unconventional look at strategies to lessen the impact of essential functions and personnel.
Some businesses may consider longand short-term investment strategies, others may consider tax shelters, and some will even consider federal or state subsidy or bankruptcy to reorganize through crippling financial times. Many businesses will look at tempering strong economic times to cushion the weaker ones. Like a fire chief to a house fire or a police chief to a school shooting, CIOs, CFOs, and other financial planners have to ask themselves: how do I keep this from happening?
The next step of the process is accepting the inevitable – this hazard will happen – and making preparations. The first thing to come to mind should not be firing the workforce, slashing budgets, and carving programs, but rather to frame it the same as any other hazard. How will the business prepare to maintain its essential services during a disaster (in this case an economic incident)? So for example, instead of a hurricane causing the shutdown of a business the threat of financial collapse does instead. The employees still cannot report for work. The computers and other office equipment are still rendered dysfunctional. Months, if not years, of projects are lost. Yet businesses will plan for the utter wreckage from a hurricane that will strike in three days but not the collapse, and yet they are alike in their impact.
Preparation then is reframing the thinking from scrapping continuity and disaster recovery planning due to financial hardship to implementation of that very planning in response to financial hardship.
It is important to touch on the issue of conducting exercises. This is no time to cut corners, and do not be afraid to challenge conventional wisdom. Businesses need to know if they will be sustainable under the worse conditions. Compare it to a fire drill. Sure everyone gets tired of doing them over and over again, but think what would happen if no one knew what to do. The same holds true with disaster preparation. Everyone involved in the BCP/DR plan needs to know what they are to do and when to do it in order to make it successful. In addition, facing the reality of closing the doors is not the time to discover flaws in the plan.
Start by breaking down the preparation into sections, divisions, or departments. Ensuring pieces of the whole are sturdy guarantees the sturdiness as the whole. An example would be to test the effectiveness of the marketing department over a period of 72 hours. Think up the worst-case scenario, and tell department heads and subordinates they have to maintain a nearthe- same amount of productivity for that amount of time using whatever resources they come up with within the confines of the plan. Once completed, move to the next department then the next. Eventually the cycle will allow multiple departments to be tested at once. Be open to changes or fine-tuning of the plan as opportunities arise.
Framing the Response
Once the exercises have been completed a draft response plan should now be on the minds of emergency planners within the business. It is time to start processing delegation of authority, and successive orders of devolution within the BCP/DR. This step ensures that everyone knows who can take over when needed and what authority they will have over people and finances. The last step then in the response phase is identifying the trigger that prompts the activation of the plan.
Recovery is the last phase of the planning process and becomes, to some degree, a responsive effort. Just as a plan to devolve the business was developed to manage the hazard, so must a plan be developed so that it may evolve as well. Building a business after an economic disaster may take as many months or years as it would after an earthquake. But taking time to identify key lines of evolution prioritizes essential functions and their role in success. For example, information technology may have been the last department to devolve, but now that the business is recovering an aggressive marketing department is going to be needed first to reestablish crucial accounts.
BCP/DR encompasses planning for businesses to endure disasters that would otherwise render it completely unable to recover. Typically, this includes natural incidences such as tornadoes, earthquakes, hurricanes, and floods as well as manmade incidences such as bio-terrorism, terrorism, and chemical and nuclear exposures.
But when the economy is on the downturn, businesses are quick to scrap the planning and preparedness process due to lack of funds or cutbacks when in reality that plan is exactly what needs to be activated. An “economic disaster” can result in equal amounts of damage to a company and need to be planned for accordingly.
Administrators and emergency planners would be wise to discuss establishment of response practices to mitigate, prepare for, respond to, and recover from an economic disaster and maintain essential functions.
Daniel Schellenger has been involved in public safety for more than 15 years including working as a volunteer firefighter, public safety dispatcher, EMT/paramedic, and is currently the community liaison/PIO and exercise coordinator for Life Care Ambulance in Sterling, Colo. Schellenger can be reached at schellengers@hotmail. com.