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Business continuity is advanced crisis planning that anticipates critical operational interruptions to ensure the organization can continue to function and return to a normal state as quickly as possible. If any period could be described as turbulent and causing critical operational interruptions, it's now. It's been one business crisis after another for the last 18 months, straining the abilities of organizational leaders to keep their businesses on track.
The COVID-19 pandemic tops the list of turbulent events because it was like a tsunami rolling across the business environment. It forced people to suddenly work remotely and significantly disrupted the supply chain. It also prompted worker protests over health and safety issues; and highlighted systemic organizational racism, ethnicism, and genderism in various ways. At the same time, unions stepped up their activities because a pro-union administration was elected; natural disasters struck, and cyber attacks disrupted the operations of critical businesses like hospitals and food processing plants. It was not one crisis but multiple crises that significantly impacted business recovery time for organizations all over.
The first thing to understand when asking, "What is business continuity planning?" is that it is proactive crisis response planning. It is intended to prevent the disruption of critical business functions or minimize the disruption's impact and recover as quickly as possible should a disruption occur despite all planning. Without effective business continuity planning, all your leaders can do is wait for the crisis and react as best they can. Proactive crisis management planning is a critical process in the proactive era, and it can determine an organization's ability to maintain critical functions.
A reactive approach would very likely prolong the disruption of business functions. This became apparent when almost overnight, businesses were told to close due to COVID-19. Those with a plan for business continuity were able to continue serving customers within days. Those without a plan had to close and regroup - many frantically trying to find new suppliers, get websites up and running, and/or safely deliver products and services.
A business crisis occurs when the stability of the company is put at risk. If not appropriately addressed, the situation could escalate to a point where the business could fail. It could be a natural disaster, financial crisis, technology crisis, management unethical or illegal misconduct, or even a public crisis, like a product boycott. Even a union strike is a crisis because it seriously disrupts operations.
Some events are difficult to pigeonhole under a particular type of disaster – like COVID-19. The classification may seem unimportant on the surface, but the classification impacts the business continuity plan and organizational response. Think of it like this: Would your organization respond differently to natural disasters versus a cyber attack or technology crisis? When answering the question, "What is business continuity planning?" there is the general organizational continuation, but what that takes to achieve depends on the type of crisis and the appropriate crisis management response.
Any crisis has three characteristics that lead to organizational stress.
The business continuity plan addresses business processes, procedures, decision-making, employee communication, and activities that will enable your business to continue functioning through disruption and return to regular business. Successful implementation relies heavily on regular communication between leaders and between leaders and employees.
The first step is identifying the essential or core functions that must be impacted as little as possible or (hopefully) not at all to continue operating. The business continuity plan could be called a business resiliency plan because it sets out alternative ways to manage critical business processes during unplanned events.
The plans vary from organization to organization, but the essential crisis management plan ingredients are as follows.
1. Risk Assessment
First, identify the essential business functions for continued business operation. The first essential or critical business functions specified are those that have little or no flexibility and must operate in order for the business to continue. Some of the operations or functions not considered critical could become critical should the crisis last longer than expected. Each business function's department managers should have input in the business continuity planning because the department heads and frontline supervisors are the people who know what critical duties and responsibilities are within their departments.
Then determine the type of crisis events that can negatively affect your company. The crises identified are those common wherever the business operates. Each crisis and its impacts are unique to the organization. For example, one business may consider a loss of services for five days a crisis, while a small business considers two days a major crisis. Recovery priorities will be different for different organizations after a disruptive incident.
2. Business Impact Analysis
Each event is scoped out as the extent of the damage the event can cause, the controls needed to minimize losses, and the planned recovery time for business continuity. What are the impacts the particular type of disruption will have on essential business functions? How will the loss of the essential business function impact other functions?
3. Response StrategiesEach event needs a planned crisis management response that will recognize the unique characteristics of the event. The strategies will focus on maintaining the essential business functions and minimizing the possible impacts while striving for operational resilience. Strategies will address:
4. Crisis Communication ProcessWhat is business continuity without effective employee communication? The answer is there might not be continuity if your leaders aren't communicating transparently and regularly with employees. Communication during a crisis is critical to keeping the workforce engaged and minimizing the fear and uncertainty that will naturally occur. The quality and effectiveness of leadership communication is a crucial determinant of whether the business will continue functioning and have a successful recovery from the crisis.
5. Documentation of the PlanSenior management should always approve a documented business contingency plan. It's good to have a hard copy of the plan in writing and stored as a digital document. It is also recommended that crisis team members have a copy of the business continuity plan at their desks and home, with up-to-date emergency contact information for each member.
6. Testing of the PlanTest the procedures based on developed criteria to evaluate the efficacy of the business continuity plan. Test the plan at least once each year or whenever the plan is amended for changed conditions.
Any business plan should be a "living document," meaning it is regularly revisited for review and amended to accommodate business and other changes and new information and knowledge. This applies to the business continuity plan, meaning it is an element of business continuity management.
For example, you develop a business continuity plan while transforming your communication system to a digital communication system. The original plan needs amending to include digital communication. Perhaps you are expanding operations and adding additional sites. Your business likely upgrades technology regularly. These changes to your business need folding into the continuity plan.
Effective organizations begin business continuity management before a crisis hits. Leaders lay a strong foundation that serves the business and its employees well when business is disrupted. Following are three significant aspects of business continuity management.
The first is senior-level communication. Top management is ultimately responsible for business continuity management, approving the plan, and reviewing it periodically. Yvette Mucharraz y Cano studied an event that occurred in Mexico City on September 19, 2017, in which an earthquake struck Mexico City, destroying businesses and killing and injuring thousands. She saw some businesses return to work quickly while others were unable to recover or failed.
The difference between the businesses was the survivors had business resilience. The top leaders recognized the potential risks and had put in place the necessary business continuity activities and disaster recovery plans, human resources, technology, and other resources that enabled an effective response. Employees and clients knew in advance the business recovery processes and protocols. The business leaders took several steps prior to the disaster that led to business survival.
The second management aspect is communication with the crisis management team members. They need a common mindset and extensive employee training on the continuity plan. The team members need to know:
As mentioned, the workforce will be in distress when a crisis develops. Senior leaders, middle managers, and supervisors need to recognize that business disruption is an emotional and physical issue. People are scared during a crisis, and that fear will endure during the recovery stage and beyond. It is an employee mental health issue. Leaders who build resilient organizations demonstrate responsibility for employees before a crisis develops. Employee engagement and a positive culture are two of the most important features of a resilient organization when it comes to business continuity.
That leads to the third level of communication, which is with employees or the general workforce. Employees not only need to feel confident in the ability of organizational leaders to manage the crisis, but they also need regular communication. Ineffective communication can escalate the crisis. The leadership communication for crisis management includes:
The International Labour Organization identified the 4 Ps to consider for the business continuity plan. They are:
The ILO provides a good example of effective business continuity plans for SMEs dealing with COVID-19 impacts in April 2020.
1. Complete a risk/vulnerability matrix for each of the 4 Ps to identify areas of weakness, i.e., difficulty obtaining supplies, amount of asset insurance, materials sources and delays in securing, market location (medium to high risk), public pressure, and publicity impacts working environment; etc.
2. Develop a total risk score that serves as a benchmark of vulnerability to a crisis. The score is based on how the number of yes/no answers to 60 items on the risk matrix. A score of 40-60 indicates high vulnerability; 20-40 indicates some vulnerability despite preparing for a crisis, and 0-20 points to a few areas needing attention.
3. Develop a business continuity plan that addresses vulnerable items in the matrix. If a plan already exists, strengthen the areas of weakness.
The probability, magnitude, warning, and duration of a potential hazard determine the risk priority. After the hazards are identified, a similar approach is presented. FEMA also offers a business continuity plan template for businesses that follows a similar path.
These are two examples of effective business continuity plans. There are many ways to approach plan development which is influenced by the type and size of the business. However, all business continuity plans address the areas discussed.
A business continuity plan considers the continuity of the whole business before, during, and after a business crisis. The strength of the communication process within the organization is the most crucial element that determines quick and efficient recovery. The positive employee relations you develop now will significantly influence whether your business can survive a crisis. Your employees must know what to do during a crisis and the consequences of the crisis on the business.
During the COVID-19 pandemic, some business leaders refused to keep employees informed about things like workplace safety, health protection measures, and access to PPE. The result was many employees called upon unions which added another layer of crisis to an already difficult situation. An April 2020 Gallup survey found only 52 percent of employees said their employer had communicated a clear plan of action in response to COVID-19.
No one wants a business interruption, but they are a fact of life. Business resilience depends on a carefully developed business continuity plan, excellent leadership communication skills, and an engaged workforce.
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