How Much Damage Do You Want to Incur From a Major Business Interruption?

Recent burst of serious disruptions highlights need for crisis preparedness and planning

Ransomware hackers shut down a critical oil pipeline.

A single ship blocks the entire Suez Canal.

Animal rights protestors blockade four McDonald’s distribution centers in the UK, impacting 1,300 restaurants.

Covid-19 disrupts every aspect of the global supply chain.

Tensions in the South China sea shut down commerce through the region (a very real future possibility).

Whether it’s an incident affecting a single location, or a pandemic sweeping the globe, business continuity is increasingly vulnerable to a wide variety of natural and man-made interruptions for which organizations must plan as carefully as they plan for launching any product or service.

The depth of backup resources (internal and external) and an organization’s ability to quickly pivot their operations and communications (which requires advance planning and training) are two of the most critical elements of preparing for business interruption.

Failure to prepare for business interruption is a guaranteed way to ensure that you incur more damage from any interruption, damage to both reputation and bottom line.  We saw that happen, when, at the start of the Covid-19 crisis, our agency consulted to several organizations which wanted to reassure their employees, clients/customers, shareholders, and other stakeholders that they were responding to the pandemic threat appropriately.  We saw how much more difficult that was to communicate when an organization had not, in fact, done the right kind of advance preparation.  When advance prep had been done, adapting to the Covid threat was still challenging, but was achieved fairly quickly and smoothly.

What can you do, today, to immediately improve your resilience when faced with inevitable major business interruptions?  Here’s a strong starting point:

  1. Convene the heads of all your operational divisions for a brainstorming session.
  2. Brainstorm a list of potential major business interruptions that could impact your organization (think on a global, regional and local level).
  3. With ruthless honesty, assess your current ability to respond to each type of interruption and the consequences of responding poorly. Sometimes a decision is made to simply live with a risk because the cost of being bettered prepared in that case far exceeds any potential damage.  That’s not, in our experience, typically the case.  More typically, an organization fails to consider the long-term impact of reputation damage, even after any physical damage has been reversed.
  4. Improve planning and training as determined by that assessment.

If you have the budget to bring in a Business Continuity Professional, you’ll get guided through a much more in-depth version of that process, but even these simple four steps, if you haven’t engaged in this type of exercise recently and regularly, will improved your preparedness and mitigate future damage considerably.

Jonathan Bernstein
jonathan@bernsteincrisismanagement.com