It is characteristic for natural disasters to occur with little or even zero warning. Sometimes, natural disasters bear devastating effects on the economy because of the severe slow-down in operations of most, if not all, businesses. Natural disasters often injurious to businesses include extreme weather conditions, earthquakes, volcanic eruptions, tsunamis, etc. This is why business organizations are best advised to address the potential impact of such disasters beforehand.
A study found that 48% of small to medium businesses do not have strategies for business continuity in place. Also, the Federal Emergency Management Agency (FEMA) estimates that up to 40%of enterprises are unable to resume operations after a significant disaster. At the same time, around 25% of businesses close down within 12 months of an impacting natural disaster. The leading factor behind this high failure rate is unpreparedness.
What Is Business Continuity Planning?
Business continuity planning (BCP) is the process of outlining strategies for the prevention of business breakdown and the recovery from the negative impact of natural disasters and other threats. A BCP protects business personnel and assets, ensuring these elements remain functional in the event of such threats.
A business continuity plan includes a clear definition of risks to a business’s operations and strategies to manage these risks. Such risks may include natural disasters like typhoons, fire, flooding, etc., and man-made disasters such as cyber-attacks or acts of terrorism.
Once the risks have been defined, the plan should also outline:
- Potential impact to the business
- Safety procedures applicable to each risk factor
- Testing of procedures to prove the effectiveness
- Periodic process reviews for staying current
The Three Phases of Business Continuity Planning
The first phase starts with a layout of the organization’s structure, personnel or staffing, policies, and business procedures. After this step, you can map out your course of action.
- Determine the activities required for sustaining operations during a disaster. Include the relevant supply chains necessary for continued function.
- List down the precise threats that place the organization at risk. Specify potential effects related to each threat so that everyone can understand the relevance of the action items.
- Review all current insurance policies to be clear about the scope of business coverage and all restrictions.
- Organize a detailed contact sheet of stakeholders and providers critical to operations such as banks, attorneys, accountants, maintenance, suppliers, and personnel. Safe-keep this contact information sheet and orient all involved where, how, and when to access it.
- Instruct key personnel to conduct regular checks to confirm if they can remotely access the business server.
- Identify a team designated for crisis management. You may appoint team leaders for different break-away teams (like security, search, and rescue, traffic, etc.) and enlist volunteers for each team, especially those assigned to public safety interoperable communications.
- Develop a system for filing and producing file backups of essential documents such as contracts, tax documents, insurance, accounting statements, etc. Include the safe-keep procedures for these files, preferably off-site.
- Conduct periodic fire, earthquake, and evacuation drills throughout the organization. Orient all employees on all necessary safety protocols.
- Ensure all emergency supply kits are in order.
The crisis management team and all volunteers may require specialized training or orientation. They are to take the lead in implementing the business continuity plan in the event of natural disasters or other threats.
- Stipulate a procedure for coordinated communication with external agencies and first responders. Include a flow chart of how to receive, respond, and relay disaster alerts.
- Migrate electronic records and digital backups to secure, ideally off-site, locations.
- Facilities managers should secure all utilities and equipment, including fire protection systems, gas tanks, boilers, generators, water heaters, etc.
- Establish convenient communication with supply providers and coordinate emergency deliveries.
- Safeguard all employees by communicating the enforcement of practiced safety protocols. Instruct them to stay away from windows, glass finishes, elevators, etc., and to follow orderly evacuation procedures, if necessary.
How a business successfully recovers from disasters is contingent upon its effective planning for disaster-preparedness. After a disaster, the organization must promptly assess the conditions to determine the extent of physical damages and how these impact business operations.
- Return to business premises with caution. Check for structural damage, fallen power lines, gas leaks, etc.
- Control access to affected areas. Communicate to all employees which areas are allowed and restricted.
- Make an inventory of losses for possible insurance claims.
- Implement provisional business procedures, such as skeleton workforce or remote work, to resume operations swiftly. Establish alternate business sites, if available.
- Continue safeguarding your employees, especially upon recalling them back to the site. Initiate response to employees critically affected by the disaster.
- Restore data and communication channels using backup systems.
- Evaluate and address any backlogs in operations.
It is good sense for all businesses to establish a solid business continuity plan to enforce preparedness for crises. Strategic planning and implementation ensure the organization’s protection or make its recovery after a disaster more seamless. A business will never have to activate its continuity protocols for any disaster in a perfect world, but developing one anyway definitely puts the company at an advantage.