A crisis invariably produces reactions that may have profoundly detrimental physical, cognitive, emotional, and behavioural effects. People can adopt and adapt coping and intervention skills over time; so too must businesses, on a grander scale.
According to the International Standards Organization (ISO), a crisis is defined as “a situation with a high level of uncertainty that disrupts the core activities and/or credibility of an organization and requires an urgent action.”
Such a situation may present itself in the form of natural disasters, fires, information technology failures and cyber-attacks, power outages, or pandemic outbreaks and can leave a company with diminished functional capacity or without a working facility entirely. Unwelcome happenings can happen at any time, are not selective, can cause greatly varying interruptions and carry with them the elements of surprise, anxiety, confusion, and a sense of helplessness.
Dismissing an event based on the hope that it will not have a long-term impact is not responsible decision-making, nor should it be an option. If a company hopes to continue services for all involved employees, customers, suppliers, and stakeholders, thoughtful, well-formulated crisis management and business continuity planning are essential. Emergencies need quick decision-making to help preserve mission-critical business operations and abate financial losses from the beginning, during, and after the situation returns to normal.
As noted, no company, in whatever capacity it provides services is invincible to a catastrophe. It is not a question of if an emergency occurs but of when a business may have to implement its strategic action plans in response. Crisis management and business continuity strategies are vital tools that no company should be without.
Crisis management and business continuity planning and strategies are often categorized similarly, but they differ concerning how events are to be addressed and the plans that are initiated.
Business continuity is part of strategic crisis management planning, yet having a business continuity blueprint in place does not ensure that a company is prepared for any contingency. Let us look at the definitions of these two terms more clearly.
A crisis management plan minimizes the effect of an emergency through a series of processes to address health and safety concerns and business disruptions. It incorporates emergency response, contingency, and communication plans with clearly defined business continuity plans. Not having a plan results in longer recovery times.
All of those within a company have some role to play while moving toward recovery. A well-trained crisis management team can recognize, assess, and respond to adversity through the best avenues possible.
A well-conceived and managed professional crisis management plan encompasses all effective responses and actions to restore operations to as close to business-as-usual as possible. It includes the framework for compliance with regulatory requirements and ethical objectives like corporate social responsibility.
And why is this so important? Because those businesses that have maintained and showcased a history of being socially responsible through an obvious concern for people, communities, and established partnerships, more readily ride out the storm. Such companies establish confidence and loyalty when it is seen that a genuine concern was the driving principle behind protecting their communities. Upholding a reputation speaks volumes and is a crucial component for risk mitigation in any business – large or small.
Even more important is examining what has been learned from the experience and how future preparation may generate more successful results. So, in a sense, a crisis can be seen as an opportunity to evaluate, learn, adapt, and innovate, perhaps beyond what was ever thought possible.
A business continuity plan, meanwhile, is more than a backup plan. It is incorporated into a regular business plan and is comprised of all relevant information needed for the company to become fully functional should a crisis occur. Its size and complexity depend on the business in question, and each phase has its own contingency plan in case one phase or process fails.
It entails specific directives that will be distributed to key personnel, with a clearly established chain of command and responsibilities. During a calamity is not the time to be quibbling about who holds the reins in decision making.
The continuity plan includes an introduction, objectives, risk management, and recovery stratagem as well as an executive summary with an overview of priorities, areas most vulnerable, and steps to be taken in response.
The executive summary is most often the last to be written once risks have been ascertained and strategies put into place. Although somewhat difficult to do when preparing for the unknown, the plans should be frequently rehearsed through simulated scenarios and drills and a concise revision history recorded. Once the recovery is concluded, the management of operations is transferred from the recovery team to designated managers. It is advised, for obvious reasons, that copies of business continuity plans be secured off-site.
Crisis management and business continuity plans serve as tools that a company will undoubtedly have to resort to at some point. By sharpening and fine-tuning these tools regularly, it can more readily address any upheaval in the most efficient manner possible.
In conclusion, crisis planning forces a reassessment of business vulnerabilities that perhaps were not obvious in the past. It becomes a time when the truth about how well a company is running is realized. Perhaps it was said best by Oscar Wilde in his play An Ideal Husband: “To expect the unexpected shows a thoroughly modern intellect.”