While the possibility of a global pandemic was always at the back of our minds, its emergence still managed to catch us off-guard and wreaked havoc on every aspect of our lives, particularly the world of work. Therefore, it’s safe to say that Covid-19 has been a wake-up call for organisations to rethink their priorities and strategies to ensure their businesses will survive the next disaster.
When you fail to prepare, you prepare to fail
The current health crisis highlighted the vulnerability of businesses around the globe, exposing the consequences of fragile business continuity plans and executives completely failing to prepare for unforeseen crises. Covid-19 is not the first crisis our world has faced, and it will certainly not be the last. From disease outbreaks to climate change threats, and cyber-attacks, the list of future potential business crises is endless. Now is the time to pay attention to the bigger picture – to learn from global businesses, adapt to create new opportunities, and prioritise business continuity planning.
How will an effective Business Continuity Plan (BCP) benefit your business?
Business continuity planning is the proactive process of understanding your company’s vulnerabilities and ensures that your business knows what measures to take to keep operating and maximise its growth potential in the face of unpredictable events. An effective BCP minimises losses and costs; protects your workforce, physical assets, and electronic assets; prioritises continuity and recovery of critical business functions and supply chain processes; and reduces recovery periods.
While most businesses do have BCPs in place, they don’t always take the time necessary to review and update them. In light of the current global crisis, business leaders can’t afford to make the same mistakes in the future. It’s time to dust off and revise your business continuity plan if you want to ensure that your organisation emerges stronger the next time around.
BCP 101: What steps can your business take to better prepare for the next crisis?
Identify existing vulnerabilities: How businesses position themselves in a post-pandemic world is critical in building organisational resilience and will determine how well they respond to future disasters. In what ways was your business not prepared for the Covid-19 pandemic? Think about the impact of those pitfalls and the likelihood of it happening again. Focus on what your business can do to mitigate those risks in the face of the next potential crisis.
Anticipate financial fluctuations: Cash flow is certainly the biggest challenge that organisations faced during the Covid-19 outbreak. Assess the probable impact of various scenarios and evaluate your company’s working capital accordingly. If your cash reserve is not sufficient, you will need to set aside funds that will help keep your debt low while your business keeps operating. Speak to an accredited financial advisor if you are uncertain about your cash reserve requirements or whether all financial planning risks have been thoroughly addressed in your business.
Overcome AI fears: Many employees are concerned that they will lose their jobs once their employers implement Artificial Intelligence, failing to realise how it can empower them to improve their performance. Take remote working for example – if it wasn’t for digital innovation, most businesses wouldn’t have been able to continue their operations. For your business to be well-prepared for unexpected crises, you must recognise that technological advancements will accelerate, and online demand for products and services will increase. “Business as usual” is a thing of the past and business leaders will have to start thinking out of the box. Attract new clients by increasing your online presence and developing new service offerings in a digital world.
Provide upskilling opportunities: To remain relevant and gain a competitive advantage in an ever-changing consumer market, it is critical to provide your workforce with upskilling opportunities. Your employees are your most valuable asset, which is why investing in online training should be of critical importance. With the accelerated digitalisation brought about by the pandemic, and the needs of businesses and consumers constantly changing, there is an urgent demand to bridge knowledge gaps and sharpen essential skills among staff to ensure future business success.
Establish roles: Build a crisis management team, and determine who will be in charge of what when disaster strikes. This includes clearly articulating which participants will initiate the BCP and who will manage the execution of the activities. Assigning the right individuals to the right roles and informing each person about their specific responsibilities will optimize your business continuity. Conversely, placing the wrong individuals, i.e. those lacking in certain skills and experience, in the wrong positions, can result in poor performance, and ultimately – an ineffective business continuity plan.
Test and revise your plan: Once you have updated your BCP, it cannot be considered final until you are truly sure it will work in any situation. Take the time to search for any weak spots in your BCP and rectify them accordingly. Schedule a debrief session with your crisis management team following the test to gather their input and to address what worked and what didn’t. Listening to their concerns and suggestions will help you develop new perspectives that could possibly lead to further adjustments. Only when you are fully confident that your BCP has covered all the bases, you can put it aside until it needs to be tested and revised again.
The coronavirus catastrophe serves as an important reminder for business leaders that crises do happen. And they will continue to happen. But ensuring that your business has an effective BCP in place, will make it easier for your business to bounce back when the next crisis hits. Keep in mind that a BCP is not a one-size-fits-all solution and will vary according to each organisation’s unique corporate culture, structure, and operational requirements.
What measures have you taken to make business continuity a top priority in your organisation? Speak to your financial or risk adviser as you establish your comprehensive BCP.
This article is a general information sheet and should not be used or relied upon as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial adviser for specific and detailed advice. Errors and omissions excepted (E&OE)