Why Plan for the Worst?
Companies today face an unprecedented number of exposures. The frequency and severity of weather-related events seem to be increasing and reliance on a complex network of technology and supply chains is expanding. Both trends leave businesses susceptible to a variety of existing and emerging risks. Managing these risks by developing a business continuity plan is key to the survival of any organisation.
Crisis Management planning is one of the most critical components of any recovery strategy. Unfortunately, not every company develops a continuity plan. Here are a few misconceptions and realities about Crisis Management planning.
Misconception #1: "Our people will know what to do in an emergency."
Even the best employees cannot be expected to know what to do when disaster strikes. Leaving each to respond in his or her own way only adds to the confusion of an event. Having a well-documented business continuity plan, and training your employees to follow it, gets everyone on the same page — helping to ensure an organised, safe and timely recovery.
Misconception #2: "We have insurance to cover our losses."
Insurance alone is NOT a business continuity strategy. Proper coverage is a significant and important part of the plan. But it may not fully cover some of the peripheral damages from an event, like loss of customers, loss of market share, or setbacks in development or release of a new product. Consult with your insurance agent to understand what is and is not covered under your policy.
Misconception #3: "We do not have the time to develop a crisis management plan."
Time spent developing and maintaining a crisis management plan is an investment in your company. Your fixed costs will continue after an event, regardless of if you are open for business. The faster you can return your operations to normal, the more likely you will recover from the event successfully. With so much at stake, your company cannot afford to NOT have a plan.
A Good Investment
Whether it’s the Christchurch earthquakes in 2010 or the 2017 Edgecumbe floods, disaster can strike at any time. Companies that proactively consider how to respond to events are the first to get back to business, often at the expense of competitors. A predefined business continuity plan combined with the proper insurance coverage, maximises the chance of a successful recovery by eliminating hasty decision-making under stressful conditions. It details how to get businesses back on track after a disruption – in the most thoughtful way possible.
Think Your Business Can Withstand a Disaster? Think Again
Twenty-five percent of businesses do not reopen following a major event. It does not take a major catastrophe to shut down a business. In fact, seemingly minor disruptions compared to widespread natural disasters can often cause significant damage — power failures, broken water pipes, or loss of computer data.
Natural Disasters Becoming More Common — and Costly
The last decade has seen some of the most destructive natural events in New Zealand history. Our unique geography and climate mean we are likely to see more events, but these aren’t all that can disrupt a business – fire, power cut, or a cyber security breach can be just as costly. That means crisis management planning is more than smart business — it helps your company remain better positioned to recover from the business interruption, property damage, financial impact, and loss of life that a natural disaster or man-made event may cause.