ROI
Preparing Your Company for Disaster
Businesses can’t plan for everything, but with the right prep they can adapt.
December is finally here. Mercy knows it seems to have taken forever to bring this most unusual year to a close. I keep pondering the question customers inevitably ask during a supplier audit: What contingencies are in place for “unforeseen and unthinkable” disasters and events? If anyone had asked me a couple years ago to come up with a plan to deal with a global pandemic I would have thought them to be crazy for asking. And yet, that was 2020!

The one takeaway from this crazy year is you can never plan for everything. Paradoxically, good planning makes it easier to deal with the unimaginable.

Business planning takes numerous forms. Most people think first of the financial budget planning, usually led by finance and account staffs. Visions of building a budget, whether bottom-up or top-down, as a tool to measure specific activities against comes to mind. This type of planning revolves around predicting core operating activities that are repeatable, predictable and highly measureable. While important, if not essential, for the operations folk to run the “business as usual,” that budget is only one aspect of planning.

Capital planning is the kissing cousin to financial budgeting. The one major difference is that planning for the acquisition of capital assets, facilities upgrades, or working capital needs more of a “what if?” in the equation. Multiple scenarios must be taken into consideration to hedge both the best- and worst-case scenarios. Such planning incorporates potential risks and focuses on what “could” occur, rather than what is “expected” to take place.

Contingency planning is a horse of a different color. While the event, situation, occurrence(s) and magnitude of the contingency being planned for may differ, the common trait is the events are major distractions, all unprecedented and usually quite unimaginable. One cannot do this type of planning alone, and this type of planning may seem a waste of time, as the contingency most likely will never occur.

For many, navigating and surviving the unimaginable (and most likely unplanned for) global pandemic was, in part, accomplished because the organization performed some kind of contingency planning and was able to leverage pieces of those plans to adapt to the situation at hand. Plans for any extreme disaster or crisis share several basic elements.

Flexibility is critical for everyone, especially the leadership team. An unprecedented event requires all involved to be flexible, adaptable and ready to shift gears on-the-fly to manage the crisis. Flexibility of one’s mind, let alone an entire organization, doesn’t just happen. Leadership needs to plan for how it will adapt and enable a department, division or company to move in different directions if needed.

Cross-trained staff is one of the best ways to enable flexibility. Even those in very specialized roles or the most mundane jobs need to move around the organization periodically so they are exposed to other aspects of the process and see tasks they may be able to handle if and when necessary. A cross-trained staff does not happen organically. It takes planning and advanced training to have employees who can move in and out of different situations and tasks smoothly and effectively.

Rapid deployment is critical when dealing with a crisis. Leadership needs to quickly deploy people, ideas, contingency plans, and resources to deal with a given situation. Times like these have no set script. Management needs to utilize the best-available information from wherever it is offered to move decisively and rapidly. Waiting for perfect information, or analysis paralysis, is a surefire way to lose precious time, often the most precious resource.

Communication is the most important element, one that makes the difference between a successful attack plan and workers flailing unproductively. Communication is two-way. It is essential that all involved understand the strategy, deployment plan, risk, and basis of information used to make decisions. There is nothing wrong communicating that everyone is working in an unprecedented situation. Equally, it is imperative to listen and take what is reported by those in the line of action forward to the appropriate person(s), so all information is taken into consideration. A solid communication environment does not just happen: It is planned for and understood by all.

Patience is needed by all and, most important, must be exercised and demonstrated by everyone in the leadership team. While everyone reacts differently, plan on how those in charge will mutually support and demonstrate as much patience as possible while dealing with the challenge so employees don’t panic.

Finally, have adequate financial reserves available to tap, if needed. All in charge should know if and when those resources are deployed, so they can be focused on the most critical areas of need.

No organization can plan for and be prepared for every possible event. Moreover, trying to plan for every permutation and combination is not the best utilization of resources. A management team and corporate culture that has the critical elements needed to prepare and respond may make the critical difference when an unimaginable event strikes.

Peter Bigelow headshot
Peter Bigelow
is president and CEO of IMI Inc.; pbigelow@imipcb.com. His column appears monthly.