“Continuity and contingency are crucial to business. ”
The coronavirus pandemic has forced us all to rethink our plans, but its impact on some sectors of the business community has been seismic. How prepared are you for when the unexpected happens?
As part of our series of workshops commissioned by the East Midlands Chamber of Commerce’s Business Gateway Growth Hub, Asking Better Questions’ Steve Hobbs presented to an audience of Nottinghamshire, Derbyshire and Leicestershire business owners and leaders, the contingency plans that they can put in place now to safeguard against unpredictability in the future..
It’s time for clarity
Businesses of every size are being forced to rethink the way that they operate if they’re to survive the ‘new normal’. Many assumptions that have guided business strategy are being revisited and, while many organisations are already in the midst of change, clarity and action are key to ensuring that new plans stay on track.
What is a contingency?
A contingency is defined as “a future event or circumstance which is possible but cannot be predicted with certainty.”
Right now, we are in the midst of one and it’s fair to say that few were prepared.
By putting a contingency plan in place, you’re creating a roadmap that means you’re equipped to deal with contingencies of every size, from a natural disaster to a key employee being ‘poached’, regardless of whether they happen or not.
What if?
Contingency planning is a resilience mindset that can apply to a person or a business leader. It’s about operating in difficult circumstances and identifying the possibilities and ‘what ifs’ that we’re often too busy to consider.
To be resilient, you need to consider how you’ll identify and sustain positive adjustments now and in the future. Ask yourself ‘What if this happens and what will I do about it?’
How will you anticipate, avoid and adjust to circumstances?
How do we continue with business, regardless of risks, so we don’t fail?
How well do you understand your organisation? This insight is crucial for preparing for the future and is a proactive part of the contingency planning process.
If you aren’t prepared for risk then you have to be reactive rather than proactive, likewise, if we aren’t proactive, to be reactive is the only option.
Our understanding of an organisation will improve as we adapt and improve according to change.
It’s time to plan
Contingency planning is as simple as this four-step process that can be applied now or in the future:
Business Continuity Strategy Chart, Bryan Weisbard, Intuit
1. Identify the risks
To prepare for an unexpected event, you need to identify the possible risks.
Think about involving individuals from across the business in a brainstorm to ensure you’re preparing for all eventualities and use structured tools to support the process (more of that in our “What tools do you need for contingency planning?” blog [LINK])
Risks
Risks or threats to your business, might include:
Biological hazards;
Natural disasters, fires or floods;
Gas leaks or power cut;
Malicious internet/cyber-attack;
Key staff leaving, being poached or falling ill;
Supplier failing.
2. Prioritise risks
Now it’s time to consider how likely these things are to occur and what the impact will be if they did occur, from negligible to severe.
Something that is likely to occur and would have severe repercussions is a high priority.
This risk matrix allows you to prioritise your efforts and identify where you need to focus your efforts to safeguard your business
Risk matrix
The impact on your business might include:
Loss of sales and income
Increased expenses
Customers being dissatisfied and losing their loyalty
Delays in delivering your service
Poor product quality
Regulatory fines
Ask yourself which other factors might affect your business and be curious about what might impact you as a business leader.
3. Develop contingency plans
Once you’ve created a prioritised list, put together a plan to mitigate those risks.
As you write your contingency plan, think about including visuals and step-by-step guides.
A plan needs to include the ‘what, where, who, how and when?’. Think about who you need to action the plan and communicate with.
Flow charts can help visualise how to action a contingency plan as events unfold and the correct course of action to take.
Use your judgement to decide what to do if a risk does come to fruition and think about how you would communicate with people so that they would know what to do if a problem occurred.
4. Maintain the plan
Once you’ve developed a contingency plan, the process doesn’t stop there.
You need to:
Communicate the plan to everyone who could potentially be affected
Describe their roles and responsibilities during the crisis.
Don’t forget!
You need to review your plan frequently. The early stages involve identifying and prioritising risk but remember that things can change so your business needs to keep pace.
Are you prepared? Do you need help in identifying and prioritising the risks facing your business? Do you need a steer on getting the right contingency plans in place? Contact us for an informal chat.