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Protecting Your Business From Disaster: Why Contingency Planning Isn’t Enough

Forbes Human Resources Council

CEO at BrightHR and COO at the Peninsula Group, responsible for the global rollout of HR tech supporting over 85,000 organizations.

Over the last year, we’ve had unprecedented fuel prices, severe supply chain disruption and warnings of power blackouts. There was even uncertainty about whether Twitter would continue to exist under new ownership. And that’s all at a time when business owners were still reeling from the impact of a global pandemic.

If the past few years have taught us anything, it’s that we can’t take our essentials for granted. The means to produce or promote our products and services can be cut off at a moment’s notice.

But while it’s normal for external factors to rattle certain parts of your business, this shouldn’t have a devastating knock-on effect. You should have a strategy in place to keep operations running when disaster strikes.

Think of it like a domino effect. If you were to line up your core business pillars—your people, products, processes and profit—these should all remain strong during times of crisis. When one begins to waver, it shouldn’t fall totally flat and cause your other pillars to collapse.

For example, imagine if a senior manager were suddenly unable to work for your business. This would no doubt be inconvenient—but you shouldn’t allow this to significantly affect the quality of your products or disrupt your operations. If it does, you then risk putting your entire business in danger.

Without fallback plans, you allow your business to succumb to the first sign of disruption. So disaster planning is crucial. But how can you plan for the worst and, more importantly, get through it?

First, identify your risks. Prioritize anything your business couldn’t survive without. After the past few years, it’s best to plan for the extreme.

Think about your day-to-day demands and start from there. Consider what allows your business to function as normal. A senior member of staff? A third-party supplier? A certain office space or warehouse? Even if it seems unlikely, consider what would happen if any of these things become unavailable. If it would disrupt your operations, you’ll need to lay out contingency plans.

It’s prudent to rank your business risks by the level of disruption they would cause. That way, you can prioritize the disasters that would wreak the most devastation.

Once you’ve outlined your biggest business risks, you’ll need realistic and practical solutions to combat them.

A good contingency plan is a detailed one. This means cementing plans with a thorough policy that you can refer to at any time. This should ideally provide alternatives should initial plans fall through.

Having a detailed route forward means you can take faster action when disaster strikes, without pouring your reaction time into research. It also means you can move past any potential setbacks quickly.

Be sure to emphasize the how, not just the what. It’s no good saying you’ll resolve a severe lack of staff by hiring agency workers if you don’t know the cost or process involved. When planning alternatives, keep in mind what’s realistic for your business.

It’s essential to regularly review your contingency plans. Imagine if your supplier were to pull out so that you’re unable to source the materials you need. You reach for your contingency plans to find your next steps—only to find that your alternative option went bust six months ago. Or they might have significantly raised their prices since you last checked.

This is going to cause further delay and stress at an already difficult time. Putting time aside to regularly review your plans means you’ll always have the most suitable road map to hand.

To really safeguard your business, however, you need to go further.

If your business is at risk of collapsing at the first sign of trouble, disaster plans will only go so far. To remain robust, you need to do more to protect your business.

If we go back to the domino analogy, contingency planning means distancing each piece to prevent them from toppling into one another. And that’s great.

But if your pieces are often falling flat, it suggests you’re setting up your game on a shaky foundation.

So instead of merely planning to pick up the pieces, see if you can reinforce them. After all, sturdy cubes are much less likely to topple over than thin planks.

Take the Covid-19 pandemic. While this is an extreme example, the health restrictions at the time exposed business models that were not able to weather a change in circumstance.

As an example, consider marketing agencies that specialize in luxury travel and dining sectors. With a narrow client base, it meant they were often first to collapse as travel and social restrictions came into force. No contingency plan could have saved them from the months of disruption that lay ahead.

Businesses that collapse during times of crisis do so because they have no other option. So it’s important to proactively create other options. And you need to do this before emergency strikes.

This extends to all parts of your business. If you rely on one social media channel to make sales, how will you reach new customers should this cease to exist? If you specialize in one product, what can you do if demand suddenly plummets? If you only cater to one demographic, how will you respond if their needs or circumstances change?

Without embedding flexibility and variety into the very fabric of your business, you’re putting yourself in a vulnerable position from the start. The more you diversify, the more protection you give your business. Reach your customers in different ways. Create flexibility within your supply chain. Diversify the products and services you provide.

Think back to your biggest business risks and reduce them to mild inconveniences.

Yes, you should always have robust contingency plans to prevent unexpected disruption. But you shouldn’t need to plan for complete and utter disaster—because it’s already in your power to decide what is and isn’t a disaster for your business.


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