Engaging Executives in Business Continuity Management
Roberts, Patrick, Management Services
For many years, one of the key challenges in Business Continuity Management (BCM) has been securing the support of executives. Over the years, many explanations for the difficulties encountered have been advanced including:
* Lack of understanding of BCM;
* Lack of personal experience of crises; and
* Constant distraction by more pressing concerns.
Understanding of BCM
Clearly the fact that few executives will have had any hands-on BCM experience in their career has slowed the recognition of the importance of the discipline.
This is exacerbated by the almost total absence of BCM in MBA syllabuses and executive education programmes. That said, numerous articles on BCM have appeared in mainstream business publications and the quality newspapers, so awareness should be improving.
Furthermore, BCM now has a number of powerful advocates including (in the UK) the Institute of Directors, MI5 and the FSA. Ultimately, BCM is not a complex subject to grasp and a reasonably articulate BC consultant or manager should be able to communicate the important messages in a short space of time.
Experience of crises
One often hears the explanation that executives fail to appreciate the importance of BCM because organisational crises are seen as being so rare in modern times. However, a study of a large number of UK companies over the period 1997 to 2002 revealed that:
* 99% of companies
experienced a crisis resulting in a loss of value of over 10%; and
* 40% of companies
experienced a crisis resulting in a loss of value of over 30%.
Whilst it is perfectly possible that an individual will not experience any personal involvement in a crisis over the course of their career, nobody in a senior management position can be truly unaware of the numerous high-profile recent disasters.
Lack of time
Undoubtedly, in many organisations, executives' time is one of the scarcest resources. Indeed in his classic 1975 Harvard Business Review article 'The Manager's Job: Folklore and Fact, Henry Mintzberg revealed that half of the activities that CEOs engaged in lasted less than nine minutes and only 10% exceeded one hour. However, the same article also highlights a more positive point: 93% of CEOs' verbal contacts are arranged on an ad hoc basis so getting 'face-time' with key decision makers would appear to be largely a matter of persistence.
What's in it for me?
Generally people focus on the tasks for which they are best rewarded and much work in recent years has gone into designing incentive schemes to ensure that employees' interests, particularly those of senior managers and executives, are aligned with those of the shareholders of the company. These include various profit-sharing schemes and the widespread granting of shares and share-options. There is a common drawback in all of these schemes though, in that the risks that were taken to generate greater profit (or an increase in share price) can manifest themselves long after bonuses are paid or share options are cashed in.
An executive considering a BCM proposal must therefore weigh up the up-front cost of the programme - which will impact negatively on this year's bonus - against the potential long term pay-off. …