4 Steps to Business Resilience

By Tompkins, James A. | Industrial Management, July/August 2007 | Go to article overview

4 Steps to Business Resilience


Tompkins, James A., Industrial Management


EXECUTIVE SUMMARY

If your company isn't prepared for business disruptions, then be prepared for the consequences because many organizations that suffer serious disturbances don't rebound. A four-step action plan will put you on track to create, maintain, and implement responses to interruptions.

If your business is not prepared to handle disruption or disaster, then it will suffer. It may not even survive. It takes a bold approach to ensure protection in today's ever-shifting marketplace.

According to the book Management Information Systems for the Information Age, only 6 percent of companies affected by the loss of all company records survive long-term. You may have planned for data loss and recovery in the case of a disruption in operations since company records are a major priority for all organizations. But protecting records is just one part of resilience planning.

Information technology, physical security and structure, operations processes, and considerations for the supply chain are all factors, as are personnel. For example, there may be a plan for employees at your organizations to communicate if land-line and cell phone service is disabled due to a disaster. But if employees can't get to work because of structural damage to their offices or they can't use inaccessible roads or borders have been closed, your work force will be greatly reduced in a situation in which you need them the most.

The concept of business resilience is still relatively new. Except for those companies that have learned to expect continuous business disruptions, many are still struggling with the idea. There is a tendency to look for the cause of the disruption and tackle survival that way, which can be helpful. But it is not as important as other activities - such as researching how companies with frequently disrupted supply chains plan ahead and recover or determining how to add redundancy to operations without driving up costs.

With the following four steps, you can produce a plan that will address these concerns and allow your company to be resilient.

Step 1: Prepare for the plan

The process of developing a business resilience plan starts with the creation of a planning team. The makeup of this team is critical and should include members from all functional areas in the company because vulnerability and resilience affect everyone. The members of the team must have a good understanding of the processes in their functional areas and how those processes would be affected by both interruptions and surges in demand.

The business resilience planning team typically includes members from outside the physical boundaries of the company, such as supplier and outsourcing provider representatives. Including them is a bold move: You might meet with some initial internal and external resistance. Be firm when you encounter it.

Resilient organizations rely heavily on outsourcing providers and supply chain partners to help them achieve the flexibility, adaptability, and redundancy they need. Use your leadership skills to persuade key players from outside your company to join the team. The results will probably surprise and please them, and everyone will win when an unexpected situation occurs.

After the team is created, choose a representative to be the single point of contact between the team, the rest of the company, outside supply chain partners, outsourcing providers, and company executives. The team should then gather the results of its assessments, including:

* A list and analysis of all significant threats, vulnerabilities and dependencies related to critical business processes throughout the organization at both functional and geographic levels.

* An evaluation of any existing disaster recovery, business continuity, and crisis management plans.

* Metrics that show the business impacts of gaps, vulnerabilities, and risks on critical business process and operational infrastructures. …

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