Thomas Insights, Hugo Britt, April 23, 2020
A business contingency plan will give your organization a head-start over its competitors when a disruptive event occurs. It identifies risks, prioritizes them, and outlines the actions that need to be taken to minimize impacts and return to normal operations as soon as possible.
In light of disruptions surrounding the spread of COVID-19, there’s no better time than the present to prepare a plan for an event that can have a major impact on your business. As climate change continues to elevate the risk of extreme weather and natural disasters, especially in the Asian Pacific region, so increases their risk of having a detrimental impact on your business.
Having to develop a plan from scratch in response to a disruptive event wastes valuable time, during which production is impacted and sales lost until the plan is finally ready to launch. By contrast, having a ready-to-go plan that can easily be accessed, tweaked, and launched will dramatically shorten the impact period and bring about recovery sooner.
Where should you start? With a brainstorming session.
Brainstorm Potential Risks to Your Business
Start by listing the very broad categories of risk that could impact your business and lead to weaker sales. Factors may be external, such as:
- The economy
- Technology
- Changing social attitudes
- Government
- Competition
- Natural hazards
Or internal, such as:
- Supply chain disruption
- Workplace accidents
- Employee availability
- Infrastructure failure
- Cybersecurity breach
- Budget or schedule overruns
Then, brainstorm as many specific risks as you can envisage under each of these categories. For example:
- The economy
- Severe economic downturn or recession
- Significant currency exchange rate change
- New trade agreements and tariffs
- Employee availability
- A key employee quits suddenly
- A large number of employees call in sick at once
- Industrial action
Not every risk event will fit neatly into a single category. For example, COVID-19 straddles several of the above categories. As a disease, it is a natural hazard, but Coronavirus is also causing a severe economic downturn, supply chain disruptions, and impacting employee availability.
A business contingency plan may also identify positive impacts that may increase sales. Examples include an economic upturn or a competitor exiting the market. A plan should be in place to take advantage of new conditions, for example by hiring more operations staff to cope with an increase in sales volume.