Is It Time to Revise Your Business Continuity Plan?
Business continuity planning has typically focused on natural disasters. Flooding, hurricanes, tornados, earthquakes, blizzards, fires, power outages, acts of terrorism and outright war pose a significant risk to continued operations. Add pandemics to the list.
A lack of preparation for pandemics left many businesses ill-prepared for lockdowns, shelter-in-place orders, school closings, social distancing measures and the transition to a remote workforce. COVID-19 forced many businesses to take drastic actions to remain operational, actions they previously never would have considered.
Beginning in March 2020, business continuity planning managers were revamping plans to include variables that had rarely been addressed. According to research from the University of New Hampshire, 11.5 million jobs were lost in the United States due to the COVID-19 pandemic. Business Insider reports that more than 7,500 retail stores are closing in 2020 because of what they are referring to as a “business apocalypse.”
Many businesses were simply unprepared to adapt their business models to accommodate the new rules in place to prevent the spread of the virus. In light of what we know, now is the time for businesses to revisit their business continuity plan (BCP).
Plan for Rare 'Black Swan' Events
Dan Johnson, director of global business continuity and disaster recovery at Ensono, a hybrid IT provider, said businesses should treat their BCP as an ongoing effort, not just a check-the-box activity that they test once a year.
"Keep your leadership, employees and vendors engaged in your resiliency efforts by including them in your tests, reviewing and updating their recovery plans and ensuring that your company is always prepared for an event," he said. "When a disaster does occur, you will be prepared for it because you manage your business continuity program throughout the year anticipating the inevitable and ensuring your employees are fully engaged to respond to it when it does.”
Some call the COVID-19 crisis a "black swan" event because the majority of businesses, and even many BCP professionals, failed to see it coming and were not prepared to deal with the ramifications. Though experts have been warning that a pandemic was inevitable, many businesses failed to plan and were unable to adapt quickly enough to remain fully operational.
Unforeseen disasters can effectively stop a business from functioning, and they can take many forms. The key is to be prepared for the unknown, said Jim Goldfinger, chief customer officer at Customertimes. Customertimes, whose global offices include Belarus, found itself in a unique situation when its employees' internet access was suddenly interrupted during recent protests against the government.
“When the political protests forced the shutdown of the internet, we were forced to relocate many of our employees to the Ukraine and had to scramble to find suitable housing and transportation for them," he said. "This was certainly an unforeseen situation over and above COVID and an example of our need to institutionalize plans and procedures moving forward to streamline that type of scenario if it happens again.”
While it may be impossible to predict black swan events, it is not impossible to prepare for them. Much like survivalists or “preppers," businesses can prepare for the unknown in much the same manner. As the saying goes, when you fail to prepare, you prepare to fail.
Building more resilient systems will help businesses bounce back from future shocks such as pandemics, wildfires, hurricanes and earthquakes, said Justine Burt, director of outreach at Manzanita Works and author of The Great Pivot: Creating Meaningful Work to Build a Sustainable Future.
"Having an updated business continuity plan means a business will have thought through what they need to run their operations and that they will have redundancies in place in case they are suddenly cut off from those resources,” Burt said. “Clearly we do not know what the future holds but we can conduct scenario planning to think through what could happen and make sure we are prepared for various scenarios.”
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Flexibility and Adaptability Is Crucial
The COVID-19 pandemic has allowed businesses to learn what works and what doesn’t in terms of business continuity. Flexibility has been the key, said Goldfinger, as guidelines for safety and in-school vs. remote learning have shifted, companies have been forced to be more flexible in support of employees’ families.
"Companies have been forced to adapt as the rules change and need to use this time as a learning opportunity to install more formal processes and procedures moving forward," he said. "We are learning very hard lessons right now and need to be cognizant of what has worked and not worked in order to institutionalize changes for the future.”
Just as it’s important during a crisis to provide employees a flexible work schedule, it’s also crucial to be flexible when it comes to a BCP. There should be thorough responses to the potential scenarios but businesses should recognize the most important quality during a crisis is the ability to adapt. The rules change quickly, conditions are fluid and there is no sense of normalcy.
“Our businesses are changing every day and the only way to capture those changes in your BCP is to ensure your program is flexible and adaptable," Johnson said. "As your business continues to grow including more staff, support systems and new processes, you must capture that growth in your Business Impact Analysis and Business Continuity Plans."
Having a sound testing program is also essential, he said, and be sure to use a variety of scenarios to test plans, not just a fire or power outage. “Don’t make your business continuity plans scenario-based, ensure that your plans can be used to recover your business regardless of the scenario," Johnson said. "This will allow you to have the flexibility to respond to any disaster and keep your business running. Have a pandemic plan for your organization, but your BCP should include the steps to recover during the incident regardless of the event."
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Ensure Customer and Employee Safety
Johnson said the safety of employees and customers has to be the top priority. “They are the most important asset for any business. Your BCP is worthless if you don’t have the employees to implement it. Ensuring your employees are safe will allow you to recover and support your customers,” he said.
Throughout the COVID-19 crisis many businesses were unprepared or unable to provide for the safety of their employees, Goldfinger said. Government lack of preparedness has complicated it even further. “The lack of preparation by the federal, state and local governments has created a painful and ethical dilemma with regard to the safety of employees and customers right now," he said. "Of course, everyone would love to open up all of our businesses and schools fully, not just for the health of the economy but for the psychological well-being of our citizens.”
Businesses not in a position to allow employees to work remotely, or otherwise work in a safe environment, must “be proactive in making whatever investments are necessary to make safety a priority, such as providing the appropriate PPE, flexible work schedules, private transportation, and anything else that can minimize the risk,” Goldfinger said. These issues are often overlooked in a BCP.
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Another neglected element is employee mental health. A November 2019 Gallup report revealed that isolation and loneliness are a problem for nearly 35% of remote workers. On top of that, a study on employee benefit trends by MetLife indicated that 58% of struggling employees work for employers that do not provide mental health programs that fulfill their needs and among those that do, those programs are hard to access or understand.
Automate Systems and Processes
Simple repetitive tasks can be automated to further enhance flexibility. Using robotic process automation (RPA), companies are able to perform a task in days that previously would have taken weeks. During the pandemic, many businesses used RPA to automate mundane processes. “Automation should be a part of your BCP because it is most likely a part of your business," Johnson said. "If automation is utilized for your most critical processes, then you should ensure this is also covered in your BCP."
According to a report from Grand View Research, the RPA software segment is expected to grow at a 38.7% compound annual growth rate from 2020 to 2027 based on demand for handling remote workplace issues and reducing company expenses. A Forrester report from May indicated that the COVID-19 crisis is accelerating enterprise automation plans as businesses recognize the urgency to adopt automation for risk mitigation and strategic investment.
While many businesses will require human interaction in conjunction with automated processes, there are industries that are using automation to reduce human contact during the pandemic. The meat processing and manufacturing industries, fast food restaurants, the medical cleaning industry, and even the welding industry are using robotics and automation to reduce mundane tasks. Investment in automation should be considered an essential part of a BCP.
Distributed Systems Increase Resilience
Traditional management thinking held that centralized business practices enabled leadership to maintain control of a business, its workers and its costs. While this may have been true at the time, decentralized methodologies make more sense for resilience. By having distributed systems and processes, the chances of them being shut down during a localized disaster or crisis are less likely. The same holds true for the workforce. A remote and distributed workforce decreases the likelihood of workers being unable to work due to localized events.
“COVID disrupted many systems in the U.S.: commercial supply chains for food and personal protective equipment, healthcare, where we work, and where our kids learn. We learned how brittle many of these systems were, systems we thought were nimble,” Burt said.
One of the largest hurdles many businesses faced, and are still facing, is supply chain failure. Businesses that depended on supplies from vendors and manufacturers dealing with lockdown restrictions faced severe operational challenges. Other businesses that transitioned to a remote workforce found themselves dealing with employees that did not have functional home workplaces, lacking laptops, webcams or other equipment required to do their jobs. It became difficult to even purchase required equipment as millions of newly remote workers scoured the web to find in-demand products.
“As the global economy rebuilds, companies big and small will take a closer look at their supply chain business continuity plans," said Sam Polakoff, CEO at Nexterus, a supply chain and technology company that’s been in business since 1946. "Manufacturers, retailers and distributors will need to create better contingency plans and ensure their supply chains are lean."
That means developing cost-mitigation strategies, modeling ‘what if’ scenarios and looking for ways to increase efficiency. In addition, companies should develop new business relationships with suppliers in different parts of the world. Businesses need to establish alternate options for their supply chains before they are needed and that they “can’t put strategic planning issues on the back burner while only focusing on day-to-day operations,” Polakoff said.
By having alternate vendors in different locations and various delivery service options, businesses are better prepared to deal with the challenges of remaining operational during a crisis. Additionally, it’s not enough to simply have a remote workplace plan. The hardware and software requirements of remote workers should be planned as well, and hardware should be on hand so it can be provided when workers need it.
Which Roles, Services and Skills Are Essential?
In times of crisis, it’s important to know which elements of business are mission critical and those that are not. Critical processes such as employee payroll, supply chain and healthcare are necessary to keep operational. By understanding which aspects are critical, leaders will be in a better position to reorganize teams and reallocate resources during a crisis.
“This is one of the most critical elements of your business continuity program," Johnson said. "You should always revisit your most critical processes, the systems and applications that support them and the roles of your employees that support these critical processes."
Employee engagement and productivity are also critical to the operation of a business. In times of crisis, especially in regards to remote workers, value is defined by productivity rather than hours worked. Expectations and guidelines for remote employees should be clearly defined within the BCP.
“With a large number of non-essential employees working at home, now is the time to revisit how supervisors manage their employees. People who had been wanting to work from home were suddenly allowed to do so once statewide shelter-in-place orders were announced,” said Burt. “Clearly defining metrics of workplace productivity provides employees with guidance they need to meet management’s expectations. Face time in the office is being replaced by output-based metrics which give employees the flexibility to complete their work in a way that is most productive for them.”
Creating a plan that prepares a business for potential disaster is challenging. But by being prepared for unknown events, incorporating flexibility, prioritizing the safety of customers and employees, automating mundane tasks, using distributed systems, prioritizing essential processes, and reshaping strategies for business continuity and resilience, a business can be prepared to handle the next crisis.