Planning for the people side of continuity
Recent events in Canterbury, New Zealand, have emphasised the risks that exist in business and the fragility of organisational operational ability. The earthquakes that shook the city of Christchurch in 2010-2011 caused extensive damage to people's lives, homes and businesses. Organisations, particularly those within critical industries, faced enormous pressure to continue operating while simultaneously experiencing major business disruption which threatened their survival. Yet some organisations were able to endure, even thrive, throughout and after the events. How?
A study conducted by Resilient Organisations (in partnership with the University of Canterbury) found that the magic ingredients to such success are not only being prepared through planning, but also organisations taking care of their social capital and utilising their networks. Organisations that had prepared thorough Business Continuity Plans (BCPs) prior to the September earthquake were able to use them to take immediate action during the disasters and continue operations. They knew how to take care of their people, how to keep communication channels open, and what actions to take. Those that had no formal plan, or whose plans were weak, experienced a significant learning curve (which served them well for when the more devastating February earthquakes occurred). They survived based on their utilisation of networks - good relationships and cooperation along the supply chain - and through the ways in which they took care of staff – providing for employee needs and making sure they felt valued by the company. These organisations contradicted the myth that a lack of formal planning will result in business failure. Plan or no plan, it was the relationships between people and the resilience of organisational members that allowed the organisation to succeed through such disruption. In a truly resilient style, these organisations learnt from their experiences and came out stronger and more resourceful for when the next disaster struck.
BCPs are well established as a central plank in an organisation's risk management process, and an integral component of developing a resilient organisation - one that is able to recover and recuperate quickly from a disaster and resume normal functioning. But BCP is just one part of creating a resilient organisation with other aspects relating to leadership and culture of equal importance.
Resilient Organisations interviewed Canterbury businesses to investigate what part their BCP played in their recovery; which parts of their plans were the most or least useful, and whether the process of preparing the plan influenced its perceived efficacy. The findings suggest that the identification of critical functions, good communication prior to and during a disaster, having information back-ups, and training and testing were found to be the most important parts of the BCP process. However, this was something that large organisations found to be more important, and the larger the organisation, the stronger the plan tended to be. Small organisations (SMEs) however found the creation of formal plans to be less important, instead relying on communication and common sense to get them through. If you only have three people in your organisation, there seems little point in writing a large document governing each individual action and telling people where to meet afterwards... everyone already knows! Nevertheless, for those that did use BCPs, keeping the BCP relevant and incorporating the organisation's learning's into it was also key.
Areas that were not well covered in these organisations' plans relate to the consideration of human capital. The study highlights the importance of considering employee wellbeing in designing a BCP, as well as choosing BCP leaders who have good levels of personal resilience and high EQ (Emotional Quotient). Such considerations are often neglected in both theory and practice because of the complexity that planning for human capital demands. After all, planning how to manage people, especially during a disaster, is a lot harder than planning for the more constant elements of one's business such as equipment. However, looking after employees – an organisation's most important asset – is essential for supporting individual resilience through disaster and helping people stay with the organisation when they may otherwise leave. Furthermore, having resilient BCP leaders who can stay calm during high-stress situations, and who can monitor their own emotions to keep everyone else calm too, will be better able to make quick decisions that direct people and resources to actions that promote business continuity. Difficult as it may be, the people side of business during disaster is the number one determinant of success and was of greatest concern following the earthquakes.
The empirical evidence from real organisations in real crises provided by this study should help companies understand the value of, and make improvements to, their own BCP process in the future.
18th March 2014
This article is one of many articles published simultaneously as part of a Flashblog for Business Continuity Awareness Week: #bcFlashBlog, #CountingTheCost