It will never happen to our business! In New Zealand, we recently experienced several large-scale storms over summer, while just over a decade ago, one of our larger cities, Christchurch, was devastated by an earthquake destroying many buildings.
Extreme events like these are difficult to fully anticipate or prepare for. However, conducting "what-if" exercises with your team can help your organisation to consider a wide range of events that could impact your ability to navigate events outside the norm. Your business continuity risk plan might involve establishing a branch of your business in another region to reduce risk.
So, what is business continuity risk?
Business continuity risk (BCR) is an area of understanding, planning and readiness all businesses should make room for. Not doing so is a risk itself!
BCR is the risk your business faces if it were unable to trade and carry on business, should a range of adverse events happen. A BCR plan is a document the business uses to manage this trading risk.
Most businesses take on a range of insurances to reimburse them, should some adverse event occur. However, those insurances may not include a pay-out for all eventualities, nor might they be enough to protect the intangible losses like brand damage or the capital loss if trading was paused. Most insurances are like an ambulance at the bottom of the cliff. BCR plans will include in them some mix of insurance policies for adverse events. However, the value in a business continuity plan is how your business thinks about a whole range of adverse events and their impact on your normal trading. Prevention is better than a cure. Building preventative elements into your business plan and being able to enact them easily, if required, or taking proactive measures before the possibility of an event occurring, is the essence of managing your BCR.
The New Zealand government has some helpful information for organisations to gain awareness of continuity risk planning. This is a good place to start: Continuity and contingency planning
Prior to my Founder/CEO role at Tidy, my career had long focussed on the assessment, by way of mathematical-computer modelling, the business risks for others. This allowed risk reduction solutions to be put in place. The key is to initially brainstorm and then model all potential adverse events which may contribute to the demise of some or all aspects of an organisation's operations and trading success. Although doing nothing may be the chosen outcome in certain situations, it is still important to have considered the reasons why, and the likely impact on your trading. Additionally, it is crucial to evaluate the probability of this outcome relative to other more likely negative events.