Does your organization have a contingency plan? If not, learn how to use contingency planning to reduce identified risks and protect business assets.
Contingency planning is an integral part of any sound business strategy. As a component of risk mitigation and management, planning for downtime, damage to infrastructure, and interruptions to service helps reduce financial losses. Contingency planning also helps reduce the impact of any service interruptions. Protecting an organization’s financial, tangible, and intangible assets is one of the central purposes of any plan. Several circumstances that fall outside the direct control of leadership can lead to service interruptions and damage to existing assets. Leaders can use the planning process to anticipate what circumstances could impact the organization’s ability to deliver service and come up with ways to effectively respond to those circumstances.
Preparing for Service Interruptions
The types of circumstances that can lead to service disruptions include:
- Power outages
- Severe storms
- Water leaks and flooding resulting in damage
- Fires that cause damages to infrastructure and property
- Earthquakes, tornadoes, hurricanes, and other natural disasters
- Cyber attacks and malicious intrusions
- Data theft
- Intellectual property theft
- Bombs and explosions
- Gun violence
Contingency planning includes assessing the risk of each of these circumstances, as well as other vulnerabilities that are unique to the organization. Besides assessing the risk for separate circumstances, planning how to respond to various emergencies and how to manage various crises are components of any contingency plan. Risk assessment includes determining the probability of various circumstances and what incidents the organization could face. Emergency response plans include how to respond to various emergencies, determining a chain of command and specific processes, and assigning specific processes and tasks to individuals or groups. Crisis management entails detailing how the organization will respond to questions and complaints about service disruptions, in addition to what the organization’s response to those questions and complaints will be.
At the beginning of the planning process, leadership should assess the organization’s contingency needs. Some of the areas and issues to look at include whether the firm currently has a contingency plan, what type of contingency plan exists and what processes and response methods need to be updated, added, and eliminated. If a contingency plan does not exist, leaders should determine what needs to be done to get one in place and who needs to be involved in creating the plan’s response methods and processes. Training on any modifications to an existing contingency plan or a newly formulated one should also be included in the needs assessment. Leaders should determine who needs to be trained, when, and how.
A sound contingency plan that is thought out and well implemented can help an organization better identify what assets are at risk, what circumstances present the highest risks and improvement opportunities. Over time with implementation, employees will become more experienced with responding to emergencies and managing crises. Successful risk mitigation will continue to increase, along with knowledge of the most appropriate responses to various adverse circumstances.