Creating Business Resilience- 4 Things to Remember
Regardless of the business' history of profitability, no organization is completely free of risks. While strict planning can prevent internal threats such as human errors and data leaks, some things are simply out of anyone's control.
To prepare for these situations, companies can proactively create business resilience in their operations to minimize the potential damage and allow flexibility in their budgets for recovery strategies.
Understanding Business Resilience
From natural disasters such as tsunamis and earthquakes to manmade disruptions such as cyber-attacks or human errors, the potential threats to a business are varied and many. While disasters can strike without warning, building business resilience is a precautionary measure organizations can take to minimize the impact of interruptions.
Business Resilience sums up a company's ability to prepare and plan for hypothetical emergencies, while continuously adapting and strategizing to improve response capacity and recoverability.
An organization showcasing excellent resilience will furthermore have the capacity to protect personnel and assets and minimize the time required for recovery. Utilizing the right technology plays a big part in business resilience. With the use of forecasting software and innovative security measures, companies can make data-informed decisions during these processes and protect sensitive information.
Furthermore, business resilience relies on excellent communication throughout all levels of the organization, alongside proactive, rather than reactive, disaster plans.
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Top 4 Tips for Planning Business Resilience
1. Understand What Business Resilience Means For the Company
Handling disruptions or a disaster with quick, decisive, and well-reasoned actions while keeping staff and assets safe is a huge part of building resilience.
With this in mind, it is important to precisely identify what that resilience means to the company while considering the vision of the business, its clientele, and the financial and operational breaking points.
Every facet of a business should be assessed in this crucial planning stage as this will shine a light on what parts of the operations are more flexible than others and which aspects require attention and greater assistance.
This initial assessment stage is also about identifying the vital operations and personnel of the business and what actions or tasks need to be performed when crises strike. The aim should be to unearth the weak spots of the business and determine the minimum level of operation required to keep the organization afloat.
2. Be Well Versed in What Types of Disasters Can Strike
While major natural disasters may seem like the obvious crisis to safeguard against, there is a host of other common disruptions that need to be understood and considered before a business resilience plan can be crafted.
According to a Business Continuity Institute Horizon Scan Report from 2016, the most concerning threats to a business include cyber-attacks, data breaches, unplanned IT outages, security incidents (such as vandalism or fraud), interruptions to utility supplies, adverse weather, health and safety incidents, and fires. Thus, it is vital to focus on the risks specific to the business and its respective industry.
Formal risk assessments are a great way to identify which threats the business is more susceptible to, as well as the potential level of damage to finances and reputation. Using this information, businesses can strategize ways to decrease the severity of disruption by implementing effective risk treatments.
3. Devise a Business Continuity Plan
Being prepared is one aspect of building resilience, but organizations must also ensure there is a plan to get the business back on its feet post-crisis. A business continuity plan is the key to successfully resuming operations and should contain the following information-
- Business Impact Analysis (BIA)
- Essential Functions
- Vital Records
- Resource Plan
- Risk Assessments
- Risk Management Plan
- Readiness Handbook
- Emergency Response Plans
- Communication Plans
- Authority Delegation
4. Crunch the Numbers
Even minor disruptions can impact business finances, which means all business resilience planning should include a comprehensive outlay of the financial implications of disruption scenarios. It's vital to analyze and forecast how much it will cost the organization to halt operations for an hour, a day, a week, or more.
It is also important to remember that according to the Federal Emergency Management Agency, disasters typically force 40% of small businesses to permanently close their doors with average daily losses of $3,000 USD post-incident. While the probability of disruptions reaching this level of severity is typically low, business resilience planning costs little and can save thousands.
Taking the time to identify what the potential impacts of each possible threat are and consequently devising a strategic plan to mitigate risks can preserve the financial health and reputation of a business.
- Business Impact Analysis- Guide to Uncovering Risks in an Organization
- Risk Assessment Process- 6 Steps to Follow
- Risk Mitigation Plan- 5 Strategies to Consider
- Creating Business Resilience- 4 Things to Remember
- The 3 Components of Reputational Risk Management
- Business Recovery Plan- Checklist for Small Businesses
- 7 Types of Business Risks and How to Counteract Them