Every business will face an emergency or unplanned disruption at some point – it’s inevitable. Although the prospect of a disruption is always unsettling, there may be a silver lining for businesses if they’re prepared for what’s ahead. With a strategic Business Continuity plan, a company’s response to disruption can be an opportunity to demonstrate the integrity of its leadership and the strength of the organisation as a whole. Dean Guida, Founder and CEO of Infragistics, explains what an effective Business Continuity plan looks like.
Companies need to be ready for the crises that cause a noticeable impact on the business and how they continue to operate. This includes everything from natural disasters to data breaches to supply chain failures. And something that’s not part of every organisation’s Business Continuity plan, but should be, are market shifts and economic downturn. While typically a more gradual disruption than a natural disaster or cybersecurity issue, these events can completely change how a business operates.
During our 35 years at Infragistics, we’ve faced our fair share of disruptions like any business, but the biggest challenges to our business have been those from our own industry. Technology can be an especially volatile industry as new companies emerge and tech evolves, forcing businesses to adapt, or get left behind. For example, over three-plus decades I’ve navigated the company through a series of tumultuous moments in the Internet’s ongoing evolution from the dot-com tech bubble of the late 90s, the explosion of the Internet, the 2008 recession and even the launch of the iPhone. Each of these events impacted the needs of our customers, the products we create and sell and, ultimately, the direction of our business.
There’s not one specific method to best address an emergency or industry disruption, but rather a series of steps businesses can take to prepare, adapt, react and drive future success.
Here are five tips to prepare for the inevitable business emergencies and industry disruptions and respond accordingly to successfully move business forward:
- Have money in the bank
The worst thing a business can be is unprepared. Without having the proper protocols and systems in place before a disaster strikes, a company puts itself at more risk of a disruption making a severe impact on business.
A big part of the preparation, if not the biggest, is finances. A company’s employees and products and/or services may remain untouched when disaster strikes or the industry changes tides. But, if there’s no money to support the business at the end of the day, it will not survive.
To prepare for this, companies should have at least three months of cash in the bank. This means, if a business were to make absolutely no money for three months, this amount should cover those three months of bills. It’s an emergency fund for businesses and should be non-negotiable.
Companies should also understand their business from the perspective of a rolling 12-month cash flow to have a full view into where money is coming from and where it’s going. The more companies understand this, the better decisions they can make about where to attribute resources in emergency scenarios or amidst changing industry conditions.
- Establish a response team
Another critical piece of Business Continuity is creating a response team. This team should be responsible for preparing for, detecting and addressing disruptions and be in place before disruption happens. This is important not only for the team itself to respond quickly and mitigate any damage, but for other employees to have peers to look to for answers.
Response teams are typically composed of managers and executives who can make on-the-spot decisions. They should cover all areas of the business, like communications, finance, HR, business operations and legal.
Once a response team is in place, the next step is to develop a comprehensive risk assessment by identifying potential disruptions and creating a clear response protocol for each. An effective plan can shorten or lessen the impact of a disaster, protect employees and other stakeholders and safeguard the company’s reputation.
While a formal response team is best to respond to quick-hitting disasters, there are also teams that companies can put in place for industry disruption-related decisions. A red team is another type of team that can be made up of employees, customers and other stakeholders. The red team’s goal is to punch holes in things like business strategies, go-to-market plans and data security. This is especially helpful when companies are facing industry disruption and need to make decisions to create or expand products and/or services or adapt to new technology. This approach forces companies to think critically about their goals and address potential blind spots.
Businesses should embrace diverse perspectives for these teams by recruiting employees and other stakeholders with a variety of backgrounds, experiences and ideas. This ensures that the company isn’t trapped in an echo chamber, but rather has access to a wider range of perspectives to navigate challenges.
- Communicate thoughtfully
A company’s top priority during a disaster is to communicate with its employees and external stakeholders (like investors and customers). But it’s not enough to just communicate, it must be done both quickly and thoughtfully.
While communicating with employees and external stakeholders, businesses need to be transparent by addressing the issue at hand, answering questions and providing regular updates throughout the disruption’s impact. Consistent communication fosters trust and allows companies to regain control during a turbulent time.
A company facing a data breach, for example, needs to share details about the breach, answering questions like when the breach took place, who was affected and what information was taken. While this is required information, the company can then take additional steps to offer free credit monitoring services for those affected and share what internal changes are taking place to prevent a similar disruption in the future.
- Be flexible
At some point, every business will come up against an unplanned emergency or face disruptions like economic downturns and market shifts. And even with plans in place, these events can make even the most meticulously thought-out plans obsolete.
Successful businesses are ones that ditch the ‘my way or the highway’ mentality and learn to adjust their course and strategies as needed. In emergency situations where time is of the essence, companies need to lean on their response team to make the best decisions for the business, employees and customers in the now – even if it’s not according to plan.
When faced with the onset of an evolving industry, companies need to be open to adapting their business to the changing times. Especially in technology, the businesses that stay set in their ways are the ones that get left behind. This doesn’t mean that businesses should quickly hop on the bandwagon of new technology or transformation. But they should be open and do their due diligence to how they can potentially evolve to keep up with the times and address customers’ changing needs. We’re seeing this right now as businesses navigate the use of AI.
- Stay true to who you are as a business
A natural reaction to a business disruption can be to abandon strategy and scramble for a quick fix that might not necessarily align with your business. And while companies need to be flexible and adaptable, this doesn’t mean they should completely change course on who they are as a company. Companies that choose to stay true to their core mission and vision during these tough times are the ones that will ultimately emerge stronger.
A well-defined ‘North Star’ – a company’s core values or long-term goals – reminds everyone of the ‘why’ behind the work. It provides a sense of purpose, ensuring that all actions, whether day-to-day work or response to a business disruption, align with the overall mission.
As part of this vision, businesses should have a clear, strategic plan outlining a roadmap for the company’s future to help guide their decision-making and stay true to their larger vision. This will ensure every employee understands the vision and can properly make decisions for the better of the business. This strategy should be considered as companies think through their response plans.
By being proactive and flexible, businesses are prepared to not only weather the storms that come their way but have the opportunity to emerge stronger.
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