Embracing Business Resilience

In our previous article, we provided practical advice on how to protect yourself and others from catching or spreading the COVID-19 coronavirus. However, we are all experiencing not only the threat of the virus itself, but the business impacts due to social measures being put in place. So how can your business be ready to handle unusual situations and ensure you are able to continue doing business even when your everyday routine is disrupted? In this article, we discuss the concept of business resilience, provide tips towards achieving resilience, and identify a great resource for you to use in your efforts.

What is Business Resilience?

Business Resilience is the ability to quickly adapt and respond to threats and disruptions that could impact your company’s viability, while maintaining continuous operations and safeguarding people, assets and overall brand equity.

Why Should I Care about Business Resilience?

Your Livelihood is at Stake! How long can you afford to be down? Although the probability of a major disruption may be low, the impact of disruptions—even minor—can be significant on profit and productivity.

• A small business can experience an average of $3,000 in losses for every day it is closed. A medium-sized business can average $23,000 in losses per day.
• After a disaster, about 40% of small businesses will not reopen. An additional 25% close their doors over the following two years.

Customers Look for Resilience. Due to regulations and their own vendor policies, your customers are demanding resilient practices of those they do business with. Show your existing and potential customers that you are dependable and can be relied upon at all times.

Hindsight is NOT an Option. News of a loss travels fast and businesses that are unprepared may be unable to swiftly resume normal operations, which could result in a decline in client confidence, loss of business, and a deterioration of your brand. Careful business resilience planning can mitigate the impacts of a disruption and allow your business to continue to function or to return to normal more quickly.

Where Do I Start?

To achieve business resilience, you need to understand where your business vulnerabilities are and work to minimize those vulnerabilities.

Step 1: Identify Hazards: Think about the events that could adversely impact your business. These should include both natural events – hurricanes, tornadoes, fires, floods, snowstorms – and man-made events – theft, vandalism, ransomware attacks, and computer viruses. Another approach is to identify the immediate impacts these types of hazards would have, because many hazards will result in similar impacts to your business. Do NOT underestimate the risks associated with IT and data threats!

• Power outage
• Telephone/Internet outage
• Office space damage
• Staff unavailability
• Key data corruption/unavailability

Step 2: Identify your Assets: Identify all of the resources that you use in your business. It will be helpful to categorize these resources into different categories:

• Data – documents, files, vital records, etc.
• People – employees, customers, vendors, visitors, partners, etc.
• Operations – accounts receivable/payable, payroll, etc.
• Equipment – computers, servers, network, furniture, copiers, etc.
• Buildings – main office, store front, leased space, storage unit, etc.
• Inventory – emergency supplies, stock, materials, etc.

Step 3: Assess Hazard Impact to Each Asset: Not all hazards will impact all assets equally, so identify which assets are vulnerable to each hazard. For example, a ransomware attack is an extreme hazard to your Data and Equipment, but not your People or Buildings. Conversely, depending on where you store your data and how it is backed up, a fire in your office building will be an extreme hazard to your People, Equipment, and Building, but not your Data.

Rather than a yes/no answer, rate each hazard’s impact on each asset, using a scale of:

• 1 = Negligible
• 2 = Marginal
• 3 = Critical
• 4 = Catastrophic

By using a rating scale, you will be able to quickly identify the hazard/asset combinations that are the largest threat to your business resilience and work to protect yourself.

Step 4: Prevent and Plan: Starting with the hazard/asset combinations with the highest impact scores, work on:

• Preventative Policies and Procedures – Create policies and business practices that lessen the probability of a hazard occurring or the impact of the hazard. Examples are:
  • Antivirus software, training on email phishing attacks, and strong password policies help prevent the probability of malicious IT attacks.
  • Setting up remote data hosting and desktop capability eliminates the need for staff to work at the office.
  • Succession plans that map out key staff positions and skills required, along with training plans for developing redundant skill sets, reduce the threat presented by an unanticipated employee absence.

• Response and Recovery Plans – Create contingency plans that spell out the actions your business will take in the event a hazard occurs. Do these now, so you have your thoughts in order. Trying to determine the best course of action while in the midst of hazard recovery will be stressful and likely lead to some missteps. Make these plans clear and concise – no long paragraphs. Think about bulletized instructions. Any plan should include:
  • A Timeline of Actions – steps that you and your staff take during the first hour, the first day, the first week, the first month, etc. until you have fully recovered operations.
  • A Contact List – phone numbers and emails of employees, customers, and vendors, so you can keep everyone informed of your business status and actions.

Where Can I Get Help?

An excellent guide that can help you understand your current resilience level and how to improve your resilience stance is the “Resilience in a Box” effort, sponsored by the U.S. Chamber of Commerce. Go to https://www.uschamberfoundation.org/resilience-box for:

• A checklist to determine your resilience level
• A Business Resilience 101 Workbook that walks you through the steps highlighted above
• Additional tips for preparing your business

Be Prepared!

The likelihood of a threat to your operational viability is a reality that most businesses will face. Be proactive and protect your business by adapting business resilience strategies.