By: Ignacio Barros
In theory, every organization should be prepared for incidents that could cause an unplanned interruption to its operations. In practice, very few organizations are.
And it is that, in the desire to feed operational certainties, more than one company develops various levels of control, but does not always stop to theorize uncertain scenarios (black swans, as Nassim Taleb calls them) that could endanger the company or that could derail their core mission in the markets they serve.
In its simplest definition, a Business Continuity Plan (BCP) is a logistics plan that prepares an organization to restore or recover its critical functions when they are totally or partially interrupted by some type of disaster; for example, a fire, an earthquake, a flood… or a pandemic (1).
What basic elements should a PCN contain in the Covid-19 environment that we are testifying? We propose these three:
1) Anticipate the inevitable contagion and contain the avoidable one.- And this goes far beyond sending the greatest number of collaborators to work at home or implementing basic hygiene measures that reduce the spread of contagion.
It involves anticipating what should happen if a collaborator becomes infected and, as a consequence, a critical circumstance occurs due to two intersecting effects: the possibility of massive contagion and the possible operational implosion due to the absence of key personnel at key moments.
2) Try to anticipate all the negative effects of the disaster.-And not because they can all be reversed or redirected, but because the new theater of operations must be identified, with its new logistical and market limitations and restrictions.
In optimal terms, for each negative effect identified, a microplan can be created to contain, mitigate, absorb or dilute it, but the most important thing is to be aware that the facts do not cease to exist by the mere act of ignoring them.
3) Decide the necessary changes immediately.- In the design and execution of a PCN, speed is more important than perfection. And it is that more companies suffer from inaction and inability to react managerially, than from the intrinsic uncertainty that a disaster causes.
Evaluating and defining action criteria is of the utmost importance in such sensitive issues as liquidity management, the suspension of non-essential expenses, the capitalization of positive impacts (if any), the review of critical costs of the restoration, the monetization of non-operational assets or the immediate substitution of capacities required for the new reality.
In the short term, the primary goal of a BCP is to enable business continuity. Certain areas of regular operation may be suspended, but everything technically, financially and humanly possible must be done to keep viable business flowing.
A natural disaster or pandemic tends to throw most organizations off course and adrift in moments. Consequently, the most important thing about a BCP is that it allows the company to re-set a conscious course of rapid strategic action.
Note that a BCP does not solve everything by itself, nor does it structurally reinvent the business, but it does shape a unified perspective of the complexity faced and provide direction. And it is that, even in the midst of disaster, the main function of an entrepreneur and his reaction team is to shape in the organization what is necessary to produce predictable income in an unpredictable world and markets.
(1) Article The ABC of a BCP: Mauricio Candiani for El Financiero de México in partnership with Bloomberg