If recent history is a gauge it would appear there are a growing number of extreme natural disasters wreaking havoc on the global economy. In a report prepared by London-based global reinsurance firm Aon Benfield, Hurricane Sandy resulted in 65 billion dollar in economic losses. Look to the earthquake and tsunami in Japan as a proof point of how a disaster can impact the delicate global supply chain. Each year the Philippines are impacted by 20 plus typhoons.
According to the Insurance Institute for Business and Home Safety, approximately 25 percent of small businesses fail to reopen after a major disaster. Consider that Hurricane Sandy affected more than one million businesses; it is plausible thousands of companies did not re-open. Having a dynamic recovery strategy could have made the difference in keeping a business afloat or having it fall victim to that historic storm.
Impact of Hurricane Sandy
Greater attention to the need for disaster preparedness occurred when Hurricane Sandy hit the New York City area on October 29, 2012. The widespread devastation in a densely populated business region created unprecedented challenges for the cities affected in New York, New Jersey and Connecticut, as well as the companies trying to find suitable places for employees to work.
With ground transportation compromised, airports closed, limited gas supply and prolonged power outages, executing any type of workplace recovery plan was full of obstacles.
Businesses who believed they were prepared with static recovery locations– meaning workers were to report to a single location–did not have a back-up plan when they learned their employees were unable to access these static locations. Limited work location choices, lack of public transportation and concerns for their families who were at home with no power exposed the drawbacks of a static recovery approach.
Many businesses without formal plans believed working from home was a good enough plan. The prolonged power disruption caused by Sandy illustrated the need for a more dynamic solution. While it can work for short-term problems or for non-essential staff, Sandy proved that organizations should have a formal plan to place key staff if and when a disaster happens. Regus, worked with more than 1400 companies looking to find nearby places for employees to work.
Given all of the issues today’s businesses are coping with— an uncertain economy, poor sales and an increase in global competition, prepping for a disaster may not be deemed urgent or necessary. While it may not be a top priority, many now defunct businesses can confirm, it takes just one incident to permanently shutter the doors of a company.
Of course, in order to keep a business moving, employees and management must be laser-focused on the day-to-day goals of the organization. However, when faced with the devastation and interruption caused by a fire, flood, hurricane or manmade catastrophe; how a business approaches the disaster is sometimes as critical as having a plan at all. While unlikely, disasters do occur and companies’ productivity can sink causing an enormous financial toll if businesses don’t have a robust plan to tackle the unthinkable. What to do?
Conduct a Risk Assessment Analysis
This analysis should address all functions of your business–from accounting to IT and from HR to supply chains should have their specific risks assessed. The safety of personnel, data and business critical documents should be analyzed to determine the impact of worse case scenarios. The more detail the better the better plan.
"According to the Insurance Institute for Business and Home Safety, approximately 25 percent of small businesses fail to reopen after a major disaster"
Develop a Formal Plan
Once vulnerabilities have been identified, make disaster recovery a top priority and create a formal plan. Business continuity planning should take into consideration all functions of an enterprise. To be fully prepared it’s crucial to be flexible, creative and redundant. The plan needs to be communicated to all employees, tested in advance and modified as business needs change.
Identify a Disaster Recovery Team
Someone needs to be in charge. Gather a team of employees who can implement the plan. This team will be responsible for updating, auditing and revising the plan as needed.
Have Multiple Places to Go
If a company’s office is not accessible and working from home is not an option, companies can use the services of a flexible workspace provider to ensure a professional work environment can be mobilized quickly in the wake of a disaster.
Go To the Cloud
Make sure your data is backed up. Cloud computing makes is easy to keep your documents secure and allows you access to them wherever you are. Cloud data storage is affordable, scalable and provides rapid access to data allowing businesses to be functional within minutes.