Do you have a Contingency Plan?
“One thing that makes it possible to be an optimist is if you have a contingency plan for when all hell breaks loose” Randy Pausch
You may call it “plan B” or “Backup plan”, but it really doesn’t matter what you call it as long as you have a contingency plan for your business.
Having a contingency plan is not only for large organizations, even small companies like startups need to be ready for any surprises along the way. It’s not just natural disasters like a tornado or flood that could have a physical effect on your company or on your employees for which you need to be prepared. But what happens if your main supplier suddenly goes bankrupt, the internet cuts out or your payroll clerk calls in sick on pay day?
As you can see, contingency planning is not just about major disasters, but about the smaller things that could go wrong and how you are prepared to handle each situation. Your contingency plan should be a part of the way your business works and should be updated and kept at the ready.
Here are a few tips on how to start preparing your contingency plan:
1. Explore what the main risks to your business could be
Depending on your industry and location, figure out what type of disasters could possibly occur and focus on them. For instance, don’t waste time and money on how to recover from a tsunami if you not even near a tsunami zone. Then prioritize these risks as you don’t want to plan more than needed and find yourself wasting time, money and manpower on planning for situations that may never happen. Focus on the risks that could affect your business.
2. Developing each plan
Once you know for which risks you want to be prepared, it’s time to start planning. The main goal is to maintain your usual business operations throughout whatever crisis may occur. This means that your plan should lead to a situation that will seem like business is as usual even if there have been changes. Showing calmness and maintaining a “business as usual” atmosphere will also be good for the rest of your team.
While your contingency plan covers how to act in the midst of the chaos, it also needs describe how you intend to recover back to normal business operations. Sometimes this means a complete reorganization of workflows, roles and business processes, other times, it’s just about cleaning house and removing the deadwood from the team. By measuring how individuals acted and responded during the event will help determine which people stay and which have to go.
The day to day operations of a cross functional organization are demanding and a lot of leaders find it hard to set aside time in order to plan for something that might not happen. As a result, contingency planning is often ignored by managers and is not given the importance it deserves. However, making the effort and building “what if” scenarios can help your company recover from a major crisis and save significant lost time and resources when that disaster does happen to strike.