The Key Elements of Small Business Continuity Planning

Businesses of all types are constantly buffeted by changes in markets, personnel, cash flow, competitive pressures and operational constraints. None of these changes by itself is likely to be a “business killer”, however any one change that disrupts the operation could rapidly go from a nuisance to an all-consuming effort to straighten things out and get the business back on track. To stay on top of these types of situations before they create a significant impact, it is important to understand the concept of the “minimum viable operation” (MVO) for each of the critical functions. Simply put, the MVO is the minimum resources that can sustain an operation.

Each major function should have a clear definition of the MVO. This knowledge helps the company understand when it may be operating in a marginal state, carrying more risk than necessary. A useful analogy is a traffic light with green-yellow-red indicators. If you have a product that requires some assembly, you likely have some minimum inventory and personnel to be able to fill existing orders, but no more. So, even though you may believe that overall operations has a green light, if the resources are below the MVO the reality is that you are in the yellow zone and heading rapidly toward the red zone. Ideally the critical elements (number of operators, order entry, inspectors, billing operations, designers etc.) should be at the edge of the green zone.

Whether your product is physical or software the MVO still applies. Companies often fall short by looking and planning just within their own boundaries, assuming the suppliers will always be able to supply whatever outside services that are needed. In other words they forget to consider the complete supply chain. It is vital to have a relationship with the top 3-5 critical suppliers. It is also important to identify single points of failure (SPF)– usually these are a function that only one person knows how to complete, or a process that requires a specialized tool and only one version of that tool exists. For critical suppliers one strategy is to have a tiered structure for critical suppliers for example. Always have a plan for what to do when product flow gets stopped up.

This brings us to the importance of communication. Are email and phone addresses for critical decision makers up to date? What about vendors and suppliers? Can they be reached if necessary? Who has access to the IT system and is it managed locally or perhaps from a different time zone. Do you have a contract for emergency action? And speaking of emergencies, where are the emergency numbers for regulatory, fire, or safety failures and are people trained on when to make those calls? Too often these items fall to HR as a training function for which they may or may not be prepared. If you have certain on-site chemicals do you know the reporting requirements and nearest agency office. Any of these situations can bring your operation to a screaming halt. Make sure you have your bases covered.

It’s fair game to study how other companies get through surprise interruptions intact. Listed below are a few common approaches to helping make sure your business stays running even if something goes wrong.

• Cross-training. The tasks of any busy company vary in complexity and often require one or two people for certain operations. Make sure you have enough back-up operators that you can have at least two sets of operators that can keep things running.
• Computer. Data breaches have become commonplace and at least one strategy is to keep a backup of the data. Commonly the IT contract will specify a back-up interval (24 hours is common). Make sure you have primary and secondary authority contacts, so decisions can be made quickly. Also do a trial run through the recovery process so you have confidence that your data can be recovered quickly. The recovery plan needs to work easily when the time comes.
• Identify where there are inherent bottlenecks. These might be a decision point, or a critical component that is out of tolerance. Somebody needs to step in and decide if parts need to be re-worked and how, or may even have to make a decision to push out lead times for a few days.
• There may be a few areas in the company that rely on “tribal knowledge” to complete a process. These need to be replaced with a written set of instructions and then taught to enough people to make sure that operations can carry on.
• Communication. If the situation has caused enough of a disruption that deliveries will be impacted, customers need to be contacted. It’s best to do it by phone depending on how many are affected and via email for a larger group. A dedicated emergency response group will need to coordinate communication and re-scheduling of orders. Speed and clarity take precedence over perfection.

These are a few common situations that are likely to happen at most businesses if you have been operating for more than a few years. It’s worth the time to review the critical points before you need to rely on them. And make sure it is clear who should do what for each situation. Once you have your “Playbook” figured out, set aside time to do a few dry runs so that everyone feels comfortable in those “red light” roles. You’ll be glad you did.

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