The fifth anniversary of Hurricane Katrina brings with it a fitting time to talk about disaster recovery — or, to use a more appropriate term, business continuity. Disaster, after all, connotes an event with low odds of occurring, such as an earthquake or a hurricane. But more than nature contributes to business continuity issues — the failure of a water main flooding your street, or a police action closing it off.
Take a look at the Web site of the Institute for Business and Home Safety [www.disastersafety.org] to get a sense of just how many things can go wrong. And remember the U.S. Department of Labor statistics estimating that, after a disaster of any kind, more than 40% of businesses never reopen, and of those that do, another 25% will close within two years. These statistics include larger businesses, but small businesses with just a few locations, or a single one, are more susceptible to problems when something goes wrong.
Here are some tips for business continuity planning.
Start thinking about contingencies. Check out this recent article, “Is My Business Ready For A Disaster?”, on developing and testing a plan by Craig Augenstein, practice partner for Eddsa, an IT support organization on Columbia, S. Car.
Turn off the computers. One of the smartest pieces of advice that came out of the mess that was Katrina came from the chief information officer of a midsize bank just outside New Orleans. He put in place a plan that one day every six months, employees would have to conduct business without their computers (i.e., with pencils and pads); that way, in the event of the loss of their computer system, they could still serve customers.
Set up an exchange program. Find another business owner in a different region and set up a mutual-aid pact. If something goes wrong with either one’s facility, you have a place for employees to meet and continue doing business.
Think about mobility and accessibility. With mobile computing devices — either laptops or smartphones — and options for cloud computing (where your data is stored somewhere else and accessed over the Internet), location no longer matters. Consider these technologies for optimal flexibility.
Most important, don’t create a plan and then stick it into a drawer. Review it every six months, just as you would your business plan (in a sense, it’s a key part of your business plan). Make it a part of new-employee orientation. Don’t think of it as something like insurance that you buy and remain protected. Think of it as contingency planning. You have a contingency plan if you lose your biggest client. You have a contingency plan if you lose your biggest supplier. Have a contingency plan if you lose your access to your physical location and the computers you rely on.
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About the Author, Howard Baldwin
Wow, this sounds scary but it is a reality. I am sure most of the businesses in Louisiana did not recover. I like the idea of cloud computing and that sounds like a really great idea to me. I wonder how much more information I can pack into my laptop.
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Scott Pollov Reply:
September 4th, 2010 at 4:31 pm
Hi Nicole. Scary yes, but definitely preventable. Having a “what if” plan should be something every management team spends quality time preparing. Thank you for stopping by our Blog! Scott Pollov
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Howard, this blog posting is sensational. It is practical, actionable and of great value to any of our readers. I can’t wait for the next one.
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I can still remember the adhoc that a majority of the management board of Tesla died in a plane crash because all were sitting on the same aircraft.
Talk about business continuity not understood.
Great post!
Lars Hilse recently posted..Triple Email-Marketing Opening-Rate from 22 to 74- A Case Study
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Scott Pollov Reply:
September 4th, 2010 at 4:26 pm
Lars. Thank you for that reminder. Never a good idea to have the majority of a management team sitting on the same aircraft or any vehicle for that matter. Thank you for stopping by! Scott Pollov
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Takes me back to my IT days and I think most people think of IT systems when this subject comes up. Of course, it’s OK to save the data, but what about having an alternative location to work from and the infrastructure to run your business. The stats of old showed that two thirds of small businesses that lost there data didn’t recover. Scary stuff.
And you’ve given me a timely reminder that I should back up my PC today.
Thanks very much for the article!
Regards,
andrew
Andrew Sayers recently posted..Mid-Life Crisis… Moi
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Scott Pollov Reply:
September 4th, 2010 at 4:24 pm
Hi Andrew. It is scary stuff. Unfortunately most businesses simply are not prepared for a disaster situation. Something we all need to give some serious thought. Thanks for stopping by BizPlanIt’s blog! Scott Pollov
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Scott,
Thanks so much for sharing this. Planning for disaster recovery is quite critical, but not something that is at the top of people’s minds. As we were reading this, we got some ideas on how to put in place more pieces to our existing plan.
Thanks,
~ Pat and Lorna
http://TheCoolestCouple.com
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Thanks for the kind comments. I’m gratified that it inspired so many of you. I really wanted to stress the point that business continuity shouldn’t be a policy you create and then stick in a drawer or on a bulletin board. It should be part of your regular business process.
The point that Lars Hilse made is also very valid. I once worked for a midsize publishing company whose policies stated that no more that 10% of a particular division and no more than 25% of a particular department could fly together.
Unfortunately, the one scenario it’s frequently hard to protect against is fire. Thirty years ago, 13 Arrow Electronics executives and 13 Nestle executives died in a fire at a Westchester County Stouffer’s Inn. This took place just weeks after the MGM Grand fire, which killed 85 during one of the early Comdex trade shows. However, those two fires did a lot to inspire better and more consistent regulations for the installation of sprinkers and emergency exits.
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Scott Pollov Reply:
September 6th, 2010 at 1:03 pm
Hi Howard – I wanted to personally and publicly thank you for contributing to BizPlanIt’s blog. We very much appreciate you sharing your knowledge and expertise with us and our readers. We look forward to your continued involvement. Thanks,
Scott Pollov
BizPlanIt – Founder
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Howard
Here’s a few extra elements for any contingency plan
* make a list of all key personnel for the purposes of DR, with clear detailing of who is in overall charge and who should handle which tasks in an emergency, each such person should have a designated “substitute” who can take over the task – then circulate the list with phone and cell/mobile contact numbers. Keep this up to date. And then make sure all staff know who is responsible for executing each element of a plan.
* one of the commonest emergencies [or elements of an emergency] is loss of all landline-based telecoms – so make sure you’ve talked to your telco and arranged for instant on-demand phone switchover to alternative numbers, possibly with the option to reroute all incoming calls to designated mobile/cell numbers.
* make sure that you have also planned for failure in other communications: alternative email and postal addresses.
* if your business uses or depends on web-based services then ensure that you have at least one person tasked with updating the site with “breaking news” to keep customers and/or suppliers informed, which leads on to two further points
* relationship management during an emergency can make/break businesses; make sure that at least one competent person in the DR team is tasked with handling communications with all important stakeholders and/or press/media etc.
* if you host your web-site or web-based services in-house rather than via an ISP or web hosting service then make absolutely certain you have failover or other resilient services arrangements in place to “replace” the normal services.
Finally remember two things:
1] a backup [of data or of systems, or indeed an entire recovery plan] is only ever as good as your last full test of it. Regular testing and adjustment of all aspects of your wider plan is the only way to be sure that things will work as expected.
2] make sure that all your stakeholders – such as lenders and business insurers and investors – are happy with your continuity planning; it’s incredibly hard to negotiate with them during the course of an emergency or disaster.
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Scott Pollov Reply:
September 6th, 2010 at 1:06 pm
Robert. Thank you for sharing these tips and insight with us. I particularly like your point about relationship management. Communicating with external audiences would seem to be critical. Thanks,
Scott Pollov
BizPlanIt – Founder
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Hi Scott,
As I read this, the country is preparing for a hurricane that’s expected to hit the east coast….how appropriate!
You have some great suggestions here, and you’re right, we always need to be prepared for the worst. As a home business owner some of the potential problems that would result from a disaster would not affect me, but others would.
I especially like what you’ve said about “cloud computing” (have never heard that term, but I like it…). More and more people are turning to internet based programs, and it makes so much sense. One of my favorite is mind42. I can keep all of my important information in 1 place, access it from anywhere as long as I have an internet connection, and never have to worry about losing my data.
Kathy Jodrey recently posted..Team Building Ideas- Tribe Style – Summer Scenery Series 6
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Hi Scott, as the boy scouts taught me years ago, be prepared, you have a great point that I haven’t thought about in a very long time. Thanks for sharing some great insight and excellent ideas to help get ready for the next disaster!
Internet Marketing Kris recently posted..About Steroid Marketing
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Scott Pollov Reply:
September 6th, 2010 at 1:07 pm
Kris – It is funny how many lessons we learned as a child that do apply to the business world. Being prepared is definitely one of them.
Scott Pollov
BizPlanIt – Founder
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Great article! Every business should have a disaster plan. The question to ask is: “How long would my business be down if everything I own were blown away?” Backups… and backup plans are key! Thanks!
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Reader Robert Neuschul noted my reference to U.S. Department of Labor Statistics regarding business closures after a disaster, and asked for the original reference. I have to admit that I relied on secondary sourcing for that: http://sbinformation.about.com/od/disastermanagement/a/disasterrecover.htm and I have been unable to find the original U.S. Department of Labor Statistics. My apologies. However, the difficulties unprepared small businesses face when confronted with unanticipated interruptions are still potentially dangerous.
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Planning for disaster is a wise decision that many companies (and people) do not do. It may sound negative, but it’s a necessity to survive. Your post was a great reminder that anything can happen, and being ready for it can save your business.
Regards,
Mike
Mike Pedersen recently posted..Showing Appreciation…You Don’t Have The Time
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