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Risk Strategies

An ‘all hazards’ contingency plan for businesses Add to ...

Small businesses and non-profits are the two segments of the economy that contribute most to our country, yet they receive the least resources and they are under constant financial, labour and operational pressures. Threats to the continued health and operation of these organizations are omnipresent: labour strife, failed deliveries, train derailments, and network and communications failures among them. Any one of these can seriously jeopardize or kill a business.

The Burlington, Ont.-based Canadian Centre for Emergency Preparedness (CCEP) is developing a program to address these issues and reduce threats. The comprehensive online service has one main objective: to give small businesses or non-profits the ability to create an effective, functional, ‘all hazards’ contingency plan with minimal time, cost and resources.

Its simplicity is contained in six steps:

Know the risks . Every organization operates under risk. Some are acceptable, many are not. This step guides users to list the greatest risks to their operations, whether they be closure due to fire, flood or ice storm, disruption by power outage, strike or G20 summits, or loss of data, equipment or supply chain. It also serves as a reminder that impacts may not be direct. For example, a business may be rendered inaccessible due to a security threat or a hazardous gas plume blocks away.

Know the impact . Risk is not just about an event. It escalates with greater impacts on a business. An organization must be able to answer these vital questions: What are the key products or services offered by the business? What are the critical inputs required to produce these key elements? If these critical elements are disrupted, how long can they remain ‘down’ before serious damage is done to the operation? This exercise helps identify the priorities that are required to keep functioning.

Develop strategies . You now know the threats, the risks, the critical inputs and their priorities. The boss is saying, “If you bring me a problem, bring me a solution!” What to do? Through this process, the strategies begin to form. Can I not afford to lose data? Install a back-up and recovery service. Might my only delivery vehicle become inoperable? Develop an effective plan to rent or borrow a vehicle or hire a service. Could the power go out? Practice manual processes including issuing written receipts, carbon-copy order sheets, cash floats and accounting ledgers.

Secure communications tactics . The most likely thing to fail in any emergency is communication. How will you communicate with employees, clients and suppliers? Every company should have contact lists, which are critical for operating during a disruption. An operation should also develop and practice alternative channels of communication, such as phone, fax, e-mail, cell and web, to ensure that communications are maintained.

Devise a plan . This is the document that brings it all together, providing an overview of the problems, the strategies to combat the issues and steps to carry out the strategies. Appendices include supporting information, such as contact lists, alternate supplier lists and specific instructions or protocols. It’s important to realize that this plan is a ‘living document,’ with information that changes over time. For example, strategies used to reduce risk or ‘mitigation’ alter the priorities for further planning, employees come and go, and business processes and services change.

Review and exercise . Because businesses are always changing, regular review of the plan and its components is necessary. Has the operation changed? Are there new policies or regulations that require a different response or render a strategy obsolete? To keep up with the plan, all employees need to be aware of and practice, or ‘exercise,’ their roles and responsibilities during a disruption – whether that be evacuation of a building, treatment of a ‘white powder’ envelope or simply ensuring data can be recovered from a back up. It is far better to learn lessons during an exercise than to fail during an emergency.

“The development of this six-step program was spurred by industry demand,” says Adrian Gordon, president and CEO of CCEP. “Small business owners who search the Internet for guidelines on simple contingency planning are faced with an intimidating variety of sites – some very comprehensive or technical – and guidelines that do not address the common concerns of all small businesses, namely cost, time and expertise.”

Other features of the program will be webcasts for full tutorials, webcast ‘slices’ for individual step instructions, webinars on planning for emerging threats, and interactive plan building tools and templates. The website is scheduled to launch in October during Small Business Month.

Special to The Globe and Mail

Richard Kinchlea is director of operations of the Canadian Centre for Emergency Preparedness. He will be reviewing the six-step program in more detail at the World Conference on Disaster Management in Toronto on Monday at 4:15 p.m. More information can be found at www.wcdm.org.

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