It’s easy to see crisis events play out on TV and think, “that will never happen to me,” but world events in 2020 have taught us that viral pandemics, natural disasters, government lockdowns, riots and civil unrest can bring any business operation to a standstill for days or weeks or even months at a time.
It’s impossible to foretell the future or entirely eliminate risk, but proactive risk management strategies and business continuity plans can provide some calm in the storm and make problem-solving more straightforward.
Setting up these business protections begins by understanding your organization’s unique risk factors. And while it is undoubtedly preferable to perform a risk assessment as a routine preventive measure, there is no better teacher than experience. Crisis situations often help expose vulnerabilities and make us aware of the potential threats to our success.
If 2020 has provided you with newfound or increased risk awareness, you are not alone. The good news: awareness is a useful tool for planning. Here are 5 ways to use your risk awareness to support operations and keep your organization running strong.
Document what has occurred. Memory and details can fade over time, so it’s important to document and maintain detailed records of incidents of business interruption, the causes, impacts and related expenses. If you have a potential insurance claim, the information is helpful in evaluating the claim. If the loss isn’t covered by current insurance, the information can help you determine what types of coverage to consider in the future.
Identify risk and determine tolerance. Once you have all losses documented and laid out in front of you, you can start to identify patterns or key areas of risk to be addressed. Some vulnerabilities will likely require more in-depth analysis, but identifying key risks helps you determine what risk management approaches—avoidance, mitigation, transfer or retention—match your risk tolerance.
Conduct post-event analysis and audit. You know what happened, you have identified key areas of risk—now, what could you have done differently for a better outcome? This shouldn’t be an exercise in blame. Instead, it’s an opportunity to review events and build a solid game plan for the future. What security mechanisms did you have in place (cameras, sprinkler systems, cyber security)? Was communication clear? Did personnel have clear responsibilities and authority to act? Do you have appropriate insurance coverage in place?
Seek the counsel of trusted advisors. The events of the past few months have not followed the usual scenarios covered in risk management texts, and even in the best of times there isn’t a one-size-fits all solution. Seek advice from knowledgeable professionals. Network with other business owners and ask them what they are doing and how it is working. Talk with a trustworthy risk advisor and insurance broker to understand the best options for your organization.
Act: Design and implement a plan. A business continuity plan is critical for any organization, no matter how big or small. It outlines processes that can help navigate through the confusion to recover quickly when your business faces disruption. It can protect against costly downtime, protect your market share and also protect your brand and reputation. But it can’t do any of those things unless you implement it.
This year might be off to a rough start, but it doesn’t necessarily need to end that way. Take this opportunity to use what you’ve learned through your experiences and set your organization up to finish the year strong.
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Let our experienced professionals help you develop a plan! As part of our RiskMAP™ process, we learn your values and goals and work with you to identify the specific risks your company faces. We use the information gathered to explore strategies to minimize risk, and we present you with available options and support tools to help you achieve your objectives. Sign up for your complimentary risk assessment today!
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