Member Press Releases

Business Planning for Resilience

12 Mar 2020

coronavirus II

The current outbreak of coronavirus COVID-19 should encourage companies to look into business resilience and continuity strategies, which normally cover fire, flood, IT disasters etc. Every business is unique, and so must design their own disaster recovery plans, but the common steps are outlined below.

Ensure your business considers how it will continue to function following a major incident. Which processes, people and resources are vital to business operations? How will these be affected by specific incidents (for example if your premises are in a flood area, could staff still reach their workplace via another route?). How do you reduce this risk? (in this example, perhaps by home working or taking an alternate route). If these risk reduction efforts fail, what will you do? Identify a named individual responsible for each action, and clarify who is responsible for the decision to put the plan into effect.

Consider your insurances – their adequacy and relevance. Business interruption insurances are available, but rarely cover pandemics, and more usually focus on flood or fire. Your travel insurance may be void if staff travel to areas prescribed by current advice – stay up to date and ensure staff check before they leave. A regular review of insurances is worthwhile – consult NAJ’s preferred insurance partner TH March.

Contractually, what will it mean to your supply chain if you are out of action? Ensure contracts allow for time to recover, and if possible that you are protected from losses caused further up the supply chain. In a national crisis claims for breach of contract are difficult to enforce, but do not assume you can break such agreements with impunity. ‘Force majeure’ (unforeseeable circumstances that prevent someone from fulfilling a contract) clauses in contracts are useful, but the circumstances need to be spelled out to be enforceable. Consult NAJ’s free legal advisers to get clarification.

Disaster planning should encompass staff resources, whether the loss of a key employee or an outbreak of an infectious disease which might keep half your team away from work. How will you cope, while preserving the health and safety of your workforce? Ensuring staff have access to official advice is vital, as is a method of contact outside normal work – perhaps a WhatsApp or email group. In the case of a disease, ensure your remaining staff know what to do to stay healthy, for example proper hygiene and minimising travel. The need to keep things going must be balanced by the need to preserve the health and safety of your workforce, customers and stakeholders. Government travel restrictions, local floods or a fire at work might make staff attendance impossible, but in less clear circumstances you may need to review your staff attendance policies and procedures – consult a HR professional for advice (NAJ Members can access one for free), particularly if your company culture is to encourage staff to come to work even if ill, to limit disease transmission and potential litigation. In the current climate, you should also review and possibly relax to self-certification rather than insisting on a doctor’s note for absences. If you can, allow staff to work remotely and provide appropriate kit.

Most businesses are reliant on IT. Your service providers can advise on disaster recovery in the event of a failure, but ensure you back up to, and can access remotely, cloud-based systems.

When you have a plan in place, test it and identify improvements. Are the resources to address a disaster still appropriate? By ensuring you have likely issues covered, you can assure your staff and customers that it will be “Business As Usual”

Further resources

 

Ten Steps to take:

1. Don’t Panic! You understand your business, and are best placed to know how to get through a crisis.

2. Understand your supply chains – where are they sourcing products, and how can you source alternatives?

3. Develop a contingency plan to deal with disruptions to supply – how can you scale back production? Consider your marketing plan to tweak customer behaviour or diversify to new markets if your current customers are affected

4. Review cash flow – how will a crisis impact your ability to pay suppliers and staff?

5. Ensure your financial reporting systems are strong – frequently monitor profitability, stock levels and creditors and debtors

6. Talk to your Stakeholders – be honest and keep people up to date – tell them if delivery times or quality will be affected.

7. Consider your business continuity insurances – check with your broker as you may be able to claim

8. Cross-train staff to provide cover in the event of people being unavailable

9. Reduce overheads on non-essentials, focus on fixed costs

10. Use the NAJ Member benefits – HR, legal, insurances and more 

 

NAJ Better Business Support Service

Source: NAJ