America's Business to Business Journal for Industry

Crisis Management Plans Vital to Ensure Business Recovery


Natural disasters in 2011 have dominated headlines in newspapers from east coast to west as tornadoes ripped apart the plains in a hellacious spring and floods washed away portions of the northeast in the aftermath of Hurricane Irene.

As of July, the cost of natural disaster damage had already surpassed all of 2010, exceeding $23 billion. In August, Hurricane Irene marked the 10th weather-related disaster in 2011 to result in $1 billion or more in damages, the highest annual number of major disasters in 31 years, according to the National Climatic Data Center.

Furthermore, forecasters are predicting a brutal winter for the upper Midwest and predicting heavy lake-effect snow in the Great Lakes region, which could trigger massive flooding next spring.

A business in the path of a natural disaster can be enormously impacted affecting not only the physical plant, but also the lives of your employees. It's imperative that companies coast-to-coast have in place an effective crisis management plan a plan developed to help companies react to catastrophic events that could harm your business. An effective plan can help a business quickly return to productivity following a disaster, be it a natural disaster, or a manmade crisis.

But developing a plan on the fly following a disaster or crisis is not recommended. A detailed plan should be developed well in advance of a disaster. Once a disaster strikes, there likely will be chaos and confusion and a crisis management plan can keep the business focused and on track to recovery.

Every aspect of a business should be considered when developing a plan, from how to contact employees about work conditions to what happens if your facility and your back-up facility cannot be used because of the damage.


 

While developing a plan, companies should ask:

  • How will you contact employees when facing a threat and following a disaster Do you have current contact information for all of your employees
  • What will be done about payroll In the event of a natural disaster like a tornado or hurricane, your employees might be dependent on their paychecks to help offset damages to their homes.
  • How will you support employees who may have lost loved ones or co-workers in the disaster And how do you ensure employees perform at a satisfactory level following what could be a harrowing experience

While keeping employees informed is imperative to your operations, there are many other aspects that must be considered when developing a crisis management plan.

Other considerations include identifying an alternative location for operations while the primary facility is being repaired. And develop a plan in the event the back-up facility also is damaged.

Businesses also will need to communicate clearly with suppliers and customers to ensure the supply chain isn't broken. Provide, if possible, a timeline as to when you might return to productivity.

(In addition to planning for your downtime, consider how a supplier's downtime will affect your operations. In March, car makers were unable to provide buyers with vehicles painted with certain colors because the lone facility that produced some colors was damaged in the tsunami that devastated Japan. What alternatives do you have when a supplier's facility is inoperable )

Crisis management plans are key to ensuring a business can survive following a disaster, and should be developed to adequately suit the needs of the business. A one-person operation, for example, will have a much different plan than a company with thousands of employees. The cost of developing a crisis management plan also will vary based on the size and needs of the organization. The cost though is quickly repaid if it is ever needed.

After a plan is developed, employees and management should attend training to learn about the plan and its details. Evacuation and tornado drills should be part of training to ensure everyone in the company understands what to do in an emergency.

And while, in a recessed economy, it's easy to put off creating a plan based on cost, consider this: It will be less expensive to develop a plan now, than after a disaster. Unfortunately, there will be aspects of your business that will be lost after a disaster, but with a plan in place, one thing that won't be lost will be the business itself.

Crisis management plans are vital to any company that wants to return to business following a disaster.

Ron Atkinson says quality tools and processes are integral to his personal life as well as his professional life. Prior to retirement, Atkinson spent 35 years in the automotive industry, where he served as quality systems manager and had the opportunity to develop and implement crisis management plans. Ron also is a former chair of the ASQ Board of Directors. For more information, contact ASQ at 800-248-1946. For information on the web: www.asq.org.


Recent Videos

comments powered by Disqus