SOCAP International

6 Mistakes You're Making When It Comes to Business Continuity

Know that you can have a program that is economical, but high-impact, and invaluable to the customer experience.

Click here to access the full digital issue of CRM Magazine Spring 2015 


What Business Continuity Isn't
When it comes to a business continuity program, make sure you understand that...

  • It isn’t just insurance. Business interruption insurance can replace lost revenue, but can’t bring back customers who give up when service is severed.
  • It isn’t an all-or-nothing proposition. It has components that can be selectively used for contingencies large, medium or small.
  • It isn’t a document; it’s a capability. Think ergonomic point-of-use tools.
  • It isn’t a distraction from real work. Instead, it helps with continuous development of leaders and improvement of processes.
  • It isn’t an expensive budget line item. It can reduce costs in insurance coverage and be seen as a market differentiator.
  • It isn’t something that can be improvised. Coordinating around an emergency situation requires forethought, planning and practice.

Keeping the customer promise and delivering the customer experience is paramount to a company’s success. Continuous availability of the customer service function (indeed, all critical processes in your organizations) is paramount to fulfilling that mission. A business continuity program for the reestablishment of operations from a business interruption can be critical during outage situations. Indeed, it can make or break a company. 

Many executives, however, misunderstand what business continuity is, or even worse, they misunderstand what it’s not, and so choose not to invest in it. Here are
some of the main misperceptions and mistakes when it comes to business continuity programs. Once these are understood, your executive conversations will shift
from “Why do this?” to “Why would we not!”

Mistake 1: Business continuity equals insurance.

Executives view having a plan as either a necessary box to be ticked or something they can risk doing without (common thinking from entrepreneurs). Who spends time managing an insurance policy? Leaders who view business continuity in this light are missing a valuable opportunity. While insurance is important, it is not value creating. Insurance is betting your underwriter that something bad will happen and then being happy when you lose. I’m happy that my “investment” in life insurance didn’t pay off this year.

Business continuity is more properly viewed as hedging. Banks hedge their foreign exchange positions, and that has value every day. Airlines hedge their fuel costs, and that has value every day. Hedging is buying down risk with money that has everyday tangible value. So is business continuity. Some companies mitigate risk with business interruption insurance. This can supplant lost revenue, but will it bring back customers who give up when service is severed?

Given that acquiring a new/replacement customer is more expensive than retaining a current customer, and given that having a good business continuity program can be less expensive than business interruption insurance, the business case for a business continuity plan is compelling.


Mistake 2: Business continuity is only for “The Big One.”

Executives look at business continuity as the “break the glass” last resort for the zombie apocalypse-type major catastrophes. Therefore, it will rarely if ever be used, so it’s a waste of time to build. Executives, indeed most people, don’t like to think about disasters and bad news, so they psychologically avoid the subject (business continuity consultants do not help the cause when regaling executives with pictures of 9/11 or earthquake devastation). The reality is that contingency plans are for contingencies large, medium or small.

Case in point: a global company with European headquarters in London had contracted for an emergency work center (centre, as they say) as an alternate place to run the business. Some executives misperceived it as only being there in case the office was destroyed and therefore never thought it was used. In fact, the center was activated during a citywide Internet outage (the center had segregated redundant connectivity). It
was placed on standby multiple times during office moves, building maintenance and the 2012 Olympic games. For the executives, it was transparent, as it should be. A properly constructed program is not all-or-nothing, it has components that can be
selectively employed and dialed up or down for the zombie apocalypse or minor interruptions. 

Mistake 3: Business continuity is “The Big Red Binder.”

Executives think that “The Plan” is the 500-page document that sits on the shelf. Since it’s too big to read and nobody will reach for it during an emergency, it’s a waste of time, right? Wrong! The ability to manage employee safety/well-being and reestablish operations isn’t a document, it’s a capability, with tools and enablers to document its existence and use. Consultants (here we go again!) contribute to this
misperception by producing big weighty deliverables as proof of their hard work.

A best practice is not to have one bulky tome with reference information, history, process descriptions with no actionable data. Instead it employs crisp checklists, wallet cards, one-page “grab as you evacuate” handouts and other ergonomic point-of-use tools. Think about emergency information for an airplane. Pilots might study the thick operating manual, but if the engines cut out, they reach for the laminated emergency-landing checklist.

A best-best practice is also to drill and exercise so managers are operating not from documents but from muscle memory (more on this later).

Mistake 4: Working on a business continuity plan detracts from real work.

The real work of running a world-class operation includes continuous development of the leaders and continuous improvement of processes, right? These are the collateral benefits of a business continuity program. The discovery phase of a program touches every important facet of the organization, identifying dependencies, single points of failure and process weaknesses for mitigation, or better yet, elimination. The planning
phase of a business continuity program is a catalyst for managers to think through “what if,” “what next,” “what’s important” and incorporate the findings into their everyday operation. 

The exercise phase of business continuity program provides practice opportunities for teams to work through problems in a safe environment and build leadership and competency around decisiveness, connecting the dots, acting on less-than-complete or less-than-perfect information and managing under stress. Leaders who can manage under pressure and operations that are resilient, in addition to having a contingency plan, are all valuable outcomes of business continuity planning.

Mistake 5: A business continuity plan is expensive.

A business continuity program has a reputation of being a high-ticket high-overhead expense item. Consultants in this field unfortunately feed this perception since the bigger and more intrusive they make it, the more they get paid. Like many things, bigger does not always mean better! In fact, a business continuity plan that is chock full of endless analyses, worksheets and workbooks, graphs, charts, PowerPoint decks and the infamous Big Red Binder can do more harm than good—it can give an illusion of preparedness that won’t perform when activated.

A good business continuity program follows the principles of pragmatism, the Pareto Principle (80/20), preventing Perfect from being the enemy of Good, and recognizing the differences between fat, meat and bone—so knowing where to slim down. These
principles can produce a business continuity program that’s sleek, aerodynamic and able to outperform “big” for nickels on the dollar from a cost standpoint, and for pennies on the dollar from the standpoint of operations, brand and customer relations protected. 

Another often-overlook point is that the "net" cost of business continuity is less than the "gross" cost. The cost of implementing and maintaining the program can be partially underwritten by reductions in business interruption or liability insurance premiums. It can also contribute to revenue generation by demonstrating “We’ll always be there for you” to your customers. Smart companies with good programs view business continuity not as an expense to be buried but as a market differentiator to be showcased.

Mistake 6: We don’t need a plan.

We all have worked from home occasionally, right? We all have remote access, web-based email, VPNs, smartphones that can display documents … I even had an executive tell me, “I can check anything I want to from my girlfriend’s iPad!”

Executives forget that they can be productive remotely only when the rest of the organization is productive. Many functions often cannot be performed remotely or on non-company equipment for security reasons, for example troubleshooting technology issues in a production or live web environment or handling payments or money transfers. Some functions require the human touch, such as HR. Many call centers capitalize on the ability of a roving tier 2 or manager to come to an agent’s rescue at the raise of a hand. 

Even for remote workers, the capability to coalesce around an emergency situation, account for people’s whereabouts and status, choreograph a response and maintain communications in the hectic atmosphere of an emergency require forethought, planning and practice. It’s one thing to take a sick day or Monday-after-weekend and keep up on email. It’s another thing entirely to manage an enterprise with suddenly displaced teams, impacted resources, under duress, during an emergency situation … from a Starbucks using your girlfriend’s iPad.

Business continuity is sometimes challenging to understand, especially for business executives whose main mission is not contingency planning but operations, customer service or other specialties. However, it can be doable, economical, nonintrusive, light-touch but high-impact and, at the time of need, invaluable to the customer experience or even the continued health of the business. Now that the excuses have been dispatched, time to get planning.

Mannella_headshotHoward Mannella, MBCI, CBCP, is managing principal of Alternative Resiliency Services Corp, a consultancy with the mission of evangelizing organizational resiliency, business continuity, disaster recovery and crisis management. He was previously principal resiliency strategist for Expedia Inc., starting up the global program and managing it for almost eight years. He has helped organizations throughout North America and EMEA in banking/card processing, insurance, pharmaceuticals, internet/new media, defense/aerospace and other sectors.