According to Forbes, US retail imports will significantly drop in Q1 2020 compared to Q4 2019. This is a considerable blow to a leader in the world economy.
Small businesses are also suffering from the pandemic, which accounts for more than 99% of businesses in the US. They also employ half of the US workforce. Furthermore, business experts see the possibility of a “start-up depression,” which means new companies will have a hard time entering the market because of the pandemic.
The Shift in Priority
With countries still doing measures to flatten the curve and lower the cases and fatalities of the COVID-19 pandemic, consumers have now different priorities compared to before the spread of the virus.
As countries go on lockdown, retail stores only have limited operation hours or can only occupy a limited number of people; many have switched to alternatives that allow them to work remotely, keep them safe, and keep items within the budget to sustain them while there have been salary cuts or they are currently unemployed.
Businesses are also struggling with the change in trend.
Due to lockdowns, businesses in the travel and hospitality industry are struggling to get more revenue. Restaurants have to adjust to their states’ safety protocols to continue operations. Manufacturing and construction businesses also have to layoff their workers due to strict regulations and the strain of lowering consumer demand.
At the same time, many individuals are more inclined to shop online rather than go to a physical store to get what they need.
With all these challenges that small businesses and big corporations alike face, how can they rise above it? Perhaps it’s time for businesses to regroup and come up with changes within their systems and management, as well as how they can accommodate their consumer’s needs in the long run.
From Resilience to Return
According to McKinsey & Company, despite the ongoing health concerns, consumers still have the desire to spend and shop. The outlook of the survey showing consumer behavior is still positive meaning business owners are more optimistic about continuing with business as usual.
Now, many companies are going back to their drawing boards to come up with strategies and systems that will accommodate today’s reality. Creating a business continuity plan is certainly a hit or a miss, but all the various elements that come with it play a part in its results.
What Is a Business Continuity Plan?
It is a process that involves creating a system of prevention and recovery from the potential risks of a company. The plan ensures that assets and personnel are secure and can function quickly even amid a disaster.
This is usually devised in advance and involves input from organizational leaders within a company, like key stakeholders and personnel.
Factors to Consider When Creating Your Business Continuity Plan
Planning is one of the most crucial aspects of running a successful business. Ultimately, it helps you know what to expect, identify what your business’s objectives are, and anticipate the risks you might encounter. Devising a business continuity plan isn’t any different. When creating one, these are the factors you need to consider:
- Run a risk assessment and Business Impact Analysis
- Know what the scope of your business plan
- Identify the goals you want to achieve in your BCP
- Develop a Recovery Strategy
- Test Your Business Continuity Plan
Run a Risk Assessment and a Business Impact Analysis
a. Conducting a Risk Evaluation
Evaluating the potential risks your business may go through is critical to the continuation of your business operations. This helps determine how long can your business endure the loss of resources. When planning your risk evaluation, you need to identify critical business functions and the time frame in which the function becomes critical. So how do you go about this?
- Know the entities responsible for each function
- Acquire employee’s contact information and home address
- Determine the resources needed for each critical function
- Know the variances in the time of year for critical functions
- Determine the variances in the resource needs
- Tabulate alternate sites for a complete loss of services
- Identify your means on how you will relocate your personnel safely
- Know how you will relocate your equipment
- Write down the people who will be responsible for the relocation logistics, as well as their contact information
- Have back-up methods for relocating personnel and equipment
b. Establishing Your Business Impact Analysis
This is the process of identifying all the time-sensitive activities in your business based on the impact stemming from a disruption, such as the COVID-19 crisis. It also includes determining any supporting resource dependencies and establishing their recovery time targets. With a Business Impact Analysis, you can expect these major outcomes when implementing your business continuity plan:
- You can prioritize your in-scope products and services that must be protected as well as determine how quickly can the delivery of your products and services resume
- Making an inventory on business activities and resources to establish what should be protected or recovered when a disruption happens becomes easier
- You can establish recovery timeframes that will help your business determine when resources may need to be recovered. It also helps prioritize your risk treatment options and choose the appropriate response and recovery strategies. Identifying recovery time objectives is critical, as it would enable your business its strategic priorities if achieved.
When devising your Business Impact Analysis, you will know the activities and resources necessary to deliver the most important products and services during the crisis. Furthermore, by discovering and understanding the activity and resource impact associated with the crisis, your team can determine which activities and resources need to be performed, despite the circumstances, which will have an impact on the scope you’ve initially documented.
Know the Scope of Your Business Plan
Having an appropriate scope of your plan ensures your organization can effectively plan for any disruptive incident. Furthermore, it allows your company to prioritize the products and services that are essential during the initial implementation and expand the program to the least essential areas in the long run. Typically, an organization defines the scope of a business continuity plan based on the following factors:
Your business’s stakeholders include customers, regulators, management, and other interested parties. Every stakeholder group has a set of expectations and to ensure its effectiveness, a business continuity plan should address and protect the business from violating these expectations.
Hence, when designing a business continuity plan, a business must protect itself from the impacts of violating key requirements, like Contractual Obligations, Regulatory Requirements, Customer Promises, Employee Commitments, and Health/Safety Requirements.
As your business continuity plan centers on how you continue your business operations amid the COVID-19 crisis; in your stakeholder requirement, it should be in line with the current situation. There will be new requirements as your company may need to follow new health and safety provisions and new contractual obligations and employee commitment as the people involved in your business may have shifted priorities and goals due to the crisis.
However, you must clearly state that in the scope of your business continuity plan as you can’t tackle all of your customer’s, employees’, and business partners’ needs. You also need to fully understand the new health and safety requirements that your company has to abide by, so you can fully operate again. Once everything under your stakeholder requirements is understood, then you can now document a set of business continuity objectives.
Products and Services
When you’ve understood your obligations as a company and you’ve established your business continuity objective, you should understand and assess your business’ products and services. When you define your products and services, it helps you manage the scoping effort at a strategic level because stakeholders can easily understand what you offer.
Once your business takes inventory of its products and services, you will then determine if an interruption to each of them would result in the inability to comply with the set business objectives or losses. Should there be such products or services, that if interrupted would result in missed obligations or negative consequences, it must be considered in the scope of your business continuity plan, along with the activities, departments involved, and the resources.
So what is risk appetite? This is the tolerance of a risk that a business is willing to take to meet its set of objectives. Businesses may need various risk appetites, depending on their culture, sector, and objectives. Your business’ risk appetite and tolerance are critical in your management team’s agenda and should be the core consideration in your risk management approach.
When coming up with a risk appetite, you need to define the potential impacts associated with the threats you have identified and analyzed. It should be in the following categories: Legal and Contractual Impacts, Regulatory Impacts, Customer Impacts, Operational Impacts, Reputational Impacts, and Financial Impacts.
Identify the Goals and Objectives You Want to Achieve in Your BCP
Having clear and specific goals and objectives in your planning allows you to envision and come up with concrete ideas as to how it can be executed effectively and efficiently. Without specific and attainable goals and objectives, you will go through a limbo of planning efforts with very little capability of achieving anything.
So what are the goals and objectives of your company now that you are now facing a different reality than the one before the COVID-19 pandemic? Know that your goals are more long-term wins and objectives are more short-term, so you should be more specific in listing down your objectives.
Develop a Recovery Strategy
Your recovery strategy is the means to restore business operations to a minimum acceptable level following a business disruption. It prioritizes the recovery time objectives you’ve planned out in your business impact analysis.
Your recovery strategy involves the following resources: people, equipment, facilities, information technology, and materials. You need to analyze the resources needed to identify the gaps.
When your team is coming up with recovery strategies during the COVID-19 outbreak, these are some key points you may need to consider:
- When health regulations affect how employees can work and how your business operates, how will you continue to meet the demand for your products and services?
- How do you market your products and services with the consumers shifting their priorities during the health crisis?
- Do you have enough resources to meet the demand for your services and products with some industries on a standstill because of the virus?
- Do you have alternatives for resources you cannot tap into as of the moment due to the crisis?
Of course, every situation is unique for every business. However, your recovery strategy should be able to address the points you’ve complied with within your business impact analysis. You and your team should discuss questions and concerns about the circumstance.
When coming up with strategies, you may consider contracting with third parties, entering into reciprocal or partnership agreements, or displacing other activities within your company. You can rely on organizational leaders within your business with in-depth knowledge of business functions and processes to determine which strategies may be appropriate for your business continuity plan. Various options should be explored and presented to the management for approval and for determining the expenses.
Test Your Business Continuity Plan
Know that your initial business continuity plan won’t be perfect. Your business’s risks and requirements aren’t truly set in stone but can change and adapt due to circumstances and your business’s growth. That’s why you must test out your business continuity plan to see if it’s effective. Before testing it out, you should develop its testing criteria and procedures. The plan must be thoroughly tested and evaluated regularly. Furthermore, it should be updated to correct any issues that have occurred during the test.
What types of tests should be included?
- Checklist Tests
- Parallel Tests
- Simulation Tests
- Full Recovery/Interruption Tests
Why do you need to conduct tests for your business continuity plan?
- To determine if the backup facilities and procedures are compatible and feasible
- Identify parts of the plan that may need modification
- Train team managers and employees
- Demonstrate the company’s ability to recover from any disruptions
- Motivate maintaining and updating the business continuity plan
Come up with a business continuity plan and continuously revising it over time to address the needs of every area of your company and prepare you for anything worse to come after the crisis.
How would you define the type of leader you are in whichever area you manage in your company?
Defining Your Leadership Role During a Crisis
What we’ve discussed previously was a plan, your guideline as to what should be analyzed, what should be focused on, and the likes. However, leading your team after a time of panic and anxiety is now your challenge. After months of fear from a health crisis, the uncertainty of employment, the struggle of their current surroundings today, you will be faced with the challenge of keeping them motivated to do any work.
“Leadership is about people, and people are hard to lead.”
(Graham Jones, Ph.D., 2019)
It is during these critical moments when leaders need to step up. We could name the abundance of qualities needed to become a real leader; however, listening to your employees’ concerns, showing empathy, and celebrating their small wins boost their morale and trust.
Your performance during times of turbulence determines what kind of leader are you. Are you a Real Leader or a Safe Leader?
Real Leader vs. Safe Leader
How do you differentiate a Real Leader from a Safe Leader? In retrospect, they both have positive connotations, so why is being a real leader better than being a safe leader?
If you paint a picture of a Safe Leader, here’s how they can be described:
- A person driven by status, recognition, and power; thus, they will not do anything that would compromise these things, such as taking significant risks on key business decisions
- Focused on the task at hand rather than the people they handle
- Too busy with the work they have as of the moment to envision a common goal for the future
- Reluctant to receive feedback and highlight areas that may need improvement
- Insist on their people’s compliance and avoid dealing with the real issues
- More comfortable with their team to embody “conformity and tested” methods rather than new ideas
Overall, what drives a safe leader to do their work are the extrinsic motivations that come with their job, including money and promotion. They stay in their comfort zone rather than make bold choices that may make an impact the company’s survival.
On the other hand, here’s how you describe Real Leaders:
- Driven to work because of the challenges and opportunities for them to make a difference
- Motivating people to work on their short-term objectives so they can work hard on long-term goals
- Creating a vision and work to steer their team toward that direction
- Craving for feedback on how they can improve and see mistakes as a significant part of the learning process
- Recognizing the contributions of the team and encourage each member through every challenge so they can enhance their skills
Real leaders make innovative solutions that drive organizations to success. They go beyond conforming to standards and challenge what they think could be done better. In every crisis, a real leader brings all hands together for the better.
The Power of Empathy and Motivation in a Crisis
Being a leader, you need to empathize and motivate both your consumers and your employees. In times of unrest, you need to touch their hand and ask: “How can I help you?”
A leader that truly cares for you. It is someone who is not afraid to come up with out-of-the-box ideas to solve challenges. They acknowledge the hardships of reality but see opportunities ahead. A real leader acknowledges the efforts of every individual involved in the success of the organization. Above all, they drive people to work together toward the objectives and goals of the business continuity plan.
Here’s a quote that may help you manifest being a Real Leader during these turbulent times:
“The greatest leader is not necessarily the one who does the greatest things. He is the one that gets the people to do the greatest things.”
– Ronald Reagan
How Proweaver Can Help You Get Back on Your Feet
When you partner with Proweaver, we can help you with the online marketing aspect of your business while you focus on the other areas of your operations. With our help, you can connect with your consumers through effective online marketing strategies.
Our team has the tools and knowledge to help you reach people needing your services during this critical time.
The difficulties your business is facing today should not hinder you from achieving the success you envision in the future.
Let us be a part of your business’ rise and success story by getting in touch with our team today.