The Role of Risk Management in Business Continuity Planning

Posted on August 2, 2011 by Jason Hamilton, CPP

Risk is associated with virtually every activity in life.  However, when applied to a business operation, it is more commonly translated into an assessment of the severity of a given event versus its probability of occurrence.  Severity can mean direct financial impact, damage and/or business interruption.  This central tenet of Risk Management is often overlooked as businesses prepare for a disaster, often focusing on the most catastrophic natural disaster event(s) that could impact their business. 

So what’s the problem with this approach?  It is FAR more likely that a small scale business DISRUPTION can not only have the same devastating impact and at the same time, be much more likely to occur.  Such is the perfect storm that can quickly shut down any business not engaged in Disruption Preparedness.  I think its safe to say that most small businesses can’t rely on a Federal Government “bailout” for a failure to plan.

 When evaluating the various risks a business can face, a Risk Analysis is tool that security, technology and insurance consultants use as an important management tool.  The whole idea of the Risk Analysis is that it can:

  • Identify potential risks;
  • Evaluate the standards on what risks will be planned for;
  • Evaluate to what extent those risks should be planned for.

 

According to Mr. James Broder, CPP, in his book Risk Management and the Security Survey, planning takes into consideration the following:

 

  1. Identification of the assets in need of protection (community equipment / property, buildings, industrial equipment, hazardous chemicals or even personnel, to name a few);
  2. Identification of the kinds of risk or peril that may affect the assets involved (loss of office / plant, natural disaster internal/external theft, fire, labor disturbance are good examples);
  3. Determination of the probability of occurrence (not a science, but an art, the art of projecting probabilities);
  4. Determination of the impact or effect (in dollars if possible) if a loss occurs. (Risk Management & the Security Survey, 2000)

As Mr. Broder points about above, each type of risk (or peril) has the potential for impact, but it is probability that will determine to what extent a business should prepare and invest money in plans to mitigate the risk. 

 

During the Disaster Recovery and Business Continuity Series sponsored by Anexio, participants were introduced to this very concept by Mr. Chad Bowers and his company, Bold Planning Solutions. Chad used the concept of Disruption Preparedness to drive the point home with the importance of preparing not only for the next “named storm”, but for the more probable events that can have just as big an impact on a business operation.   Bold Planning Solutions offers a number of these Risk Management tools to help businesses focus their Business Continuity Planning and allocate their preparation funds effectively.

 

For assistance and focus in Business Continuity Planning (and DISRPUTION Preparedness), the Disaster Recovery and Business Continuity Series is a great place to start.  Businesses that plan effectively do so by educating key management personnel in Risk Management, taking planning seriously and surrounding themselves with subject matter and Risk Management experts – their go-to people after a crisis occurs.  In this way, expectations are set before an emergency occurs and makes working through the recovery process more manageable, when tensions and stress levels are at their highest.

Are you prepared for the next hurricane that threatens Sarasota County?

Are you prepared for the next hurricane  or tropical storm emergency? 

 

by: Edward J. McCrane

         Emergency Management Chief

         Sarasota County

Your answers to the questions below could save your life and the lives of your family.

  • Do you know if your home is in a hurricane storm surge evacuation zone?
  • If a hurricane heads toward Sarasota County, how would you decide whether to stay or evacuate?
  • If you stay, what do you need to do?
  • Have you prepared your home for the effects of hurricane force winds?
  • If you leave, where would you go?
  • After the storm, would you be self-sufficient for at least a week?

How did you do?

Now’s the best time to answer these questions – before the next hurricane is 24 hours from landfall and people are lining up to buy storm supplies.

Hurricane season is a part of living in Florida. It’s becomes harder for some people to remember that after a couple of seasons with little to no storm activity. But we can’t count on a hurricane-free year.  It only takes one hurricane to ruin our day. We can only count on being prepared to stay safe. That means doing three things:

  1. Have a plan for your family and your pets
  2. Put together a disaster supply kit to get you through the first week.
  3. Stay alert and be ready to carry out your plan.

Your first step for storm preparation and storm information should be a visit to Sarasota County’s Web site, scgov.net. Click on the “All Hazards Be Prepared” button at the bottom of the home page. On the “All Hazards” page, you’ll find links to information about preparations for your family, your home, your neighborhood and business. There also is special information and storm tips for senior citizens. People who have special needs during a storm should contact Emergency Management to register in advance for assistance.

If you do not own a computer with internet access pick up a hurricane guide at your local library or at the county administration center on Ringling Boulevard.  A great seasonal hurricane preparedness guide is prepared by the Tampa Bay Regional Planning Council and can viewed online and comes in a readable web version and an Adobe Acrobat .pdf that can be downloaded, saved and printed.

The first question – whether to stay or go during a storm – partially depends on which evacuation zone you live in. Maps are available online at scgov.net or in the hurricane guides referenced above.

You can also use the “Know Your Zone” tool on the all hazards webpage to find out if your home or business is in a hurricane storm surge evacuation zone.  This tool includes an interactive map, what each zone “means” shelter locations & their status and area hospital locations.  As a storm approaches, the Sarasota County Emergency Operations center will issue evacuation orders by zone, depending on the intensity of the storm. But your evacuation zone isn’t the only factor to consider.

Even if you don’t live in a mandatory evacuation zone, your house may not be safe if it wasn’t constructed to meet recent Florida building codes. If you haven’t done a wind inspection on your house, of if you don’t have storm shutters, it may not be safe to stay. This is especially true in some areas of the county that have high concentrations of mobile homes or older homes constructed before we learned how easily wind can damage them.

If you plan to stay home, remember your ABC’S of preparation:

  • Anchor your roof, especially if was built before 1994 and is gabled.
  • Brace the entry and garage doors, which is where 80 percent of home wind damage starts.
  • Cover windows with secure impact-resistant shutters or other window protection systems.
  • Safe, interior rooms provide more protection than rooms with windows and doors.

 This video taken during 2004′s Hurricane Charlie (in Punta Gorda) by Jim Edds is a great reminder on why these ABCs are important:

Preparing your neighborhood for a storm is as important as preparing your home. Sarasota County is helping residents develop Neighborhood Preparedness Programs (NPPs) with the goal of making families self-sufficient for up to seven days following a storm. Neighborhood organizations can provide assistance when police, fire, emergency service and other workers may be overwhelmed with demands.

A NPP includes 25 to 250 households and is lead by a Neighborhood Disaster Team. For assistance in starting a NPP in your neighborhood or homeowners association, call the county Call Center at 861-5000 and ask about the Neighborhood Preparedness Program.  An overview of the NPP can be found online and will provide a great start in forming plans for your neighborhood.

Sarasota County Emergency Management will keep residents informed as storms approach and residents can count on us for help after a storm passes. But residents need to be prepared and self-sufficient until we can respond. Being prepared is the best way to make sure your family is ready for any disaster.

Edward McCrane Jr.

– Sarasota County Emergency Management Chief

Disaster Preparedness and Business Continuity SEMINAR (free!)

On June 17, 2011, Anexio, Al Purmort Insurance and several other companies are partnering with the Sarasota County Government Emergency Management Chief Ed McCrane to present a half-day seminar on Disaster Preparedness and Business Continuity. 

Due to a number of generous donations, this seminar is now FREE to participants!  Based on a Community Associations Instiute (West Florida Chapter) breakfast meeting in early June, this seminar should prove to be informative, timely and worthwhile.  At that CAI meeting on June 1st, Ed McCrane gave an outstanding presentation discussing the importance of and steps to take for businesses and homeowner associations in preparing their own disaster plans.

The video below includes Mr. McCrane and Anexio’s Michelle Nelson discussing the potential value this seminar will have for the community:

Follow the link above to register – we hope to see you there!

Preparedness – Are you Ready?

With June 1st fast approaching, our thoughts here in Florida head toward the 2011 Hurricane Season.  While reviewing storm forcast predicitions maybe useful, the preparedness discussion is more impactful.  The key to real preparedness is having a viable plan that is laid out, in advance.  For me, this is never an issue, as a fair number of people that know me will state that I’m a planner.  My fear is for my neighbors and what five consecutive seasons of little to no storm action has done to their level of preparedness.

In reviewing the 2011 hurricane predictions, Emily Holbrook discusses predictions and probabilities in her article, 2011 Hurricane Predicitons, from the Risk Management Monitor. Her information contains a great deal of data from the Colorado State University team of Dr. William Gray and Phil Klotzbach who issue these predictions each year. More importantly, Emily’s discussion includes important points from Dr. Gray that don’t focus on the actual predictions, but rather on the statistical probabilities of tropical storm and hurricane activity in our region.  These thoughts and the CSU team’s predictions are a good start to the discussion on preparedness.

Thinking about preparedness specifically, I reflect on an article initially found in the Washington Post on May 18, 2008. Written by John D. Solomon, the article entitled It’s an Emergency - We’re Not Prepared focuses on a “lack of preparedness” and how even the September 11, 2001 attacks have not spurred most of us into preparing for emergencies.  Its important to point out, these emergencies don’t just include a terrorist attack, but more probable scenarios like a fire, disease pandemic (think, a very ugly strain of the Flu) or a natural disaster (think, hurricane, tornado, earthquake, etc…).  Any of these issues have the potential for serious impact on you, your family, your business and your community.  The severe weather and tornadoes across Alabama, Missouri, Kansas and Oklahoma over the past few weeks have been a painful reminder of that impact.

Granted, I live in Florida and for those of us that were around in 2004 & 2005, we have a memory of Hurricanes Charlie, Francis, Jeanne, Ivan & Wilma.  However, unless we were DIRECTLY affected, the urgency to plan & prepare for a disastrous situation lessens which each passing day.  We’ve breathed sighs of relief in 2006, 2007, 2008, 2009 and 2010 when our state was not affected in any meaningful way by tropical storms.  With the past five seasons relatively calm, how many have an active hurricane or disaster plan in place?  How many of have worked out what to do if they were displaced from their home?  How many have chosen alternate meeting sites for family and/or business in case of catastrophe near or around their home?  Remember, we shouldn’t expect our wonderful electronic gadgetry – smart phones, mobile phones to work flawlessly in the aftermath of a storm.  I experienced that first hand working through the aftermaths of Hurricanes Charlie, Francis and Jeanne.

Discussing these issues on a national scale, Mr. Solmon quotes 9/11 Commission Chairman Thomas H. Kean when he says:

  • “The weakest part of our homeland security plan is the citizen… Addressing that is very, very important”.

The problem is in the fact that too many citizens rely on a government agency to help them in the aftermath of a disaster…and too often, that help doesn’t come fast  nor is it a complete solution by any means.  As Mr. Solomon correctly points out, history has shown that individuals will rise to the occasion in an emergency.  At the same time, offering them training, information, support & encouragement to prepare IN ADVANCE means they’ll be in the best position to help not only their community — but their family and THEMSELVES.  Given this, Mr. Solomon points out “10 suggestions for achieving a more prepared public”.

10 Suggestions — for all leaders & citizens —  for achieving a more prepared public  (John D. Solomon):

–Make public preparedness a priority, or it won’t happen:  “…of 300 people asked, only 9 had family plans, in a roomful of first responders…”

–Make preparedness part of 21st century citizenship:  “…being prepared may be the most significant contribution many citizens can make…”

–Don’t laugh at Duck & Cover:  “…we need to get back the preparedness ethic from our past…”

–Knowledge is power:  “…public education could help mitigate the impact of a catastrophic disaster, according to many emergency officials…”

–We should tell the children:  …”going through kids makes it more likely that adults will follow, as preparedness may take a generation to take hold…”

–Try the carrot and the stick:  “…the government uses the bottom line ($) when it wants to influence behavior…”

–Bring in business to help make the sale:  “…it’s time to engage the private sector in advancing civilian preparedness…”

–Use 21st century technology to prepare for 21st century emergencies:  “…make Americans more aware of capabilities and how to use them…”

–Everyone should learn the drill:  “…how will you get information and communicate with YOUR family?…”

–Create a National Preparedness Day:  “…briefing citizens, conducting drills, filling emergency kits are just some of the activities…”

For Floridians, the time to prepare for the devastation a hurricane can supply is NOT when a Hurricane Watch is issued.  When the watch is issued, that is the time to put your plan into action, both for your business and your family.  The time to start planning and prepare detailed plans is now:  when the seas are calm, the weather is pleasant and the lines at the local home improvement store are short.

I am a huge beleiver in personal responsibility, especially when it comes to preparedness activities. In short order, I’ll be discussing plans and key resources for hurricane season planning and personal – family and business preparedness. As Paul Harvey was fond of saying, “stand by for news!”

Creative Leadership: “What to do when the way is not clear”

Earlier this spring, I had the opportunity to be a part of the audience in presentation given by Mike Wagner, President of White Rabbit Group.  Mike’s presentation was a part of an MBA leadership concepts course presented by Dr. Delaney Kirk at the University of South Florida.   Early on, it was evident that Mike is a gifted communicator, able to make connections with his audience as if he is speaking one on one.  As he presented his ideas on leadership, branding, personal development and creativity, a question was asked by a classmate about branding that struck me as often overlooked by organizational leaders:

  • “How do you know if your perception of your personal brand – or chracteristics – is the same as the perceptions others have of you?”
  • In other words, how do you know if what you “say” is really what you “do”?

Mike’s answer was beautiful in its simplicity:  “ASK!”  At the same time, he got more specicific and suggested the leaders ask the following questions to test the validity of the perception equation, does SAY = DO?

  1. “What do I do that you think I should stop doing (or do less of)?”
  2. “What do I do that you think I should do more of?”
  3. “What am I doing just right?”

These questions are powerful ones when leaders have the courage to not only ask them, but actually listen to, learn from and act on the answers they are given.  It is not always easy to receive feedback that is not glowing or positive.  However, I submit that it is critical feedback that is not only most important in determining where organizational leaders are missing the mark, but it will further help leaders determine where they should go next, suggest what to do and perhaps, how to do it.

But what happens when the way is not clear?  Mr. Wagner suggests that feedback is important, but too many managers (as opposed to great leaders) have what he calls a “profound commitment to the right answer” and simply apply fixes to problems they may not fully understand.

In his The Creative Leader presentation (seen below), Mike suggests that in a world with a great degree of complexity and an incredible change rate, great leaders should work to nurture complexity:

  • Great leaders should make it “easier to connect with people that have different ideas”;
  •  Great leaders should “create settings for people to communicate and also disagree”.

This session was presented as a breakout for SHRM (the Society for Human Resources Managers) and focuses on what he calls Mental Models for leaders to “better understand what they are looking at” and “how to take people on a journey to create something collectively”.

 

The Creative Leader – What To Do When the Way’s Not Clear from Ben Stone on Vimeo.

If your way is not clear and / or are looking for a dynamic, talented speaker to learn from, watch Mike’s presentation.  I can guarantee it will start your creative juices flowing.

Welcome!

We established our Blog on May 10, 2011 to better communicate with our customers, security officers and anyone wishing to discuss topics of importance in Security Management. Look foward to discussions centered around topics such as:

  • Leadership and Personnel Management
  • Security Officer Services
  • Mobile Patrol
  • Security Technology
  • Security Consulting

We want to offer you clear, comprehensive and timely information you can use, while also looking for your thoughts and experiences to share.  Thanks for stopping by – and look for more soon!

 

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