Disaster Ahead: Planning for the Worst
In today's world, there's no longer such a thing as the unthinkable. Strategic preparation can help your business manage disasters, both natural and man-made.
Craig Guillot (Dec/Jan 10)
(page 2 of 2)
During Hurricane Katrina in 2005, New
Orleans East was one of the hardest-hit parts of the city. Despite the
fact that Michoud sits below sea level and was right in the path of
destruction, the facility completed a space shuttle tank on time just
six weeks after the storm, at a time when most businesses were still
picking up the ruins. Director of business development Raymond Vogel
credits that success not just to the durability of the physical
infrastructure, but the fact that they anticipate the risks and
constantly prepare and re-evaluate their plans to handle such
One can't necessarily prepare for a disaster of
such magnitudes, and only by going through it can a company learn where
improvements need to be made. Experts in the industry say that the
best-made plans are worth nothing if they aren't frequently practiced,
tested and updated. "You are constantly doing these tests and want to
make sure these plans are reflecting your business," says DiMartini.
"Your plans should change as your business does." Philip Jan Rothstein,
president of Rothstein Associates, Inc., a Brookfield,
Connecticut-based firm specializing in disaster recovery and planning,
says the exercise process is the biggest part of a business continuity
program, and one that some businesses forget. "An unexercised
contingency plan is worse than no plan at all," he says. "You are going
to assume it works and that could be a fatal mistake. Exercising is the
single biggest factor." He says business continuity planning is an
ongoing process where the plan stronger with each test.
Shifting People and Processes
specifics of business continuity plans and how businesses prepare for
disaster can vary according to industry. Manufacturers might have
excess inventory stockpiled in another location. Retailers might have
inventory ready to flow in if a disaster destroys what is on hand. Call
centers might simply transfer calls to another location.
Szuhaj, director of strategy and operations for Deloitte Consulting,
says that some companies use the "lifeboat" scenario, which entails
partial or complete building of an alternative site in a different
location. In the event of a disaster, that site can quickly be finished
and made operable to house operations from the old location. "If you
have a catastrophic failure, you can actually finish the facility and,
within a short order, get things up and running," he says.
says that while geography can often dictate what types of threats a
business has to prepare for, the fundamentals of emergency and
continuity plans are usually very similar. He estimates that roughly 80
percent of a business continuity plan will be written to deal with
non-specific disasters. Plans to handle business interruption, work
force support, and continuing operations can be applied to any
disaster, whether it's an ice storm, tornado, or terrorist attack.
"It's about building a structure that will address categories or
classes of threats and vulnerabilities, some of which you can't even
imagine," he says.
Aside from the physical threats that a
natural or manmade disaster can pose, there are big risks in what can
happen to a work force. During Hurricane Katrina and the September 11,
2001 attacks, many companies had facilities that survived the disaster,
but they were out of operation for weeks because their employees
couldn't get to work. Because large disasters can affect entire
regions, the damage to transportation, housing, and infrastructure can
disable a work force, even more than on the company itself. "The
company also needs to take a look at the risk to [its] work force and
ensure that there's going to be enough people coming in to make it
operational," says Wilson. He suggests along with making plans to
potentially house and feed employees, companies can also institute
cross-training programs or set up some employees to work from home.