Will your customers hang in with you when you are in a crisis?
This article is co-authored between Rezilienze and Implement Consulting Group. It was originally co-authored by Jeannette Chua.
If you are faced with a crisis, how bad does it have to be before your customers turn to your competitors?
Business Continuity Management (BCM) has been around for many years, but there are still questions about the value it brings to an organisation or if it just ends up being a paper tiger. This is often the case when BCM is viewed in isolation. However, good BCM helps you maintain trust with customers in times of crisis and ensures that you continue to meet your commitments to them despite being hit with a disruptive event.
When discussing BCM with organisations, we often hear comments like, “we have it all figured out”. And certainly, many have a lot of knowledge within their own field of expertise. But in most cases, getting to grips with the derived effects of severe incidents is often unsuccessful. More often than not, the outcome of such incidents has a knock-on impact on your customers’ supply chain, making your ability for rapid response also relevant for them.
The analytics behind business continuity, the business impact analysis, are always focussed on the products and services you deliver to your customer. How deep into the organisation you wish to go is entirely up to your strategy, delivery obligations and not least, your gut feeling. A good BCM set-up enhances these by breaking down the barriers between various functions to understand how different scenarios will affect your business and impact your customers.
When done right, BCM can prove to be a competitive advantage for you. This is especially true if a disruption impacts an entire group segment where you are able to respond or recover more quickly than the others, minimising the disruption to your customers’ (and even your competitors’ customers’) supply. When it becomes clear that you excel in dealing with operations disruptions, trust and assurance in your brand will be established, allowing you to leverage this to be a preferred choice for your customers and even bolster confidence and increase your shareholder value.
It will allow your business continuity plan to be fit for purpose and provide you with a sound overview of process criticality, if you design and implement the business continuity plan starting with a customer perspective to drive the business impact analysis. Understanding your customer needs is key to identifying where you create value for them, allowing you to prioritise and discern how much downtime is manageable in different areas before impacting your business and how fast you should be up and running again. Impacts can focus on bankruptcy, competitors increasing market shares, loss of customers etc. This is done across your entire organisation, thereby identifying internal and external dependencies and not least, exactly where you may have the biggest influence on your key customers’ supply chain.
Many organisations encounter many pitfalls in setting up BCM. To address these pitfalls, some foundation across the organisation needs to be laid to ensure focus on the right impact and value is achieved:
Any change to existing programmes or entirely new programmes will seem complex at first. Business continuity is not about creating new and complex procedures and systems, it is about identifying critical components and interdependencies already present. Often, different departments and functions have different methods and terminologies covering the same topics. This can be a challenge when discussing risks and disruptions as most often, stakeholders will have to communicate on a topic using different vocabularies. When done right, business continuity creates a common platform for these discussions, and you will be able to come to conclusions on potential continuity and recovery options faster.
Understanding the construct, culture and business objectives of an organisation is important for achieving success when implementing business continuity. If you do not embed the set-up across the entire business, you also end up with a lack of communication to and from this entity when there is a serious incident leading to a potentially bigger impact. Often, it is the smaller incidents which escalate to full blown crisis situations. This is because they were not treated how they could have been and the total impact, including on external stakeholders, was not considered. These would have a significant impact on the whole supply chain, as well as customer relations and fulfilment, and brand value.
A key part of preparing an organisation to deal with any disruptive events is to embed a resilient mindset to enable the company to respond according to the BCM plans to any shocks to the business. It is important to bear in mind that resilience is a dynamic concept and is therefore not a fixed activity or state, but a goal to be more (or less) resilient. It therefore requires integration and co-ordination of various operational disciplines to ensure that the right responses are activated in the face of an event or crisis. This requires the right mindset and awareness to activate responses in the face of stress during a crisis. In part two of this article, we will discuss crisis management and how your BCM could be tested in a crisis.
Read part two of the article, where we discuss crisis management and how your BCM could be tested in a crisis.
Implement Consulting Group