Planning ahead for a crisis is crucial to business
Play a little defense by writing an effective business continuity plan. This game plan can help you cope when your world falls apart.
The “normal” business climate no longer exists. Whether you are a senior manager, a shift supervisor or just starting your career, it is important to recognize that the unexpected is the norm.
Business continuity planning and crisis management are crucial in today’s world. Over the past three years, I have worked with a number of dairy plants on business continuity/crisis management planning. I have heard these comments from management:
• “We have always handled any crisis with our current staff, so a plan is unnecessary.”
• “If we have a crisis that prevents us from operating, our customers will have to get their products elsewhere.”
• “We would have to reveal proprietary processes that might become known outside the company. So we will deal with any business interruption or crisis once it occurs.”
A true crisis is not a government inspection, a load of questionable milk getting into our silos, a short-term utility interruption or even a product recall. I’m talking about what a company does when it does not have all of the resources and technical capability to address and solve the crisis in the short term. Crisis management is a process of transformation where the old system can no longer be maintained.
Let me define the issues:
1. Problem: A situation (or people) that blocks or limits the ability to reach a solution, need, goal or position. An unresolved problem can escalate into an emergency. Examples include a temporary loss of electrical power or a positive drug residue test on an incoming raw milk tanker.
2. Emergency: A situation that poses an immediate risk to health, life, property or environment and requiring urgent intervention to prevent a worsening of the situation. This has a high probability of escalating to cause immediate danger to life, health, property or environment. Examples include a limited plant fire or an ammonia leak.
3. Crisis: Any event that has or will lead to a dangerous situation affecting an individual, group, community or whole society. Crises have four defining characteristics. They are unexpected; they create uncertainty or destabilize physical, social or emotional norms; they are or are perceived to be a threat to the continued existence of a company, community or society; and they demand change in order to end the crisis.
Crisis events usually can be grouped into five categories:
• Natural disasters and weather-related (earthquakes, hurricanes, blizzards, floods)
• Work-force related (wide-spread illness, union strikes, civil disruptions, transportation infrastructure breakdown, criminal acts on-site)
• Plant infrastructure failures (roof collapse, significant equipment failure without back-ups)
• Utility-related (electrical, water or sewer service interruptions lasting more than three days)
• Supplier-related (transport failures, supply disruptions caused by the four events listed above, contagious animal disease outbreaks preventing delivery of adequate raw milk volumes, etc.)
4. Disaster: A natural or man-made crisis that either is improperly managed or becomes unmanageable, causing significant physical or economic damage, destruction, loss of life, or a drastic change to the environment. While a disaster can be understood to be uncontrollable, manmade disasters are the result of inappropriate preparation.
A true business continuity plan addresses what to do in the case of a crisis or disaster. Elements of a good plan are:
• Appointing a management team with 24/7 access (including multiple means of contact); specific responsibilities; annual response testing; a legal advisor; and a media advisor.
• Building a contact list with information about the local, county and/or state emergency management committees/agencies, police, fire and first responder service. You need to familiarize them with your operation and business continuity plan.
• Having at least two alternative plans to deal with each of the “crisis events” listed above.
• Creating a “dark” (not-yet-published) website that has information for customers, the media and consumers about your company and how it has prepared for a crisis.
• Evaluating all property protection and liability insurance to have a clear idea of your plant’s exposure and financial risk.
• Conducting a mock crisis annually and evaluate the ability of the team to operate and complete their responsibilities.
Remember this: the Japanese Fukushima nuclear plant disaster had two back-up plans to keep the nuclear fuel rods cool. Both plans failed. The BP Deep Water Horizon blow-out in the Gulf of Mexico had two back-ups. The first fail-safe and the two back-ups failed.
To better prepare your company, see the Center for Food Safety & Regulatory Solutions website, www.cfsrs.com, or the Dairy Response Center site, www.dairyresponse.com.
Allen R. Sayler is vice president of the Center for Food Safety & Regulatory Solutions, Woodbridge, Va.