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Business Continuity – What To Do When a Crisis Ensues

No business owner wants to think about the day when operations stop as a serious crisis ensues. Having a plan in place well ahead of time will leave a company much better positioned to both manage the crisis and succeed after it has concluded.

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No business owner wants to think about the day when operations stop as a serious crisis ensues. Having a plan in place well ahead of time will leave a company much better positioned to both manage the crisis and succeed after it has concluded.

Business interruption is something no business owner wants to spend time thinking about; to many, it could logically seem like a waste of time, worrying about a day that may never come. Naturally, however, it is something that needs to be given thought, because while no one wants an interruption to occur, they need to be ready of the worst-case scenario ever arrives.  As the common adage goes, if you can’t prevent, you must prepare.

As with all crisis planning, putting some thought into a business interruption plan ahead of time – when things are operational and before anything bad has taken place—can save a company both time and, most important, money down the road. This means building a plan that details what to do, on a step by step basis, if an interruption ever occurs. And it also means having mechanisms in place that hopefully will prevent crises from ever occurring.

To begin with, let’s talk about preventing a crisis in the first place. Workshops should be held for employees on prevention techniques, and a full plan put in place on the appropriate response steps. Frequent response drills, sometimes called “tabletop” drills, should be held, roles should be assigned and corporate compliance programs should be updated on a regular basis.

If the company deals in specific products that are brought to market, procedures need to be created to deal with recalls, and regular audits done on those particular products that may be considered “higher risk.” And finally, the prevention plan must be retained as a living document that is easily accessible; this is critically important due to potential employee and management turnover. Regardless of who is in charge and how long employees have worked there, people need to know that this plan exists and can be accessed at a moment’s notice.

Of course, even if a plan is in place, a crisis could still ensue that leads to an interruption of the business operation. If this happens, the first step is to notify emergency, government and regulatory authorities of the interruption; bringing people “in the loop” early on is never a bad idea. Once this happens, the crisis management team should be activated, a company spokesperson should be designated and emergency relief efforts need to be organized. If need be a media statement should be drafted and approved by the appropriate people, as should a statement to employees, and insurers and other key constituencies should be notified. At this point, an internal investigation can begin, and the company can make the determination to whether it should be led by internal or external counsel.

Once the business interruption crisis hits what is known as the intermediate stage, an investigative and legal team needs to be assembled. Preparations must be made to determine the loss of income that a business suffers after a disaster. The income loss may be due to disaster-related closing of the business facility or due to the rebuilding process after a disaster. Evidence needs to be collected and preserved – this means a halt on otherwise routine document destruction – and witnesses need to be interviewed as part of the investigation.  The company need to consider whether outside experts and independent testing of evidence is required, and all employees involved must be notified on privileges, the creation of new documents, electronic records and email. It is likely that requests, possible even subpoenas, from investigative agencies could be coming in at this point, and those will require immediate responses. Lastly, the company should formulate legal strategies for defending or settling lawsuits.

At this point, companies tend to reach the final stage of crisis management, where the following task list should be utilized.

  • Revise existing crisis response plan as needed.
  • Conduct crisis post mortem and make needed changes to company procedures.
  • Prepare a “lessons learned” after-action evaluation of the crisis.
  • Evaluate insurance needs.
  • Consider the need for a public relations consultant.
  • Consider additional employee training.
  • Consider additional preventative legal counseling.

No business owner wants to think about the day when operations stop as a serious crisis ensues. Having a plan in place well ahead of time will leave a company much better positioned to both manage the crisis and succeed after it has concluded.

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