Leading successfully in turbulent times - A guide to robust business continuity planning (KPMG)
In turbulent times, how can boards, senior management and risk managers safeguard the business and discover opportunities amid a crisis?
Many businesses have contingency plans that were developed with an eye on disruptions to the microenvironment, such as power outages, the inability of staff to reach their workplace, and the unavailability of machinery.
However, such plans might not be adequate for the type of macro-environmental disruption we are currently experiencing which affects many, if not all, stakeholders in a business’s ecosystem. This compounds the ramifications and makes the disruption more acute.
For now, businesses need to manage in a highly challenging environment, that for some, is tantamount to a crisis. To succeed, they require strong leadership, and they will need to adapt and improvise. Short- term success can be measured through the immediate safety of their workforce and compliance with relevant laws, followed by the continuity of operations and brand preservation.
Businesses need to answer some difficult but important questions:
- Are you fully prepared for a crisis?
- Do you understand all potential risks?
- Have you thought “outside the box” regarding risks and responses?
- Are all responses documented?
- Do you have the right resources readily available to assist?
The current environment will test most businesses’ ability to operate and manage in a crisis. An effective response by a company requires transparency, accountability and above all, strong leadership. Businesses need to be clear about who is making the decisions, keeping the board regularly informed, and maintaining the board’s independence.
Businesses must also rapidly establish their immediate and longer-term risks, and develop a response plan accordingly.
In developing that plan they should consider:
- Who will act as an internal lead, and who are their backups for each category of crisis?
- What is the role of each member of the crisis team?
- Which outside advisors should be on the team?
- Who is responsible for communications with each constituency (e.g. regulators, investors, employees, clients, media and the public)?
- What is the role of the board vis-a-vis management?
KPMG has compiled a series of Business Continuity Insights to provide guidance to businesses across all sectors during difficult times. This report outlines key focus areas that organizations should pay attention to when developing an effective business continuity strategy.