Impact of Natural and Human Disasters on Businesses
Effective organizations are typically assessed by how well they have accomplished their goals by effectively setting plans in the right direction and allocating enough resources to attain those goals. However, the business journey to success could be affected by natural or human disasters that are beyond the control of management. Therefore, more often now the success or failure is measured by the manner in which
company owners and managers treat problems outside their control.
When a disaster strikes your business, many things can go wrong. At the very least, a company can expect:
- An inability to interact with management, vendors, staff or clients, to make them aware of the situation so that they can strengthen their preparation for the situation ahead;
- A sudden lack of energy generation can reduce the ability of a business to produce at full capacity. In reality, even a short power loss can shut down a cleanroom to get back to clean for at least a day;
- Efficient and dependable supply chains are key to a company\’s performance. Unfortunately, these supply chains are dealing with natural disasters, as they impact highways, bridges, and airports;
- Businesses have different equipment types depending on the products they are offering and the scale of their operations that are also critical to business operations. Unfortunately, these are adversely affected by natural disasters. To many businesses, the cost of repairing such damaged goods would again be debilitating; and
- Natural disasters also lead to loss of clientele due to people moving away from the area affected. This is worth remembering that those who live to spend their money mostly restoring their homes and businesses. That means there would be a decrease in the number of customers visiting particular places such as entertainment spots. Damaged goods are also a further result of natural disasters.
Worldwide organizations were victims of all kinds of upheavals. Human-made and natural disasters over the years have exposed organizational weaknesses on a global scale. In recent times the biggest global calamity that the world has witnessed is the pandemic COVID-19, which took the world by surprise. Business Continuity Planning has always been a requirement; however, in the wake of COVID-19, it has become essential for corporate survival. Preparation is the essence of reducing risks, avoiding disaster where possible, and putting in place a plan to cope with and recover when unavoidable losses are present.
A \”Business Continuity Plan\” (BCP) is a mechanism that outlines the possible effects of crisis scenarios, develops plans to resolve them, and helps companies recover rapidly so that they can operate as normal. A BCP is usually created before a catastrophe and includes the main stakeholders of the organization. A BCP\’s key objective is to protect human resources and properties during and after an emergency.
BCP is a component of Business Continuity Management (BCM). BCM\’s aim is to allow the company to respond effectively to threats such as natural disasters or data breaches and to protect the organization\’s business interests. BCM covers recovery from accidents, operations recovery, crisis control, emergency management, and contingency planning.
Business Continuity Checklist
The crisis leadership is in place with clearly defined roles and responsibilities to ensure that members conduct their responsibility in-strategic and the organizational environment as defined, and plans are revised as new information needs.
Review Current Policies and Procedures
Review your current business continuity and recovery plans for the disaster. If they are detailed enough, they will tackle a number of contingencies that might affect industries within the company, including possible pandemics. This must ensure the mechanism and controls of the company during a pandemic event are established and implemented.
Assemble the Crisis Team
The BCM organizational structure selected should be functionally scalable and ready to expand or contract to meet the needs of all crises. All relevant organizational functions should be analyzed and represented. Each business continuity team shall have a designated team leader and alternates. To keep the size of the teams to manageable levels, certain employees will often be assigned multiple responsibilities. It should also be kept in mind that some individuals may not be available to perform certain responsibilities during a crisis due to personal situations and alternates should be identified.
When confronted with a catastrophe, people want simple, easy measures they can take and feel that they have covered their bases. Leaving as little to interpretation as possible is best, and incorporating different viewpoints will help to make the proposal as comprehensive and transparent as warranting the needs. It is in the best of interests to create a communication plan that includes regular updates of the situation for employees and clients. Establish a virtual workplace command center to assess efficiency, profitability, compliance, knowledge and intelligence, participation of employees and health of the workplace.
Identify Critical Business Functions
Identify goals and essential processes, including functions such as employee payroll, benefits and supply chain (to keep supplies moving and services ongoing); and highly relevant processes and other resources such as payments, and education, insurance and banking resources available. Bring together highly skilled, dispersed teams that are able to log in at anytime, anywhere and deliver on customer commitments on a scale. Build a broader ecosystem around the workforce of the organization to allow collaboration across a wider set of priorities — including healthcare and child care. This would result in increased levels of productivity and commitment leading to better business outcomes.
Establish a Resilient Culture
Organizations should continue to execute work in a collaborative manner—with critical knowledge workers augmented by digital capabilities. Organizations should participate in strategic business and sustainability preparation, so that the most important issues can be resolved promptly. Around the same time they will track trends regularly to ensure timely response to various events while proactively preparing for future scenarios.
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