How can business owners develop an effective disaster plan?
First, don’t assume your insurance will take care of everything. Most people think their insurance will take care of it, but that’s not always the case.
You have to look at your plan as a business continuation plan. From there, gather a team that represents all aspects of your business.
Rank every aspect’s importance and determine how you would attack it in a disaster environment.
Then take that a step further and talk to others in your industry. Use trade associations, business groups, your insurance broker, even peers in your business. Government Web sites such as Ready.gov and the Pennsylvania version of that called Readypa.org can also be helpful.
You have to keep in mind that your plan is a living document. Once you build it, it doesn’t just end there. You have to look at it regularly, and you have to change and adjust it.
How can you ensure that prioritizing tasks in the planning process goes smoothly?
Have somebody from the senior executive or ownership level who has significant authority lead the charge, because people by natural tendency are going to get competitive between their units and want their issues to be covered first.
It’s a good idea to have somebody from the ownership level, which is where it really counts, who can referee and make a decision if they have to.
Once it is in place, how can companies evaluate their disaster plan to ensure it is working?
Three words: Practice, practice, practice. Dry run your plan using different scenarios to see what works and what doesn’t. You actually have to run the plan from start to finish. Create a scenario and then practice executing your plan based on that scenario.
With our team, I told them we would have a dry run on a Friday. I told them I wouldn’t spring it on them totally by surprise, but I wouldn’t tell them what time and what disaster would be coming. So they’re sitting on pins and needles, and I send an e-mail saying there is a tornado three miles from here — react.
Throw a few scenarios at them, then execute the plan from a tabletop level. We didn’t actually move people, at least on the first few runs. From there, you will find out what you missed. Then you can have some full-blown total company runs, as well.
Obviously you can’t do that a lot, because you don’t want total disruption, but you should do it at least one each year.
Rick Eckert is CFO of ECBM Insurance Brokers and Consultants. Reach him at (610) 668-7100 or [email protected].
