The importance of having contingency plans.
“Everyone has a plan until they get punched in the face.”
Tony Bellew, Professional Boxer
I recently read Tony Bellew’s autobiography which carries the above title. The book is shaped around things that boxing teaches you about life…and it struck me that the same applies to being ready for the worst in a business situation. Everyone has said or heard ‘that would not be good if that happened!’ or ‘hope that gets sorted quick or we are in real trouble!”…just like the first time a boxer gets punched in the face, they know it is likely to happen but when it does it hurts…the key is how quickly do you recover and be ready to avoid or evade the next punch. Or can you have a plan that ensures you rarely get punched at all?
Introduction
Ever arrive at work and know it is ‘going to be one of those days!’? Hopefully it is a very rare occasion. It might just be a minor glitch that is just part of trying to run your business as smoothly and effectively as possible…but sometimes it’s a ‘SHOWSTOPPER’ (@britishbakeoff) that causes not just disruption for the business, but is having a negative knock-on effect on your customer base. In recent times we have had a pandemic, higher evidence of stress & mental health issues and massive recruitment competition for the best staff. While in the workplace most businesses are operating in challenging environments, looking to be as lean as possible while maximising profit. It is a powerful cocktail that makes having contingency plans in place for the ‘showstoppers’ vital.
What is a contingency plan?
A contingency (or back up) plan is a plan put in place to help individuals, teams, or the business minimise disruption. They are about proactively thinking about issues, developing the business’s problem-solving skills, and creating outcomes that lessen or mitigate any business disruption. It is not negative or counter product to think about ‘what is the worst thing that could happen?’. Ask yourself how many businesses had asked the question ‘what would happen if everyone in the business had to be put on furlough for 9 months or more?’ before 2019…want to bet that it is a question that is on almost every business risk and contingency plan now
What steps should you be taking?
For most businesses it will be the loss of key staff and/or critical business knowledge so let’s consider what steps need to be taken to offset that type of scenario.
Here are 4 steps to developing a contingency plan for your business:
1. Carryout a risk assessment – identify what could trigger the need to employ your back-up plan?
Involve all key staff in the business.
List everything that could impact the smooth running of the business, to ensure customers remain the top priority…no matter how obscure (get all the worst-case scenarios out in the open). Might only be 1 or 2…could be 15-20?
List them all in order of likelihood, with the most important and probable ones at the top.
Once you have the list, target the top 25-30%. These will be the ones that would throw the business, your staff, and your customer off course! You will need to ensure you have a rock-solid contingency plan for these.
Work through the remaining 70-75% and ensure the plan would support a quick return to BAU in the business.
2. Pro-actively review each risk and the proposed course of action (safe in the knowledge that it has not happened yet!)
Hypothetically from the point of the risk materialising work through the route to resolution that you are planning to take.
Make sure everyone who would be impacted in the business is involved in this walk through…everyone has an item of specialist or specific insight that if not considered and talked over could be the hidden stumbling block in the future.
Having everyone involved ensures across the board buy-in to the contingency plan, which will mean no surprises should you ever need to put the plan into action: minimised disruption.
3. Who needs to know?
Put simply, probably everyone should know that contingency plans are place for all major business risks.
More specifically, communicate with each key stakeholder or role that would have a part to play to ensure each contingency plan is actioned quickly and effectively. The minute plan B is set in motion everyone with a role to play must play their role well.
Consider who outside of the business could be impacted i.e. any specialist business support you use or would need to deploy if a risk crystalised. They need to be communicated with as effectively as your internal team.
4. Build familiarity.
The best way to build familiarity is to practice, practice, practice!
It may not be possible to run a ‘risk scenario’ identically to how it would occur in ‘real time’, but running through the planned actions is always a useful exercise.
Through practice you are also potentially identifying gaps in skills, knowledge, or confidence that these sessions will help fill. Well structure practice is brilliant CPD for staff and the business.
And it comes with a valuable secondary benefit; as the business changes, grows or evolves it ensures an ongoing review is taking place to ensure the current plan is still the best plan.
Superb, you now have a contingency plan in place, that everyone knows and has confidence in. Hopefully you will never need to use any of the plans you have created or the new skills, knowledge, or confidence you have built within your staff and business. However the next question becomes…
How to maintain and manage your contingency plan(s)
We would recommend that you review your contingency plan on (at minimum) an annual basis. However, there may be other events that might trigger a review earlier:
Moving to a new system, platform, or
Changes in workflow BAU steps or standards, or
Changes to key staff that may change the people involved, whether it is due to long term absence or resignation, or
New roles or functions being introduced to the business, or
New products or services being introduced to your offering.
Insurance Support Solutions Ltd can provide specialist support to help you build your contingency plan, assess the probabilities, build & run practice scenarios and in many cases be an effective part in the solution whilst ensuring your business continues to improve your customer experience, your team, and your business.
Ask us about what is involved, and we will work with you to provide a bespoke solution that gives you the confidence and conviction that all issues, risk have a contingency plan (plan B) behind them.
And don’t forget, if you do find yourselves in a sticky spot and in need of additional resource to get things on track, Insurance Support Solutions Ltd have experienced account handlers and claims administrators who can jump in at short notice to help you out.
And finally…
Lawyer speak contingency planning…
A rude and difficult client who had been injured in an accident went looking for a lawyer to represent him without cost. One lawyer told him that he would take the case on one contingency. When the client asked what the "contingency" was, the lawyer replied, "If I don't win your lawsuit, I don't get anything. If I do win your lawsuit, you don't get anything."
Think about it!
