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Does your company have a Contingency Plan?

Good strategies always involve a Business Contingency Plan (CP), in case the original plan backfires, and does not work as expected. In this case you need a CP to achieve the same goal as planned. A CP will work as your ‘plan B’ in such case.

Let us see why you need a business contingency plan and how to create one in a few simple steps!

What is a BCP?

But first, let’s define what a contingency plan is.

A contingency plan is a proactive strategy that describes the course of actions the management and staff of an organization need to take in response to an event that could possibly happen in the future. A CP is, in other words, related to likelihood and possibility which we can not predict with certainty.  

What is the purpose of a BCP?

A CP helps you stay prepared for unforeseen events and minimize their impact. The purpose of a business contingency plan is to help your business resume normal business operations after a disruptive event. A CP can also help organizations recover from accidents, manage risk, avoid negative publicity, and handle employee injuries.
In times where your primary plan doesn’t work, you need to execute the plan B. By this your business can react faster to unexpected events.

How to make a CP?

An effective CP is based on good research and brainstorming. The four steps below show you how to develop a business contingency plan to help you prepare for the unexpected.

1) Identify the risks

Before you can prepare for an event, you need to know what you are preparing for. Because of this you need to identify the major events that can have a negative impact on the course of your business and on the key resources, such as your employees, IT systems, machines etc.. Think of all the possible risks in your organization. As you are brainstorming, you could with advantage involve employee from other teams, to ensure that you are preparing for risks in the entire organization, and not only in your team.

Tip: use a min map to organize and categorize the risks you gather from the brainstorming session!

2) Prioritize the risks

 Once the list is created, you need to start prioritizing them, based on the threat they pose. Make sure you spend your time preparing for events that have a high chance of occurring. You would not want to spend all your time preparing for events you’re not experiencing.

Tip: To determine which risks are more likely yo occur, use a risk impact scale!

3) Develop contingency plans                     

Once you have created a prioritized list, it’s time to put a plan together to mitigate those risks. As you write a contingency plan, it should include visuals or a step-by-step guide that outlines what to do once the event has happened and how to keep your business running. Include a list of everyone, both inside and outside of the organization, who needs to be contacted should the event occur, along with up-to-date contact information.

Tip: we recommend you begin with the threats you consider high priority!

4) Maintain the plan

Even after you’ve developed a CP, the process doesn’t stop here. Once you have completed the contingency plans, make sure that:

  • The CP is quickly accessible to all employees and stakeholders
  • You communicate the plan to everyone who could potentially be affected
  • Review your plan frequently (Personnel, operational, and technological changes can make the plan inefficient, which means you may need to make some changes)

Benefits of a CP

Without a backup plan, you’re opening yourself to unnecessary risks. Here we have listed some om the most important benefits of a CP, that you cannot ignore:

  • Helps your business react quickly to negative events
  • A CP lists the actions that needs to be taken, and by this everyone knows what to do, without wasting time panicking
  • Allows to minimize damage and loss of production

What is the CP planning process in your organization? Let us know in the comment section below!

Sources:

The danish template for CP

For inspiration take a look at CP templates:

About the author

Julie Hviid

jh@rocconsult.eu


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