What you need to know:
- Resilience is being able to deal with shocks. Life is unpredictable and any business, small or big should prepare to deal with any shocks thrown at it. That is the essence of a resilience plan. Simply put, a plan B for businesses Samuel Gitta writes.
It has been a roller coaster of events during the pandemic. Just as the dust seems to be settling, comes a new variant, armed with the power to wreak havoc. But the business environment, unpredictable as the weather, needs to be governed.
Businesses ought to create business resilience and sustainability plans to sail through the effects of the pandemic. If you have a business, or are thinking of starting one, here are some of the key considerations they should have in mind.
Understand that resilience is being able to deal with shocks. Life is unpredictable and any business, small or big should prepare to deal with any shocks thrown at it. That is the essence of a resilience plan. Simply put, a plan B for businesses.
Right for creating resilience plan
One challenge during the pandemic is that businesses wait for the shocks to plan for them. A resilience plan should be created the minute a business is set up. In the telecom industry, a resilience plan can be based on a product or project. If a business has partners in a project, the business ought to understand the continuity risks with that partner lest you risk failure. That is why the resilience plan needs to be done at the initiation of a project or product and needs to be refreshed periodically.
You can set a minimum as to when you must review a plan. It is recommended annually, but should also be revised as and when the shocks are emerging or there has been a material change in the process.
A resilience plan has two fronts; Internal and external.
The Internal aspect of a plan deals with features inside a company for example staff and technology. In regard to technology, a business needs to have a resilience plan for loss of data or information through for example a natural disaster ie earthquakes. This can be mitigated by disaster recovery through possession of a backup.
The other aspect is staff for example critical staff deemed important to the resilience of the business.
It is paramount that a business is designed to have redundancy if person A isn’t available, B can take on the role. The same applies for service providers; always have a buffer such that if one has challenges, the other can take up the service.
The external aspects are even harder to predict as you may not have control over them. These may not be predictable, but there are those that are. For instance, forex. It is common for many businesses to spend quite a bit in investment and operational expenditure using forex. Whereas you can make short term plans, you have to keep watch of changes in the exchange rates because they can affect your business plans.
A resilience plan, often created on an annual basis, should bear points at which it can be invoked for example; when a covid-19 wave evolves, you invoke certain aspects of the plan.
The plan is to be used as and when those shocks happen or for certain shocks you can see in the horizon, for example forex depreciation. It often comes gradually meaning you can set in points at which you invoke your plan for example if it gets to this rate, this is what we do.
Monitoring is critical
You need to have a means of monitoring the micro and macro environment to determine when to invoke the plan. One of the tenets can be the positivity rate for staff. It can help you plan for worst case scenarios for example when someone resigns, there has to be a period of transitioning. There are exits of critical employees, you need to invoke the plan.
There are international standards on both resilience and sustainability however, the big three are people, process and technology. As you design any business resilience plan, look at it on the people side, processes side, then from a technology side.
These can be distilled further for example liquidity/cash flow plans. A business ought to have a solid cash flow plan for sustainability. While it is important to have a resilience plan, monitoring and refreshing cannot be neglected. Most of these shocks trend over time before they create impact.
Resilience feeds into sustainability. Sustainability can be affected by ability to innovate. Eg Kodak, Yahoo. You might be doing well now, but oblivious to changes from emerging competition or way of life of your customers. So if you don’t have a good innovation framework to introduce new products or agility in delivery, you might not have a sustainable business. If you had sit in arrangements for your restaurant and the pandemic hit, yet you were without an online delivery solution, then the business might not be sustainable. If you don’t innovate and the competition does, then you might not be sustainable.
As a business, sustainability and resilience plans are provisions for longevity, but it is key to remember that without the technical capacity and frequent reviews, the plan remains yet another document in your stock pile.
The author is the general manager risk and compliance, MTN Uganda.