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Navigating Disruption: Managing Risk by Planning for the Unplanned

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Disruption planning is an ongoing effort. Does your organization maintain some sort of an emergency preparedness plan or have contingencies in place that you fall back on? We spoke with business leaders about this very topic to see how businesses manage risk and plan for disruption to business on many levels. Disruption that could come in the form of market collapse, loss of funding, supply chain issues, consumer confidence or an unexpected calamity.

Take lesson from disruptions of yesteryear.

The CEO/president of a leading Midwestern bank discussed how they’ve dealt with disruption in the past and how that has prepared them in some ways for the latest disruption, which will in turn prepare them for the next disruption.

“We never got involved in some of the chaos that went on in the early 2000s that got a lot of banks into trouble. It was nerve-wracking during the 2008 financial crisis, but as the situation began to unfold, we came to quickly realize that our asset quality was better than other banks. We didn’t have to make any major adjustments but wanted to protect ourselves on the downside. We knew the economy was set to change. We were [a] relatively undercapitalized financial institution comparable to our peer group. And we needed to make a change in that area.”

Become familiar with the many faces of disruption.

Disruption planning takes many possible factors into consideration – and not just natural disasters or pandemics, but other business issues as well. For the CEO of an insurance company, planning for this takes outside-the-box thinking and constant strategizing.

“We’re always challenging ourselves to think outside of the box, thinking of other events that could impact our business. One of the ways we do that is through our enterprise management plan. We have a committee of staff in various disciplines across the organization that meets quarterly to discuss all matters of risk that our organization faces. We ask, ‘What happens if…’”

Having that constant gardener approach to business risk management and disruption planning helped them take on the latest challenge with the pandemic.

“I was at our office in Maryland. The east coast started seeing the impact first. I talked with our local president about their plan. They were getting ready. When I returned to our headquarters, I immediately called a meeting with our people and said, ‘Look, we need to update our pandemic plan just in case this situation escalates.’ We have a list of staff and what equipment they had at home and who had internet and the capabilities to work from home and got it to the supervisors and said, ‘Get this updated.’ We ordered more monitors to have them on hand and enough laptops. We have our key codes for our VPN. Let’s make sure we have plenty on hand. Each of the various offices had their business continuity plans, and everybody implemented it. From my perspective, one of the things I was most proud of is we didn’t miss a beat.” 

From my perspective, one of the things I was most proud of is that we didn’t miss a beat.

Plan from A to Z and beyond.

In the case of the insurance company with multiple locations, each office location had a pre-existing plan and implemented it when appropriate, but not all offices were impacted at the same time or in the same way. They required independent action yet followed a similar master plan. Being part of a larger system takes extensive planning and a set of protocols as we learned from the insurance company. This sentiment was echoed by the vice chancellor for academic and student affairs at a university.

“Being part of a larger system is an advantage of being a part of a university system. We have an emergency response plan, and it has annexes, with sub-plans specific to various topics. They’re lettered with letters in the alphabet. And the one of pandemic is a letter R in the alphabet. So, that gives a little sense to the types of issues that we have plans for.”

The stories are helpful to gain insights in your own preparedness plans and realize the importance of anticipating changes that your business has to make at a point to get through the disruption. It seems the echoes of history and the anticipation of elements repeating always play a role in our planning for the future. Managing risk and planning for disruption should be an ever-present item on the agenda for quarterly planning as much as setting goals and reviewing budgets.

Here’s to expecting the unexpected, anticipating the unanticipated and being ready to make a move at the dawn of a new disruption.

Thanks,
PRIME46


Are you a business leader seeking to adapt, change and grow following a business environment disruption? Let’s talk about how PRIME46 research and strategic advice can help.

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