Written by: Wayne Elsey, Executive Contributor
Executive Contributors at Brainz Magazine are handpicked and invited to contribute because of their knowledge and valuable insight within their area of expertise.
One of the biggest lessons most successful business leaders learn is resilience. Resilience is a vital concept to embrace fully—regardless of whether you have a small or large company. Moreover, resilience taps into the essential idea of creating a business continuity plan if something unexpected happens, which significantly alters a company's operations.
Not too long ago, I received distressing news from one of our sustainability business partners in Kenya. Several of our brands are in the second-hand shoe business, paying North American clients to reuse, recycle, and repurpose. As a result, the inventory we receive then gets shipped by us worldwide for commerce in the Global South and elsewhere.
Unfortunately, one of our micro-enterprise business partners in Kenya had her store burn down. Isabella’s store represented her hard work and dedication but also served as a source of income for her livelihood. The loss of all the shoes she painstakingly curated and offered to her customers adds another layer of sorrow to this already distressing situation.
Something as tragic and unexpected as what happened to Isabella can happen to any of our companies. All you have to do is think of the next pandemic, the potential expansion of war in Europe and the Middle East, logistics disruptions, or an economic shock such as a recession or even a depression. These things can and have happened, so a continuity plan is vital for businesses.
Shocks to the system: Lessons for a business continuity plan
We should all be used to the 'new normal,' which is to expect the unexpected. The pandemic of 2020 was a wake-up call for companies and business leaders. Many businesses needed a continuity plan in the chaos that happened. One of the lessons of that shock to the system was how vulnerable our supply chains were (and still are). Companies with contingency plans weathered the storm and recovered fully after some years. But it wasn't easy.
So, what elements should any and every business consider when it comes to continuity planning and resilience to move forward no matter what happens?
Key elements for business continuity planning of resilient companies
1. Risk assessment and scenario planning
Companies need to do a comprehensive risk assessment to build resilience and ensure a robust continuity plan. As part of the assessment, leaders must map out potential threats—including global and security threats. They also have to create scenarios that simulate risks so they can know the impact on business and determine actionable steps to triage any disruption.
2. Business supply chain resilience
As mentioned, one of the key things that came out of the pandemic for business leaders was the vulnerabilities in the supply chain. The threats still exist; even if it's a local company, global supply chain issues can affect any company. Therefore, relying on something other than a single source or vendor for supplies is critical. Creating redundancies with suppliers and logistics partners is vital to ensure resilience and continued operations.
3. Technology, communication, and security protocols
In the digital age, and when one of the biggest threats to any business is via a cybersecurity attack, it's vital to have robust protocols. For one, companies need to ensure clear and solid communication lines in case communications drop. Also, if a business has outsourced work, continuity plans must address security and continued operations in case of any emergency.
4. Financial preparedness for business
Like every household has to ensure a cash reserve, a business needs to ensure they have a cushion in case of any disruption. For one, companies should have a reserve fund with at least six months, if not more, of whole operating revenue. Credit lines should be clear, and it makes good business sense to establish a personal relationship with a financial institution if it's vital to get a loan.
5. Employee training and well-being
Finally, it's vital to focus on teams to ensure a company remains resilient through small failures and potential disruptions. For one, employees need to understand how to respond in case of any crisis, so they should be fully aware and informed about continuity plans. Also, ensuring a support network for business employees is essential if there's a significant existential threat.
A Complex and uncertain climate
Most business leaders now understand and expect a complex and uncertain business climate. However, it's always essential to remember that the unexpected isn't something that happens to someone else. It can happen to any one of us. Therefore, ensuring that a company is continually resilient will make it better to weather any storm or shock to the system.
© 2024 Wayne Elsey. All Rights Reserved.
Wayne Elsey, Executive Contributor Brainz Magazine
Wayne Elsey is the founder and CEO of Elsey Enterprises. Among his independent brands, he is also the founder and CEO of Funds2Orgs. This social enterprise helps nonprofits, schools, churches, civic groups, individuals, and others raise funds while helping to support micro-enterprise (small business) opportunities in developing nations and the environment.
