Is Disaster Preparedness Really Necessary?

Forty percent of businesses do not reopen following a disaster and an additional 25% fail within one year according to the Federal Emergency Management Agency (FEMA).

The Small Business Disaster Preparedness Study conducted by Portland software maker Sage North America, indicates that more than 60% of U.S. small businesses have no emergency-response plan.

2017 was an unusual year for catastrophic natural disasters in the United States–record wildfires in California and severe cataclysmic hurricanes in the Caribbean and mainland. Catastrophes can strike anywhere at any time, and can disrupt every aspect of a business, from employee and workplace productivity to IT systems, supply chains and banking services.  No part of the country is immune to natural disasters or disruptive events… (Bryan C. Martin SANS Institute).  Oregon is located on the “Ring of Fire” that surrounds much of the Pacific Ocean and is home to 75% of the world’s active and dormant volcanoes.  Look at the on-going catastrophic seismic/magma issues on the big island of Hawaii.

Every day, businesses like yours are confronted with disasters of varying degrees.  Those that have adequately developed, maintained and exercised their contingency plans will survive.  It’s easy to take the uninhibited operations of your company for granted.  Yet it’s only a matter of time before a disaster strikes. When that happens, power will not always be available, telephone and IT systems will likely fail.  As we have discussed in our business transition planning blog posts,  few executives plan for their own, much less their organization’s mortality.

The beauty and splendor of Oregon make it a great place to live, but our state has its share of extreme weather, floods, wildfires, earthquakes, civil unrest, chemical spills, toxic air and even tornadoes.  Under the best of circumstances, government agencies and other emergency organizations can’t protect firms from disaster.

From wildfires to information backup failure, there are many possible hazards, disasters, economically induced issues, politically induced catastrophes and man-caused crises. These include everything from toxic water, waste or air to an international trade crisis or volcanic eruption.

Here are some practical tips to help your business survive a disaster by creating an organizational strategic and tactical plan.

Develop and Write a Plan

Protect your business and employees before, during and after an emergency by assessing critical assets, IT backups, recovery, implementation, routine testing and plan maintenance. Be sure to include:

• Sales and marketing
• Vendor relations
• Stockholders/Board members
• Legal
• Community officials
• Media
• Utility companies
• Fire department/emergency medical offices
• American Red Cross
• Insurance carriers
• Neighboring businesses

Identify A First Aid Team

Approximately 10-15% of the company’s workforce should be trained in first aid and CPR so that they can assist in times of disaster or emergency until help arrives

Obtain Necessary Safety Equipment

Budget for and purchase any safety equipment, first aid kits, Automatic External Defibrillators (AEDs), fire extinguishers, smoke detectors, sprinkler system, and needed shelter-in-place supplies

Write a Plan for Responding to Emergencies

• Have a system for warning employees about emergencies and communicating with employees and local emergency management officials
• Consider the special needs of employees
• Evacuation routes
• Provisions and location for employees’ shelter-in-place
• Temporary facilities

Develop a Business Continuity Plan

• Designate employees to develop the plan
• Identify assets most critical to the business
• Develop different procedures needed for different departments
• Identify essential business functions and staff to implement these functions
• Identify essential and non-essential employees.
• Consider cross-training advantages
• Establish procedures with suppliers and customers critical to daily operations
• Create a plan for conducting business offsite if the plant is inaccessible
• Identify records and documents that must be readily available for safe storage and immediate, reliable accessibility

Providing for the safety of company employees and assets is the first responsibility of management.  Next in importance is the protection of all critical company records, including HR records, financial/legal documents, supplier, vendor and customer contracts and records, and insurance documents.

Most small to medium size manufacturing firms have some level of disaster preparedness–maybe just installing a sprinkler system in the plant or having one person trained in basic first aid.  Sufficient in the past was just putting the hand-written account books in the company safe overnight and having a few band-aids in a cupboard.  Tape and disc storage soon followed, often taken home at night.  Now firms use offsite servers and/or cloud storage to routinely secure their critical documents and records.

Can you virtualize your entire IT structure off-site?  Can the disaster recovery solution be centrally managed?  Does the client have a dependable solution that automatically backs up the most recent files?  Does the provider’s solution offer a simple, reliable solution to protect the client’s business information and eliminate IT downtime?  Is their solution built on reliable hardware and software?  What if the provider suffers a disaster? 

Poll your staff regarding the extent of their disaster preparedness/disaster recovery viability and pose the same question to your suppliers, vendors, and clients.

“Disruption is among the most powerful forces facing business of all sizes,” said Baruch Professor Scott Newbert.

One strategy is to turn disasters into positive disruption through preparedness and agility.  In other words, is there a way to make disasters work for good if one is ready for them?  If you stay up to date with trends and make sure customer satisfaction is extremely high, you have a good chance to survive and prosper.

Review Your Plan

Once your plan is in place, schedule a yearly or bi-yearly review. You can apply continuous improvement to be sure your plans are up to date and do not grow stale.

When you take a proactive stance toward disaster preparedness and recovery you’ve set your business up for success moving forward.

Guest blog post by Tom Teague