Serious and unforeseen incidents can happen to any organisation, no matter what size. One of the responsibilities of a board is to ensure contingency plans are in place so that if the worst does happen, business can continue.
What is a contingency plan?
A contingency plan is a process that prepares an organisation to respond effectively and coherently to an unplanned event. A contingency plan can be also used as an alternative action plan if the original plan fails to generate the desired result.
Who produces a contingency plan?
Development of a contingency plan is a team task, with involvement of staff from each functional area of a business. The plan must have support from the top down.
What is the board’s role in contingency planning?
It is the responsibility of the board to ensure that a contingency plan is in place, and is reviewed regularly to ensure any changes are taken into consideration.
What are typical events which require contingency arrangements?
- Natural disasters such as fire, flood etc.
- Loss of data / IT security breach
- PR disaster
- Loss of key personnel
- Loss of key customers or suppliers
What problems might I encounter in developing a contingency plan, and how can I deal with them?
- The very nature of contingency planning is to look for events which are highly unlikely to happen. Staff can often see developing a plan to cope with these events as having a low priority.
- Stress the urgency of contingency planning by highlighting that a disaster is as likely to happen tomorrow as six months from now.
- Staff can be so invested in “Plan A” that they don’t want to consider having to switch to a “Plan B”.
- Stress that “Plan B” should be properly thought through.
- Staff can feel that their area of responsibility is the most important area within the organisation.
- By taking a team approach to the development of contingency plans, staff can challenge each other on the priority given to each area. Stress that essential business processes must be given priority, and that everyone has a role in this.
Steps in developing a contingency plan
- Identify potential risks
- Prioritise these by assessing what impact they might have on the operation of the organisation
- Identify sources of outside assistance such as the emergency services. Involve relevant outside agencies in your plan
- Identify key milestones along the way to becoming fully operational and ways in which each will be achieved
- Test your plan. Run simulations to ensure your plan has the desired result. This will also include staff training to ensure their readiness
- Monitor the plan. Regularly review the plan to ensure it includes new potential risks.
In March 2013, Northern Ireland experienced a weekend of heavy snowfall and severe gales. The strong wind caused the snow to drift and brought down power lines across the country. As a result, many homes and businesses lost power. The Northern Ireland Ambulance Service was one of the organisations hit by the power cuts. A contingency plan was in place and an emergency generator was used to provide power for the service. Unfortunately that too failed, and the Ambulance Service communication network stopped working. The Northern Ireland Ambulance Service therefore diverted all calls to the Scottish Ambulance Service, who then contacted ambulance crews via mobile phone. This resulted in delays of only a few minutes, and ensured continuity of service. The arrangement between the Ambulance Services of Northern Ireland and Scotland is part of a long-standing contingency plan which has been tested on a number of occasions. The Northern Ireland Ambulance Service were also able to confirm that had the Scottish Ambulance Service been unable to help, a further plan was in place which would have seen calls routed to the Police Service of Northern Ireland.
This example demonstrates the importance of contingency planning for all eventualities and worst case scenarios. The plan had been tested and worked efficiently when called into play. The result was an uninterrupted service to customers.
Is this an area of concern for you? Contact Leading Governance for more help.