Business Crisis and Continuity Management (BCCM) Class Session

Business Crisis and Continuity Management – The business management practices that provide the focus and guidance for the decisions and actions necessary for a business to prevent, mitigate, prepare for, respond to, resume, recover, restore and transition from a disruptive (crisis) event in a manner consistent with its strategic objectives. (Shaw, 2006)

STRATEGY Strategy is 1.a coherent, unifying and integrative pattern of decisions; 2.a means of establishing the organization’s purpose in term of long term objectives, action plans and resource allocation priorities; 3.a definition of what is the real business (products and/or services) of the organization; 4.a response to the internal and external environment to remain competitive. 5.a means of defining management roles and responsibilities at all levels of the organization; 6.a way of defining the organization’s contributions to its stakeholders. Applied Strategic Planning page 3

PLANNING A formalized process to produce an articulated result in the form of an integrated system of decisions (interdependent decisions). Planning requires thinking about the future in an attempt to exercise some level of control over it. Adapted from CALSTATE.EDU Web Site “Establishing objectives and choosing the most suitable means of achieving those objectives before taking action” – anticipatory decision making Applied Strategic Planning page 3

STRATEGIC PLANNING “ the process by which the guiding members of an organization envision its future and develop the necessary procedures and operations to achieve that future” From Applied Strategic Planning

QUESTIONS FOR STRATEGIC PLANNING 1.WHERE ARE WE NOW 2.WHERE DO WE WANT TO BE (AND WHEN DO WE WANT TO BE THERE)? 3.WHAT ARE THE ENVIRONMENTAL (INTERNAL AND EXTERNAL) CONDITIONS THAT SHAPE OUR OPTIONS? 4.HOW DO WE GET FROM HERE TO THERE?

BENEFITS OF STRATEGIC PLANNING 1.INCREASED EFFECTIVENESS 2.INCREASED EFFICIENCY 3.IMPROVED UNDERSTANDING AND BETTER LEARNING 4.BETTER DECISION MAKING 5.ENHANCED ORGANIZATIONAL CAPABILITIES 6.IMPROVED COMMUNICATION & PUBLIC RELATIONS 7.INCREASED POLITICAL SUPPORT Creating and Implementing Your Strategic Plan. Bryson and Alston. Page 9.

Benefits of Strategic Planning 1.A framework and a clearly defined direction that guides and supports the governance and management of the organization 2.A uniform vision and purpose that is shared among all constituencies 3.An increased level of commitment to the organization and its goals 4.Improved quality of services for clients and a means of measuring the service 5.A foundation for fund raising and board development 6.The ability to set priorities and to match resources to opportunities 7.The ability to deal with risks from the external environment and 8.A process to help with crisis management From Alliance for Nonprofit Management

Tactical (supporting) objectives directly supporting strategic BCCM 1.Ensuring the safety of employees, customers and the public. 2.Protecting business tangible and intangible assets (e.g. physical property, data and information, goodwill) 3.Minimizing business operation disruptions. 4.Resuming, recovering and restoring business operations according to a pre-developed and defined priority scheme. 5.Maintaining a positive internal and public image. 6.Complying with legal and regulatory requirements

PLANNING TO PLAN VALUES SCAN MISSION FORMULATION STRATEGIC BUSINESS MODELING PERFORMANCE AUDITGAP ANALYSIS INTEGRATED ACTION PLANS CONTINGENCY PLANNING IMPLEMENTATION THE APPLIED STRATEGIC PLANNING MODEL FIGURE 1 -1 E NVIRONMENTAL MONITORING APPLICATION CONSIDERATIONS

A Good Mission Statement A good mission statement captures an organization’s unique and enduring reason for being, and energizes stakeholders to pursue common goals. It also enables a focused allocation of organizational resources because it compels a firm to address some tough questions: What is our business? Why do we exist? What are we trying to accomplish? From: "Mission Matters." The CPA Journal

AmerisourceBergen Mission Statement “To build shareholder value by delivering pharmaceutical and healthcare products, services and solutions in innovative and cost effective ways. We will realize this mission by setting the highest standards in service, reliability, safety and cost containment in our industry.” From AmerisourceBergen Web Site

DHS Mission We will lead the unified national effort to secure America. We will prevent and deter terrorist attacks and protect against and respond to threats and hazards to the nation. We will ensure safe and secure borders, welcome lawful immigrants and visitors, and promote the free-flow of commerce. DHS Strategic Plan

DHS Strategic Goals 1.Awareness 2.Prevention 3.Protection 4.Response 5.Recovery 6.Service 7.Organizational excellence DHS Strategic Plan 2004

TSA Mission The Transportation Security Administration protects the Nation’s transportation systems to ensure freedom of movement for people and commerce. TSA Strategic Plan 2004

Aligning TSA Goals with DHS Strategic Objectives DHS Strategic Goals Awareness PreventionProtectionResponse Organizational Excellence/ Service TSA Strategic Goals Domain Awareness Prevent/Protect Respond/ Restore Organizational Effectiveness

TSA Strategic Goals 1.Domain Awareness – Ensure we gain awareness of the full scope of threats and vulnerabilities to all modes of transportation in our domain of responsibility 2.Prevent and Protect 3.Respond and Restore 4.Organizational Effectiveness

Strategic Objectives for Goal 1 Domain Awareness Strategic Objective 1.1 – Gather and analyze intelligence information related to threats and vulnerabilities of all modes of transportation and assess the effectiveness of available countermeasures to most effectively manage risk. Strategic Objective 1.2 – Make innovative use of analytical and detection technologies and techniques to collect and manage information regarding potential threats to persons, cargo, and commerce in the transportation arena. Strategic Objective 1.3 – Disseminate relevant transportation security and intelligence information to appropriate entities in a timely and functional manner.

John Laye’s Strategies 1.Eliminating the threat 2.Continuity 3.Quick restoration disaster recovery 4.Deferred restoration disaster recovery 5.Discontinuing the product

Pitching Preparedness by Philip Jan Rothstein or How to Convince Senior Management that BCCM is a Strategic Investment Key Points Justify on tangible results, not emotions Point out specific, direct benefits Recognize top management may have other conflicts Speak top management’s language

Selling BCCM as a Strategic Investment 1.BCCM philosophy as demonstrated by past efforts and commitment 2.Risk appetite 3.Risk culture 4.Oversight of the Board of Directors 5. Integrity and ethical values of the organization’s people

Selling BCCM as a Strategic Investment 6.Commitment to competence 7.Management philosophy and operating style 8.Management’s assignment of responsibility and authority 9.Organizational structure 10.Human resource policies and practices

The Impact of Corporate Culture on Continuity 1.What three things does the organization value most? 2. What 10 words would best describe the organization? 3. What’s important at the organization? 4. How do employees get promoted and what behaviors get rewarded? From The Impact of Corporate Culture on Continuity

The Impact of Corporate Culture on Continuity 5.How does a person fit into the organization? 6.Do organization leaders/managers take risks? 7.How are decisions made and then communicated throughout the organization? From The Impact of Corporate Culture on Continuity

Considerations for Calculating the Cost of Downtime 1.Revenue lost by inability to accept orders. 2.Cost of lost productivity. 3.Value of inventory lost or spoiled. 4.Cost to recover and/or rebalance manufacturing processes. 5.Fines, fees and/or compensatory payments. 6.Cost of marketing and sales efforts to recover revenues. 7. Lost customer loyalty, reputation and/or goodwill. 8.Cost of legal, health, safety and/or legal exposure

Difficulties Associated with Calculating the Cost of Downtime Many impacts can be overlooked or underestimated (e.g., intangibles and lost opportunities) Many impacts can be overestimated since: Services may be made up to customers The cost of downtime is not necessarily a linear relationship Customer loyalty issues can increase or decrease impacts Not all of overhead may be impacted (e.g, administrative services, senior personnel activities) Outsourced services may be discontinued without penalty Certain support and administrative tasks which provide little value added may be deferred