1. What disasters could your house face?

2. Business Disasters

3. WHAT SCENARIOS DO DAVID LLOYD FITNESS CENTRES PLAN FOR?
What are the two types of risk DL plan for in their Annual Report?
Which are likely to be the worst risks, if realised, in terms of losses to the firm? Why?
How might the management quantify the expected value of the risk (remember your Decision Trees!)
Having identified the big risks above, what would be management’s next steps?
DL doesn’t mention Natural Disasters or Key Man Risk in its annual report…Why not?

4. THE DIFFERENCE Contingency Planning for unexpected events
Crisis Planning
Responding to a sudden event
What’s the difference?? Are they both needed?
A CRISIS RARELY GOES AS PLANNED!

5. Clarification
 Contingency planning is the process of preparing for potential emergencies, while crisis management is the overall management of emergencies when they do occur.

6. Planning for Contingencies
Business Continuity Procedures (“BCP”) – Prepare, Plan, Practice
Example: Denial of Office Location
Example: Succession Planning (Wise words for SHS!)

7. Contingency Planning has to ensure business continuity in the long term
All key services/functions of the business must be covered
Consideration of what will be the impact on ALL sectors of the business…ie
HRM
Operational Management
Marketing
Finance

8. CONTINGENCY PLANNING “CRITICAL” SUCCESS FACTORS
Strong leadership
Quick decision making
Correct action by responsible teams on behalf of any people affected
Action to mitigate any environmental impact
Clear and continuous communication
Clear roles and robust (tested) plans
Well trained teams
Good stakeholder relationships
Active media management; effective spokespeople.
Not being afraid to say "sorry"
BUSS4.8 Planning for Change

9. CRISIS MANAGEMENT

10. Can you think of any businesses that have had to deal with a ‘crisis’ recently?

11. crisis might a business face?
What other types of
crisis might a business face?
Environmental disaster
Hostile takeover
Faulty/dangerous
products
Major customer
withdrawing
orders
Physical destruction e.g. bombing / earthquakes / Physical destruction e.g. bombing / earthquakes / fires
Strikes by workforce

12. What areas of a business
Finance:
Budgeting for Crisis Management
- ad campaigns;
- environment clean up;
- compensation
Personnel:
- Leadership style …crisis usually requires direct authoritarian leadership;
- Internal and external communication that is rapid and direct; external communication that is informative and truthful
- Prevent exit of key staff
What areas of a business
could a crisis affect?
Operations:
particularly if JIT
Storage/warehousing
Machinery
Marketing:
public image under threat – PR
Ad campaigns
Promotions to maintain sales

13. Scenario Planning & Strategy – what issues do we accept / what issues do we mitigate?
Profit margins – what will the impact be?
(short term less important than the LONG TERM!)
Risks & uncertainty
– what is the business’ attitude to risks?
Opportunity costs
Business objectives
Constraints – internal & external
Ethics
Business culture
Ansoff matrix & Boston matrix

14. Issues for Evaluation Change is normal, not abnormal
Firms need to be alert to cause of change and quick to devise a strategic plan for coping
Many successful businesses do not have a formal strategic planning process, and prefer to be flexible (Why?)
Setting aside time for strategic planning is useful, in that managers’ minds are concentrated on the key questions facing the firm in the future. Then the actions decided upon can be more closely integrated/tested.
Essay planning:
Assess how a fitness centre might deal with the serious injury of a celebrity client?