How secure is your business?

Regrettably, one of the major reasons for business failure lies in the inability of leaders to protect their organisation. It is, essentially, too tempting to focus on ‘doing business to survive’ rather than ‘ensuring survival to do business’. And, according to the latest Business Continuity report from the Chartered Management Institute and Cabinet Office, the threat of disaster continues to hang over organisations throughout the UK. It seems that, although many recognise the need to guard against disruption, their attempts to protect ‘business operations’ are often haphazard and left untested.

The survey has been running for almost a decade and it shows that little has changed over the past few years. For example, only 47 per cent of organisations have created business continuity plans – a figure that has only climbed from 45 per cent in 2002. Major differences also exist between organisations types, with only one-third of SMEs looking to protect themselves, compared to twice that amount of large corporations.

Given the impact of high profile disruptions such as last year’s extreme weather conditions or the publicity surrounding ‘bird flu’, the low level of protection amongst SMEs is surprising. It might mean that complacency is setting in.

Or worse, could it be that business leaders amongst the UK’s 4.6 million SMEs are simply not thinking about the impact and strain that a loss of staff might have? The government advises that SMEs should allow for absence rates of 30 to 35 per cent in addition to usual levels, when it comes to planning for ‘flu absence. In other words, where staff absenteeism is more likely to impact on others, it is vital that plans are in place should the possibility become a reality.

Of course, protecting the business is not just about ensuring plans are in place to cover staff loss. The Institute / Cabinet Office survey indicates that organisations are coming under increasing pressure to develop continuity plans from external stakeholders. More than ever before, respondents are suggesting that auditors, customers and insurers want to see contingency plans. They want to know that the business is a going concern, robust and that their investment will be secure. It means that SMEs should, take the time to demonstrate their commitment to business continuity management to their key stakeholders, communicating plans to them and involving them in any exercises and rehearsals.

And this also means taking a more coherent approach to protection. Why is it, for example, that only 29 per cent of organisations address the potential loss of people, when 35 per cent experienced this problem last year? Clearly some questions need to be asked about why the mismatch between planning and implementation. It doesn’t matter what the cause; the simple fact is that failing to provide safeguards for business operations does not make sense. The ability to manage risk is a critical skill and unless it is taken seriously businesses and jobs will remain at risk.

By Jo Causon
Director, Marketing and Corporate Affairs
Chartered Management Institute