The importance of contingency planning
You’ve lived through a global pandemic – I shouldn’t need to say more about why contingency planning is vital! However, contingency planning is wider reaching, and can involve likely areas of high-risk such as staff or skill shortages or a cyber breach.
As a back-up plan for your business, a contingency plan goes as far as possible to plan your most effective response in times of difficulty. Proactivity can prevent crisis and help you to weather any storm that comes your way, and potentially enable you to thrive when competitors fail. Contingency plans allow you to act fast, which is often the key to minimising impact.
How do you write effective contingency plans to navigate your business successfully through business-critical events?
How to write an effective contingency plan
1. Analyse risk
Start by identifying possible risks and assessing the potential impact. Work with the business as a whole but also drill down into team level, or even individual level, risks. You will need contingency plans which encompass all major risks at all levels. Get input from all key players and then weigh risks against likelihood and impact.
Hint: It’s nearly impossible to address all risks and you have to draw the line somewhere or you’ll solely be risk-planning! Focus on high-severity high-likelihood risks first and then encompass as many more scenarios as you have resources for.
2. Create plans
For each identified risk consider:
· The markers that will bring the plan into action
· Immediate and interim responses
· Who should be notified
· Timelines for action
· Mitigation strategies in the present
Write flexible plans which can be adapted to different but similar scenarios.
3. Distribute your plans
Let people know about the contingency plans especially if they have responsibility to put in place risk mitigation steps.
4. Review plans
Contingency plans need to be regularly reviewed and updated. For some plans it may be beneficial to practice some actions and offer training on their implementation.
Buy-in for your contingency plans is essential. Without it, they aren’t worth the paper they are written on. Involve key players with writing contingency plans from the outset.
Considering risk and developing contingency plans is an essential part of your business but a tricky ‘how long is a piece of string’ exercise. It’s a perfect area for experienced business coaching support.