BCCM - Session 12 - Power Point

7/30/2019 BCCM - Session 12 - Power Point

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Business Crisis and Continuity

Management (BCCM)

Class Session 12

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Business Crisis and Continuity

Management

The businessmanagement practices that provide the

focus and guidance for the decisions

and actions necessary for a business to

prevent, mitigate, prepare for, respondto, resume, recover, restore and

transition from a disruptive (crisis)

event in a manner consistent with its

strategic objectives. (Shaw, 2006)


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STRATEGY

Strategy is

1. a coherent, unifying and integrative pattern of decisions;

2. a means of establishing the organizations 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) ofthe 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 organizations contributions to its stakeholders.Applied Strategic Planning page 3


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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 makingApplied Strategic Planning page 3


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STRATEGIC PLANNING

the process by which the guidingmembers of an organizationenvision its future and develop the

necessary procedures andoperations to achieve that future

From Applied Strategic Planning


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QUESTIONS FOR STRATEGIC

PLANNING

1. WHERE ARE WE NOW

2. WHERE DO WE WANT TO BE (AND WHENDO WE WANT TO BE THERE)?

3. WHAT ARE THE ENVIRONMENTAL(INTERNAL AND EXTERNAL) CONDITIONSTHAT SHAPE OUR OPTIONS?

4. HOW DO WE GET FROM HERE TO THERE?


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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.


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Benefits of Strategic Planning1. 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 12 - 8


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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.

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PLANNING TO PLAN

VALUES SCAN

MISSION

FORMULATION

STRATEGIC BUSINESS

MODELING

PERFORMANCE AUDIT GAP ANALYSIS

INTEGRATED ACTION

PLANS

CONTINGENCY

PLANNING

IMPLEMENTATION

THE APPLIED STRATEGIC PLANNING MODEL FIGURE 1 -1

ENVIRONM

ENTALMONITORING

APPLICATIO

NCONSIDERA

TIONS


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A Good Mission Statement

A good mission statement captures an

organizations unique and enduring reason

for being, and energizes stakeholders to

pursue common goals. It also enables afocused allocation of organizational resources

because it compels a firm to address some

tough questions: What is our business? Whydo we exist? What are we trying to

accomplish?

From: "Mission Matters." The CPA Journal. 12 - 11


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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 bysetting the highest standards in service,

reliability, safety and cost containment in our

industry.

From AmerisourceBergen Web Site.

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DHS Mission

We will lead the unified national effort tosecure America. We will prevent and deterterrorist attacks and protect against and

respond to threats and hazards to thenation. We will ensure safe and secureborders, welcome lawful immigrants andvisitors, and promote the free-flow of

commerce.DHS Strategic Plan. 2004.


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DHS Strategic Goals

1. Awareness

2. Prevention

3. Protection4. Response

5. Recovery

6. Service7. Organizational excellenceDHS Strategic Plan 2004


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TSA Mission

The Transportation Security Administration

protects the Nations transportation systems

to ensure freedom of movement for people

and commerce.TSA Strategic Plan 2004


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Aligning TSA Goals with DHS Strategic Objectives

DHS

Strategic

Goals

Awareness Prevention Protection Response

Organizational

Excellence/

Service

TSA

Strategic

Goals

Domain

AwarenessPrevent/Protect

Respond/

Restore

Organizational

Effectiveness


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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 ofresponsibility

2. Prevent and Protect

3. Respond and Restore

4. Organizational Effectiveness


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Strategic Objectives for Goal 1

Domain Awareness

Strategic Objective 1.1 Gather and analyze intelligenceinformation related to threats and vulnerabilities of allmodes of transportation and assess the effectiveness of

available countermeasures to most effectively managerisk.

Strategic Objective 1.2 Make innovative use of analyticaland detection technologies and techniques to collect

and manage information regarding potential threats topersons, cargo, and commerce in the transportationarena.

Strategic Objective 1.3 Disseminate relevant

transportation security and intelligence information toappropriate entities in a timely and functional manner.


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John Layes Strategies

1. Eliminating the threat

2. Continuity

3. Quick restoration disaster recovery

4. Deferred restoration disaster recovery

5. Discontinuing the product12 - 19


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Pitching Preparedness by Philip Jan Rothstein

or

How to Convince Senior Management that BCCM is a

Strategic Investment

www.rothstein.com

Key Points

Justify on tangible results, not emotions

Point out specific, direct benefits

Recognize top management may have other

conflicts Speak top managements language


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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 theorganizations people

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Selling BCCM as a Strategic Investment

6. Commitment to competence

7. Management philosophy and operating

style

8. Managements assignment of responsibility

and authority

9. Organizational structure

10. Human resource policies and practices

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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. Whats important at the organization?

4. How do employees get promoted and what

behaviors get rewarded?

From The Impact of Corporate Culture on Continuity

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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

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31 different rationalizations that in different combinations and degrees of belief shape the organizational culture with respect to

crisis management.

Source: Mitroff and Pauchant. (1992) Transforming the Crisis-Prone Organization. p. 86.

Properties of the

Organization

Properties of the environment Properties of the Crises

Themselves

Properties of Prior Crisis

Management Efforts1. Our size will protect us.2. Excellent, well-managed

companies do not have crises.3. Our special location will

protect us.4. Certain crises only happen to

others.5. Crises do not require special

procedures.6. It is enough to react to a crisis

once it has happened.7. Crisis management or crisis

prevention is a luxury.8. Employees who bring bad

news deserve to be punished.9. Our employees are so

dedicated that we can trustthem without question.

10.Desirable business endsjustify the taking of high-riskmeans.

11.If a major crisis happens,someone else will rescue us.

12.The environment is benign;or, we can effectively bufferourselves from theenvironment.

13.Nothing new has reallyoccurred that warrants change.

14.Crisis management issomeone elses responsibility.

15.Its not a crisis if it doesnthappen to or hurt us.

16.Accidents are just a cost ofdoing business.

17.Most crises turn out not to bevery important.

18.Each crisis is so unique that itis impossible to prepare for allcrises.

19.Crises are isolated incidents.20.Most crises resolve

themselves; therefore time isour best ally.

21.Most (if not all) crises have atechnical solution.

22. It is enough to throw technicaland technical quick fixes at aproblem.

23.Crises are solely negative intheir impact. We cannot learnanything from them.

24.Crisis management is like aninsurance policy; you onlyneed so much.

25.In a crisis situation, we justneed to refer to the emergencyprocedures weve laid out inour crisis manuals.

26.We are a team that willfunction well during a crisis.

27.Only executives need to beaware of our crisis plans; whyscare employees or membersof the community?

28.We are tough enough to reactto a crisis in an objective andrational manner.

29.We know how to manipulatethe media.

30.The most important thing incrisis management is toprotect the good image of theorganization.

31.The only important thing incrisis management is to ensurethat our internal operationsstay intact.


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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 recoverrevenues.

7. Lost customer loyalty, reputation and/or goodwill.

8. Cost of legal, health, safety and/or legal exposure.12 - 26


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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

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Documents

BCCM - Session 12 - Power Point