Business Crisis and Continuity
Management (BCCM)
Class Session 12
12 - 1
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)
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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?
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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 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 12 - 8
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
APPLICATION CONSIDERATIONS
E NVIRONMENTAL MONITORING
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 12 - 10
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. 12 - 11
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.
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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. 2004.
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 Organizational
Awareness
Strategic Prevention Protection Response Excellence/
Goals Service
TSA
Domain Respond/ Organizational
Strategic Prevent/Protect
Awareness Restore Effectiveness
Goals
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
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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 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
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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
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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. 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
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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 Properties of the environment Properties of the Crises Properties of Prior Crisis
Organization Themselves Management Efforts
1. Our size will protect us. 11. If a major crisis happens, 17. Most crises turn out not to be 24. Crisis management is like an
2. Excellent, well-managed someone else will rescue us. very important. insurance policy; you only
companies do not have crises. 12. The environment is benign; 18. Each crisis is so unique that it need so much.
3. Our special location will or, we can effectively buffer is impossible to prepare for all 25. In a crisis situation, we just
protect us. ourselves from the crises. need to refer to the emergency
4. Certain crises only happen to environment. 19. Crises are isolated incidents. procedures we’ve laid out in
others. 13. Nothing new has really 20. Most crises resolve our crisis manuals.
5. Crises do not require special occurred that warrants change. themselves; therefore time is 26. We are a team that will
procedures. 14. Crisis management is our best ally. function well during a crisis.
6. It is enough to react to a crisis someone else’s responsibility. 21. Most (if not all) crises have a 27. Only executives need to be
once it has happened. 15. It’s not a crisis if it doesn’t technical solution. aware of our crisis plans; why
7. Crisis management or crisis happen to or hurt us. 22. It is enough to throw technical scare employees or members
prevention is a luxury. 16. Accidents are just a cost of and technical quick fixes at a of the community?
8. Employees who bring bad doing business. problem. 28. We are tough enough to react
news deserve to be punished. 23. Crises are solely negative in to a crisis in an objective and
9. Our employees are so their impact. We cannot learn rational manner.
dedicated that we can trust anything from them. 29. We know how to manipulate
them without question. the media.
10. Desirable business ends 30. The most important thing in
justify the taking of high-risk crisis management is to
means. protect the good image of the
organization.
31. The only important thing in
crisis management is to ensure
that our internal operations
stay 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 recover
revenues.
7. Lost customer loyalty, reputation and/or goodwill.
8. Cost of legal, health, safety and/or legal exposure.- 26
12
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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