It’s a dangerous world out there. From natural disasters to civil unrest to attacks on data networks, businesses today face a variety of challenges to their day-to-day operation. Risk management, once found only in the financial sector, is now used as a tool to help mitigate these threats by companies in several industries.

Business continuity planning is more prevalent in the United States. Its role is not yet well understood by executives. The five biggest mistakes business leaders make when it comes to business continuity are:

  1. Not Having a Plan
    This is the biggest mistake and the easiest to correct. The arguments for not having a plan usually come down to this: “We’ve been in business this long and never needed one.” The flaw in the logic is obvious. Why bother having business interruption insurance if they’ve never had an interruption? Why bother having a safety program (regulations aside) if the company has never had an accident?All ads for financial investment firms carry the same disclaimer; “Past performance does not guarantee future returns”. Just because a company has never experienced a business interruption doesn’t guarantee they never will. This is the purpose of a business continuity plan: to help the company recover quickly from an unplanned interruption.
  2. Not updating an existing plan

This is almost as bad as not having a plan. Information is like milk; it has a shelf life and it will go out of date. When it comes time to activate the plan in an emergency, it won’t be of much use if the information – key vendor contacts, phone numbers for the emergency management team, and emergency procedures, just to name a few – is out of date. In an emergency, time is crucial, and out of date information will slow your response.

If you have a plan, assign someone the task of updating it on a regular basis. This means going through the plan to make certain all the contact names along with their contact information are correct. If you rely on vendors for services, make certain the contact information is up to date. If your business is like any other, then you’re adding/changing vendors constantly. This needs to be in the plan. You need to be certain that the procedures to be followed in an emergency are valid. Review them on a regular basis.

  1. Not exercising the plan

Suppose you took an ocean cruise and you asked the captain how often his crew ran “abandon ship” drills and she told you the following: “Oh, we’ve never bothered. People have read the manual about what we’re supposed to do. I’m sure we’ll do just fine when the time comes.”

How confident would you be that the captain and crew would get it absolutely right should the order to “abandon ship” be given? You would probably have zero confidence in them. If you don’t practice how and when to activate your plan and run through a simulated event, how will you know if your team will perform flawlessly at the crucial time?

Aside from practicing to gain the skills and confidence needed to execute the plan, there is another reason to exercise the plan annually. Even with a regular schedule to maintain and update the plan, you are likely to find gaps. Businesses are dynamic. Products and services are added and discontinued constantly. People come and go. It’s conceivable that something has been overlooked. You want to find that during an exercise and not during an actual emergency.

  1. Not promoting the plan

In not promoting the plan, business leaders miss three opportunities. The first is to help instill among the employees confidence in the company’s ability to “weather the storm”.  The second is to instill among its customers’ confidence in the company’s resilience when business is interrupted. The third is to instill among the shareholders confidence that any loss of shareholder value due to a business interruption will be short-lived. The fourth is to assure vendors and partners that the company has identified the risks that threaten its operation and has created a plan to respond to unintended interruptions.

No one ever left a company because it didn’t have a business continuity plan. It’s probably not very effective as a recruiting tool. It is invaluable, though, when an interruption occurs in calming the fears of employees as to the company’s future. Promoting the plan among the employees can go a long way in assuring them when the unplanned event happens.

A business continuity plan can be a competitive advantage when it comes to customers. This is especially true with companies in the Business to Business space where their customers are other companies who rely on their products and services. Companies want to do business with other companies on whom they can rely to be a steady source of the parts and services they need.

Studies have shown that publicly traded companies with business continuity plans lose less shareholder value and regain it more quickly than those that do not.[1] People invest in companies whose leadership they trust. Companies that promote their plan to their shareholders help cement that trust.

  1. Confusing Business Continuity and Disaster Recovery

They’re not the same. Period. Business continuity deals with the recovery of the operations of your business. Disaster recovery deals with the protection of information technology and data. A disaster recovery plan should be incorporated into a business continuity plan. It’s a mistake for a business to think it’s protected if all it has is a disaster recovery plan. It’s vital, but it’s not the entire picture. To truly protect the business, you need both.

Is your company making any of these mistakes with its business continuity plan? I can help! Contact me today for a free one-hour consult on the state of your plan.


[1] The Impact of Catastrophes on Shareholder Value Rory F. Knight & Deborah J. Pretty A Research Report Sponsored by Sedgwick Group


David Discenza
President Discenza Business Continuity Solutions
The resilience of your business is my business


David Discenza, CBCP, president of Discenza Business Continuity Solutions, has been involved in business continuity planning since 2009. He was the business continuity manager for the Risk & Information Management (RIM) group within American Express and currently works with companies in Philadelphia, New York City, Washington, DC, Baltimore, Connecticut, and nationwide to help them formulate plans they can implement when an unexpected business interruption occurs. David is certified as a Business Continuity Planner by the Disaster Recovery Institute International.