Business Planning

Discussion on Business Continuity with Patrick Rivait, President, Rivait Business Solutions Inc.

 

This article was prepared by Patrick Rivait and it is one of a series to be presented in this forum. Patrick specializes in Business Continuity planning and I recommend any reader contact him directly for advice on this valuable service. Patrick can be reached at 519.984.6633

Business Continuity Planning versus Disaster Recovery: Are they the same?

Technology has become entrenched as a cornerstone in most companies’ daily operation, regardless of their size or complexity.  Given the potential risks of operating disruption or data loss arising from IT service disruptions, Disaster Recovery Planning (DRP) has become a critical function for IT departments or third party IT service providers.

A question that often is raised is “The organization has invested a great deal of money in support of a DRP by acquiring backup hardware, off-site data co-location, or hosted solutions -- so are we covered?”

While this is a broad question, the likelihood that even the best DRP will be sufficient in times of crisis is fairly small.  A bit of additional background may help shed more light.

By definition, Disaster Recovery (DR) is “The technical aspect of business continuity.  The collection of resources and activities to re-establish information technology services (including components such as infrastructure, telecommunications, systems, applications and data) at an alternate site following a disruption of IT services.  Disaster recovery includes subsequent resumption and restoration of those operations at a more permanent site”[1]

In contrast, Business Continuity (BC) is defined as “A holistic management process that identifies potential impacts that threaten an organization and provides a framework for building resilience with the capability for an effective response that safeguards the interests of its key stakeholders, reputation, brand and value creating activities. The management of recovery or continuity in the event of a disaster. Also the management of the overall program through training, rehearsals, and reviews, to ensure the plan stays current and up to date.”[2]

It becomes a bit clearer from these definitions that DRP is essentially a sub-set of the broader process of BCP.  The DR focus is solely on assets surrounding IT, whereas BC focuses on all the organization assets – people, brand, buildings, processes, and data.

To help provide further clarification-- in the event off a fire at a workplace, having DR plans to recover information and business systems will be critical in ensuring issues such as safety of client and financial data, production information, orders, compliance for accounting audits and taxation, they do not cover key considerations such as:

·        how employees and customers will safely be evacuated from the building;

·        where the business will operate through the immediate response period to the crisis;

·        who will be responsible for overseeing various sets of activities during, and immediately following the crisis; and what authority they might have during this response and recovery period;

·        how the organization will communicate to suppliers, customers, employees (and potentially their families) and shareholders or funding sources;

·        where the operation will relocate immediately after the crisis -  during the recovery period.

Following a serious event, while it might be useful to access accounting data from a hosted service provider, if there are no contingency plans in place to facilitate the organization’s value-generating functions (such as ongoing production) in order to meet client demands, it is still highly likely that an organization will suffer significant losses to cash-flow and profitability, potentially lose employees through attrition or layoffs, and the customers may be forced to seek alternate providers for their goods and services.  While these issues may appear to be the indirect impact of the critical event (i.e. the building fire), they are actually the direct impact of a failure to have appropriate programs in place to ensure the long-term viability of the organization.

Generally, DRP’s are driven by the IT function within an organization, and hopefully consider the core IT requirements of the various stakeholders within the organization.  On the other hand, a robust BCP should be driven by a Steering Committee that represents all key stakeholders across the organization, and leverage the insights and experience of all key functions that support the organization.  This broader perspective helps ensure that the final plans will be more robust, and that the proposed solutions will be workable and practical in the event that they need to be actioned in the aftermath of a critical event.

In clarifying the difference between these types of plans, it is important to remember that both are critical for ensuring the long-term viability of an organization.  Both plans, when developed and produced in conjunction with one another, will help and organization mitigate both the risks and impacts of a potential crisis.  Both are valuable, and should be considered critical parts of an organization’s regular management process.

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[1] Source – Disaster Recovery Journal  - Business Continuity Glossary:  http://www.drj.com/tools/tools/glossary-2.html

[2]Source – Disaster Recovery Journal  - Business Continuity Glossary:  http://www.drj.com/tools/tools/glossary-2.html 

 

Business Principles

Do you know your competition?

In order to compete effectively and outperform competition you need to know their strengths and weaknesses. Your product or service has to be unique or stand out against prime competitors.

To test your competitive intelligence; ask yourself:

What products do you offer that competitors don’t offer?

Are your employees as well trained to service customers as your competitor?

Can your employees answer questions about your competitor’s products? Can you identify competitive weaknesses? Are you vulnerable in any way?

Are you familiar with competitive messages? Check their websites, brochures and promotion material to understand their positioning and how it affects you. Does your competition spend more advertising and promotion that you do? How does that affect how you compete?

Do you know your competitors customers, suppliers and distributors? You need to know how strong their relationships are to know how you can compete most effectively.

Understanding your competition not only allows you to understand where you compete best but may offer the opportunity to collaborate in areas in which you do not directly compete. A competitor may be willing to refer customers to you if you offer a particularly unique product or service. This can only happen if you know your competition and develop a relationship of trust between you.

In the end use this knowledge to strengthen your own position and build your strategy and a place in the market.

Business Management

Keys to Successful Business Management

There are critical areas where your ability to think largely determines the success or failure of your business. The greater clarity you have in each of these areas, the better decisions you will make and better results you will achieve.

1.     Have a vision

One of the most important aspects of running any business is to have a clear vision of what you want that business to be like. What do you want to be known for in the marketplace? Who is the target market? What level of service do you want to provide? Do you want to be “one among many" or do you want to be considered a leader in your industry?

2.     Develop a plan 

Once you gain clarity on your vision, you must be willing to develop a plan. Far too often people have an idea of where they want their organization to be, but they fail to put together a viable plan. Take time to map out what needs to be done to achieve your outcomes.

3.     Measure results

Establish key yardsticks for success. They would include financial goals and profitability but should include a measure of customer satisfaction. Your ability to satisfy your customers to such a degree that they buy from you rather than from competitors, that they buy again, and that they bring their friends is a key determinant of growth and profitability.

4.     Surround yourself with great People

One of most important keys to success is a strong team. People can be your greatest asset or an enormous liability. Great people will push you, teach you, inspire you, and ultimately grow your business.

Business Performance

Performance Management

Performance management is a process bringing together many of the elements that make up the successful practice of people management in a business in order to achieve high levels of organizational performance. As such, it establishes shared understanding about what is to be achieved and an approach to leading and developing people which will ensure that it is achieved.

Here are some elements that can be included in an effective system.

1.     Plan:

In an effective organization, work is planned in advance. This includes setting performance expectations and goals for individuals or departments. It helps channel employee efforts towards achieving organizational objectives. Getting employees involved in the planning process will help them understand the company’s goals, what needs to be done, and why it needs to be done, and how well the job needs to be done to meet expectations.

2.     Review:

Reviewing performance regularly allows the company to receive feedback from all employees. Managers can identify and resolve employees' concerns, problems and ideas for improvement. Reviews ensure all members of the organization are held accountable for personal performance. It is important also to operate in a "no surprise" developmental-oriented employee performance review, with significant employee input, to ensure employees see the fairness of the practice.

3.     Develop: 

An organization can be strengthened when employee needs are evaluated and addressed. Development means increasing the capacity to perform through training, assigning new functions that introduce new skills or higher level of responsibility or improving work processes.  Providing employees with training and development opportunities encourages better performance, enhances moral, and helps employees grow. This improves the company’s bench strengths and facilitates organizational succession planning.

4.     Perform:

The elements outlined strengthen the ability of the organization to achieve results and attain overall goals to grow and sustain profitability. Highly motivated employees who understand performance expectations, achieve panned goals, should enjoy improved compensation and promotion to positions of greater responsibility. The payoff is that management can focus on larger strategic issues that can improve profitability and growth.

Business Communication

Need to Improve Communication at Work?

The ability to communicate with clarity and effectiveness is an imperative skill for organizational leaders. Here are important ways to make your communication more productive and effective.

1. Provide clear information

 If your communication isn’t complete and accurate, it can cause confusion instead of clarity among employees. Carefully plan your communication to be sure you are passing along the correct information and the right amount so those you are communicating with understand what you want to say.

2. Communicate honestly

People know when something isn’t adding up. If you try to communicate something that isn’t totally true and honest it will eventually be revealed. It’s difficult to maintain dishonest communication in the workplace because it gets too complicated to hold all of the stories together. Speak the truth and leave the rest for later or don’t say it at all if it’s not true and honest.

3. Bring non-verbal and verbal communication together

Remember, communication is both non-verbal and verbal. Sometimes, a person says one thing but acts in a different way. For instance, it’s not uncommon to hear someone say “Yes” but shake his head in a horizontally which indicates “No” in a non-verbal way . This sends mixed messages. Make sure that your non-verbal and verbal messages are in agreement.

4. Listen
Listening is an important communication skill that is seldom done well. In order to actually share information with another person, you have to hear what is being communicated. A lot of conflict stems from poor listening. To help learn how to listen well, take time to repeat what you here from the other person. Simply paraphrase what you heard to verify accuracy. This will cut down on conflict and vastly increase the effectiveness of your communications.

5. Ask questions

Asking questions is a good way to verify what you hear so you respond appropriately. Questions let the other person have the chance to clarify what they said. Make sure your questions relate specifically to what is being said. Don’t change the conversation by bringing in a question on a totally different matter. Also use questions to gather quick additional points that help you understand the conversation.

6. Let others talk

Have you ever been stuck in a meeting when only one person did all of the talking? Few things are as irritating as having a person dominate a conversation. A conversation is a two way event at a minimum. Remember to let the others speak. Dominating a conversation becomes a monologue, not a conversation. Solicit opinions, ask for response, and bring others into the conversation. Sometimes, all it takes is to be quiet for a moment.

7. Engage in Difficult Conversations When necessary

Do you ever avoid saying what needs to be said or avoid a difficult conversation altogether? Not saying something doesn’t make a situation go away. Instead, things can get worse. Not communicating can also cause more stress and trauma in a situation. Instead of avoiding difficult communications, sit down and plan out what you’re going to say. Actually write down the important points in order to feel comfortable about what you have to say. Make sure the tone you use is open and non-confrontational in order to encourage feedback from the other person. Conversations aren’t always fun but getting the words out will relieve the tension and let the matter move forward.

Obviously there’s a lot more that can be said about communications in the workplace. These steps may help improve workplace communications. Remember, practice makes perfect. Use daily opportunities to practice your communication skills until you feel comfortable in any situation that arises in the organization.

Business Management

 Cash Conservation

Conserving cash flow can create benefits in economic conditions facing business today. When business is in a low or slow growth pattern, cash is very important and if you don’t have cash when you need it the most operations can be constrained.

Conserving cash flow may not be easy for those businesses that have been used to having the money to spend at any time. However, when the time comes that some belt-tightening would be necessary, some practical cash flow conservation methods may be prudent.

Here are a few tips to conserve cash:

·       Spend wisely. Make sure that purchases are made for need to have not nice to have items. Items should have a good use in the business producing revenue where possible.

·       Ensure new employee hiring is necessary. Employee salaries are a significant cash drain so efforts to maximize productivity from current employees are paramount.

·       Try leasing equipment. Leasing vs buying can be an important option since equipment purchasing can be a serious cash drain.

·       Plan ahead. Make sure you forecast financial activity. A plan outlining expected revenues and expenditures is vital to understanding cash needs. You certainly want no surprises on cash flow activity.

·       Renegotiate leases. Rent is often a sizeable fixed cost that can be negotiated. Speak with your landlord; there may be an opportunity to downsize or even temporarily obtain rent reductions. Landlords often prefer to accept lower income than losing tenants.

·       Go to the clouds. If your business is large enough to have in-house servers you are aware of the maintenance costs. If business is increasing this may be a cost effective way to create additional capacity without buying expensive new servers.

Business owners should share their cash flow objectives with other key managers to ensure every opportunity to maximize cash savings is realized.

Business Management

Crisis Management

What is Crisis Management?

In any business, it is always essential that you are prepared for any problems that may arise when it is least expected. It is in the way that you deal with these issues that the success of your business will be based on.

No organization, however large, is immune from various crises. This may include situations such as your computer systems failing or even worse, infrastructure being completely destroyed.

Crisis management can contribute a great deal to the prevention of major management disasters.

Types of Crises

It is important that you have a good understanding of the different types of crises that could take place, as all crises cannot be handled in the same manner. The most common categories are as follows:

1. Financial crises - This would be huge problem for any organization, as such a crisis would basically involve the organization heading in the direction of bankruptcy.
2. Natural disasters - This type of crisis is highly unpredictable and could come by at any time. Earthquakes, tsunamis, hurricanes have occurred recently in different areas and businesses should always be ready to face such a situation.
3. Technological crises. This is where a system collapses due to failure in the functioning of different equipment and machinery. These crises could occur either because of human error or a fault in the system used, and have multiple consequences including chemical spills and oil leaks.
4. Political & Social - With the current political climate the world over, organizations may want to take into consideration any threats to security and any forms of terrorist activity.

Dealing with Crises

It is essential to keep in mind, that when a crisis occurs, you would need to have a response team ready to deal with employees, media, and the various other stakeholders.

All these parties would need information on the given situation and what is being done to deal with it. This also requires you to have a clear crisis communication plan with the target audience in mind.

Remember that each group needs to be handled in a different manner; Customers may not require the same information as the employees of the organization, and so on.

Conclusion

The only way to successfully control a crisis from getting out of hand is to always have a good plan and a team ready to deal with various situations that may crop up.

With these strategies in place, you would always be able to reduce the damage caused to the organization.