BUSINESS CONTINUITY: How to Keep the Grinch from Stealing Your Business Jack Hipple Elliot Consulting Predictive Failure Analysis Consultant www.elliot-consulting.com

WHAT DID THE GRINCH DO?

STOLE CHRISTMAS WHEN WE WERE NOT LOOKING (UNPREPARED?)

HOW CAN WE AVOID THIS FROM A QUALITY STANDPOINT? HOW CAN WE BE BETTER PREPARED?

WHAT’S OUR NORMAL VIEW OF QUALITY?

WHAT’S OUR NORMAL VIEW OF QUALITY? Knowledge of what the customer wants/needs, how to delight Knowledge of how to fulfill those needs and unspoken desires with products and/or services Supply that service and/or product reliably and consistently in a value added, win/win environment Awareness of changes in needs Recycle and repeat

Knowledge of what the customer wants/needs, how to delight

Knowledge of how to fulfill those needs and unspoken desires with products and/or services

Supply that service and/or product reliably and consistently in a value added, win/win environment

Awareness of changes in needs

Recycle and repeat

IS THAT ENOUGH? You are Home Depot or Lowes You have done all these things for all your contractor customers There is a serious outbreak of Asian bird flu Some of your contractor customers close down ½ of your employees cannot report to work Your invoicing, accounting, and shipping/receiving departments are decimated by illness and vacancy Combine this with a major hurricane in the Tampa area at the same time

You are Home Depot or Lowes

You have done all these things for all your contractor customers

There is a serious outbreak of Asian bird flu

Some of your contractor customers close down

½ of your employees cannot report to work

Your invoicing, accounting, and shipping/receiving departments are decimated by illness and vacancy

Combine this with a major hurricane in the Tampa area at the same time

WHAT ARE ALL THE THINGS INVOLVED? Manufacturing Sales IT Human Resources Environmental, Health and Safety Shipping and Receiving

Manufacturing

Sales

IT

Human Resources

Environmental, Health and Safety

Shipping and Receiving

HYPOTHESIS: QUALITY IS ALSO THE ABILITY TO CONTINUOUSLY SUPPLY YOUR CUSTOMERS’ NEEDS NO MATTER WHAT!!

NO MATTER WHAT…. Remember 2004? 4 Hurricanes in 6 weeks!

Remember 2004? 4 Hurricanes in 6 weeks!

BUSINESS RESILIENCY What comes to mind? Physical Analogies?

LET’S DISTINGUISH BETWEEN--- BACKUP CONTINUITY RESILIENCY

LET’S DISTINGUISH BETWEEN--- BACKUP Retrieve information Supply alternative CONTINUITY The “whatever” is there for some time frame to keep things going RESILIENCY Business survives as if nothing happened under any circumstance

Business Resiliency Before After Assets Finance Vulnerability and Risk Communications IT Customer Care

VULERABILITY AND RISK What is your business and the quality of its products vulnerable to? Have you thought about all the possibilities? Weather Terrorism (physical, biological, chemical) Pandemics Supplier default due to the same things Customer default to the same things What is the economic impact? Hours, days, weeks, months, years?

What is your business and the quality of its products vulnerable to? Have you thought about all the possibilities?

Weather

Terrorism (physical, biological, chemical)

Pandemics

Supplier default due to the same things

Customer default to the same things

What is the economic impact?

Hours, days, weeks, months, years?

WHAT IS YOUR BUSINESS TOLERANCE?

WHAT’S THE RISK? Get real, but not doomsday (80/20) Longer than you think Short term vs. long term Can you be replaced? By whom? Are the affected at the same time or not? Physical, financial, structural What affects the most customers and the future of the business Reliability of resources planned upon

Get real, but not doomsday (80/20)

Longer than you think

Short term vs. long term

Can you be replaced?

By whom?

Are the affected at the same time or not?

Physical, financial, structural

What affects the most customers and the future of the business

Reliability of resources planned upon

COMMUNICATIONS AND DATA STRATEGIES Employees Suppliers Customers Internet and communication systems Verizon story Data backup Not a different floor in the same hurricane prone building! Cell phones OK until the power is off for several days—then what?

Employees

Suppliers

Customers

Internet and communication systems

Verizon story

Data backup

Not a different floor in the same hurricane prone building!

Cell phones OK until the power is off for several days—then what?

CRISIS MANAGEMENT Dependent upon the type of business Chemical manufacturing Knitting goods supplier Newspapers, TV, radio Who needs to know what, how, when, and how soon

Dependent upon the type of business

Chemical manufacturing

Knitting goods supplier

Newspapers, TV, radio

Who needs to know what, how, when, and how soon

INCIDENT COMMAND SYSTEM Originated with CA wildfire systems Restore facilities Assess, control, and minimize asset damage Control the conditions Focal point for communication and reporting Business report

Originated with CA wildfire systems

Restore facilities

Assess, control, and minimize asset damage

Control the conditions

Focal point for communication and reporting

Business report

BUSINESS RECOVERY Grab and Go Box Immediate needs, contacts, and information Where to meet, assemble Who? What type of emergency? Duration of Emergency What if it’s months, not days? Communication system and protocol for employees Pay and benefits?

Grab and Go Box

Immediate needs, contacts, and information

Where to meet, assemble

Who?

What type of emergency?

Duration of Emergency

What if it’s months, not days?

Communication system and protocol for employees

Pay and benefits?

IT RESTORATION Backup what? How? Redundancy? Where? To what level? How often checked? Weather Rain, wind, temperatures, salt water

Backup what?

How?

Redundancy?

Where?

To what level?

How often checked?

Weather

Rain, wind, temperatures, salt water

RESILIENCY: Before and After, Not Just During

IT BEFORE DURING AFTER Survivability Backup Recovery What are all the factors that might affect? Which are most important? Is the plan tested?

BEFORE DURING AFTER

Survivability Backup Recovery

What are all the factors that might affect?

Which are most important?

Is the plan tested?

ASSETS BEFORE DURING AFTER Survivability Protection Damage Analysis; Assets Assessment Prioritization Contacts Claims Are these up to date? Competition for protection?

BEFORE DURING AFTER

Survivability Protection Damage

Analysis; Assets Assessment

Prioritization Contacts Claims

Are these up to date? Competition for protection?

Customer Care BEFORE DURING AFTER Who? When? Defined Contact How? Re-contact Alternative Contact Assess Supplier Plan Partner Plan Quality Impact? Check! Participate

BEFORE DURING AFTER

Who? When? Defined Contact

How? Re-contact

Alternative Contact Assess

Supplier Plan Partner Plan

Quality Impact? Check! Participate

© 2006 Elliot Consulting Services. All Rights Reserved.

AWARENESS It IS possible! Impact Short term, long term Equipment, suppliers, supplies, information, customers, people, cash Before, during, after How long after?

It IS possible!

Impact

Short term, long term

Equipment, suppliers, supplies, information, customers, people, cash

Before, during, after

How long after?

BUSINESS IMPACT ANALYSIS Translation of the risk into bottom line calculations How much protection vs. cost A trade-off, but easy to err on the side of optimism

Translation of the risk into bottom line calculations

How much protection vs. cost

A trade-off, but easy to err on the side of optimism

A WRITTEN BUSINESS RESILIENCY PLAN Write it down! Review it! Memorize the key points of it—you may not have much time Terrorism evacuation notice for Tampa Second most dangerous port in the country (Anhydrous ammonia for fertilizer manufacturing in central Florida)

Write it down!

Review it!

Memorize the key points of it—you may not have much time

Terrorism evacuation notice for Tampa

Second most dangerous port in the country (Anhydrous ammonia for fertilizer manufacturing in central Florida)

TRAIN, PRACTICE, AND REVIEW Practice, practice, practice! A fire is the wrong time to do a fire drill Simulate different conditions Changes in political, health, and terrorist threats Type, degree

Practice, practice, practice!

A fire is the wrong time to do a fire drill

Simulate different conditions

Changes in political, health, and terrorist threats

Type, degree

A SUPPORTING TOOL: PREDICTIVE FAILURE ANALYSIS ™ Note: Brief mention of this in 9/05 presentation made to section

HOW DO WE NORMALLY TRY TO THINK OF ALL THE THINGS THAT MIGHT GO WRONG? Imagine Checklists Our own Industry Technical or business society Do these work adequately? Chemical plant releases, defective products, unforeseen consequences Recycle and learn over time

Imagine

Checklists

Our own

Industry

Technical or business society

Do these work adequately?

Chemical plant releases, defective products, unforeseen consequences

Recycle and learn over time

AN ALGORITHM TO ASSIST State the problem of concern My business backup plan works Invert the problem I don’t want my backup plan to work Exaggerate the inverted problem I NEVER want my backup plan to work How would I make that happen? What has to happen? What resources do I need? The list will always be longer than our fist list Prioritize, plan, act

State the problem of concern

My business backup plan works

Invert the problem

I don’t want my backup plan to work

Exaggerate the inverted problem

I NEVER want my backup plan to work

How would I make that happen?

What has to happen? What resources do I need?

The list will always be longer than our fist list

Prioritize, plan, act

EXAMPLES Communication Backup supply Verizon Internet Example Personnel Customer service Billing and invoicing

Communication

Backup supply

Verizon Internet Example

Personnel

Customer service

Billing and invoicing

Elliot Consulting Services Business Survival Solutions © 2006 Elliot Consulting Services. All Rights Reserved. Business Continuity and Disaster Preparedness Strategic Business Development, Sales, and Marketing Communications and Technology solutions Business Process Outsourcing

Business Continuity and Disaster Preparedness

Strategic Business Development, Sales, and Marketing

Communications and Technology solutions

Business Process Outsourcing