Our daily life events provide us with the best examples of risk management. Seriously. Think about events during your day, and then step back for a moment and consider the risks surrounding those events. I bet if you do this with the right mindset, you will now recognise a number of risks that impacted events during the day – whether they be financial risks, operational risks and/or compliance risks.
The simple act of driving a car generates many individual risks. Financially you are making a commitment regarding the fuel you are using and the funds available to you to purchase new fuel if needed. Operational risks abound this event, ranging from the operational risks of the vehicle itself and of your learned processes in driving the vehicle. And finally, driving a car involves understanding and comprehending the many varied driving laws and their changeability.
Imagine thinking about risks this way and then trying to live your life! That is why we always refer to people embedding risk management into how they act, think and even feel, rather than it being something outside their normal day-to-day activities. However, this article is less about that and more about what happens when things don’t go right.
Consider again the example of the motor vehicle. The motor vehicle is a complex mechanical body that has many small and large working parts. Each of which can be impacted through internal use, poor build, and/or external factors. To mitigate one of the most common of risks surrounding your motor vehicle you carry a simple, yet effective control – it is called a jack and spare tire. Yes, this is risk management in action!
Today, I was involved in a normal everyday life event of purchasing my lunch from a popular sandwich shop (you may be familiar with it as there are now more of these shops in Australia than McDonalds!). During this event, I was able to “think on my feet” for this business and develop an on the spot business continuity solution for them. I will tell the tale of this a little later.
What this “on the spot” business continuity event reminded me of was the fact that business continuity is not just a large organisation problem. It is something that organisations with 1 employee to 50,0000 employees must master. In addition, it is not just about the “big stuff”, such as the major catastrophes, but the small stuff as well. In actual fact, in this very case it was the smallest thing that brought this business process unstuck, and almost unable to service its customers!
Business continuity is about understanding the relevant points of failure in your business, ranging from the significant to the insignificant and then developing incident response plans for these events. Incident response plans can range from the simple to the complex depending on the nature of the event and your appetite in dealing with the consequences of the event. Clearly, the oil industry for instance, has a very different appetite for dealing with major oil spills compared to dealing with distribution of product problems. Each requires the organisation to consider the financial and non-financial components.
We offer this break-down of 7 areas to consider for your incident response plans (not in any specific order):
- Communication internal
- Communication external
- Event root cause analysis
- Event escalation
- Process alternatives
- Customer compensation
- Customer experience
Organisations that value the customer and evaluate themselves on their effective response to events will prepare incident response plans prior to events through analysis of their business processes and identification of potential failure points.
We can hear the loud screams of the waste of time of preparing for the things “that just cannot happen”. But these loud screams are nothing compared to the louder screams of your customers on social media telling everyone about how poor your service is, or how your processes or systems don’t work. For those of you reading this and calling me the “boy who cried wolf”, stop and think. I am not crying “wolf”, I am actually stating you should be prepared for when you have to call “wolf” and rather than just calling “wolf”, you actually will have a plan to execute. You will deal with the wolf itself! And within that plan, you will have a communication plan that you can execute that gives the new generation of instant media tycoons (aka everyone) confidence you are still in control of your business and the customer experience. So, yes this is work, but this is not additional work, it is just what should happen for anyone to run a successful business.
So, what is my story of today?
The order of the sandwich was complete and we progressed along the well drilled process that the staff execute every moment of every day. The roll was prepared, the ingredients ranging from the lettuce, tomato, onion and then dressing were all applied. The smell of the upcoming feast I was about to have was fantastic. Lunch was well overdue by this point, being 3pm on a Saturday. This author was starving and really just wanted to get home and relax with the sandwich and perhaps a little television.
The process line continued to the final part of the process. The register received the order details and as with many people these days, this customer was paying for the meal with a credit card. The credit card was inserted (chip enabled) and the selection of credit occurred. We both waited, the server and the “servee”. The machine started to whir and then it stopped. A stub of a receipt appeared but not the full receipt. The server looked at the machine. No response. After 30 seconds of silence, this author thought to offer some assistance. “I believe it is out of paper”. “Right”. Another 15 seconds pass. “Can you hang on for a second…..I am not sure what to do.” “Sure”. By now this customer is thinking that advising a customer you have no idea what you are doing is not the best form of communication, but it was at least honest.
The second employee comes to the machine. Again, the stare at the machine. Personally, I wonder if they were both hoping it would miraculously regenerate the paper required. Now that would be a brilliant process enhancement, but alas the world of Star Trek is still a few generations ahead of us!
“It needs some paper, I believe”. I still wonder if the advice from the customer was helping but it just seemed that the process had completely stalled with one small, very tiny problem.
“Thanks. I am not sure where we keep the rolls. Let me check”. “Sure”.
Now a few minutes had passed since the initial loss of paper. Of course the sandwich is now getting a little “cool”, and as it had hot ingredients, this was very disappointing to this customer. He (the employee) searches for the roll of paper. Having opened around 5 doors, he locates a box of paper. “Found it, that was lucky.” Personally, that is not something I would like to say to a customer, but again, honesty doesn’t hurt.
He takes the roll and walks back to the machine. This is where a photo would do this more justice. But picture a roll twice the size of the machine it is meant to enter. You guessed it, it did not fit. [laugh] “Wrong machine roll. Let me call my manager.”
When he referred to call, he was not referring to in the next room. He meant a phone call.
Incident response not working as there was no answer. “Let me try again”. “Sure”
Escalation might be necessary now. “Maybe I should try the Shop Manager.” I was not sure if this was a question to me, or himself. “Sure”. I was not stressed, the sandwich was cold now and it was going to be interesting to see how this was solved.
Meanwhile, someone else had arrived, ordered their sandwich and was now waiting. With my card still in the machine, and no paper, it looked like a queue would start to develop. With the employee now trying to locate the Shop Manager’s number, the other staff member asked the new customer. “Are you paying via cash as the machine is not working?”. “Yes, cash”. “Great”. In the year 2011, clearly the only alternative for this organisation is cash to an incident. Am I in the right decade?
The other employee returns from the back and clearly has the Store Manager on the phone. This customer watches the employee perform the same search again. “Right. We are out of these rolls. Thanks.” With the phone hung up, he returns to inform an already informed customer that the problem is still as it was over 5 minutes ago. “If you want I can call the Manager again and ask them to pick up some rolls and come in.” Mentally I am picturing this Manager is not located next door, and a 30 minute wait for a visit to OfficeWorks and then a drive to the store, just does not seem like an effective and efficient use of my time. Especially when all that was required was a simple sandwich. Interesting that he did not consider asking this question of the Manager when he had them on the phone.
Incident response plan is required on the fly here. I raise, “How about walking down to the convenience store on the corner there and seeing if they can give you a spare?”. “That’s a great idea”. “I will be back in a few moments”.
About a minute later, he returns. Beaming smile. Roll in hand.
See what we mean?
Business continuity is needed everywhere.
And some of you were saying what a waste of time it would be to invest the time now to be ready with these solutions. In this instance the customer was understanding, rationale and not annoyed. That is not the case normally. That one customer could have thousands of followers on social media sites, who in turn have thousands of followers. One bad customer experience can turn into a bad story.
Business continuity is needed everywhere.