Organizational Structure and Success

Take the top 3 businesses in any industry, or your industry. Now take a look at how they do business? It is safe to say they did not start or run their businesses with exactly the same processes. HP and Dell build and sell in two very different ways.......Ford and Toyota, Apple and Microsoft.

Their approaches and execution are different. It is safe to say that the most responsive organization to the marketplace is the one that wins most marketshare. The difference though is not in the raw materials of the business, but in the thought structure of how to execute, and the responsiveness is based on the ability to take the thought process from the top to the bottom and execute it rapidly and well.

Speed to market with the "new" idea.

Is your organization set up to communicate quickly and effectively between groups? Do you have a "siloed" business for budgeting, goal setting, and execution - or does each group do it's best to support the entire organizations goal of getting ahead?

Do you succeed because of Stars or Teamwork?

One of the bonuses of doing a business continuity plan is it breaks down the silo's and gets your team focused on communicating and understanding it's priorities and corporate goals.

A simple test to see if you are prepared is go and ask the head of a department to name the top goal and top problem of a sister department they have to work with in the organization.

If they can't........your not communicating well organizationally.

911 What needs to be remembered

Today marks the anniversary for 911. We should remember the people who died, fathers and mothers, brothers and sisters, daughters and sons.

We need to remember emergency workers who died saving and trying to save lives.

I have been to ground zero and taught Business Continuity and Disaster Recovery in a building 3 blocks from the site. The building and the room we held the class in was used as a triage site and a morgue. New Yorkers were in the class.

What needs to be remembered are all of the simple preventable actions and mistakes that were made before and during attack.

You won't hear much about these issues, the media likes to present the heroic efforts - AFTER the attack. These are the stories told. You see it again and again after the bridge collapse in Minnesota, the hero's at the scene......does anyone know the name of the engineering firm who ok'd the bridge? Does anyone know who signed off on the reports? You won't hear about this. What about the mine disaster......hero stories everywhere, but no talk of the preventable causes and shirked responsibilities.

In 911 the mistakes were many, from ill conceived evacuation plans, to insufficient training and testing of emergency responses, to failing communications equipment. The list is long.

Today is a day to remember those lost, and tomorrow is a day you should consider what your leadership will be in protecting your mothers, fathers, son & daughters, brothers and sisters working for you.

Identify your risks and take prudent action to prepare.....it does not cost anymore to get it right than is does to get it wrong.

Respectfully
Ross McLean

Product Recalls and Business Continuity

According to the American Bar Association, the best plan is to take proactive preventive measures by establishing a product safety team.

Next, decide if you need recall insurance, but be careful, you get what you pay for, and you do not want to end up under insured.

Some policy's only cover cost of the announcements, mailings, press, and ads. Other policy's are more comprehensive, and will cover wages and other costs incurred in the recall, but be sure you understand the terms, many policy's require pre-approval on all expenses, so if you method of recovery is different than your insurer's position on what is right are at odds, you may not have the protection you need.

The cost of a recall can be high in direct costs, for example a tire distributor in New York got caught in the recall of Chinese made tires, the estimate is they can afford to replace 10% of the defective tires then they will be bankrupt.

Intel's past recall on Pentium chips had costs exceeding $500,000,000, a ceiling fan company had a recall in excess of $700,000,000, Black and Decker recalled coffee makers to the tune of $49,000,000.

The right insurance can play a critical role.

Bomb Threats - The risk to your business

There has been a recent rash of bomb threats to organizations to extort money. The caller threatens to detonate a bomb if money is not wired to an account. Some business's have wired the money....so expect copy cat type threats in the near future.

The truth is the risk of a bomb threat has a likelier occurrence than a bomb, so you should have a protocol for dealing with bomb threats.

Based on the earnings of your company to empty out a building for 2 to 4 hours could cost your company 50,000 or more easily.

Here is the link http://www.fbi.gov/pressrel/pressrel07/extortion_threats083007.htm

Minnesota Bridge Collapse - Economic Cost & Recovery

Infrastructure problems will be haunting us in North America for the next 30 years. As governments have taken money from capital budgets and used it to support operating budgets.

How susceptible is your business to a major infrastructure collapse? Does your business depend on traffic patterns or major routes for receiving and delivering product?

The estimated cost to the economy around the collapsed bridge in Minnesota is from $500,000 to $1,000,000 PER DAY!

They are looking at 2 years before it is up and running again.

How long could your business survive without a plan?

To learn how to assess the risks to your business, invest in our Business Continuity and Disaster Recovery training course so you can make an informed decision.

Ross McLean

Stats to Make you go hmmmmm

How does your company evaluate and manage risk?

Managing risk is something I have done all of my professional life. You can't remove risk entirely BUT you can eliminate it in great part by limiting the downside or by vastly increasing the odds in your favor through a mitigating action.

I have dealt with cases where my clients assets, or possibly their life is on the line. I more importantly have dealt with risk where my life was on the line.

If a risk had a high danger level and had a moderate to high level of occurrence, I took action in my planning to mitigate that risk, while still going about my life, or my client going about their business.

Lets look at some stats surrounding risk to your business. ( I know very well people can lie with stats, you have to analyze the risks correctly - see my earlier posting on bird flu, that being said though have you analyzed your business in relation to these stats?)

A 2005 study of 1,200 businesses found that 33% had no continuity plan in place. (what some peoples idea of a continuity plan is would make me believe that the realistic number is much higher, in fact I would double it at least)

2/3 rds of the businesses experiencing some sort of serious business interuption reported losing business because of it.

16% of those reporting had losses between $100,000 and $500,000.

26% of those reporting lost business had "no idea" what it had cost them per day.

(eventually someone in the company will know - the CFO, but how those numbers are accounted for is another issue)

93% of businesses who lose their data for 10 days or more file for bankruptcy within a year of the event. This is perhaps the most sobering stat. If you cannot recover within ten days......you will not recover. This is why it is crucial to have a response plan in place and you do not waste precious time in your recovery.

After Hurricane Floyd in 1999, 43% of businesses that closed temporarily - NEVER OPENED FOR BUSINESS AGAIN.

For small businesses of 100 employees or less, only 5% have any form of business interruption insurance.

J. Paul Getty once said "decide what is the worst thing that can happen to your business, then, take all the steps you need to take to ensure that it does not happen."

All the stats in the world don't matter when your business is the one that is affected, plan to make your business, not one of the ones that folds. It's good risk management.

Transformation

Change will and is coming fast at your business. Business leaders who see these challenges coming are now asking themselves "What will we do about .......".

I recently read a blog entry from Tom Peter's where he met with his fortune 100 client and they had a long discussion about what they needed to change......what is the answer and where could they obtain it. The debate raged.....what is our solution.... is it a product, is it a service, how do you buy a transformation?

The answer lies with the executive team, however what is needed is a dispassionate outsiders way to look at your business and assess strategically and tactically what requires change.....or more accurately transformation. Structures have to transform to meet new challenges, business process mapping and understanding of risks and potential responses are critical to making the right move.

I once heard this described as changing a propeller driven plane to a jet plane while it is in flight as the type of challenge facing business today.

It can be done but it will take committed, focused, actions as a team to get it done.

What do you think the odds of success are without a plan?