Business Recovery: Do You Have a Plan?

By M. Suzanne C. Berry, CAE and Raphael Deh-Atheba

Business recovery planning is a crucial part of any business. In today’s corporate world, a long-term operations outage can have a catastrophic impact not only on the business but also its clients. Developing a viable recovery strategy can help organizations reestablish normal business operations after a natural or man-made disaster. To survive a fire, a flood, or even a terrorist attack, organizations must ensure that they are able to maintain their critical core operational functions and be able to continue the viability of their clients within a reasonable time frame.

Planning for the worst
Statistically, the probability of a large-scale disaster is extremely remote, but the consequences of an unprepared office could be catastrophic in terms of operational impact and in the eyes of clients.

A proper recovery plan emphasizes

• management’s understanding of the recovery plan;
• commitment from management on their roles in the effort;
• recovery of business function; and
• ease of business resumption plan.

When preparing a business resumption plan, an organization needs to

• identify weaknesses in infrastructure that could jeopardize reaching data;
• plan how to minimize the duration of a disruption to business operations; and
• effectively plan the responsibilities and responses of each staff member.

The key ingredient in any business resumption plan is the thorough education of employees on their roles and responsibilities should a disaster strike. Each staff member must be attuned to his or her specific role and course of action to ensure the continuity of responsibilities.

The quintessential business resumption plan includes three important items:

• backing up of essential resources (financial, data),
• procedures for plan implementation, everything from the notification to the mobilization of the staff, and
• inventory of accessible resources, including equipment.

Putting it into practice
Association Resources, Inc., has developed a comprehensive business resumption plan to ensure that clients maintain business as usual quickly and seamlessly. In the event of a disaster, Association Resources’ goal is to have the office up and running within two days. In addition, all clients are routed to the emergency headquarters location and client calendars are adjusted and conferences and events take place as scheduled.

Three key employees, representing the information technology, human resources, and financial and technology planning departments, work as a team to look at all aspects of the plan. Regular maintenance of the plan is essential to ensure that recovery capability will occur effectively. Association Resources’ business recovery plan is a living document and will continue to evolve to ensure that the same top level of service is provided to our clients in the event of a disaster.

Learning as you go
How do other associations handle and prepare for the unexpected?

Twelve years ago, just days before Christmas, the pipes in the building housing Association & Society Management, Inc., froze and burst. No matter how prepared this Austin, Texas, company was, President Don McCullough, CAE, says, “One learns a lot from actually having a disaster and not being prepared for it.”

He and his staff learned four important lessons.

1.     Check your coverage. Accessing electronic records was not a problem; the AMC had backed up its customer and financial records, which were stored offsite. But saving the equipment wasn’t easy. Recovery specialists disassembled and dried the computers, which then literally blew up two weeks after being returned to operation. Replacement costs were more than $175,000.

Lesson learned: Make sure your business insurance coverage specifies replacement costs instead of the standard depreciated costs, McCullough says.

2.     Move out. The carpet in the office was new, but in spite of heroic efforts to dry it out, it molded and many employees developed allergic reactions as a result. In addition, water seeped between the walls into the insulation where black mold developed.

Lesson learned: Don’t endure an unhealthy environment, McCullough says. “Just move to another office or work remotely from home if you can and communicate via cell phones and laptops.”

3.     Leave some tasks to the experts. McCullough’s employees learned they had no business wading into their offices to unplug all the electrical equipment. While McCullough says he appreciated his staff’s loyalty, the potential exposure to injury was large.

Lesson learned: Don’t let employees perform tasks that should be left to experts, particularly when there is risk to injury or potential danger. Also include in your plan all possible authorities and have them review your plan if possible. If you are dealing with a landlord, make sure that the company is aware of your plan and have approved it from a facilities standpoint. As a matter of fact, what is the building owner’s plan and do you have a copy of it?

It’s important to assess the disaster and what it will take to resume operations in that particular location, McCullough says. “Move out and move on when the situation indicates you should.”

Preparing for sudden management changes
Disasters aren’t limited to natural or man-made events. Businesses also need to plan for continuity should anything happen to the company’s principal, says Sherri Oken, CAE, president of Association Advantage, Wakefied, Massachusetts. Much of what she advises can also be applied to disaster planning.

“Many of us have very small staff companies, are very hands on, are getting older, and wrestle with how we would provide continuity for our clients (and take care of staff) if anything happens to the company’s principal,” she says.

She points out several things to consider:

• legal protection and dispersal of business assets,
• protection of personal assets and heirs,
• continuity for client services and contracts,
• delegation of authority and compensation of delegate during transition and/or liquidation, and
• care and feeding of dedicated staff members.

Oken advises that any business not incorporated do so. “Just as you earmark personal assets in a will, as a company owner you need to do the same for your business to ensure that there is money to assist both your staff and your clients through the transition to new management.”

Also record company and client procedures. “If you do not want to burden family with business issues, you have to delegate (and train) an individual to act on your behalf legally and make sure that person is compensated,” Oken says. “If physical assets are to be liquidated, you need to set up a method for the sale and dispersal of earned funds.”

Whether small or large, any unexpected event that disrupts your business can also disrupt your clients’ business. Taking steps now to plan for your—and your clients’—continued operations will go a long way toward survival should a disaster or other disruption occur.

M. Suzanne C. Berry, CAE, is executive vice president of Association Resources, Inc., Hartford, Connecticut, a member of the AMC Section Council, and vice chair of the Key AMC Committee. E-mail: sberry@associationresources.com. Raphael Deh-Atheba is manager of information technology planning and financial analysis, Association Resources, Inc., Hartford, Connecticut. E-mail: rdehateba@associationresources.com.