From fires to floods, tornadoes to hurricanes, a disaster can strike anytime, anywhere, and often with little to no warning. How an organization responds in the days and hours following a disruption is critical.
Studies show one in four businesses will never reopen their doors after closing due to a disaster. Disruption stemming from a disaster can cost a construction company major dollars, as well as additional time and resources, causing huge setbacks for completing projects and successfully continuing services. Every construction company, regardless of size, should prepare response procedures for the unthinkable. One way to accomplish this is through a business continuity plan.
A business continuity plan is intended to ensure that an organization’s critical business functions will continue to operate or be recovered to an operational state despite serious incidents or disasters. Businesses with a formalized and tested business continuity plan have much higher success rates of avoiding and recovering from disruptions than those that don’t. A business continuity plan, in conjunction with Business Interruption insurance, forms a business continuity management (BCM) program. Businesses with strong BCM programs are more resilient in the face of emergencies and disasters.
Five Steps to a Business Continuity Plan
The process of establishing a business continuity plan can be overwhelming. This five-step strategy sums up the process:
Step 1: Establish a Planning Team. Create a team of employees and/or supervisors that are responsible for the development of the disaster/emergency management plan.
Step 2: Analyze Capabilities and Hazards. Gather information about current capabilities and possible hazards and/or emergencies. Then conduct a vulnerability analysis to determine the organization’s capabilities for handling emergencies.
Step 3: Develop the Plan. To start:
- Set goals for what the plan should accomplish. For example, ask: “Where do we relocate?” and “Who should I partner with?”
- Identify challenges and prioritize activities. Make a list of tasks to be performed by whom and when to determine how to address the problem areas and resource shortfalls that were identified in the vulnerability analysis.
- Seek out a reputable disaster restoration company that offers disaster and continuity planning. Set up pre-arranged agreements that outline the priority of service and assessment of emergency equipment when needed, so when the restoration company responds, it will have all the necessary equipment and personnel. Include this information within the plan.
- Develop an action plan for each type of disaster. Note whether the company faces additional exposures based on the location of various construction projects and offices.
- Make each member of the planning group responsible for writing a section of the plan.
- Include communication procedures so employees, vendors and subcontractors know how and when to reach your management team.
- Assign one person to develop a training schedule for the organization.
- Distribute the first draft to group members for review and then revise. Arrange for the CEO, president and senior management to make final, written approval.
- Distribute physical copies to senior management, headquarters, project supervisors and community emergency response agencies. Require a signature from everyone that receives a copy.
Step 4: Implement the Plan. Implement the plan by integrating it into company operations, training employees and evaluating the plan.
Step 5: Test the Plan. All that hard work in putting together a recovery plan is useless unless it’s tested. Testing is essential to ensure the disaster and continuity plan work and that it aligns with current operations and addresses all areas of response. The plan should be tested at least annually, although seasonally is recommended as cold and hot weather present a wide variety of issues that could be missed. Several types of tests should be considered, including:
- Table-top exercise: A table-top exercise basically walks through a disaster response with all parties involved in a conference room. Each person is responsible for outlining his or her specific response and how it coordinates with others. During the exercise, the scenarios can be changed or other unexpected issues can be introduced and the response discussed. A major issue with only running table-top exercises is that it doesn’t reflect real-world situations that arise during a disaster, but it’s cost-effective and can highlight coordination issues.
- Physical disaster response drill: A physical disaster response drill is time-consuming and costly, but it’s the closest replication of how the response plan will work. It not only will test operation coordination, but also the physical placement and operation capabilities of the equipment. Issues, such as whether the hoses are long enough, will be exposed during this drill.
The most important thing to do during a disaster is remain flexible, even when following a plan. Understanding the nature of the plan and the disaster at hand will help all construction companies work through any disaster.