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business planning


What to do if things go wrong...


Robert Lloyd Griffiths, director of the IoD in Wales looks at contingency planning and the importance of it for a business


A


pair of contrasting topical themes brought the question of disaster planning into sharp focus again this year.


The first was the long, hot April (and a few


magnificent days in May). The second was the death of Osama Bin Laden. South east Wales’ early bout of baking


sunshine had me revelling in the warmth on one hand but also thinking ahead to the possibility of heavy downpours onto hard ground and the resultant flooding. Remember the Ryder Cup, anyone? Thousands of miles away, America’s


astonishing attack on the Al-Qaeda founder once again raised the spectre of terrorism counter-strikes. A common strand in such disparate themes,


of course, is business disruption. Other dangers include fraud, systems failure, legal issues, fire, an industrial dispute and a disruptive amount of staff sickness. So how can we ensure that enterprises


which have taken many years and much toil to develop aren’t shattered by a freak extreme occurrence of any nature? In two words – contingency planning. In my experience, our first contingency planning target as directors is to understand


28 28 THEbusiness QUARTER THE QUARTER


the specific risk profile of our own operations. We’re all different. Those who fully understand the risks


they run are best positioned to evaluate the likelihood of those risks turning to reality and recognising their potential impact. This can lead to measured decisions on the


appropriate management of each individual exposure. Recently, the IoD gathered together


contributions from experts in the management of different areas of risk. Their insights helped us all achieve a better understanding of our own risk profile and so manage it more effectively. The advice I offer here is largely thanks to


them. Tim Kemp, of HSBC Insurance Brokers,


told us that thinking about old problems in a new way can help highlight the risks to your business. His key points included:


• it’s not always clear what your risks are and how to assess them • using professional specialists can give you a new perspective • identify those risks you can afford to live with, and the ones that could destroy the business • try to eliminate or transfer those risks identified as ‘fatal’.


The Mail on Sunday’s Stephen Womack


warned that, partly due to the creep of regulation, shareholders, employees, contractors and the authorities were increasingly keen to hold directors personally responsible for how they run a business. He said it was crucial that we should


be more careful than ever to monitor legal developments and to keep good records of the reasons our decisions. We should not overlook the very real ‘human’ costs of being a director. Occupational Health magazine’s Nic Paton


told us that looking after the workforce in the right way is key to reducing the human risks of being in business. He advised that, as workers are ever more


willing to exert their rights, directors should ensure that risk management strategies reflect the changing nature of workplace injuries. Did you know that absence costs employers


more than £12bn a year. Investing in rehabilitation and retraining for employees can more than pay for itself. Business and insurance journalist Chris


Wheal suggested a healthy regime to reduce the risk of financial heart attacks. He said: “Cash keeps the business heart


pumping, but if there’s a blockage the company can die.”


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