At the time of this writing, it’s not quite December 21, the day the world is going to end—at least according to people who believe in that Mayan calendar deal.
Those people have more than likely been outfitting themselves with supplies: water, food, guns, fuel, generators. Some Twinkies maybe.
On the other hand, if you’re like me, you’ve done nothing because you believe that whatever Mayan was in charge of calendar carving got to 2012 and said “That’s far enough, I’m done.”
And, if you’re like me, you believe that up here in Canada, we’re insulated from tsunamis, hurricanes, earthquakes, tornadoes and other disasters that tend to shut down regions of the U.S. and the rest of the world.
But we’ve had an earthquake. And power outages. And tornadoes. Hurricane Sandy? That was pretty close. Think Slave Lake. Or the City of Toronto calling in the army when it was blasted with snow. Or, go way back to 1979 when a 106-car freight train carrying explosives and chemicals was derailed in Mississauga, prompting the evacuation of 200,000 people. There was a little power outage a few years ago, too. Oh, and SARS and the Bird Flu. And 9/11.
They may not be world-ending in the Hollywood sense, but those disasters — both the human made and the natural — could end your business if you’re not prepared.
The Dirty Diaper Problem
What we’re talking about here is developing a Business Continuity Plan and a Disaster Recovery Plan, both of which will need money and resources.
“Your financial guys are going to want to know what it’s going to cost to implement this plan,” Mike Webb of Old Dominion Freight Line told a small room of carriers at this year’s American Trucking Associations (ATA) Management Conference in Las Vegas. “Tell them, ‘if you don’t have it and this happens, this is what it is going to cost if we don’t have a plan.’”
The problem, he says, is that the companies that invest in emergency planning are typically the ones that have already been hit. It’s like a dirty diaper, Webb said: “We don’t do anything about it until it’s dirty.”
For Terry Shaw of the Manitoba Trucking Association (MTA), having a disaster-recovery plan is key from a large customer perspective. “I would suspect they [larger customers] would ask for ‘proof of’ in order for certain companies to be able to tender products. And just part of that general safety of culture, being prepared and aware, and that I would recommend to all companies.”
After the 1994 World Trade Center bombings, about 150 businesses out of 350 failed to recover from the disaster.
Chris Anderson is with Grant Thornton LLP’s Business Risk Services in Toronto. He says that the ROI is not the way to evaluate whether you should spend money on this.
Says Anderson: “A lot of truckers understand that things go wrong all the time. Put it into the context that things go wrong and to expect the unexpected.”
The real ROI is you’ve got the ability to get trucks back on the road and communicate to your customers where their goods are — perhaps better than your competitors. “If you can show even a glimmer of customer service,” Anderson says, “you may get more business.”
Plus, he asks, “can you really withstand a couple of days or a week not being able to ship goods or bill their customers?”
Might a small or medium-sized disaster, without a disaster-recovery plan, be the straw that breaks the camel’s back?”
Your Plan Needs to be Your Plan
“There is not a cookie-cutter program. Every program is very unique,” stressed Webb. “Taking somebody else’s document doesn’t work.
“Just because you have a 500-page recovery document doesn’t mean you are prepared,” Webb explained. “The program needs to be comprehensive and it needs to be simple. People need to pick it up and [be able to] follow the directions.”
“Part of the business-continuity plan is to do some risk-assessment and review your control and security measures that would help you avoid a disaster or mitigate a problem on your world,” says Anderson.
Step One: Business Continuity Planning
A Business Impact Analysis or Business Continuity Plan (BCP) will not only give you a road map and path for your specific organization, says Michael Cummings of the now-famous American emergency response organization FEMA, “it will identify the resources: money, time, external and internal people that it will take to execute on that plan.”
Fill the Cracks
“First fix up some basics,” says Anderson, who advises making sure that the batteries are working in your fire alarms, that staff knows CPR, fire etcetera. “Part of the disaster-recovery program is ‘let’s not have a disaster’ or, if something goes wrong like a small fire in the main office, we have people trained to use the fire extinguisher so that it doesn’t turn into a conflagration.”
Attack of the Dinosaurs
“There’s a set of answers to that and somewhere in the middle is the truth,” says Anderson. “One model for doing risk analysis says ‘do the scenario-based threat identification and analysis.’” Take a look at what has happened in the past in your area, real scenarios, like the Mississauga train derailment or significant power outages. “Going crazy and saying there’s this 0.0000001-percent chance of our building being struck by lighting, what are we going to do in that scenario? That’s pointless.”
“Dinosaur attack? Aliens from outer space?” laughs Shaw when asked what should Canadian carriers plan for, before highlighting the geography of where the MTA is located: “Flooding: huge issue. And snow and the associated hype. These are items we need to plan for, and then there are things that can just happen to anyone, anywhere — fires, things like that.”
Fred Myles, director of operations with the southern-Ontario based carrier Rosedale Transport, said that while they made it through the 2003 blackout the company decided afterwards to upgrade and invest in generator sets.
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