bccm - session 12 - power point
TRANSCRIPT
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Business Crisis and Continuity
Management (BCCM)
Class Session 12
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Business Crisis and Continuity
Management
The businessmanagement practices that provide the
focus and guidance for the decisions
and actions necessary for a business to
prevent, mitigate, prepare for, respondto, resume, recover, restore and
transition from a disruptive (crisis)
event in a manner consistent with its
strategic objectives. (Shaw, 2006)
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STRATEGY
Strategy is
1. a coherent, unifying and integrative pattern of decisions;
2. a means of establishing the organizations purpose in term of long
term objectives, action plans and resource allocation priorities;
3. a definition of what is the real business (products and/or services) ofthe organization;
4. a response to the internal and external environment to remain
competitive.
5. a means of defining management roles and responsibilities at all
levels of the organization;
6. a way of defining the organizations contributions to its stakeholders.Applied Strategic Planning page 3
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PLANNING
A formalized process to produce an articulated
result in the form of an integrated system of
decisions (interdependent decisions). Planning
requires thinking about the future in an attempt to
exercise some level of control over it.Adapted from CALSTATE.EDU Web Site
Establishing objectives and choosing the most
suitable means of achieving those objectives before
taking action anticipatory decision makingApplied Strategic Planning page 3
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STRATEGIC PLANNING
the process by which the guidingmembers of an organizationenvision its future and develop the
necessary procedures andoperations to achieve that future
From Applied Strategic Planning
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QUESTIONS FOR STRATEGIC
PLANNING
1. WHERE ARE WE NOW
2. WHERE DO WE WANT TO BE (AND WHENDO WE WANT TO BE THERE)?
3. WHAT ARE THE ENVIRONMENTAL(INTERNAL AND EXTERNAL) CONDITIONSTHAT SHAPE OUR OPTIONS?
4. HOW DO WE GET FROM HERE TO THERE?
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BENEFITS OF STRATEGIC PLANNING
1. INCREASED EFFECTIVENESS
2. INCREASED EFFICIENCY
3. IMPROVED UNDERSTANDING AND BETTER LEARNING
4. BETTER DECISION MAKING
5. ENHANCED ORGANIZATIONAL CAPABILITIES
6. IMPROVED COMMUNICATION & PUBLIC RELATIONS
7. INCREASED POLITICAL SUPPORT
Creating and Implementing Your Strategic Plan. Bryson and Alston. Page 9.
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Benefits of Strategic Planning1. A framework and a clearly defined direction that guides and supports the
governance and management of the organization
2. A uniform vision and purpose that is shared among all constituencies
3. An increased level of commitment to the organization and its goals
4. Improved quality of services for clients and a means of measuring the service
5. A foundation for fund raising and board development
6. The ability to set priorities and to match resources to opportunities
7. The ability to deal with risks from the external environment and
8. A process to help with crisis management
From Alliance for Nonprofit Management 12 - 8
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Tactical (supporting) objectives directly supporting strategic
BCCM
1. Ensuring the safety of employees, customers and the public.
2. Protecting business tangible and intangible assets (e.g. physical
property, data and information, goodwill)
3. Minimizing business operation disruptions.
4. Resuming, recovering and restoring business operations according to a
pre-developed and defined priority scheme.
5. Maintaining a positive internal and public image.
6. Complying with legal and regulatory requirements.
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PLANNING TO PLAN
VALUES SCAN
MISSION
FORMULATION
STRATEGIC BUSINESS
MODELING
PERFORMANCE AUDIT GAP ANALYSIS
INTEGRATED ACTION
PLANS
CONTINGENCY
PLANNING
IMPLEMENTATION
THE APPLIED STRATEGIC PLANNING MODEL FIGURE 1 -1
ENVIRONM
ENTALMONITORING
APPLICATIO
NCONSIDERA
TIONS
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A Good Mission Statement
A good mission statement captures an
organizations unique and enduring reason
for being, and energizes stakeholders to
pursue common goals. It also enables afocused allocation of organizational resources
because it compels a firm to address some
tough questions: What is our business? Whydo we exist? What are we trying to
accomplish?
From: "Mission Matters." The CPA Journal. 12 - 11
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AmerisourceBergen Mission
Statement
To build shareholder value by delivering
pharmaceutical and healthcare products,
services and solutions in innovative and cost
effective ways. We will realize this mission bysetting the highest standards in service,
reliability, safety and cost containment in our
industry.
From AmerisourceBergen Web Site.
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DHS Mission
We will lead the unified national effort tosecure America. We will prevent and deterterrorist attacks and protect against and
respond to threats and hazards to thenation. We will ensure safe and secureborders, welcome lawful immigrants andvisitors, and promote the free-flow of
commerce.DHS Strategic Plan. 2004.
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DHS Strategic Goals
1. Awareness
2. Prevention
3. Protection4. Response
5. Recovery
6. Service7. Organizational excellenceDHS Strategic Plan 2004
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TSA Mission
The Transportation Security Administration
protects the Nations transportation systems
to ensure freedom of movement for people
and commerce.TSA Strategic Plan 2004
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Aligning TSA Goals with DHS Strategic Objectives
DHS
Strategic
Goals
Awareness Prevention Protection Response
Organizational
Excellence/
Service
TSA
Strategic
Goals
Domain
AwarenessPrevent/Protect
Respond/
Restore
Organizational
Effectiveness
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TSA Strategic Goals
1. Domain Awareness Ensure we gain
awareness of the full scope of threats and
vulnerabilities to all modes of
transportation in our domain ofresponsibility
2. Prevent and Protect
3. Respond and Restore
4. Organizational Effectiveness
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Strategic Objectives for Goal 1
Domain Awareness
Strategic Objective 1.1 Gather and analyze intelligenceinformation related to threats and vulnerabilities of allmodes of transportation and assess the effectiveness of
available countermeasures to most effectively managerisk.
Strategic Objective 1.2 Make innovative use of analyticaland detection technologies and techniques to collect
and manage information regarding potential threats topersons, cargo, and commerce in the transportationarena.
Strategic Objective 1.3 Disseminate relevant
transportation security and intelligence information toappropriate entities in a timely and functional manner.
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John Layes Strategies
1. Eliminating the threat
2. Continuity
3. Quick restoration disaster recovery
4. Deferred restoration disaster recovery
5. Discontinuing the product12 - 19
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Pitching Preparedness by Philip Jan Rothstein
or
How to Convince Senior Management that BCCM is a
Strategic Investment
www.rothstein.com
Key Points
Justify on tangible results, not emotions
Point out specific, direct benefits
Recognize top management may have other
conflicts Speak top managements language
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Selling BCCM as a Strategic Investment
1. BCCM philosophy as demonstrated by past
efforts and commitment
2. Risk appetite
3. Risk culture
4. Oversight of the Board of Directors
5. Integrity and ethical values of theorganizations people
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Selling BCCM as a Strategic Investment
6. Commitment to competence
7. Management philosophy and operating
style
8. Managements assignment of responsibility
and authority
9. Organizational structure
10. Human resource policies and practices
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The Impact of Corporate Culture on Continuity
1. What three things does the organization
value most?
2. What 10 words would best describe the
organization?
3. Whats important at the organization?
4. How do employees get promoted and what
behaviors get rewarded?
From The Impact of Corporate Culture on Continuity
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The Impact of Corporate Culture on Continuity
5. How does a person fit into the organization?
6. Do organization leaders/managers take risks?
7. How are decisions made and then
communicated throughout the organization?
From The Impact of Corporate Culture on Continuity
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31 different rationalizations that in different combinations and degrees of belief shape the organizational culture with respect to
crisis management.
Source: Mitroff and Pauchant. (1992) Transforming the Crisis-Prone Organization. p. 86.
Properties of the
Organization
Properties of the environment Properties of the Crises
Themselves
Properties of Prior Crisis
Management Efforts1. Our size will protect us.2. Excellent, well-managed
companies do not have crises.3. Our special location will
protect us.4. Certain crises only happen to
others.5. Crises do not require special
procedures.6. It is enough to react to a crisis
once it has happened.7. Crisis management or crisis
prevention is a luxury.8. Employees who bring bad
news deserve to be punished.9. Our employees are so
dedicated that we can trustthem without question.
10.Desirable business endsjustify the taking of high-riskmeans.
11.If a major crisis happens,someone else will rescue us.
12.The environment is benign;or, we can effectively bufferourselves from theenvironment.
13.Nothing new has reallyoccurred that warrants change.
14.Crisis management issomeone elses responsibility.
15.Its not a crisis if it doesnthappen to or hurt us.
16.Accidents are just a cost ofdoing business.
17.Most crises turn out not to bevery important.
18.Each crisis is so unique that itis impossible to prepare for allcrises.
19.Crises are isolated incidents.20.Most crises resolve
themselves; therefore time isour best ally.
21.Most (if not all) crises have atechnical solution.
22. It is enough to throw technicaland technical quick fixes at aproblem.
23.Crises are solely negative intheir impact. We cannot learnanything from them.
24.Crisis management is like aninsurance policy; you onlyneed so much.
25.In a crisis situation, we justneed to refer to the emergencyprocedures weve laid out inour crisis manuals.
26.We are a team that willfunction well during a crisis.
27.Only executives need to beaware of our crisis plans; whyscare employees or membersof the community?
28.We are tough enough to reactto a crisis in an objective andrational manner.
29.We know how to manipulatethe media.
30.The most important thing incrisis management is toprotect the good image of theorganization.
31.The only important thing incrisis management is to ensurethat our internal operationsstay intact.
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Considerations for Calculating the Cost of
Downtime
1. Revenue lost by inability to accept orders.
2. Cost of lost productivity.
3. Value of inventory lost or spoiled.
4. Cost to recover and/or rebalance manufacturing
processes.
5. Fines, fees and/or compensatory payments.
6. Cost of marketing and sales efforts to recoverrevenues.
7. Lost customer loyalty, reputation and/or goodwill.
8. Cost of legal, health, safety and/or legal exposure.12 - 26
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Difficulties Associated with Calculating the Cost
of Downtime
Many impacts can be overlooked or underestimated (e.g.,
intangibles and lost opportunities)
Many impacts can be overestimated since:
Services may be made up to customers
The cost of downtime is not necessarily a linear relationship
Customer loyalty issues can increase or decrease impacts
Not all of overhead may be impacted (e.g, administrative
services, senior personnel activities) Outsourced services may be discontinued without penalty
Certain support and administrative tasks which provide
little value added may be deferred
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