Planning for extreme events

When it comes to our businesses, we plan for large events, and we plan for small events; rarely do we plan for extreme events. It’s something I realised during the recent heatwaves here in the UK and a conversation topic that has come up with my clients. That is why I have come up with 10 ways of planning for extreme events. 

While anything that is extreme might be rare, they are in fact becoming more regular, which means they are worth planning for. I’m not necessarily talking full-scale disaster planning but then again, a pandemic would fall into that category and I’m sure many businesses now have a process in place to avoid a repeat of 2020. But extreme events are certainly worth considering. 

What might happen?

Extreme events that are quite likely to happen in the next few years include: 

• Financial events such as recessions or economic crashes
• Extreme hot and cold weather
• Transport problems due to strikes, accidents, or road closures
• Worker shortages
• Energy problems such as your power supply is damaged, or you can’t access the internet
• Raw material shortages
• Cyber security and data theft
• War

When it comes to your business, anything that could prevent your business operating for whole days at a time, should be considered an extreme event. So here are the ways you can mitigate against risks!

1. Establish great systems and processes

However boring systems and processes sound, if you have them in place it means that new staff are ready to use them and keep your business running if other workers leave or you cannot recruit.

If everything is in your head or on a scrap piece of paper, you are making life very difficult for yourself. That’s why you need to have processes that are easily replicated and easily explained or that have a good training manual to go with them.

2. Build in flexibility

If you have a flexible workforce, flexible working practices and flexible working hours, you are far more likely to be able to respond to whatever crisis there is. 

The recent train strikes in the UK didn’t cause anywhere near as many problems as it would have done a few years ago, because so many more people are now set up to work from home. Doing so relieved the pressure on the system and businesses were able to adapt for a few days.

3. Sound financial management

Having sound financial management of your business is crucial to success at all times, regardless of whether you’re experiencing extreme events or not. However, during recessions or a financial crisis, you certainly need to know your numbers.

If numbers are not your strong thing, which for many people they aren’t, make sure that you get a good financial director to support you. This isn’t someone who is your bookkeeper or who keeps track of your receipts. You will need somebody who can advise you on finances, ensure you have a buffer and watch that you don’t overspend and instead invest in the right things. 

In extreme circumstances, you will need to use your money wisely because it might be in short supply for a while; if you have reserves then you’re able to weather a storm much better than if you don’t have any at all.

4. Diversify products and/or markets

Essentially, don’t have all your eggs in one basket. That’s never a good idea in any aspect of your life – not just business.

While you might be a specialist in something, make sure that you can also do other things (or that you would know what you would branch into if you needed to change).

5. Involve your team

You don’t need to have all the ideas. Your team is often an untapped source of excellent ideas and solutions.

In terms of crisis management, ask your team to come up with suggestions of how you could minimise risk or potential negative effects to your business in extreme circumstances. Some of your team might have first-hand experience and be able to advise you on the best solutions to adopt.  

6. Run simulations

Running a simulation can often help you identify steps you would need to take to keep the business operating in an extreme event.

Sit with your team and pretend you have no internet. Pretend you have no electricity. What if your suppliers experienced a power cut? Acting out a problem can often be more powerful than thinking about one.

7. Always have a plan A, B and C

Having one solution might not always be enough. Having a plan B and C is sensible, especially when it comes to your suppliers.

For example, having a backup service for something like your IT support would be crucial if your business operates mostly through online systems and processes.

Now would be the best time to speak to two or three different suppliers so that you could find a team to help you in an emergency.

When the emergency isn’t immediate or impending, you have the luxury of time to find the best fit.

8. Get support

Getting support from a business coach or someone similar can help you remain accountable and on track. That’s because until these extreme events happen, they are not urgent, which means they are easily left to resolve later – and often when it’s too late. 

Also, the coach will be able to help you when the events do happen. They can keep you calm, give you clarity and help you take the next steps. 

9. Continue your personal development

As business owners and even employees, it is important that we keep on learning.

Go on courses, go to conventions and conferences and keep learning new things.

Knowledge can help us remain more flexible in terms of how we act and the solutions we adopt in extreme events.

10. Be part of a community

If you’re part of a community, whether that’s a business community or a personal community, then you have people who can help you if you need it. They might have first and second-hand stories and even recommendations about who you can approach for further support. 

Dealing successfully with extreme events isn’t something you can just wing. By actioning some of the above steps, you can minimise the drama your business would experience in an extreme event and ensure your business could continue to thrive despite any adversities that come your way.