Huw Hilditch-Roberts, director in charge of the Institute of Consulting and CMI, said: "The recent, unexpected and shocking riots, which caught the Government and police off guard, is a stark reminder to businesses of the importance of contingency planning. If a business fails to plan - it plans to fail - we all know this, and history has proved that if plans are in place, business damage is minimised and recovery is faster in the event of a crisis."
According to the CMI's 2011 business continuity management research, 84% of organisations who had contingency plan in place and needed to activate them in the last year, found that business disruption was reduced and they recovered faster.
However, even though 82% of managers viewed contingency planning as important or very important, fewer than half of businesses (49%) are prepared for unexpected threats. Worryingly, UK businesses are leaving themselves open to risk and are highly vulnerable in their failure to plan.
Effective contingency planning requires careful preparation, investment and resources. It involves brainstorming worst case scenarios and planning for every possible eventuality. Processes, responsibilities and communication plans need to be put in place as part the planning so when disaster strikes, the wheels can be set in motion immediately, with everyone within an organiSation confident about the role they will play.
To ensure contingency planning works, effective leadership is critical. As recent events also showed senior managers need to be empowered to make tough decisions if a leader is absent when a crisis occurs. This doesn't happen without planning either.
Businesses must invest in cultivating leaders and ensure any appointed 'deputies' have the training, support and authority they need to act on their leader's behalf.
Hilditch-Roberts stresses also the importance, of clear, tested, well-communicated plans being put in place before these deputies are expected to step up. This protects the organisation and the individuals involved. A deputy's decision will only be as good as the information and guidance he or she is given to base it on.
The CMI's business continuity report also showed that a worrying 16% of managers don't know whether or not their company has set crisis plans in place that they should be following. And, a quarter of organisations with crisis plans in place haven't actually tested them, running the risk that the plans might not work when they are most needed.
Things need to change if businesses want to reduce their risks and be ready for a crisis. There is little doubt that contingency planning can be complex. Often, an independent perspective is needed by companies and we are seeing a growing number of businesses calling on the skills of independent consultants to help them - both in terms of brainstorming potential crisis situations and putting in place strategic plans that will help a business immediately and in the medium to long term.
