Business continuity: helping firms stand out from the crowd

Using the example of the legal industry, Peter Joyce explains how business continuity can help differentiate companies in crowded sectors.

Ensuring business continuity plans are in place for responding to a crisis is not only good corporate governance — it also provides valuable differential in a busy marketplace.

The legal services industry, as with many other long-established industries, is justifiably proud of its traditional values and strong cultures.

One culture which has yet to take hold within the industry relates to overall support for corporate governance. And while some firms are now starting to address the issue, there remains a certain air of mystique around what is still a relatively new concept.

Millions of pounds are spent annually supporting corporate governance initiatives by legal firms. But does this represent money well-spent, or is it simply window dressing for what is felt to be required by those who do not know any better?

This is a battle that continues to be joined by firms of all sizes. Victory carries with it the prize of market leadership through differentiation.

Nevertheless, as the world of commerce demands ever higher levels of service and quality, it must be asked whether an established brand name alone is a sufficient differential to make a firm stand out from the crowd. After all, in today’s competitive environment a brand can become irrevocably damaged in minutes — as some companies are only too aware.

Those firms at the top — in the UK it is London’s ‘magic circle’ — continue to lead the evolution of the industry. However, the so-called ‘wind tunnel’ effect, first identified within the car industry, is now starting to affect these august legal institutions: the entire industry is morphing, slowly but surely, into a standard look and feel.

Standard practice
An example is the standardisation of the meet and greet process, which begins with a "good morning" from security as you enter the building, passing by designer seats and over the marble floors. A smile greets you at reception before you are processed, given your badge and lead to the conference rooms with their complimentary sweets, biscuits, soft drinks, tea and coffee. All of this is smoothly executed and has been developed to a high standard at many firms.

But this is not enough if you want to win the war on differentiation. Any new presentational idea that is developed is soon emulated by competitors — albeit in different colour schemes, styles or materials.

Therefore it is key for each firm, large or small, within the legal industry to ask whether it has done its best to differentiate its business.

Analysis across the industry shows some age-old customs have become so embedded that they act as barriers to improvements in the area of strategic differentiation. Yet these are areas which, if well managed, could not only improve the core ‘value chain’ of an organisation, but also give that organisation many more ways to differentiate itself from industry rivals.

The answer lies in corporate governance. This is a term as yet not clearly defined or understood within many industries and services. As a consequence, the concept is treated with caution.

However, corporate governance could well turn out to be the benchmark by which clients and potential clients evaluate a firm. It can — and will — make all the difference when pitching against the rival firm that happens to offer a scalp massage during meetings.

Many companies look at the need for corporate governance as a limitation or constraining requirement and focus solely on fashionable areas for consideration, such as compliance with the Sarbanes-Oxley Act and Basel II within finance departments.

Within this umbrella concept of corporate governance, there are many desirable benefits to be enjoyed by any organisation. It is not just a question of doing the minimum possible to tick the relevant box; rather, it is the positive action of making processes and supporting procedures work for you — and, as a consequence, enhancing your core values and infrastructure.

One area of focus that has arguably not been addressed in sufficient detail, and with enough strategic thought, is business continuity.

Protecting your business and enhancing your ability to recover it in the event of some calamity must therefore come close to the top of the ‘to do’ list for any senior executive. There are two specific reasons for this.

Considering all aspects
The first is that business continuity requires that you take both a functional view and a view of the organisation as a whole. The assessment of risks, formulating procedures, documenting processes, testing and post-test analysis ensures you plan to protect all aspects of the business rather than just a specific area.

Although adherence to health and safety or finance regulations, quality standards and environmental considerations is very important, these are usually driven by legislation and only address specific sections of the business. Even though business continuity itself is not compulsory for the vast majority of companies, bringing all of an organisation’s separate functions together, in some cases across regions and nations, enables the organisation to examine everything of value and everything essential to the resumption of business as a whole.

Therefore, the preparation of a business continuity plan should be seen to offer the highest level of protection. Unfortunately, due to a lack of awareness, investment is usually focused on legislative compliance only.

Unique selling points
The second reason that business continuity should be a high priority for all firms is that successfully competing in today’s environment requires a strong differential from rivals — and the value of a business continuity plan becomes very clear when pitching for new business.

Winning new business thanks to having considered governance issues that your competitors have not provides a return that makes investment in such initiatives worthwhile.

Having such a plan in place means you can illustrate to clients how you would be able to recover your operation within just a few hours if, during a multi-million pound deal, you were to lose your capability to operate from your existing location. When you are confident of this, it is then easy to ask the prospect to consider if your competitors have the same capability. If not, you now know you have a new unique selling point.

However, an established culture can be slow to adapt. Factors impeding change can include: a lack of legislative requirement or industry regulation; a lack of support from senior management; a lack of capital investment; apathy from the business as a whole; or a lack of ownership. Yet if companies are to continue their historic success and maintain their core competencies, they need to look to the new experts in this field to deliver a solution to the problem quickly and cost-effectively. The deliverable should not just be a quick fix that ultimately creates more problems than you had to begin with.

A total solution, which meets your exact requirements and demonstrates differentiation, is what is required to ensure results are delivered immediately before your business becomes just part of the herd.

Peter Joyce is founder and managing director of NonVerba, a corporate governance consultancy company. pjoyce@nonverba.com

•Date: 7th October 2005 •Region: UK/World •Type: Article •Topic: BC general
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