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Unrealistic scenarios? C’mon man!

By Geary Sikich.

Introduction

The next time you hear that one of your scenarios is unrealistic and that the events could not have occurred in the sequence that are being depicted you might direct your audience to the terrible events which have taken place in Japan. Imagine a scenario that contained an earthquake, followed by a tsunami, a nuclear accident, bird flu, snow and bad weather, panic buying of food, fuel and other necessities. Unreal? That is exactly what is happening in Japan right now; and why your key executives need to be a bigger part of the business continuity planning process.

Assessing and exercising your business’ resilience

Imagine that your plan has been implemented as it was designed in response to a scenario like the one unfolding in Japan. You and your organization would seek to carry out the plan following every detail that was contained in the planning documents. Would your plan succeed or would your plan fail?

Your challenge and that of your planning team is to assess the impact of a multi-scenario event; a worst, worst case so to speak. You must determine how much contrary evidence (information) will negate the theory that the plan you developed will succeed if you implement the steps required to respond to a disruption of your business operations.

A key goal that you should consider incorporating in your exercise methodology is to break all emotional attachments to the plan’s success. When we create a plan we become emotionally attached to its success. By showing the likely sources of breakdown that will impede and/or negate the plan (failure), we utilize a methodology that allows us to conduct a validation of the plan by determining the potential failure points that are not readily apparent in typical exercise processes.

Developing ‘decision scenarios’ allow us to describe forces that are operating to enable the use of judgment. Based on the failure point methodology, we can identify, define and assess the dependencies and assumptions that were made in developing the plan. This methodology facilitates a non-biased and critical analysis of the plan that allows planners and the business continuity team (personnel assigned to carry out the plan) to better understand the limitations that they may face when implementing the plan in a response to an actual event.

The figure below identifies many areas that are not commonly exercised in typical business continuity simulations.

Figure one

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Ask yourself, “How often do we identify the issues that arise as we move to solve the problem presented in the simulation?” Most will honestly answer that this is not how simulations are run. In fact that is a key point as to why plans fail. We fail to identify the issues that will create the crises and instead focus solely on the solution to the immediate problem. Think of how much preparation the Japanese have put into earthquake preparedness. Now, think of all the lessons learned by virtue of having to address multiple scenarios that, at the time of writing, are still unfolding.

Planning – degrees of flexibility based on uncertainty

Developing plans and simulations should be predicated on coherence, completeness, plausibility and consistency. Too complicated, you say? Complex systems are not incomprehensible. If complexity where unmanageable and chaos reigned, we would have no Internet, functioning infrastructure systems, global trade or financial markets.

In his recent book, ‘The Age of the Unthinkable,’ Joshua Ramo cites studies done by Per Bak on ‘organized instability.’ Bak’s idea had to do with things that appear simple on the surface but, in fact, contain many layers of complexity. You might think of modern business as a good example of layered complexity. Bak used sandpiles to study, what eventually he called, organized instability. Bak explained, “Complex behavior in nature reflects the tendency of large systems to evolve into a poised ‘critical’ state, way out of balance, where minor disturbances may lead to events, called avalanches, of all sizes.”

We need to recognize that our current planning and exercise paradigm is like a sandpile: complex and poised for an avalanche. It is therefore necessary to rethink catastrophic event planning in great detail. Trigger points that could create reasons for plans to fail must be identified. This goes beyond the typical business impact analysis (BIA), SWOT (strengths, weaknesses, opportunities and threats) analysis; we must allow for maximizing the creativity of the business continuity team in identifying vulnerabilities and potential plan failure points.

The figure below depicts a new paradigm for the business continuity management cycle.

Figure two

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Enter the age of nonlinear planning

Nonlinear thinking is needed in order to develop truly resilient plans and capabilities. The business landscape is changing due to the emergence and spread of digital technology. We have greater access to knowledge, capital and talent due to the emergence and spread of digital technology. This has led to performance improvements and ever greater planning challenges. Linear thinking can be defined as:

“a process of thought following known cycles or step-by-step progression where a response to a step must be elicited before another step is taken.”

Nonlinear thinking can be thought of as:

“Thinking characterized by expansion in multiple directions, rather than in one direction; based on the premise that there are many points from which one can apply logic to problem.”

Non-linear thinking is less constrictive – letting your creative side run rampant. Think in terms of ‘fractals’ with their inherent lack of structure. A non-linear planning process increases possible outcomes by not being locked into established outcomes (i.e., problem – solution). While some performance degradation may take place during the transition process, most organizations can quickly configure to take positive steps to improve performance.

Summary points

I will offer the following summary points:

* Clearly defined rules for the world do not exist, therefore computing future risks can only be accomplished if one knows future uncertainty;

* Business continuity planners need to expand their horizons to effectively identify and monitor potential threats, hazards, risks, vulnerabilities, contingencies and their consequences;

* The biggest single threat to business is staying with a previously successful business model too long and not being able to adapt to the fluidity of the situation;

* Current planning techniques are asking the wrong questions precisely; and we are getting the wrong answers precisely; the result is the creation of false positives;

* Complex systems are not incomprehensible;

* This requires that you create an intelligence mosaic that can be viewed and evaluated by various disciplines within the organization in order to create a product that is meaningful to the entire organization, not just specific disciplines with limited or narrow value;

* The resulting convergence assessment allows the organization to categorize with greater clarity allowing decision makers to consider multiple factors with potential for convergence in the overall decision making process;

* Mitigation (addressing) does not necessarily mean that the problem/issue is gone; it means that it is assessed, quantified, valued, transformed (what does it mean to the organization) and constantly monitored.

Unpredictability is fast becoming our new normal. Addressing unpredictability requires that we change how planning programs operate. Rigid plans that lock us into courses of action that cannot be changed without gutting the plans need to be put in the historical dust bin. Assumptions on the other hand, depend on situational analysis and the ongoing tweaking via assessment of new information. An assumption can be changed and adjusted as new information becomes available. Assumptions are flexible and less damaging to the reputation of the organization.

Recognize too, that unpredictability can be positive or negative. For example; our increasing rate of knowledge creates increased unpredictability due to the speed at which knowledge can create change.

Conclusion

The degree of risk is based on the perception of the person regarding their vulnerability to the consequences of the risk that is being posited materializing. Risk is, therefore, never absolute. Risk is set by the receiver of the consequences.

About the author

Geary Sikich
Entrepreneur, consultant, author and business lecturer
Contact information:
E-mail: G.Sikich@att.net or gsikich@logicalmanagement.com
Telephone: (219) 922-7718

Geary Sikich is a principal with Logical Management Systems, Corp., a consulting and executive education firm with a focus on enterprise risk management and issues analysis. www.logicalmanagement.com

Reader comment

My experience of planning for and managing hundreds of crisis events confirms the logic of developing flexible, practiced teams and process to cope with the unexpected.  Within that regime you still need some action cards and drills for safety critical operations that have to be carried out sequentially but we must not forget that "the deliverable" is intangible - it ain't the paperwork...
Bradley Wright

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•Date: 18th March 2011 • Region: US/World •Type: Article •Topic: BC general

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