Four Business Risks That Could Take Down Your Organization
- Feb 14, 2019
Are you prepared for business risks to strike? Are you prepared for any potential threat?
When you meet Vicky McKim you start to second-guess your preparedness. She’s the director of risk management and business resilience at Arion. For many years, she’s seen firsthand the wild, unthinkable happen to companies who’d thought they had their continuity plan under control (even her own).
That’s why she’s an advocate for environmental risk assessments. It’s more than just insurance, she says. Having insurance is one small component of it. While most businesses will take care to look at their financial and market risk, very few will consider operational risk. In other words, events that can put them temporarily, or permanently, out of business.
Four Business Risk Areas To Check
Vicky says environmental risks are the most overlooked, yet these are the events that will most often take a business down. Environmental assessments go beyond thinking about natural threats; it’s about looking in every direction for what potentially could cause harm.
Once you identify what all of your threats are, you rate them for the probability and potential impact and then you evaluate your vulnerability to those things. Think, what could that event do to the particular building I’m in? That allows you to hone in and mitigate your exposure to those elements.
Naturally, in her line of work, Vicky has seen countless unidentified threats turn into big disruptions later. Here are a few examples that are often overlooked:
1. A New Development Area
Maybe your building is complete but they’re still developing things around you. When you’re in this kind of environment, the whole development is technically still being dug up. Contractors are still building out things like basements and putting in conduits for water, electrical, etc.
This could mean your electrical conditions are unstable, which cause outages. Or have you asked about the chemical usage in the still-under-construction building? Vicky had one building claim to be a “green” building but then found out they were using sulfuric acid to clean pipes. The acid ate through the pipes, the concrete, even the floors, which caused their business to be down for a day.
2. Your Neighbors
Neighbors are great, but never underestimate their power to disrupt your business (unintentionally, of course). It’s important to think about who the other tenants are in your building and how they can possibly affect your operations.
Maybe they’re an organization that regularly receives bomb threats due to the nature of their work. Sounds dramatic, but these are situations that can disrupt the environment of your work and take you down.
How long have they been around? A historical building across the street from one of Vicky’s data centers caught fire while it was under renovation. Not only did it take the city days to finally put the fire out, but it damaged some of the buildings next to it and, across the street, fallen debris fell on their rubber roof which caused it to almost catch fire.
And don’t just look at your current neighbors, consider the old ones as well. Vicky recounts living in a community of former coal miners. After 50-60 years of inactive use, they began to collapse.
3. The Natural Things
Even if you’re not in the most vulnerable areas, are you close enough that you could be impacted if it was active?
We have plenty of weather safety packages that we offer to business continuity professionals to help you mitigate the “natural things” Vicki talks about. Learn more about our business continuity solutions to see if they’re a fit for your organization.
4. Major Transportation Routes
Vicky’s husband worked in a facility right off an interstate. One morning, during a high- speed chase, a car flew off the interstate and crashed into a new edition of their building. An edition that had been built just three months prior. These are things people don’t think about because they seems drastic, but she’s seen these incidents time and time again.
Business Risks & Their Impacts
When businesses are down, it affects more than just the business itself. It impacts every single family of every single employee who works there. Being out of business for a week, or two weeks, or a month because you’re trying to get your facility back up and running affects the lives of every single employee you have.
So how should you think about risk assessment? Low probability that could have high risk/high impact. What has a low probability of occurring, but if it did occur, would have a devastating impact on your business?
People fail to realize the benefits of making small investments in risk assessment. When you’re making renovations or changes to your environment, assess these risks so that you can position yourself to garner market share after an event when no one else is prepared for it.
It’s really hard to convince executives that they want to do something about these risks. But our society today is so vulnerable to these things simply because we rely on technology so much. If technology is disrupted or our infrastructure broken, people don’t know how to survive like they did even 50 years ago.
Don’t wait until the unthinkable happens, do that environmental risk assessment because business never stops… and neither do business risks.
You can listen to the full episode of the Business Continuity Forecast on iTunes or your preferred podcast player.