Survival of your business should be of paramount importance, so why do so few invest in Business Continuity?
Humans are inherent risk takers. They are also optimists on the whole. It’s therefore not surprising that business owners fail to take planning for Business Continuity seriously.
I was listening to The Today programme on BBC Radio Four this morning, and they were discussing the flooding in Queensland. In particular, they were asking why, when there had been so many warnings, there were still images of people having to be rescued from the roofs of their houses.
As part of the item they were talking to the Professor for the Assessment of Risk from Cambridge University. He was explaining how difficult it is for people to get a real feel for risk if they haven’t actually experienced the effects of the risk themselves. He admitted that even he had difficulty visualising what the ” 1 in 200 annual risk” that his own house house would flood actually meant because it had never flooded in the ten years he had lived in it.
This brought to mind the difficulty one has trying to convince business owners to take the matter of business continuity seriously. Unless they have experienced the effects that a major disruption can have: physical, financial, emotional and psychological; either personally or via a close third party, it can be very difficult to have a real feel for how serious business disruption really can be.
Being on the other side of the fence, i.e. a consultant who has worked with businesses that have experienced failures, I have seen these effects; and they can be profound. We tend to focus on the business impact: financial, reputational and regulatory; but we should never ignore the more subtle personal impacts that result.
In smaller business particularly, where owners have a large percentage of their total equity invested in the business, the impact of even a minor disruption can be severe.
I don’t know how to solve this issue or get around it. After all, doctors see the effects of dangerous behaviours like smoking and excessive drinking; and yet some of them still smoke and drink to excess. So, there is obviously something in the human psyche that encourages a disregard for risk.
What do you think?
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