In recent years, professionals across all industries have learned the importance of preparing for the unexpected. How can you plan for something that may or may not happen? That’s where contingency planning comes in. Floro Business Strategies explains this process and its purpose:
What is Contingency Planning?
A contingency plan is a prepared course of action that allows organizations to respond effectively during a crisis or significant unprecedented event.
Contingency planning is proactive, as it considers the “what ifs”. A contingency plan isn’t just a “plan b”, as there are often many possible outcomes and responses. When something arises that disrupts normal operations, contingency planning allows you to adapt with ease.
Failing to respond effectively when sudden change arises can result in downtime and revenue loss. However, when you have a contingency plan, you’re not acting impulsively to find solutions. All you have to do is assess the situation and implement your plan!
Step 1: Analyze Your Day-to-Day Processes/Resources
When you reflect on your organizational vision, what processes or resources are essential in your day-to-day operations? If compromised, what losses would prevent you from meeting your productivity goals? These processes/resources may include supply chain relationships, AI and automation, employees, etc.
Identifying the items that are most valuable to productivity and operations is key in mitigating risk.
Step 2: Identify Your Risks
To mitigate risk, you must first identify what events threaten your day-to-day operations. What events would result in downtime or revenue loss? What events would prevent you from reaching your goals? This may include market shifts, economic declines, supply chain shortages, pandemics, etc.
Step 3: Analyze the Risks
Before creating a contingency plan, you must first understand each individual risk. Ask yourself these questions:
- Who/what does this risk affect?
- How severe is the impact?
- How likely is the risk to occur?
- What are some preventative measures we can take now to mitigate risk?
- How will each department respond when/if this threat arises?
Step 4: Create a Plan
Now that you have a greater understanding of the risks and how they might impact your team, it’s time to create a plan! Not sure where to begin? The professionals at Floro Business Strategies are ready to assist! We specialize in strategic planning and work with professionals to achieve their long-term goals. Interested in learning more? Contact us today!