Are you prepared for the inevitable business disruption?
This week marks an ignominious anniversary. On August 13, 2003, a single outage in the electric grid cascaded across eight northeastern states, putting 55 million people in the dark for days, and thousands of businesses out of business. The Great Blackout of ’03 was a catastrophic reminder that we’re all one nosy squirrel in a transformer away from an instantaneous, put-you-out-of-business event.
Fifteen years later, the evidence isn’t in favor of less exposure for the next 15. Consider this report from CNBC: “The FBI warned Russian computer hackers had compromised hundreds of thousands of home and office routers.” And this one from the Department of Homeland Security: "Russian government cyber actors have been targeting U.S. critical infrastructure sectors, including energy, nuclear and commercial facilities, since at least March 2016."
In 2003, most businesses surveyed reported they weren’t unaware of a potential business disruption, but incredibly, they also admitted they weren’t prepared for one. Thankfully, that response is different these days, as one of our recent online polls indicated.
Compared to a similar poll we conducted five years ago, this year’s business interruption response is good news. The number of our respondents who’re as ready as is reasonable for the next interruption increased from 18% to 28%. And those who’re in good technological shape, and can handle a slightly extended disruption increased from 35% in 2013 to 47% today. And the ones who allowed that they can’t handle a disruption dropped by almost half from 2013, to 22% this year.
There are a number of reasons the new poll shows better business interruption preparedness.
First, almost every aspect of business today is done electronically, especially cloud-based resources. Consequently, it’s idiot-proof, fall-off-a-log easy to back up your data. In the event of a disruption, most businesses can move to another location and plug in there with less-than-catastrophic interruption. Of course, the options for retailers are more limited, but today, at least when customers return, resuming regular business processes needn’t be so painful.
Second, those small businesses that survived the Main Street economy’s lost decade (2007-2016), did so by doing two things: deleveraging – getting out of debt – and learning how to operate more efficiently, both of which produced stronger balance sheets and cash positions. Financial strength is the foundation of a business outage preparation strategy, which would include risk management resources like business interruption insurance, and sophisticated tools like power generators.
The primary advantage of wealth is the ability to afford options. When a business is financially strong, one advantage is they have the option of being better insulated from things that go bump in the night, like hurricanes, electric grid cascades and Russians.
Next week, in a companion piece to this one, I’ll remind you of another unfortunate anniversary, and offer suggestions on specific steps you can take to prepare for the inevitable business disruption in your future. Stay tuned.
Remember, as the CEO of your business, being surprised and unprepared for the next disruption with your name on it is unacceptable.
Write this on a rock … Operate for success – prepare for interruption survival.
Jim Blasingame is host of The Small Business Advocate Show and author of the new book, The 3rd Ingredient: The Journey of Analog Ethics into the World of Digital Fear and Greed.
