Why business continuity often fails - Matthes Derdack

Business continuity often fails. The reasons are manifold. If no business continuity plan exists, any response to emergency situations depends on the capabilities and action of solitary individuals. In particular in large-scale events this does not work. But even if business continuity plans exist, they not necessarily work well as they might be outdated, poorly drilled and exercised or even badly designed. Overall, business continuity plans often deal with predictable events and situations only.
However, in particular rare events are not predictable. The reason is described in the concept of the ?black swan event? developed by Nassim Taleb in his book. ?Black swan events? are highly improbable, that is why their impact is heavily underestimated. This is due to our human way of thinking - leading to a wrong correlation between probability and impact. Rare events are associated with small impact.
And then there is this serious and often mistaking issue?relating to?probability and random occurrence . Think of a tossing a coin. The probability?for head and tail is the same, i.e. 50%. But only over a long?series of tosses.?When you?get head the chance for?tail (the next individual outcome)?with your next toss is?still 50%, not higher! So, imagine your business has been running without a major incident for 50 years. That can mean that your business will be able to avoid disastrous incidents for the next 50 years. But, it can also mean that disaster strikes the very next day. The probability of the two potential ?futures? is essentially the same. Additionally, the ?Black Swan? theory suggests that you won?t even know what will be the cause of a potential disaster. It will just strike. So, preparation for any potential causes is impossible for black swan events. If you'd would know about the character and causes of such event, it wouldn't be a black swan event.

Unfortunately, rare (and because they are rare) ?black swan? events are the worst and often result in disaster. Prominent examples include the Deepwater Horizon Oilspill in 2010, the Fukushima nuclear power plant disaster in 2011 or the sinking of the ?Costa Concordia? cruise ship in 2012. One of the characteristics of?serious and dramatic?incidents is their non-linear development, so even a small malfunction can end up in an emergency situation or even in?disaster.

Failing business continuity often starts with poor communication. Notification of critical incidents might be too slow or ineffective or reaches the wrong people. Involvement of C-level executives happens too late to benefit from their access and command over resources to successfully prevent an evolving disaster. So, communicating the right information to the right people at the right time is essential in dealing with threats to business continuity and as well in disaster recovery.

This has also been one lesson from the Hurricane Sandy: "More than power, communication was the issue", said Nicolas Dubus, IT director for Florida-based eTailer CableOrganizer.com, according to CIO magazine.

More thoughts on the business continuity and?communication?in my next blog article...

Source: http://blog.derdack.com/2012/11/why-business-continuity-often-fails.html

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