Create Disaster Plan

Access your KPIs online;
Measure your success;

Navigation: All Balanced Scorecard Articles > Creating Best KPI

Every company must be ready to face difficulties and challenges. Sometimes, such difficulties turn into real disasters. Creation of a disaster plan can certainly help companies minimize effects of problems and difficulties. Check additional information about create disaster plan.

It is impossible to run a modern business without facing difficulties. Even the most successful companies face problems from time to time. Some of these problems can be easily solved on a department level while others rather concern the entire industry or market place. Yes, it is impossible to avoid all the problems, however, it is possible to forecast them. Crisis management has become an inseparable part of any management system in midsized and large companies. It may happen that a small problem turns into a real disaster that can jeopardize the entire company well being. Crisis management is all about prediction problems and solving them even before they occur. It should be said that no one is capable of making 100% accurate predictions. At the same time if company top management is involved in modeling of situations and developing response actions to certain changes in the external environment, such a company has many chances to survive or even strengthen its positions in the market. In this article we'll talk about development of crisis plans.

Crisis plan development starts with formation of a special team that will be in charge of development and implementation of such a plan. As a rule these teams consist of company employees and invite its external advisors. Keep in mind that although external consultants possess much experience in crisis management, they may be totally unaware of company structure, problems and goals. Thus, there crisis management knowledge may be useless unless supported by knowledge of company insiders. If a crisis plan is developed for the entire company, chairmen of departments, top managers and external consultants are to be involved.

The second stage is about locating problems. There are two kinds of problems and challenges that a company may face: real and potential. A real problem is the kind of problem which effects are felt at a present moment. Potential problems are problems that may occur in future due to various reasons and factors.

Once all the problems are located it is time to model company behavior. For example, if customer demand decreases by 15%, how would that impact the company? What if national currency becomes cheaper? How would a company react to changes in the national monetary policy? What if a new rival company enters the market? These are potential problems. As to the real problems a comprehensive crisis management plan is required.

As a rule, crisis management involves lots of changes in the organization structure of a business, its approaches to personnel management and customer relations etc. Thus, the company should be ready to change and be able to respond to challenges. Even the best crisis management plan will fail if no response actions are prepared. It will remain on paper and thus will be useless. The team in charge of crisis plan development must clearly understand what needs to be done to overcome crisis and how crisis measures are to be taken. Big companies should definitely consider use of specialized software and managerial tools that will facilitate the entire process.

If you are interested in create disaster plan, check this link to find out more about create disaster plan. Also, you can check other articles in Creating Best KPI category.

Balanced Scorecard Toolkit includes step-by-step manuals, documents, presentations, check lists designed to help business professionals with successful development and implementation of Balanced Scorecard. Learn more about BSC Toolkit.