In the face of nature: comprehensive recovery strategies enable organizations to respond more quickly and cohesively following a disaster.

Author:Walch, Damian
Position:Eye on Business

When considering natural disasters, what are the biggest risks to organizations?



KASTENSCHMIDT Unlike events that impact only the organization, natural disasters can affect an entire local area or even a region. As a result, natural disasters have the potential to impact a large portion of the organization's staff, making them unavailable to participate in the recovery effort. Such events also often impact the organization's vendors, business partners, customers, etc.--all of which are factors that may significantly increase the impact of a business disruption event and the nature of the required response.

WALCH Generally speaking, the biggest natural disaster risks in the U.S. are tornadoes, hurricanes, and floods. While the U.S. hasn't seen a significant earthquake in many years, Ecuador, Italy, and Taiwan all experienced catastrophic earthquakes resulting in major loss of life and business disruptions with global impact. No matter the form of the natural disaster, they all pose possible major disruption to employee health, safety, and housing--not to mention disruption to business partners and supply chain participants.

What are the greatest risks to organizations of prolonged downtime?

WALCH Disruption of normal operations due to prolonged downtime can slow communications, ultimately resulting in brand and reputation damage that leads to customer loss, C-suite and board involvement, negative media coverage, and shareholder value loss.

KASTENSCHMIDT Being unable to adequately recover key systems and business functions timely can expose an organization to any number of unacceptable consequences. Beyond the more immediate impacts the organization may incur during downtime, such as lost revenue and additional expenses, one of the more serious long-term concerns is the potential erosion of hard-earned market share. After working for years or even decades to develop a solid market share, an organization can see it erode quickly if it is not able to meet the needs of its customers following a disaster. To keep their own businesses operational, even the most loyal customers may turn to a competitor to obtain required products or services--and once they've departed, they may never return.

What types of staff protections should be in place?

KASTENSCHMIDT A comprehensive recovery plan must consider situations that substantially limit the availability of the organization's staff. To mitigate the risk...

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