Business interruption in Houston or anywhere for that matter, can refer to temporary closures or shutdowns caused by government mandates, supply chain issues, or a physical loss, damage, or destruction of items related to the business. While other activities might disrupt a business, such as pandemics and natural disasters, when it comes to insurance, those might not be covered.
The Cambridge Dictionary defines “business interruption” as “a period when a business cannot operate because of a storm, flood, or other event.” In other words, there is disruption or disturbance in the normal operations of a business. It could be an event that you anticipate or not. The term is usually used in conjunction with insurance policies, though that’s not always the case.
In any case, these interruptions have negative repercussions. They can slow down or stop customer service and other business processes, erode customer trust, and cause brand damage that might linger for a long, long time.
When faced with business interruption, there are certain things you can do to move forward.
Clean Up
In the event that your physical business location suffers any damage, for instance, after a natural disaster, then one of the first things you should do is clean up the area. The goal of this step is to determine if you can return to work in your building or business location, i.e., if it’s safe to do so.
You might have to hire other professionals to help you with the cleanup. For example, contractors will have the equipment and manpower necessary to remove fallen trees or remove debris.
Once the area has been sufficiently cleaned and you own the building, have engineers or the local government come and check what repairs need to be done to the building so that it is up to code. If you’re renting space in a building, the management company should inform you if and when it is safe to return to the building.
If the building isn’t safe, then you should transfer your business operations, at least temporarily, to an alternate location. You can lease a space, for instance. This step should already have been laid out in your business continuity plan. If it is, congratulations! It will save you on time and costs. If you don’t have a business continuity plan yet, then this is your sign to create one.
In this step, it’s helpful to have a list of all the things you need to check. This includes electricity, plumbing, machinery and equipment, computers, and internet service, among others.
You should also talk to your IT team or an IT vendor about the possibility of restoring computer systems and recovering work files and electronic documents. You might also need to get new computers to replace damaged units.
Activate Your Business Continuity Plan
Think of the business continuity plan as a playbook which outlines the instructions and procedures an organization must follow to prevent threats as well as to quickly resume business operations in the event of a disruption. The goal is to minimize downtime and get back to normal business operations as quickly as possible.
In essence, a business continuity plan should include the process of declaring an incident and implementing your recovery strategy. It should also detail your response team and how to activate them as well as your backup or alternative communication methods or channels. Most importantly, it should outline the steps necessary to reopen your businesses, restore customer accounts, and detail your customer service and marketing post-incident.
… Or, Use the OODA Loop
If you don’t have a business continuity plan yet, don’t fret. There is another way you can manage a business interruption: the OODA Loop. U.S. AirForce Col. John Boyd was the first one to use the OODA Loop. He used it to improve the performance of fighter jets during the Korean War.
OODA stands for observe, orient, decide, and act. To start the process, MIT Sloan senior lecturer John Carrier recommends assembling a team of four to eight people who will move through the OODA loop to ask and resolve select “what if” scenarios.
- Observe What has changed in the environment? The team should look into what’s happening within the business and outside the business. They should decide which leading indicators will be helpful, the technology necessary to get those indicators, and who to ask for information.
- Orient
What is the current state of the environment? Build situational awareness based on information from the Observation phase. Then shift your focus on the state of the equipment and facilities in your business as well as who in your business is using what technology.
- Decide
How can your business adjust in response to the new environment? This is where business leaders have to make the decisions in real time and within short time frames. Having technology that can deliver precise information to help make decision-making easier and smoother would be helpful.
- Act
What actions can your business take? Your business leaders have made the decision, and now it is time to act on them. You can research technology that can help you or look to other businesses doing what you’re planning to do for inspiration.
It’s All About Adaptation
Facing business interruption is all about adaptation. Even when you have a business continuity plan, some things might be far from what you’re expecting or preparing for. What will you do then?
In addition, the business environment is not static. It is always changing, and changes demand adjustment, flexibility, and agility—not optimization. Depending on the interruption your business is facing, you’ll have to adjust priorities and actions to meet the challenges and take advantage of opportunities that may arise.
“We’re not trying to optimize, we’re actually trying to adapt,” Carrier said. “Optimization actually leads to the static, unprepared organizations we have for our current crisis.”
For instance, when new technology is introduced, businesses would do well not to shun it immediately. Instead, with an open mind, business leaders should ask questions on how this new technology could help accelerate their growth or achieve their business objectives.