18 December 2006

Scenario Vs. Resource Planning: All Hazards...

This article by Saul Midler on Scenario Planning Vs. Resource Planning recently caught our eye and for a good reason. The link between Corporate Risk Management and Operational Risk Management is Business Continuity Management. Brilliant!

More importantly as he indicates:

The danger of undertaking an operational risk assessment before the BIA / RDA activity is that a business case may be built to remediate the biggest operational risk without realising that impact or the consequence is low. This is essentially defining a solution before identifying a problem.

Think about 9/11 where 320 companies FAILED to return to business, 2800 workers DIED and 135,000 workers lost their jobs. By contrast a number of organizations did recover and continued operations. These include:

• Cantor Fitzgerald who lost 658 staff and resumed operations two days later;
• Marsh & McLennan with 3,200 staff over 8 floors;
• Morgan Stanley with 3,500 staff over 17 floors;
• NY Port Authority with 2,000 staff over 23 floors.

New school thinking saved these organizations. No one could possibly have thought of the scenario that two airplanes could cause structural integrity failure of both World Trade Centre skyscrapers resulting in the collapse and complete destruction of the precinct. The businesses that did survive did so because they adopted a resource loss philosophy that included office facilities, technology systems and, of course, staff.

While the scenario of airplanes being used as weapons of mass destruction is not a new concept for planning purposes, (in fact it was hypothesized long before 9/11) the fact is that organizations today have adopted an "All-Hazards" mind set. As a result of the new worldview, "Business Continuity Management" as previously mentioned, has provided a much needed conduit between Corporate Risk and Ops Risk.

What does this "All-Hazards" mentality mean for the cure to unplanned disruptions or untested scenarios? It means that you move to the proactive side of the line and away from the reactive mode that so many organizations are still coping with. The old "It will never happen" to us syndrome.

December 9th, 2006 - WASHINGTON, D.C. – Early this morning, the House approved S. 3678, the Pandemic and All-Hazards Preparedness Act authored by Senator Richard Burr. The Senate passed the bill on Tuesday. The bill will go to the President’s desk to be signed into law.

“Senator Kennedy, many of my Senate colleagues, and I have worked together for almost two years to pass this legislation. I am so pleased the House agreed to pass it before Congress adjourned and I look forward to the President signing it into law,” said Senator Burr.

“This bill will help improve our preparedness and response to emergencies and disasters be they a terrorist attack, or caused by Mother Nature,” Burr said. “It will also help improve our ability to create new drugs and vaccines to fight against emergencies like a flu pandemic.”

The ‘‘Pandemic and All-Hazards Preparedness Act’’ (S.3678) creates an additional incentive for an "All-Hazards" approach to mitigating the risks to your enterprise.

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