Monday, 16 December 2013

Supply Chain Resilience

“No man is an island”, wrote the 16/17th century English poet John Donne and the same can be said for organisations and nations today. In the world that John Donne inhabited change of significance yet to be appreciated was on its way as nations strove to discover new oceans, lands and trade routes in an attempt to capitalise on their commercial value, including discovering routes to the lucrative spice markets. This struggle pitted established giants, such as Spain and Portugal, against each other but interestingly allowed others, such as the relatively insignificant English, the chance to exploit the weaknesses and misfortunes of the larger nations. Nations that failed to do so or experienced loss in their trading networks became insignificant or were swallowed up.

Ever since then the dependence of nations, societies and people on trading networks has deepened. In the modern era no business survives in isolation and success is often more about how you do things, through those trading networks, than it may be about what you provide. However in other ways, just like 16/17Th century nations, modern businesses are vulnerable to disruptions to those trading relationships. It may no longer come in the form of buccaneers or gentlemen pirates but, as we have seen recently, age long risks to business and commerce such as volcanoes and tsunamis remain with us. Add to those the modern threats from cyber attacks, power outages or fuel shortages and it may be said we in the 21st century have as a result more to concern ourselves with. Recently the Business Continuity Institute published its 5th report into supply chain vulnerability.  Read these findings from that report and consider how they apply to you:

  • 75% do not know what their supply chain looks like yet the same amount experienced a disruption in the previous year.
  • 42% of disruptions in the supply chain occur in your supplier’s supplier yet they impact you.
  • 15% had a disruption that cost over €1M.
  • Of those suffering a disruption 41% had customer complaints and 55% lost productivity.
  • Roughly a quarter of those experience disruption felt it negatively impacted upon reputation and caused shareholder concerns.
  • Major risks reported included severe weather, earthquake/tsunami, fire, currency volatility, terrorism, illness, animal disease, financial pressures, IPR violation, data breach, cyber attack and telephone outage.

Before you run off to build strategies for supply chain resilience you firstly need to appreciate the nature of the problem. If you don’t know what your key services and products are and if you have no idea on the supply chain that enables their delivery then you can’t focus your efforts on where you may be most vulnerable. So use a Business Impact Analysis to inform the selection of the critical supply chain paths as a starting point. Don’t forget to engage with your suppliers as part of the solution. That may be through agreed SLAs or simply by educating them as to your needs/expectations. In those cases where this can’t happen or does not remove the risks then look at alternative plans for gaining access to the goods and services you require. This may require additional or alternative sources to be identified and it may come at a costs. When assessing this make sure you consider the cost of suffering a disruption.

Tuesday, 26 November 2013

Decisions, Decisions, Decisions!

We’ve been talking on our blog recently about supporting crisis decision making through information management, and attempting to speed up the OODA Loop. On the last post we highlighted the principles of managing decisions and making sure they achieve what you intended them to. This post looks at how to actually take those crisis decisions in the first instance. It is useful to have a decision-making system that is thorough enough to be effective but not so laborious as to induce delay. We also need a process that allows for intuition and experience to play a part but doesn’t allow for sloppy analysis.  The next seven questions are just such a process.

(1) What is the situation and what does it mean to you? - Understand as much about the situation as you can. Don’t ignore aspects just because the information isn’t there or you don’t understand it. Identify your critical information requirements and get them resolved. Once you have a grip on what is actually going on be clear on the meaning for you, your staff and your clients and any other interested parties.

(2) What end state result do I need to achieve and why? Define the end state that you need to reach and why that is the case, that is the unifying purpose behind what you are doing. This will inform and focus the decisions you take. Make sure others are clear on this end state and its rationale, as this will inform their decisions as well.

(3) What effects need to take place to get to the end state? Define the key effects that need to be achieved to deliver the end state. Effects are not tasks but rather the results of tasks. Examples of effects might include enhanced staff confidence, client reassurance or favourable reporting by the media.

(4) How can the effects best be achieved? Decide how the effects can best be achieved and when and where this should take place. This will help you set down the tasks that are required to deliver the effects.

(5) What resources are required? Take a look at the tasks you have defined. See if they can be combined in some fashion and then decide who is best to undertake each task. Allocate sufficient resources to enable the tasks to be carried out.

(6) In what sequence do the tasks need to occur? Set down the sequence that the tasks need to be carried out in to achieve the desired effects. The sequencing of these tasks is effectively the plan.

(7) How are the tasks to be controlled? Put in place the measures that will enable the conduct of the tasks to be monitored and controlled. This may include aspects such as timings for completion, reporting processes, demarcated lines of responsibility, geographical boundaries etc.

Sunday, 13 October 2013

Crisis Decision Making- Top 5 Tips

In previous posts we examined information management and operating a fast OODA Loop. This post looks at some tools to help crisis decision-making. Here are five things to consider.

1. Key Questions: Have a system to guide your decision making that analyses the situation and allows you to use your experience and intuition. Think about the questions you need to ask and write them down in advance. They should help you (1) understand what is going on and the implications of that, (2) appreciate what needs to be done and why, (3) be clear on where your priority lies and (4) identify, resource and co-ordinate tasks. Practice this technique to make its use second nature - rehearse, rehearse, rehearse!

2. Get Your Intention Across: Remember those completing a task may encounter unforeseen problems. Be clear about what needs done (the task) and why (the intent - unifying the purpose of many tasks).  Understanding the intent affords your teams the freedom to adapt the task if they encounter a difficulty and still achieve the intent.

3. Achieving a Focus: There will be lots going on so, to avoid dissipation of effort, make it clear where the focus lies. Define what is critical for success and make sure everyone knows and is working towards that. It can help to define the end state - what will success look like?

4. Using Resources: Resources are scarce so use them wisely. Allocate resources to those tasks that support your focus. Others will have to wait. Remember that not everything will go to plan, so have spare capacity.

5. Using Time Effectively: The one resource that can’t be regenerated is time. If you have to take decisions then think about those who will have to implement them. Leave them the time to do that. Work out how much time is available between starting the decision process and the resulting actions needing to take place. Then use 1/3rd of that time to take the decision and leave 2/3rds for everyone else to actual carry out the tasks the decisions generate.

Our next item will be focusing on a handy tool when it comes to decision making that allows you to combine thoroughness whilst not sacrificing experience, gut feel and intuition so keep watching and following. To avoid missing out why not simply opt to follow our blog by submitting your email address. You will get each post emailed to you as they are posted.

Thursday, 12 September 2013

Managing Information and Actions in a Crisis

In an earlier post we talked about the need to manage the process by which crisis decisions are taken and talked about the OODA Loop (read Decision Making or Analysis Paralysis).  In this post we going to present some concepts around how to speed up the OODA Loop. If you can get your decision making processes to happen faster than the crisis is unfolding then your decisions stand to be more effective. On top of that, making a larger number of quicker decisions, each one correcting the errors of the previous one, is likely to help you reach an optimum solution faster than if you wait for total clarity. So what to do?

CRIP: Establish and maintain a full understanding of the situation. This is sometimes referred to as the Common Recognised Information Picture. It is built up of all available validated information. It is not a chronological list but a contextualised picture that can inform decisions. Date/Time stamp it and keep it up to date, even when the decision makers are not meeting. Use information pull (gathering information in) and information push (people and organisations knowing instinctively to forward information) to achieve this.

Strategic Aims: Make sure the Crisis Management Team establish the Strategic Aims for managing the crisis early on. These may even be drafted in a plan for confirmation or adjustment on the day. They won’t change very often but they set the tone for the response, driving information management and response. If the top aim is ‘safety and staff welfare’ this will determine that things progress differently for any given situation than if it   were ‘corporate client entertainment events’. Sounds obvious and simple but it is often overlooked.

Key Issues: Identify the Key Issues of the moment and when decisions have to be made by. Remember also that people need time to carry out the actions that result from the decisions made. Key Issues are those that arrive from looking at the CRIP through the lens of the Strategic Aims. They require management as they reflect the priorities that have been set. Use talented managers to select Key issues and identify options prior to the CMT meeting up.

Manage Actions: Decisions need actions to make them a reality. Taking a decision is not the same as things happening. Have a process, team and resources to break decisions down into actions, allocate those actions and monitor performance. Update the CMT on progress so that they can adjust decisions accordingly.

Friday, 30 August 2013

The Sum of the Parts...

Have you noticed the recent chatter about divorcing continuity and risk management?  It seems to me that this mindset is anchored in a cloudy, blinkered mentality.  At R2 we're really clear about the value of both risk management and continuity, and more importantly about how they fit together and, backed by a capable and flexible team, how they produce resilience.  We're not renowned for our algebra, but there's one formula we know works well. R + C2 = Resilience; that is to say, combining effective Risk management, Continuity management and a Capability vested in people provides real Resilience.

As business owners its obvious to us that business and risk go hand in hand, both in terms of understanding the risks you are presented with and in relation to the amount of risk you are prepared to take to achieve your goals.  Fair to say therefore that if you're running an organisation you're involved in risk.  Accepting that risk is the 'effect of uncertainty on objectives' it stands to reason that being able to deal with this uncertainty, reduce it when possible and respond when it disrupts are crucial skills for any organisation.  Its a mistake to expect risk management and continuity to work independently; in fact its our view that continuity management provides key tools that form a key element of the overall risk strategy.

To explain; there is no point in assessing the risk of every conceivable eventuality when its the risk to those things that are most crucial to your success (processes, information, resources) that should occupy your conceptual and physical efforts. In other words if the risk has no bearing on your short or long term business objectives then why manage it?  Best to focus on what matters most.  Business continuity's business impact assessment provides a great vehicle for developing this focus at the strategic, tactical and operational levels.  Done properly it provides a focus for risk, relevant to the whole organisation and its objectives, not just to continuity or operations.  Similarly continuity strategies and plans provide the treatment for many risks, both in terms of mitigation and response.  In these regards, risk and continuity work very well together to achieve resilience; keep these two disciplines in silos at your peril.

More importantly, despite the best risk management efforts, there's no such thing as 'risk free' if you're going to make progress; ships are safest in the harbour, but that's not really what ships are for.  So, given that you will be setting sail, its essential to have the resilience to recognise, monitor and deal with uncertainty and residual risk (the risk that you know is there but cant remove) as well as being resilient enough to deal with those unexpected and unforeseen risks (events that 'blindside' you).  In this regard its the capability of your people and the flexibility of your plans that will see you through the unforeseen.

Risk, continuity and capability: the whole is greater than the sum of the parts.  Break the silos and combine these components for real resilience.

(With thanks to John McKee from Linkubator for the ships metaphor!)  

Friday, 16 August 2013

Lessons from Christine, Usain and Mo...


Did you see Christine Ohuruogu win her gold medal this week?  Incredible.  It was a display of determination and a world beating performance pulled from the top drawer when it mattered most.  Usain Bolt produced his magic again and Mo Farah just completed a double double - two golds at both the Olympics and the World Championships.  Of course these athletes are only  three amongst hundreds who have been preparing for years to achieve success under the most intense pressure.    

We could all learn a thing or two from all of these athletes, especially in relation to crisis management.  In our conversations with many shapes and sizes of businesses we sometimes come across those companies and individuals who think that when the crisis strikes (and it will one day) the crisis teams will simply leap from behind their desk and, with some mystical powers, conquer the crisis.  Seriously...these people do exist; I've had the conversations.

"Let me tell you sonny, we'll be fine.  I've been in business for over twenty years and not much gets past me.  We don't need a plan and we certainly don't have the time to practice."  Or the age old classic "Of course we have a plan... I think we exercised it a few years ago."

I wonder how many gold medals Usain, Christine and Mo would be wearing if they adopted the same approach?  How on earth can it be possible to avoid meaningful practice and preparation and expect to win when the stakes are highest?  Whether its the Olympics, the World Championships or the equally high pressure atmosphere of a crisis, the simple truth is that failing to prepare only leads to defeat.

So the lesson is simple.  If you want your business to avoid meltdown  in the midst of a crisis, its essential to prepare as thoroughly as you can.  And that means having a plan that fits your business; not a copy of someone else's or a template from the internet.  It means having people who understand their roles and responsibilities in a crisis and above all it means training your people and putting the whole lot through their paces regularly.  Make your training as realistic as you can and judge the progression - Rome wasn't built in a day.  By training and practising your teams will know what to do in a crisis - they'll perform on the big occasion.  More importantly they'll develop the confidence and flexibility to be able to cope with the unexpected.  And, by it's very definition your crisis will involve the unexpected, so you need to be ready or you don't stand a chance.

So learn from the World Champs.  Preparation leads to success under the most intense pressure, amongst hungry competitors who want to defeat you.  And remember, a plan that hasn't been exercised is no plan at all - its the capability that counts.

Friday, 9 August 2013

Decision Making or Analysis Paralysis?

How's Your Crisis Navigation...?

A crisis brings many pressures to bear.  Leaders at all levels will be faced with choices about the 'least worst' option, with little time, inadequate resources and sparse information upon which to rely; they'll have to navigate the challenges of the crisis.  The path ahead won't be clear.  And quite often crisis leaders run the risk of becoming trapped by their need for certainty and simplicity, while the crisis provides for neither.  In these circumstances it's easy to become stunned into indecision, searching for a complete picture, overwhelmed by the 'noise' and making little progress.  

US Air Force pilot, John Boyd, expressed the logic of his decision making in aerial combat as the 'OODA Loop' - Observe, Orient, Decide, Act.  Observation is about improving your awareness of the situation, whilst accepting you won't gain a complete picture.  Orientation talks to 'sense making' of what you've observed, relating it to what you already know and to your experience. Options might be generated at this point and tough choices follow.  Decisions are sometimes easier said than done, but decisions there must be if any progress is to be made.  And for all of this to have any effect, the decisions must generate coherent actions that lead to progress.  Don't forget it's a loop, so after the action there'll be more observation to see the effect of the action, and so begins another cycle of the loop... you get the picture.

Simple as this may sound in theory, many crisis teams struggle to provide themselves with quality information, making their decisions more difficult and less likely to have a positive effect. To help your crisis team make optimal decisions it's key that they are neither swamped (leading to paralysis) nor misled (leading to irrelevant decisions).  They should be presented with as clear a picture as possible based on the right information (filtered - not every possible piece of information) and anchored through the key issues in play.  And that's where many teams come unhinged; they have neither a system of  information management, nor the means to bring it to bear.  The more complex your organisation the more of a problem this is likely to create.  It's therefore key to have a system that coordinates the OODA loop effectively to give the decision makers the information they need to make relevant decisions that will have a positive effect.  

Our recent piece of thought leadership draws on some experience in designing and delivering just such a system; in fact a whole crisis management facility and the accompanying procedures were designed and built around this very logic. All that's needed to help your crisis decision making is the means to gather information, filter it, join it together and present it effectively - all enabled by a skilled team and some well thought through and rehearsed procedures.  OODA - not paralysis. 


Monday, 5 August 2013