Nature is, more often than not, benign and caring. But it is unpredictable too. It can display its angry and ferocious self, at any point of time and upset our apple cart. Many a time nature unleashes its fury in reaction to mankind’s unbridled exploitation of Mother Earth. But there is no dearth of instances when nature’s actions have defied understanding and logic. Hurricanes, cyclones, tsunamis, blizzards, floods, forest fires, volcanic eruptions, earthquakes, etc. leave us benumbed with shock and fear.
However, I will not dwell upon the correlation, if any, between human behaviour and nature’s deadly disasters. This column is not the right forum for such a discussion. I only wish to bring to the notice of young managers and executives the inevitability of natural disasters and their impact on business.
That being the case, managers should be ever ready to deal with the havoc such disasters can cause. Do not be caught napping. Nepal has witnessed the traumatic impact of the 2015 quake which left the nation’s body, mind and spirit devastated. Thousands lost their lives, buildings turned into rubble, business was badly affected and, naturally, our gross domestic product figures tumbled. The fearsome impact of the great temblor is still felt.
On a global plane, year 2019 has been the worst victim of nature’s fury in recent memory. Excessive rains caused floods and landslides not only in our country but all across the planet. Vast areas in different states of India are still being ravaged by floods. China too is facing the same fate. Floods have not spared the United Kingdom and USA either. According to one estimate, the US has suffered losses amounting to $ 175 billion in the last few years all because of nature running amok.
The human tragedy caused by natural catastrophes is so overwhelming that the losses inflicted upon the business world tends to get undermined if not ignored. Those entering the managerial cadres should understand at the very outset the formidable challenge posed by natural calamities. They need to know about damages that can occur and the ways to mitigate losses.
Executives working for medium and small businesses need to be particularly vigilant about downtime caused and prolonged by the irate nature. Studies show that only four out of 10 small businesses are able to survive the blow of nature. They are not in a position to sustain downtime for long. So why not take steps in advance to meet the challenge better.
So let us first identify the blow which natural disasters can deal to business concerns.
First and foremost is physical damage which is easily visible. The business location or the access to it may get flooded causing structural damage to the building. Storms and cyclones are known to have struck down trees, blown away windows causing leaks and damage to on-site equipment. Wildfires in Northern California destroyed 8,700 buildings in October 2017. Many of these buildings were business premises.
Even if your business location and facility is not actually affected, electricity and power supply disruption, localised water shortages and failure of cell phone towers can adversely affect the work at the location. Infrastructure damage can cripple the functioning of business processes.
The disruption in transportation halters delivery of orders and receipt of supplies. The supply chain management and materials management get severely hurt. With air services disrupted, executives are unable to fly to various stakeholders and conduct business. This is especially true of companies with vast networks within the country and abroad. Damaged roads, bridges, downed power lines, gas/petroleum shortages are many of the other hurdles faced by employees and customers in reaching the company’s location. Business efficiency takes a hard knock as repair and rectification of the damaged facilities take time.
All this obviously pulls sales down. In case of companies whose customer base is located in a disaster-affected area, buyers may stop purchasing their product for a considerable period of time. Not only does this affect the bottom line, better equipped competitors get the opportunity to sneak in lure away even dedicated customers.
In places where the natural calamity, like a massive earthquake, occurs, the company may even face the loss of employees. They may have fallen prey to the catastrophe and its aftermath. We were sad witnesses to such heartrending loss when an earth quake measuring 7.6 on the Richter scale and its aftershocks rocked the country in April and May 2015.
What should we do to ensure that natural calamities affect our business minimally and we are able to be back on our feet as fast as possible?
The answer is: business continuity planning. Once the preserve of big businesses it is now considered to be essential for all types of business irrespective of size. No company is perfect and immune to challenges.
Imagine a worst case scenario and try to identify what your operations and processes are vulnerable to. Plug all the loopholes and devise possible solutions for all vulnerabilities. It may indeed not be possible for you to anticipate all possible weak points that may lead to downtime. But by undertaking business continuity planning, you may be able to protect your company from the pitfalls of hysterical decision making when crisis strikes all of a sudden.
Today, almost all middle and big concerns are vigorously using information technology to remain competitive. In fact, some of the smaller companies are more tech savvy than the biggies. This being the scenario, data protection and management assumes a vital position in the business world. Data is the lifeblood of your organisation. Whether it be payroll, customer payments information, or inventory control, businesses which lose their data are at the highest risk. Keeping a backup is, therefore, of paramount importance. Most businesses today use economical and efficient cloud-based services to protect their vital data.
It is advisable for all businesses to be prepared with remote access capability to confront a crisis when it strikes. Key employees working from home can ensure that the top priority operations of an organisation continue even when a natural calamity hits the business location. The relevant employees should be equipped with laptops with adequate knowledge of accessing the network remotely.
Natural disasters often disrupt a company’s interaction with its customers spread far and wide. Communication should not stop. Customers need to be told about the latest status. This can be done by regularly updating the company website or its Facebook pages. The company’s automated phone system can also convey relevant details of the situation. Customers affected by delayed orders or disrupted services of the company should be informed about the company’s future course of action.
The natural disaster may be sudden and debilitating but the company should have the systems in place so that the customers do not feel abandoned or lost. Without beating about the bush, the company should be upfront about the impact of the disaster. This will enhance the company’s credibility among its stakeholders and also bolster customer loyalty.
Young executives should be aware of the systems discussed above. This will enable them to keep their cool when untoward natural mishaps jolt their business and things go wrong.
Basant Chaudhary is a Poet, Writer, The Chairman of BLC and Basant Chaudhary Foundation. (firstname.lastname@example.org)