Contemplating the Unthinkable

An entrepreneur who lacks a plan for coping with catastrophe is a victim in the making, says crisis-management expert Debra Traverso

The threat of terrorism is only one of the dozens of risks on Debra Koontz Traverso's list of crises for which small-business owners need to prepare. Until recently, it would have seemed the least likely scenario of the lot, which includes landslide, radiation accident, whistle-blowing, boycott, computer virus, and employee fraud. Because of the Sept. 11 terrorist attacks in New York, Washington, D.C., and Pennsylvania, however, more U.S. company owners are likely to pay attention to what Traverso, a crisis-management consultant, has to say in her recent book, The Small Business Owner's Guide to a Good Night's Sleep.

Although a terrorist threat might be what is getting business owners to pay attention to risk management at the moment, it isn't the crisis most likely to occur in their company. "The threat has increased, indeed...but the likelihood of it happening again to any business in particular is still very low on the scale of potential threats...that they live with daily that they may not even be aware of," Traverso said in an interview.


  Most crises, she says, arise not from sudden accidents or natural catastrophes, but from smoldering conditions within the company itself. Citing studies by the Institute for Crisis Management in Louisville, Ky., she says those smoldering problems usually involve illegal, unethical, or irresponsible actions by someone in the company. Think embezzlement, harassment or discrimination, mismanagement, poorly handled layoffs, the defection of key employees, and laxity that leads to product contamination or a serious accident.

Businesses need a plan of action that can be applied to nearly any emergency, says Traverso, whose clients have included NASA, United Parcel Service, Dow Chemical, and dozens of small businesses. Although the specific type of crisis that will hit can't be known in advance, company owners can devise administrative and logistical plans that could apply to a broad range of situations:

Could we operate somewhere else?

What could we do now to secure that location?

What could we absolutely not survive without?

What if there were a prolonged power outage?

What if the phone service were disabled indefinitely?

What if our key suppliers or shippers have a crisis and can't do business for a time?

Is our insurance adequate?

Could we pay creditors and employees during a prolonged shutdown?

Are our books and records up-to-date?

Are copies stored safely off-site?

Do we have contact information for suppliers, customers, employees available in two separate locations?

Do employees know how to get in touch with one another to activate the backup plans?

Those are a fraction of the questions Traverso poses in Good Night's Sleep. In many cases, she offers practical advice on how to get the answers for your particular business. You start by prioritizing your company's assets, figuring out how vulnerable they are, and how you will protect them.

Most company owners, focusing on the myriad day-to-day details it takes to keep their businesses afloat amid today's economic turbulence might think crisis planning is a luxury for which, right now, they don't have the time and money. Such planning, though, can pay off even if the owner is lucky enough to avoid a catastrophe. "Answering the question 'Where is my business vulnerable?' can identify deficiencies and lead to strategic thinking and creative ways of doing business," Traverso says, referring to a company that found a good way to streamline its daily purchasing process as it was working out a plan for making purchases in an emergency.


  "For a small business with very limited resources, the plan may consist of simple checklists of action steps to take regardless of the type of crisis," she says. "The point is to do what you can, and as much as you can, before it's too late to do anything."

That includes paying attention to the people who work for you, both as a preventive measure and, if necessary, a restorative one. Do your management practices convey respect for employees' safety and well-being? Although the human factor has always been important in crisis control, she says, the terrorist attacks of Sept. 15 are teaching companies that, more than ever, business requirements need to be weighed against the importance of people's emotional needs.

"It's impossible to ask an employee to begin recovery in the morning, and then take a break long enough to attend a co-worker's funeral in the afternoon," Traverso says. "There's no way that, after such a devastating occurrence, you could ever return to business as usual the next day...unless you could line up a group of highly educated robots who have no emotions...then you might stand a chance."


  Certainly the terrorist attacks make the fear of a crisis seem much more rational today. All the same, planning for the day when a plane might fly into your building remains such an overwhelming scenario that it is, even now, difficult to comprehend, let alone plan for. Is there any way to logically plan for such a devastating occurrence?

"If you mean, 'Is there a way to plan in which you could be back to business as usual the next day?' The answer is no," Traverso warns. "But if you're aiming for business as modified, then yes, it is possible to plan for such an occurrence."

Whether or not it results in a good night's sleep, having such a plan in place could be the key to a company's survival.

By Theresa Forsman in New York

Edited by Robin J. Phillips

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