Disaster management basics rev 1

Copyright 2013, Logical Management Systems, Corp., all rights reservedCopyright 2013, Logical Management Systems, Corp., all rights reserved

Disaster Management Basics

It IS All About Survivability

Copyright 2013, Logical Management Systems, Corp., all rights reserved

We tend to subconsciously decide what to do before figuring out why we want to do it.

Disaster Management Basics


Business: what is it?

Business is driven by strategy carried out in the form of plans by people who operate in existing and evolving markets.

Every organization’s “strategic plan” (developed either formally or informally) identifies their critical objectives.


What is a disaster?

What is a disaster for your organization?

Merriam Webster:

something (such as a flood, tornado, fire, plane crash, etc.) that happens suddenly and causes much suffering or loss to many people

something that has a very bad effect or result

a complete or terrible failure


Is Your Organization’s Planning Brittle? Do the organization’s plans stand in silos of excellence? Are activation and implementation of plans independent

and uncoordinated? Does the organization face critical junctures of survival

every time an event or certain shocks affect it? Does analysis of “worst case” scenarios underlay the basis

for planning? Do the plans reflect the strategy, goals and objectives of the

organization?


Is Your Organization’s Planning Brittle?

We live in a complex and interdependent world, filled with complex systems that are full of interdependencies (touchpoints) that are hard to detect.

The result is nonlinearity in responses to events, especially random events/shocks.

The odds of rare events are simply not computable.

Model error swells when it comes to small probabilities.

The rarer the event; the less tractable, and the less we know about how frequent its occurrence.


Complexity

Touchpoints

Responsiveness

Resource Constraints

Is Your Organization’s Planning Brittle?

It is much easier to sell: “Look what I did for you”

than

“Look what I avoided for you.”


Business Continuity – From What?

What is going to cause discontinuity?

What is the single highest probable failure factor for your business?

People?

EHS Issues?

Terrorism?

Cyber-threats?

Internal Factors?

Nuclear, Chemical, Biological?

Workplace Violence?

Sabotage? Operations?

External Factors?

Fraud?

Mismanagement?

Natural Disaster?

Power Failure?


How much Analysis are you doing right now?Symmetric Threats – Natural, Normal, Abnormal

Natural Disasters•Hurricanes•Earthquakes•Floods•Tornadoes•Drought

Economic Disasters•Recessions•Stock Market Downturns•Rating Agency Downgrade

Personnel Disasters•Strikes•Workplace Violence•Vandalism•Employee Fraud

Physical Disasters•Industrial Accidents•Supply Chain•Value Chain•Product Failure•Fires•Environmental•Health & Safety

Criminal Disasters•Product Tampering•Terrorism•Kidnapping & Hostages

Information Disasters•Theft of Proprietary Information•Hacking, Data Tampering•Cyber Attacks

Reputation Disasters•Rumors•Regulatory Issues•Litigation•Product Liability•Media Investigations•Internet Reputation•Social Media


Asymmetric Threats – Known is replaced by the invisible foe

Put simply, asymmetric threats are a version of “not fighting fair,” that can include surprise, unplannable and unpredictable events, impacts to your touchpoints that have not been anticipated.

Not fighting fair also includes the prospect of an opponent designing a strategy that fundamentally alters the markets that you compete in.

How much Analysis are you doing right now?


Business Impact Analysiswhat are we analyzing?

We know now what to measure, we know the current performance and we have discovered some problem areas. Now we have to understand why problems are generated, and what the causes for these problems are.


If you don’t know what you don’t know, how can you prepare for it?

Conventional practices leave us vulnerable to random, potentially catastrophic events, that cannot be predicted based on simple extrapolations from the past or projections of the future.

Prediction – Projection


Low

High

Geo-PoliticalGlobal Workforce

Environmental

Competition

Economies

Infrastructure

Social Trends

Technology

Markets

Foreign Sources

Impact

Like

lihoo

d

LowHigh

Very RapidImpact of the risk would be evident in a month

RapidImpact of the risk would be evident in a quarter

SlowImpact of the risk would be evident in a year

RISK VELOCITY

Emerging Risks – Likelihood, Impact & Velocity

Sovereign Debt

Alternatives

• Traditional risk assessments that prioritize risk on probability and impact are outpaced by the speed at which risks move throughout the organization.

• While 70% of finance executives agree that risk velocity is a core consideration, only 11% have introduced it into their risk assessments.

Source: Deloitte; Risk Integration Strategy Council Research



STRATEGY: What are we committed to?

CONCEPT OF OPERATIONS: How will we fulfill these commitments?

STRUCTURE: Do we have an organization that serves our needs?

RESOURCE MANAGEMENT: How will we manage our resources?

CORE COMPETENCIES:What skills do we expect from our organization?

PRAGMATIC LEADERSHIP: How will we optimize authority, decision-making,workflow, information sharing?

Six Key Questions


Decision Making Issues Related to Risk

Identify Alter

Neutralize

Share

Diversify

Mitigate

Transfer

Contain

Offset Effects

Reduce Exposure

Alleviate Impact

Change Negative – Positive

Insure Against Loss

Monitor

Hedge

Derivatives

Control

Discount


A stone and its weight in pebbles – size matters.

A collection of small units with semi-independent variations produces vastly different risk characteristics than a single large unit

Living in a Non-Predictive World


Business Continuity Lifecycle

Normal Business Operations

Transition Point 1

ResponseMitigationTermination

Transition Point 2

ReentryRestoration Resumption

Transition Point 3

ResumptionTransition to New Normal Operations

Transition Point 4

New NormalBusiness Operations

Activation Reactive Response Chaos

Unplanned Disruption

Planned Disruption

Termination

Emergency ResponseCrisis Management

Business RecoverySystems/Information Recovery

Recovery Management


Transition Point 1

Transition Point 2

Transition Point 3

Transition Point 4

ActivationReactive ResponseChaos/Uncertainty

Unplanned Disruption

Planned Disruption

Termination

How Well Will Your Organization Transition?

?


Leve

l of S

ervi

cePlan – Respond – Recover – Restore – Resume

Low

High

Time

(Image and Profile affect degree of disruption)

Recovery

(Time Critical)(Time Sensitive)(Time Dependent)

Plan

Restore

MTO

Response

Event

RTO

RPO

Stability LevelsGraceful Degradation Agile Restoration

Resume

CTL


Plan – Respond – Recover – Restore – ResumeLe

vel o

f Ser

vice

Low

High

Time


Recovery


Plan

Restore

MTO

Response

Event

RTO

RPO


Resume

CTL


Plan – Respond – Recover – Restore – ResumeLe

vel o

f Ser

vice

Low

High

Time


Recovery


Plan

Restore

MTO

Response

Event

RTO

RPO


Resume

CTL


Graceful Degradation + Agile Restoration = Resilience

Full Functionality

Devolve to most robust less functional configuration

Minimum StableFunctionality

Maximum StableLevel of Service

(Personnel, Time, Product, Services)

Detectors/Indicators of change

Business Continuity Lifecycle


SeamlessCommunications

Management

Operations Logistics

Administration

Planning

Finance

Infrastructure Internal/External Relations

RMR3 – Flexibility


Building an effective crisis management team

Why Crisis Management Teams Fail:

Crisis Management Team does not know its own reaction time;

Communications;

Micro-Managing;

Decisions are left at low levels;

Allowing problems to compound.


Your biggest challenge:

Getting the team to work together when they generally do not function every day as a team

Getting the team to comprehend their crisis management roles, responsibilities, functions and how they differ from their day-to-day roles, responsibilities and functions

Your next biggest challenge:

Building an effective crisis management team


Crisis Management Team (CMT)

Team Competencies (TC)

Team Identity (TI)

Team Cognition (TC-1)

Team Metacognition (TM)

How good are the team members?Are they still struggling with basic procedures?

Who’s taking responsibility?Do they spot and correct problems?Do they get crunched for time?Are they “territorial”?

Does everyone know who does what?Do they help each other out?Is anyone micro-managing?Is anyone “out of it”?

Is the CMT heading for the same goals?Does everyone have the same picture?Are they consistently in a reactive mode?Do they get paralyzed by uncertainty? Gary Klein:

“Sources of Power: How People Make Decisions”


Business Continuity – Three Levels

Strategic Level –Saving the business

Operational Level –Containing Business Unit Impacts

Tactical Level –Operational Actions

Leadership (Management)

PlanningOperationsLogisticsFinanceAdministrationInfrastructureInternal/External Relations

Key Functions


Three Spheres of Concern

SPHERE OF INFLUENCE

Your assets and capabilities can affect the courses of action of others

SPHERE OF INTEREST

Assets and Capabilities of others can effect your courses of action

SPHERE OF RESPONSIBILITY

Your corporate mission, vision, values,

goals, objectives


Geary W. SikichPrincipalLogical Management Systems, Corp.

www.logicalmanagement.com

[email protected]

[email protected]

+1 (219) 922-7718

“If you keep doing what you’ve always done – you’ll keep getting what you’ve always gotten.”

Date post:	15-Jan-2015
Category:	Business
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