How does business structure impact disaster management?
A structure is only as strong as its foundation. When it comes to the foundation of the business the chosen structure can impact its strength in various situations — including disasters. Unfortunately, as we enter the third year of the pandemic, we realize that disasters are no longer a possibility but a reality. Whether an actual virus, the threat of a third world war, wildfires that threaten our physical structures and supply chains or continued cyber security concerns entrepreneurs are wise to make sure their businesses are strong enough to weather the storm.
How do different business structures impact disaster preparation efforts?
The key to a good disaster preparation plan is a combination of centralized coordination with flexibility to adjust to quickly changing conditions. This is true whether the business is set up as an LLC, partnership, or a massive corporation.
How can my business achieve this balance?
Some examples businesses are currently using include:
- Trust advisory boards. Companies are putting together groups to conduct an internal audit of the business and provide recommendations to help strengthen the organization’s security.
- Expand the c-suite. Others are adding a chief security officer (CSO) to design, implement, and oversee security measures. This role may be in combination with another, the chief information security officer (CISO). Still others may benefit from the addition of a chief medical or health officer (CMO or CHO).
- Put together a recovery plan. Those who are in areas at high risk for certain natural disasters, like wildfires, are wise to draft a plan in the event of one of these disasters. This should generally include contact information as well as a step-by-step procedure for different potential situations. The Small Business Administration has helpful checklists, available here.
Although these options can help to guide discussions about disaster management preparation, there is no right answer for every situation. As noted in a recent piece in Harvard Business Review, the best bet is generally to have a senior member oversee all aspects of risk policy and actively update business leaders as needed. Whether that role is through the use of a board, individual officer or a recurring part of budget and business decisions will vary depending on the business’ needs.
When put in place, a disaster management plan can better ensure your business is prepared to execute a plan in the event of a disaster, minimize the fallout of that disaster and lead the company through to the other side.