Is your BCP/DRP prepared for the swine flu?

Companies have to prepare for emergencies, and with the possible threat of a swine flu epidemic it is a good time to review your company Business Continuity and Disaster Recovery Plans. Threat to health and life aside (extremely important but not the focus of this entry) the impact to your business has to be assessed. In Mexico, for example, companies have had to close their doors some by order of the government, some by necessity because suppliers can’t deliver parts.

Review your BC/DR plans and identify if at least some of the most probable scenarios that you may experience are covered. The most generic examples are:

1. A significant portion of your employees or key employees get sick – do you have appointed employee backups? Are they up to date?
2. Families get sick or need assistance – what if schools get closed (like in Mexico)? Are you prepared to have your workforce working from home? What about emergency day care?
3. Your customers get sick or are afraid of getting sick (like in the case of restaurants, movie theaters, etc) – restaurants in Mexico are closed because the government won’t allow them to provide service, Hotels in Cancun are experiencing thousands of cancellations, same with airlines. Are you prepared to weather that storm?
4. Your building or installations get quarantined or need to be closed for sterilization after an outbreak - are you prepared to have your workforce working from home? What about backup installations?
5. Your suppliers can’t deliver components or services – do you have backups in place? Last minute negotiations will cost you in time and money.
6. Your employees can’t leave or can’t return to the country – some countries have already closed their borders to Mexican flights, while cruise ships sit outside of Mexico waiting to be redirected. How may your operations be affected by this?

Your plan needs to reflect the realities of a pandemic – maybe you are prepared and your plan contemplates everything that may affect you. But if you are not, it is a good time to review and decide what your next steps should be.

Pareto is wrong

If you want to thrive in business you have to forget about applying Pareto’s principle to your problem solving. I know at first it seems to make sense: “solve 20% of the problems that cause 80% of customer dissatisfaction” (or whatever you are trying to solve). The problem with that way of thinking is that:

1. Nobody wants to be satisfied only 80% (or given an 80% working product)
2. As soon as you solve that 20%, another Pareto raises its head – it never ends.

If we apply the idea that solving 80% of an issue is ok to provide for everyday situations, we would quickly realize that working like that is unacceptable (and leads to failure). For example, would you accept 80% of your laundry done? What about an 80% warm cup of coffee? Would you take an 80% cooked meal?

Let’s face it. In today’s business environment solving something 80% is not good enough. Servers have to have an uptime of 99.9995%, customers expect (and demand) 100% satisfaction, project budgets have to be accurate at least 95% of the time, six sigma expects 99.9997% efficiency in processes and products. You can see that 80% of something is way below expectations.

Why then, whenever there is a problem and a meeting is held somebody always brings Pareto into the discussion? Because there is no company that has infinite resources (well, maybe Microsoft), you always have to prioritize – it is just a matter of necessity. How then, can we escape the Pareto trap?

First, get rid of Pareto thinking! Then, follow these steps:

1. Clearly define your problem(s)
2. Identify all relevant measures or indicators to the problem – for example, percentage of customer satisfaction, number of defects per million opportunities (DPMO), or number of dropped calls. The fewer the better.
3. Measure the initial state (use the indicators selected)
4. Define your goal as the conditions necessary to consider the problem(s) solved and, if appropriate, your tolerance (nobody gets it right all the time) – be sure to use the measures or indicators selected in the second step.
5. Identify all steps necessary to get there – make a plan (and hire a Project Manager)
6. Take all of the steps, solve all of the problems until you get to your goal - don’t forget to measure progress along the way or you may not know you’ve arrived.

What happens if the steps necessary are not doable, the problem is unsolvable or your company can’t afford to make it happen? That means it is time to reconsider your strategy: either lower expectations, reposition the product or service, or exit the market.