You vs. the Volcano
April 20, 2010
Earlier this week, I was traveling through Newark’s Liberty International Airport and was struck by the number of large jets seemingly strewn around the tarmac, parked wherever they could get out of the way of other aircraft taxiing through the busy airport. I quickly realized that the impromptu parking lot was the result of the shutdown of European travel caused by – of all things – the eruption of a volcano in Iceland.
Talk about a crisis! Commerce to and from Europe essentially ground to a halt because of one of the most unpredictable events of nature. And that got me to thinking – how many companies were prepared? Smart companies know that even though you cannot predict the unpredictable, you can create contingency plans to prepare for the unforeseen and be ready to make quick adjustments to minimize the impact on your operations.
Planning starts with asking yourself a few questions – and in this case the first question to ask was not, “When will the Eyjafjallajökull volcano erupt?” Rather, it was more like, “If a catastrophic failure of the air transportation system occurred in any one of my markets, what would I be most concerned about?” Here are a few more to ask yourself:
- Employees. Can I reach all of my executives traveling in that area? What alternatives could I offer to them to get home, or absent that option, how can I ensure they are comfortable waiting out the situation?
- Customers. How dependent on air service is my supply chain? Can I still receive raw materials? Can I ship goods? What alternatives to air service can I rely on to maintain either channel, if necessary? Have I identified those alternatives and made contingency arrangements to activate them on short notice when needed?
- Investors. Have I created a mechanism to keep investors informed of our plans to maintain customer service and keep revenue flowing in the event of a catastrophic interruption?
- Regulators. Do I need to keep regulatory officials informed of a major production or service interruption?
- Media. Am I ready to respond to media inquiries at home and abroad on the potential or actual impact of an interruption?
- Marketing. Am I prepared to capitalize on the competitive advantage that contingency planning can create by having systems in place to keep production and shipments running when my competitors are scrambling?
Clearly, an unanticipated interruption like this one cannot be totally mitigated. But by planning ahead – even just by asking yourself a few questions when the unpredictable does occur –you’ll be in a better position to keep flying through the fallout of the next unforeseen crisis.