After the wettest winter on record, it’s sink or swim for Great Britain PLC’s approach to crisis and continuity management

– Posted by Pippa Griffin

Our thoughts go out to those affected by the terrible floods across the UK.  Even now – when the sun has dared to shine for a couple of days – the crisis is far from over. And crisis it is too – complete with a crisis response that has been widely scrutinised and criticised.  Since the rain started (how long ago was that now? eight weeks?) we’ve witnessed clear phases in response, and the overall perception seems to be that it hasn’t gone according to plan – if indeed, there was a plan at all?

A study by Knight and Pretty (The Oxford Executive Research Briefings, 1982-1993) explored the effect of catastrophes on fifteen major companies and traced their impact on shareholder value.  Interestingly, the study demonstrated that regardless of the preparedness or nature of the response, shareholder value dropped as the markets dealt with the news of the crisis.  However, after this initial period, companies in the study took one of two routes: either a steady climb to recovery, or an irreversible slip into decline.  At this point, it’s not entirely clear which way Great Britain plc will go.

Knight_and_Pretty_graph

It seems to us at BB&A that we’ve seen several characteristic phases to the UK Government’s response to the crisis.

In the beginning: a lack of clear communications to the media, inconsistency of messaging, blame being apportioned across various parties.

Moving on then to a greater focus on the response itself – the military brought in to help, yet the equipment they’ve needed not always being in the right place at the right time; supplies of waders and pumps in high demand and short supply; planning and reporting structures which seem poorly established.

We now seem to be seeing the beginning of a phase of reflection: the crisis is perhaps better under control (pending more rain) but the damage is far from over.  For the many people affected by the flooding, there is no return to ‘new normal’ as yet.  It’s becoming more and more clear that Continuity Management has not been as strong as it could be.  The newspapers are increasingly reporting on what could have been in place to prevent such an incident occurring, or at least what could have helped to mitigate the damage afterwards.   As the Guardian put it: “David Cameron told better planning could have prevented some flooding” (22/2/14), and from BBC News: “UK floods: damage could have been prevented” (21/2/14).

Only this week, Radio 4 (25/2/14) perhaps signalled a shift to the ‘final’ phase – the desire for continuous improvement and an understanding of what can be learned from elsewhere.  Although we’re not sure the population of a saturated Somerset are in the right frame of mind to consider the ‘amphibious’ floating homes in Holland on which they so cheerfully reported.

In Business Continuity Management, we talk about exploring what could have the biggest impact on your organisation, before exploring the credible threats which could cause that impact and then understanding how vulnerable the business might be to those threats in order to fully understand the risks it faces.  Who would have thought that a 250-year flood could become a reality?  Or that Great Britain plc would be so seemingly unprepared?

For those people affected, it is of course, too little, too late.  But perhaps, now that the terms ‘resilience’, ‘planning’ and ‘preparation’ have hit the mainstream press, it will encourage more governments, more businesses, more individuals to think what if? what if? what if? – and plan and prepare as best they can.

The Knight and Pretty study concludes that some businesses emerge from such crises with their shareholder value even higher than before the crisis hit.  The way they respond to such crises is critical to this upturn in fortunes.  We Brits pride ourselves on our sense of resilience, our ever-strong ‘spirit’ (perhaps driven almost out of stubbornness – a refusal to be beaten?).  Let’s hope that as the waters finally subside, GB PLC can harness this spirit more efficiently and effectively and emerge to become stronger than ever.