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How to write a contingency plan

Nobody needs Plan A to fail—however having a robust plan B in place is one of the best ways to be ready for any state of affairs. With a strong backup plan, you possibly can successfully reply to unexpected occasions successfully and get again on monitor as rapidly as potential.

A contingency plan is a proactive technique that can assist you handle unfavorable developments and guarantee enterprise continuity. On this article, learn to create a contingency plan for surprising occasions and construct restoration methods to make sure what you are promoting stays wholesome.

See more: How to write a contingency plan

What’s a enterprise contingency plan?

A enterprise contingency plan is a technique for a way your group will reply to necessary or business-critical occasions that knock your authentic plans off monitor. Executed accurately, a enterprise contingency plan can mitigate danger and assist you to get again to enterprise as regular—as rapidly as potential.

You may be acquainted with contingency plans to reply to pure disasters—companies and governments sometimes create contingency plans for catastrophe restoration after floods, earthquakes, or tornadoes.

However contingency plans are simply as necessary for enterprise dangers. For instance, you would possibly create a contingency plan outlining what you’ll do in case your main rivals merge or the way you’ll pivot if you happen to lose a key shopper. You may even create a contingency plan for smaller occurrences that may have a big effect—like your software program service happening for greater than three hours.

The distinction between a enterprise contingency plan and a venture danger administration plan

Undertaking danger administration is the method of figuring out, monitoring, and addressing project-level dangers. Apply venture danger administration at first of the venture planning course of to organize for any dangers that may come up. To take action, create a danger register to establish and monitor potential venture dangers. If a danger does occur, you should utilize your danger register to proactively goal that danger and resolve it as rapidly as potential.

A contingency plan is much like a venture danger administration plan as a result of it additionally helps you establish and resolve dangers. Nevertheless, a enterprise contingency plan ought to cowl dangers that span a number of initiatives and even dangers that might have an effect on a number of departments. To create a contingency plan, establish and put together for giant, business-level dangers.

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8 steps for contingency planning

You possibly can create a contingency plan at numerous ranges of your group. For instance, if you happen to’re a group lead, you would create a contingency plan to your group or division. Alternatively, firm executives ought to create enterprise contingency plans for conditions that might influence your entire group.

As you create your contingency plan, be sure to consider the chance and severity of every danger. Then, when you’ve created your plan—or plans—get it authorized by your supervisor or division head. That method if a unfavorable occasion does happen, your group can leap to motion and rapidly resolve the chance with out having to attend for approvals.

1. Make an inventory of dangers

Earlier than you possibly can resolve dangers, you first must establish them. Begin by making an inventory of any and all dangers that may influence your organization. Keep in mind: there are totally different ranges of contingency planning—you would be planning on the enterprise, division, or program stage. Make certain your contingency plans are aligned with the scope and magnitude of the dangers you’re accountable for addressing.

A contingency plan is a large-scale effort, so maintain a brainstorming session with related stakeholders to establish and talk about potential dangers. In case you aren’t positive who must be included in your brainstorming session, create a stakeholder evaluation map to establish who must be concerned.

2. Weigh dangers based mostly on severity and chance

You don’t must create a contingency plan for each danger you laid out. When you define dangers and potential threats, work together with your stakeholders to establish the potential influence of every danger.

Consider every danger based mostly on two metrics: the severity of the influence if the chance have been to occur, and the chance of the chance occurring. In the course of the danger evaluation part, assign every danger a severity and chance—we advocate utilizing excessive, medium, and low.

3. Determine necessary dangers

When you’ve assigned a severity and chance to every danger, it’s as much as you and your stakeholders to determine which dangers are most necessary to handle. For instance, it’s best to undoubtedly create a contingency plan for a danger that’s excessive chance and excessive severity, whereas you most likely don’t must create a contingency plan for a danger that’s low chance and low severity.

You and your stakeholders ought to determine the place to attract the road. For instance, what are you going to do about dangers which are low severity however excessive chance? What about dangers which are excessive severity, however comparatively low chance?

Right here’s how the totally different dangers can play out, and a possible contingency plan state of affairs your group would possibly land on:

  • Excessive severity and excessive chance or medium severity and excessive chance. Create sturdy contingency plans for these dangers. Guarantee you may have a robust mitigation plan in place if these dangers occur, so you possibly can resume regular enterprise operations as rapidly as potential.

  • Excessive severity and medium chance. Create a contingency plan for these dangers as nicely. Although they’re much less prone to occur, they might have a extreme influence on what you are promoting capabilities in the event that they do. Proactively planning for the worst-case state of affairs will help you reply to surprising occasions extra rapidly.

  • Excessive severity and low chance. You also needs to create contingency plans for these dangers. The one distinction for these contingency plans is who it’s best to share them with as soon as they’re full. Think about sharing these plans with fewer individuals since they’re much less related.

  • Medium severity and medium chance or low severity and excessive chance. Think about creating contingency plans for these dangers. You would possibly need to have a smaller stakeholder assembly for these contingency plans or take a much less rigorous method to contingency planning. However having a generalized Plan B for what you would possibly do if sure dangers occur—notably in the event that they’re prone to occur—is an efficient proactive technique.

  • Medium severity and low chance, low severity and medium chance, or low severity and low chance. Don’t create a contingency plan for these dangers. These dangers most likely gained’t occur, they usually gained’t influence what you are promoting capabilities very a lot in the event that they do. Nevertheless, do plan to come back again to those dangers periodically to evaluate if the severity and chance have modified.

4. Create contingency plans for the most important dangers

Create a contingency plan for every danger you’ve recognized as necessary. As a part of that contingency plan, describe the chance, and brainstorm what your group will do if the chance involves move. Every plan ought to embrace the entire steps it’s essential take to return to enterprise as regular.

Your contingency plan ought to embrace details about:

  • The triggers that can set this plan into movement

  • The fast response

  • Who must be concerned and knowledgeable

  • Key tasks, together with a RACI chart if vital

  • The timeline of your response (i.e. fast issues to do vs. longer-term issues to do)

For instance, let’s say you’ve recognized a possible employees scarcity as a possible and extreme danger. This could considerably influence regular operations, so that you need to create a contingency plan to organize for it. Every individual in your group has a really specific ability set, and it will be tough to handle group tasks if multiple individual left on the identical time. Your contingency plan would possibly embrace who can cowl sure initiatives or processes when you rent a backfill, or enhance group documentation to forestall siloed skillsets.

5. Get approval to your contingency plan

Make certain related firm leaders know concerning the plan and agree together with your plan of action. That is particularly related if you happen to’re creating team- or department-level plans. By making a contingency plan, you’re empowering your group to reply rapidly to a danger, however you need to guarantee that plan of action is the precise one. Plus, pre-approval will let you set the plan in movement with confidence—realizing you’re heading in the right direction—and with out having to ask for approvals beforehand.

6. Distribute your contingency plans

When you’ve created your contingency plans, share them with the precise individuals. Make certain everybody is aware of what you’ll do, so if and when the time does come, you possibly can act as rapidly and seamlessly as potential. Hold your contingency plans in a central supply of fact so everybody can simply entry them if vital.

7. Monitor your contingency plans

Overview your contingency plan incessantly to verify it’s nonetheless correct. Bear in mind new dangers or new alternatives, like new hires or a altering enterprise panorama. If a brand new government chief joins the group, be sure to floor the contingency plan for his or her evaluation as nicely.

8. Create new contingency plans if vital

It’s nice if you happen to’ve created contingency plans for all of the dangers you discovered, however be sure to’re always monitoring for brand spanking new dangers. In case you uncover a brand new danger, and it has a excessive sufficient severity or chance, create a brand new contingency plan for that danger. Likewise, chances are you’ll look again in your plans and notice that a few of the eventualities you as soon as nervous about aren’t prone to occur or, in the event that they do, they gained’t influence your group as a lot.

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Frequent contingency planning pitfalls—and keep away from them

A contingency plan is a robust instrument that can assist you get again to regular enterprise capabilities rapidly. To make sure your contingency planning course of is as clean as potential, be careful for widespread pitfalls, like:

Lack of buy-in

It takes lots of work to create a contingency plan, so earlier than you get began, guarantee you may have assist from government stakeholders. As you create your plan, repeatedly examine in together with your sponsors to make sure you’ve addressed key dangers and that your motion plan is strong. By doing so, you possibly can guarantee your stakeholders see your contingency plan as one thing they will get behind.

Bias in opposition to “Plan B” model considering

Some firm cultures don’t like to think about Plan B—they prefer to throw every little thing they’ve at Plan A and hope it really works. However considering this fashion can truly expose your group to extra dangers than if you happen to proactively create a Plan B.

Consider it like checking the climate earlier than going crusing so that you don’t by accident get caught in a storm. 9 instances out of ten, a transparent sunny day gained’t out of the blue flip stormy, nevertheless it’s at all times higher to be ready. Making a contingency plan will help you make sure that, if a unfavorable occasion does happen, your organization can be able to face it and bounce again as rapidly as potential.

One-and-done contingency plans

It takes lots of work to place a contingency plan collectively. Typically while you’ve completed, it may be tempting to think about it a job nicely accomplished and overlook about it. However be sure to schedule common reminders (possibly a few times a 12 months) to evaluation and replace your contingency plan if vital. If new dangers pop up, or if what you are promoting operations change, updating your contingency plan can guarantee you may have the most effective response to unfavorable occasions.

You’ve created a contingency plan—now what?

A contingency plan will be lots of work to create, however if you happen to ever want to make use of it, you’ll be glad you made one. However along with creating a robust contingency plan, be sure to preserve your plan up-to-date.

Being proactive will help you mitigate dangers earlier than they occur—so be sure to speak your contingency plan to the group members who can be accountable for carrying them out if a danger does occur. Don’t go away your contingency plan in a doc to gather mud—after creating it, it’s best to use it if want be!

When you’ve created the plan, be sure to retailer it in a central location that everybody can entry, like a piece administration platform. If it does come time to make use of considered one of your contingency plans, storing them in a centrally accessible location will help your group rapidly flip plans into motion.

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