“A major earthquake strikes Nepal every 80 years” is a saying that all Nepalese people have heard. The last major earthquake to strike the country occurred in 1934. That we were well due over the next big one was something that was speculated and discussed widely. Yet, very few businesses were prepared for a natural disaster of this scale. Fewer businesses had recovery plans for a post-disaster scenario. The business I founded, Biruwa Ventures, which provides business support services to startup enterprises and SMEs, had not paid any heed to warnings of this imminent disaster.
Two thirds of the revenue of Biruwa comes from a shared office space model that we were operating out of two heritage buildings built in the traditional style using bricks, mud and wooden beams. The earthquakes of April and May 2015 caused severe damage to both buildings. Six months after the earthquake, we are yet to recover from the damage it caused, forcing me to consider building strategies and preparing against such disasters, i.e. making our businesses resilient. Other entrepreneurs in my circle are doing the same.
Business resilience is a widely term that defines a collection of processes and procedures that enables a business to endure unplanned events and recover from the damages resulting from such events. Disasters can be both natural events (earthquakes, floods, etc.) or man-made (political crises, terrorist attacks, etc.) Both types of disasters can occur with little or no warning. Such crisis events not only cause damage to assets and property, causing disruption that leaves companies reeling for or months or even years, but also cause physical and/or psychological impact on the people that are part of the business.
Creating a comprehensive business resilience plan is a lengthy process. However, the process can be simplified by dividing into five phases.
Phase 1 – Identify the risks: The first step is to conduct a risk assessment to identify events that could disrupt your business. It is important to consider all kinds of risks, external as well as internal.
Phase 2 – Analyze the risks: The next step is to conduct an impact analysis of each risk you face. Determine the disruption that each scenario can cause to your business. Consider how long your business will be affected for and what resources are required to recover from such a risk.
Phase 3 – Design your strategy: Consider ways you can mitigate disruption or damage to your business. Consider steps you need to take to protect your people, your assets and your business processes after an event. Plan on how you will fill the gap when a disaster happens.
Phase 4 – Plan development and execution: Create an easy-to-follow document that outlines your strategy and assigns responsibility clearly and adequately. Ensure that the plan is communicated effectively to the right people in your team so that adequate action is taken when your business is suffering.
Phase 5 – Test your plan: Conduct a walk-through with your team as if there is an actual event at hand. Create checklists and look for areas where you can improve on your disaster response plan. It is important to conduct these tests periodically and make necessary modifications.
Disasters like the one that struck Nepal in April 25, 2015 can happen without warning anywhere in the world. No matter how successful your business is, without adequate preparation or risk mitigation – the impact on your business can be very serious. A well prepared business will periodically reassess its risks, the impact of these risks and create strategies to mitigate and respond to these risks. In this light, both myself and Shaper Ankur are leading a panel discussion on Business Resilience at the upcoming SHAPE South Asia Conference looking at the theme of Building Sustainable Cities. We hope to have a group of shapers interact with young entrepreneurs and learn how they continue to cope in the ongoing economic disaster that Nepal is going through in their respective fields.
The takeaway from this planned event is of course to learn from experiences and lessons learned the hard way from the business community here in Nepal and around the region. A meaningful discussion around this topic can shape a refined strategy for business resilience that is best-suited to the region and the various risks that we are aware of. This is one of many ways in which the Shaper community is contributing to making our cities more resilient and sustainable.
- Vidhan Rana