Share this content

Companies need a disaster recovery plan

5th Apr 2017
Share this content
Disaster Recovery Plan picture

Reputation loss is now the biggest risk in business – but how can finance leaders prepare their firms to minimise the impact of a potential disaster? Tom Herbert investigates.

While risk remains an ever-present for finance leaders and business owners to factor into their plans, its very nature is changing faster than at any time in history.

Catastrophes like flooding or fire remain a consistent threat to business stability, and IT failures or data breaches also now loom large on the list of potential dangers, but global risk management firm Aon’s annual risk survey of over 1,400 firms reveals that reputation loss is now the biggest risk to business.

Presenting at the Federation of Small Businesses’ national business show former BBC journalist and media trainer Fergal Parkinson stated that if handled badly, reputational loss suffered in the aftermath of a crisis can do serious, permanent damage to your business’s future – as companies such as TalkTalk, who lost £42m and 100,000 customers after reacting poorly to a data breach – have found.

But how can those involved in the running of a business prepare for the worst? Parkinson outlined that the most critical thing for businesses of all sizes is to have a plan of what you will say and what you will do if disaster strikes. Your plan should include the following:

  • Firstly, define crisis. Everyone’s definition will be different, but reach an understanding within the business.
  • Put together a ‘crisis checklist’ of everything that could go wrong.
  • Prepare for each crisis individually. What actions would you take? Which clients or customers could be affected? What will you say to them?
  • Regularly rehearse your plans. Think of it as a fire drill for your business reputation. Practice each incident to make sure you get it right.
  • Deal with problems quickly. According to Aon’s study, businesses who reacted immediately to problems on average returned to 5% under their pre-crisis value in 50 days. Those who didn’t were still 15% down after a year.
  • Have a spokesperson, a human face for the business. Who will say what? Depending on the severity of the crisis this person may need to be media trained to answer difficult questions.
  • Have more than one spokesperson available in case of illness or holiday.
  • It also might not be a great plan to put the boss up before the press. Aon’s study showed that in a crisis the public want to hear from people who know what they’re talking about – for example in a data breach situation hearing from the head of IT (if your company is big enough) may be better.

What should you say? Parkinson ran through what he calls the ‘four Rs’ of crisis communication.

  • Regret. You have got to say sorry – the quicker the better. And say the word sorry, not ‘apologise’. You are not taking corporate responsibility in a legal sense, but apologising for customers’ inconvenience. Take legal advice if necessary about the wording of the apology – it will be money well spent.
  • Resolve. Move into the positive by telling them how you are responding. Let clients or customers know what you are doing and going to do about it.
  • Repeat. Explain why this won’t happen again. List the steps you will take to ensure it.
  • Recompense. If your customers have been inconvenienced you have got to offer something for their trouble, even if it’s vouchers or flowers.

Build up credits in advance

With reputation more important than ever to your business, good communications can mean the difference between recovery and collapse.

Parkinson urged companies to “get some reputation credits in the bank when times are good”.

A few well-placed stories in local, regional or industry publications before something goes wrong can help build up credibility, and if things go wrong drive supporters to you.

“Good, positive stories don’t just happen,” said Parkinson, “you need to have a story or an idea of what you want to talk to customers or the media about."

“Introduce yourself, and know what you want to say. There’s no point in sending an email to a generic address. Find appropriate publications, find out a name. Be prepared for any questions, especially difficult ones. Don’t harass them if they don’t cover your story. Go somewhere else or think of another story.”


Does your business have a disaster recovery plan? Is there anything you’d add to the list above?

Replies (0)

Please login or register to join the discussion.

There are currently no replies, be the first to post a reply.