Since March 2020, individuals, families, organizations, societies, and nations have been under tremendous stress. If it isn’t one thing, it seems like a hundred more:
- Natural disasters – wildfires, hurricanes, flooding, tornadoes.
- War – Ukraine and threats in the region, increased tension between China, Russia, and the world.
- Diseases galore: new COVID variants, monkeypox, return of polio, avian influenza spreading worldwide.
- Cyberattacks – ransomware, denial-of-service.
- Civil unrest – political violence, threat of a civil war, mass shootings.
- Economic pressures – inflation, supply-chain disruptions, economic uncertainty, market instability.
You might be thinking, “This is a great time for our profession.” Anyone could simply look at the news and see what is going on around the world and think, “Any program that does emergency response, business continuity, crisis management, crisis communications, and technology recovery (aka business continuity management) must be flying high!”
My response to that: not so fast.
The goal of this article is to dig deep and peel back some “faulty logic,” explore return on investment (ROI), and then dig into value on investment (VOI) as a likely better metric.
The Dreaded Question
When an executive asks you, “What does your program do for our organization?” What do you say? I call this the dreaded question. Most BCM professionals will turn to their business impact analysis (BIA) and point to forecasted losses “after the bad thing has happened” and deduce how a BCM program will mitigate those losses. Great! Then their next question is, “When was the last time we used the program and plans to mitigate those losses?” For many the answer could be two or three years ago. Or worse yet … never!
Even with all the crises going on in the world, many BCM plans have not put into action. Most of our clients didn’t activate business continuity plans during the pandemic. It was a slow boil at first. Then when it exploded, there was nothing in their plans to really help such a catastrophic incident.
So, the question is, when was the last time you had a plan activation? For most professionals, the answer will not be helpful. For many of our clients, the answer is not at all or once in the past X years.
Return on Investment (ROI)
ROI means – very literally – “return on investment.” This is a metric many of our colleagues use. What that means is you literally must prove your organization received the same amount of money back, or more, as it was invested in your program. For some time now, I have been asking if this is the right metric.
How do you demonstrate ROI in a BCM program? Two ways:
- You can always point to your BIA, point to your planning efforts, correlate the two – and pray for the best.
- If a serious outage occurred and your plans were used, how much did you save the organization?
However, it‘s hard to do if you have had no major plan activations. Worse yet, you had an activation that wasn‘t that bad, or you never used your plans. As time passes from your last plan activation (or perceived major threat or risk) something begins to happen: the executive risk appetite grows and grows. This concept is called shifting baselines.
This is what is called a shifting baseline – what is it, you say? A basic definition of the phrase is “failure to notice change over time.” It was coined by Daniel Pauly in 1995 as part of the environmental movement to describe the subtle changes which occur over time and how we personally measure biodiversity loss. For example, 100 years ago, fishing stocks around the world were abundant. As time passed, the stocks decreased more and more. And yet, each next generation looked at what was in front of them and felt the number was “normal.” This happens even today with the loss of biodiversity, weather conditions, climate change, and more. We grow used to what is in front of us and fail to notice those changes over time.
There is no doubt you’ve heard the fable on how to boil a frog. You can’t just plunk it into a pot of boiling water like you would a lobster, because (supposedly) a frog will simply jump out to safety. As the fable goes, you put a frog in a pot of lukewarm water and he will settle into this little frog Jacuzzi. You slowly increase the heat and he becomes so relaxed it doesn’t notice the water boils him to death.
This legend has been refuted many times, but that doesn’t stop the story from being retold. However, it does demonstrate the idea of shifting baselines. Over time, as things change, we become accustomed to the “new normal” and then don’t remember any other way. This is what is happening right this moment with an expanding risk tolerance.
So how does that apply to our work? As we get used to more and more crises, this is what we know and how we have adapted.
When I first started my practice in 1982, BCM as we know it did not exist. There was only technology recovery. The first big international crisis which turned heads was the great Mexico City earthquake in 1985, followed quickly by another in Whitter, Calif., in 1987, Loma Prieta in 1989, and Northridge in 1991. With each earthquake, awareness increased and BCM was born and thrived.
Since 1991, there have been hundreds of crises, all building one on top of the other. To name just a few: Hurricane Andrew, 1992; World Trade Center bombing, 1993; Oklahoma City bombing, 1995; Kobe, Japan, earthquake, 1995; Y2K preparations 1999-2000; 9/11 terrorist attacks, 2001; Hurricane Katrina, 2005; Sichuan earthquake of 2008; Haiti earthquake, 2010; Icelandic volcano Eyjafjallajökull eruption, 2010; Christchurch earthquake, 2010; Superstorm Sandy, 2012; California firestorms, 2015-2021; Hurricane Harvey (and associated floods), 2017; Hurricane Maria, 2017; Not-Petya, 2017; locust invasions in Africa and Asia, 2020; COVID pandemic, 2020; daily mass shootings in the U.S.; school shootings; ransomware attacks; and much, much more.
When we are repeatedly exposed to so many “bad things,” we become numb and this becomes the “new normal.” When things are unsettled, the economy is struggling and money is tight. Our BCM programs, regardless of how many bad things are happening out there, are at risk.
I first started to write about this issue in 2005, and it is even more applicable today.
Value on Investment (VOI)
What if you stopped and thought about things differently? In other words, is there another, perhaps more meaningful, way to show value of your program and your work? I have three questions for you to ponder:
- What is the value-add of a BCM program?
- Is the value-add only good in a crisis/disaster?
- Is there a way to show value to your organization every single day?
Shouldn’t we as continuity professionals be asking if a better alternative exists to ROI? Is it possible to tie dollars invested to desired and realistic organizational outcomes such as
- Increased resiliency.
- Competitive advantage.
- Effective staff training.
- More thoughtful business processes.
The answer is yes! Stop and consider the concept of “value on investment” for your work. What is VOI? This concept was developed by the Gartner Group and is defined as the “intangible assets which contribute heavily to an organization’s performance.” These intangible assets include knowledge, processes, organizational structure, and ability to collaborate. VOI is the measure of the intangible benefits of a project or an activity and can include aspects of ROI.
Shifting to a VOI approach instead of an ROI approach provides the necessary forward-thinking framework for scoping, prioritizing, and initiating continuity projects. For example, VOI seeks to measure the idea of creating organizational resilience and
- Ties planning outcomes to increased employee skills.
- Creates value through collaborative planning and learning at every level of the organization.
VOI measures the total value of “soft,” or intangible benefits derived from continuity initiatives, in addition to those “hard” benefits measured by ROI. Key things to keep in mind are
- VOI is subjective and difficult to measure with the same precision as ROI.
- A VOI approach is critical to encourage funding for continuity activities and the success of these efforts.
We aren’t the only professionals who struggle to demonstrate value. There are many other businesses and sectors working to reframe the discussion:
- Health services.
- Higher education.
- Think tanks.
- Wellness programs (health, nutrition, exercise).
- Any organization that doesn’t have “tangible” results to note.
Change the Conversation
Your job is to change the conversation. Start with answering three questions:
- What is the BMC program doing now that provides value?
- What should the BCM program begin doing that provides value?
- What am I/we doing to provide value to the organization, every single day?
What you should be striving for is demonstrating that VOI = increased overall organizational resilience!
Start with that first question: what is the BMC program doing now to provide value? For me, this is what I call a whiteboard activity. Pull together your team – and if you are a solo department, others who you work with – to brainstorm ideas about the program, deliverables, and value. Here are some suggestions:
- Establish goals for the whiteboard session.
- Set a timeline for the session.
- Give everyone on your team a homework assignment.
- Bring to the session at least 10 ways that the program provides value.
- Create the environment for success.
- Be prepared at the start of the meeting with sketchpads, sticky notes, colored markers, or a large amount of whiteboard space for everyone involved.
- Write down and/or sketch out every idea.
Value on Investment (VOI) Suggestions to Explore
I strongly encourage you to really dig into the concept of VOI. To help get started on your brainstorming, let me offer at least eight ways you and your program deliver VOI every day:
- Regulatory/contractual compliance.
- Competitive advantage.
- Brand and reputation protection.
- Risk identification.
- Operational improvement.
- Knowledge capture.
- Increased robustness.
- Deeper knowledge.
I first encourage you to do your own brainstorming and build your own list. Then, take my ideas and add yours to explore them and build out the bullet points and deepen the discussion. This is critically important not only for your program’s success but to help enrich your career and capabilities. It can move you from being a planner to a leader in the organization.
Think Like an Octopus
Stop and think about this: Because of who we are, the work we do, we know so much about an organization and can connect with groups and departments which are struggling and have needs for information and understanding. We know a lot about other departments (think BIA, BCP, CM, DR, etc.). We also can break down silos between groups, departments, and individuals. Because of the widespread engagement of BCM, we can help others (executives, managers, employees) connect all the dots.
What are you waiting for? Start brainstorming, build your list of VOI qualities, and start to think octopus!
I encourage all of us in the BCM profession to start talking about this in real time. Work together with colleagues to develop a new approach to how we talk about our work and collaborate with each other. We can build a phenomenal list of qualities and values which BCM delivers every day. Together, we can create a brand-new story.