Author: David Mulders
Denis Waitley’s simple words have rung through the minds of leaders around the world as a simple way to operate their business, they are a motto that can be applied to every industry, every work place, every home and every activity. Though there are a myriad of situations that can never be expected, they can certainly be predicted and planned for. On a long enough time line, the statistical inevitability of an un planned occurrence within the predictable scope of operations is definite. How does this apply to our day to day work? If we can analyze the common outcomes of a given situation, and the necessity for training, equipment, support, appropriate time frames and controls then we can gather and implement the resources needed to cover most, if not all of the unexpected, yet predictable results. How do we factor this in to our business? The primary issue when dealing with preparation in business will always be the cost, if we try to plan for each and every possible situation and acquire the equipment, training and time necessary to cover these possibilities, we would surely run out of funds long before most of these situations occur, however if we are able to trend and prioritize the likelihood of these occurrences, we are able to triage the needs of our business and cost-effectively plan for the worst. So what is the cost of being prepared versus being un prepared? Many studies have been done on businesses to try to determine the cost of downtime per hour, these studies factor in the time paid for employees when work is not able to be performed and billed appropriately to the client, the cost for management and administration to attempt to mitigate the situation, the cost for repairs, or replacement of inappropriate equipment, re-training, re-branding, client communications, loss of information, HSE implications, and most importantly the loss or alteration of reputation. Can you put a dollar figure on these factors to an hour of downtime to your own business? Most studies show that the average cost of downtime for a medium sized business in the USA is $100,000.00 of direct and indirect costs, with most situations of one hour of downtime having disruptions to work flow for over one week of operation. How does this compare to the efforts and extent of your business to prepare and plan for the worst? Does the cost of extra training or equipment outweigh the potential for downtime? In some situations it may, including specialized equipment, rare or special expertise and certification demands, or specialized job postings and easily predictable roles and work scopes. The best business leaders will be able to predict or identify the situations where the cost of downtime outweighs the cost of preparedness. Is your business prepared to take a hit to their operations or reputation due to poor planning? Are you prepared?