How economic downturns impact BCM
How economic downturns impact BCM and what you can do about it. Business Continuity is a critical player in building an organization’s resilience. I’m honing in on Business Continuity Management (BCM) practitioners for this blog. We are all following the risk and impacts of 2022’s economic downturn. The tightening of budgets, potential layoffs, or hiring deferrals can impact a program’s resilience. It may affect the ability to deliver on outcomes as employers focus on profitability.
While considering risks and understanding potential disruptions, work to pinpoint opportunities where businesses can thrive even through difficult times. Then, if you positioned your program well, you are ready to work alongside business partners to engage in resilience. Finally, align with the organization’s resilience strategy by taking stock of financial, operational, personnel, and technology pillars, along with marketing and sales. It’s a solid approach in light of the global economic conditions.
The pandemic's impact
Economists estimate that between January 2021 and September 2022, prices increased in the US by 13.5%. The impact is a cost of living increase for the average American family is $728 in September. Next, the cost to the US family over the next year is projected at approximately $8,739. Countering the cost of living crisis is challenging, as people expect inflation, interest rates, and taxes to rise globally in 2023.
The lockdown cost the US an estimated $6 trillion more than projected. Additionally, the disaster response efforts increased the National Debt by 121% of the GDP. To level set, President Reagan declared the US debt of 35% in 1981 a crisis. Understandably, consumer and commercial spending plummeted. We all know how commercial real estate was decimated, and residential real estate prices skyrocketed. These economic indicators will cascade into continuity planning and crisis response.
The affects of stress
Mental Health America reports that “in 2019-2020, 20.78% of adults were experiencing a mental illness. That is equivalent to over 50 million Americans“. Many are struggling worldwide, and there’s an expectation that smaller bonuses and the cost of living will increase daily stressors. So, I hate to be a Debbie Downer right before the holidays, but it’s our job to face risks head-on. Expect co-workers to be distracted and concerned for the future. Similarly, this translates to organizational and global worries as geo-political concerns continue.
It’s a reality that many will feel the pinch on their wallets in the upcoming year. Our companies will address it as well. Thus, along with likely cutbacks in travel and miscellaneous spending, reductions in force or hiring freezes are the norm for 2023. From a continuity perspective, any crisis could impact tightened budgets and operational interruptions, causing a direct market impact. Therefore, from a resilience perspective, we’re operating in an environment of increased stress in 2023.
You can get there from here
In Maine, there’s an expression, “You can’t get there from here.” It’s an old New England idiom deterring travelers from attempting overly complicated destinations. With the current climate, it makes sense to make things as easy as possible. Then, taking stock of our programs and removing progress impediments is helpful.
Please don’t make the pathway to success so remote that it is difficult to get to. Now is the time to take stock of your governance and programmatic elements. Thus, I suggest pairing them down wherever possible. Businesses are focused on obtaining profitability. Understandably, you want to partner in that success. Any attempts to streamline BCM programming to increase effectiveness are appreciated. Directly, it helps the business achieve its goals while building resilience.
Be a partner is resilience
Business Continuity experienced increased visibility over the past few years. But, the boom is likely over. I’ll be talking to Cheyene Marling in January, and we will see if my prediction is correct as she shares her latest reporting. Further, she recently cautioned job seekers in our space to be patient over the holidays, which seems to signal a broader slowdown. For programs, this likely translates to less hiring at all levels. And for those looking to expand their teams, it may mean a hold on expansion for the year’s first half.
But this is where resilience kicks in. We are in a bounce-back phase from the pandemic. As we all know, recovering from significant crisis events takes time. Your program must be positioned to support leadership as they navigate the unpredictable time ahead and be engaged in return-on-value activities. In Recovery and Resilience, I shared tips on positioning programming for maximum return. It’s time to re-read it or take a look if you haven’t read it previously.
Navigating the rough waters ahead
I can’t say that 2023 won’t have some rough waters ahead. Hopefully, your program is well-tuned for success and built for resilience. Share your goals and measures with leadership. Then, fine-tune as necessary. Next, have examples at the ready to demonstrate value and justify the investment. Check out What Resiliency Success Measures Look Like if you want an overview of how data supports your program.
More now than ever, you will be expected to prove your worth as Business As Usual takes priority in an uncertain marketplace. Leaders are making strategic decisions every day to remain resilient and competitive. As professionals, we can ride the “Resilience Wave” of successful pandemic response. However, we want to build on that goodwill by continuing to demonstrate usefulness. Help the business understand its most significant risk, identify opportunities to increase stability, and help mitigate exposures.
Did you know?
Disaster Empire blogs contain embedded links to source materials, articles of interest, videos, books, and training I recommend. Just click on the blue embedded link to access the resource.
Charitable Giving Opportunity:
- Overwatch Foundation – This is an organization of US Military Veterans providing critical natural disaster relief & urgent humanitarian response. I learned of them watching an episode of the Shaw Ryan Show. Overwatch supports soldiers in Ukraine and recently completed a mission in Florida post-Hurricane Ian. Check them out, and please give if their work resonates with you.