From the course: Protecting Profitability by Reducing Financial Risk

Crisis simulation exercises

From the course: Protecting Profitability by Reducing Financial Risk

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Crisis simulation exercises

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- An organization is not crisis ready unless it validates its plans and teams through crisis simulation exercises on a regular basis. I coach high school basketball. One of our daily drills was to simulate end-of-game situations. The reason? We wanted to win those games. I knew we would face these scenarios and if we never practiced, we would execute poorly under pressure and likely lose those games. Even though the exact situations themselves might never arise, we were always mentally prepared to make decisions under pressure. You can create regular simulations for your employees. They can be as simple as a tabletop exercise or as elaborate as an earthquake drill. Once risk exposures to assets and people have been identified and assessed, it would be careless not to pressure test the work. Let's walk through a simple tabletop exercise as an example. Step one, create a crisis. Step two, gather your team and schedule the drill. Step three, run the simulation. Step four, throw in spontaneous extra challenges. Step five, debrief. So here is an example of a crisis simulation I recently ran for a client. The crisis was this. A fake news story was planted by a rival firm to damage the reputation of my client. The team was given this scenario including what they were doing at the time. We provided social media posts, news reports, and even a real call from a journalist played by my associate. Participants used their business continuity plan and other resources to make decisions on how to handle the problem to minimize damage and reduce chaos to get back to work. Extra challenges were added that employees didn't expect. We included a call from an angry client, followup phone calls from the journalists, and updated social media reports. Disasters don't live in a vacuum. That's why adding in these extra unexpected challenges creates a more realistic simulation. This could be an employee having a heart attack, the computer system going down, the power goes out, an angry client calls in. It's going to be specific to your business. Use these opportunities to distract your people from the recovery process with things that are part of your everyday work. Finally, we held a debrief session to discuss reactions and lessons learned. At your debrief, make sure you document the discussion. What you want to write down are the gaps in the recovery plan that were exposed by the crisis simulation. Then, and this is a crucial step, each problem with your recovery plan needs to be assigned to someone. That means somebody walks away with a task. You have to make people accountable for these changes or they won't get done. These simulations can be educational, team building, and fun. Most of all, they are building leadership and first responder muscle that is ready to be flexed when needed. By running these drills regularly, your team will be ready and prepared for any situation that might come their way.

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