Business

Keep Going: A Plan for Ensuring Business Continuity

Business continuity is about keeping the lights on today, tomorrow and 20 years from now. A risk-control expert tells CE how companies of all sizes can start planning for it.
By Christopher Durso
March 21, 2024
Topics
Business

The day before Construction Executive’s interview with Colby Whitfield, AT&T preemptively proved his point. We were scheduled to talk to Whitfield, assistant vice president of risk control at Travelers, on Feb. 23 about the importance of planning for business continuity—maintaining a company’s daily operations and long-time viability in the face of unforeseen disruptive events, naturally occurring and otherwise.

On Feb. 22, AT&T’s cellphone network experienced a 12-hour outage, leaving tens of thousands of people across the country unable to make calls, send texts or access the internet. When CE spoke with Whitfield the following day, he immediately connected the event to the construction industry. “Just think about how that type of event could have a significant impact on contractors,” he says, “who have become more reliant on internet connectivity to do their work.”

In our interview, Whitfield discussed how business continuity is connected to disaster preparedness and succession planning, what functions it encompasses and why it’s important for every company regardless of size.

What exactly does business continuity mean for a construction company?

At its essence, business continuity is planning for those worst-case scenarios that can impact a contractor’s ability to operate, whether that be in the short term, operationally, or in their long-term viability as a company. We see it encompassing a few distinct areas. It starts with assessing all of a company’s potential vulnerabilities and then working to prevent or reduce the impacts of any type of resulting business interruption or loss that might occur—and then, any type of activity to recover and resume operations as quickly as possible following an event.

All those fall within the umbrella of business continuity.

Is this related to things like disaster planning or succession planning, or is business continuity something completely separate and different?

They’re certainly related. When I think about succession planning, you’re focusing on identifying and developing future leaders—those needed to fill various roles and ensure a smooth transition. Disaster preparedness is more responding to those specific catastrophic events like natural disasters or cyberattacks.

Business continuity, on the other hand, encompasses a much broader range of strategies to ensure overall operational resilience in the face of various disruptions. Those could result from a wide variety of exposures. It could be a natural hazard, a manmade event or a technological event. It’s really important that you include all the risks that can have a significant impact on a contractor’s ability to operate within a business-continuity plan.

Does each of those hazards have its own distinct relationship with business continuity?

We think about natural hazards a lot with business continuity. Depending on their location, a contractor may be more impacted by hurricanes if they’re in the Southeast, or wildfires in the West, or freezing weather if they’re in the North—or even now in the South. We’re seeing more about non-weather-related fire and water losses that can impact a project during construction, or the availability of materials due to supply-chain disruptions.

And then, technological events are things we’re seeing more and more of.

Think about the increasing prevalence of cyberattacks. Earlier this week, we saw a widespread outage of internet and cellphone service in parts of the U.S. Just think about how that type of event could have a significant impact on contractors who have become more reliant on internet connectivity to do their work—with building information modeling or just simple communication with others on the construction team. If you don’t have that connectivity, it becomes really critical.

Is the idea of business continuity to keep the business running so your people’s day-to-day work isn’t interrupted, or is the ultimate goal to keep the business solvent in the long term?

It’s planning for both those things.

From a day-to-day perspective, how are we going to keep the lights on? And then, are we going to be a company that can make it the next year, five years, 20 years into the future?

For construction companies, is this something that is focused mostly on the back-office level, or does it also apply to individual jobsites?

When you think about the disruptions that could happen, they’re going to have a significant impact on project timelines budgets, client satisfaction—business continuity impacts all levels of a construction company, from executive leadership down to the jobsite personnel.

Office functions like finance, procurement and administration certainly play an important role in developing the business-continuity plan, but field leaders and site workers play an equally critical role in helping implement that plan and evaluating its effectiveness.

What areas should a company focus on when it comes to ensuring business continuity?

It always starts with conducting a comprehensive risk assessment of all the potential disruptive events, threats and vulnerabilities to an organization. So, identifying those internal/external factors that could disrupt an organization—natural disasters, supply-chain disruptions, cybertheft, regulatory changes—and assessing their potential impact to a company’s operations, assets, employees and reputation.

Following closely behind, once you identify those risks, it’s important to implement strategies to mitigate them and ensure that the organization is resilient in the face of those disruptions. Think about things like developing emergency-response plans that would kick in in the event of some type of disruption, establishing backup systems and redundancies, as well as providing training for employees who are going to implement the program.

What would you say to a contractor that says they’re too small to need something like a business-continuity plan?

Thinking about all those events that we’ve talked about, they can happen to any size company—and tried-and-true risk-management practices work. While the risks that we’re talking about today may be a little bit different than they were 10, 20, 50 years ago, those practices are still effective. Evaluating and understanding what could happen, putting a plan in place, making sure your folks are supported, testing it through and through—whether you’re a multimillion-dollar, publicly traded company or a small, family-owned business, those same procedures work.

Can you give an example of how you see business continuity being specifically relevant for construction companies?

The first thing I think about is the economic volatility we’re seeing today, including the supply-chain disruptions for certain materials and equipment.

For example, we know contractors are experiencing significant lead times when it comes to replacing electrical equipment like copper wire, switch gears and control panels. Lead times for transformers have gone from weeks to over a year in some cases. So, that’s one of the things that we talk about with our customers—not having that single-source supplier, having multiple different suppliers, which is a great practice to help insulate a contractor from those types of materials shortages.

Similarly, I think about cranes, paving machines or any type of unique or hard-to-get pieces of equipment. It’s important to have backup plans in case one goes down. Again, having different suppliers, but equally important and probably easier to do is just ensuring preventive maintenance plans are in place to prevent them from going down in the first place.

Did the pandemic help you make the case for the importance of business continuity?

The pandemic was a great example of taking what could be a disruptive event to its largest potential. It was eye-opening, I think, to many contractors. We’ve talked to a lot of them since, thinking about the future, whether it be that type of pandemic or some of the typical things that could happen—natural disasters, technology events, manmade events.

I will say that we see a lot of manmade issues, such as keeping equipment up and running. So, using the pandemic as a kind of thought experiment of what could happen is great, but we always bring it back to the things that we typically see happen in a week, in a month, in a year for your typical contractor.

Is it a good idea for a company to put one person in charge of its business-continuity planning? Or does that defeat the purpose, because what happens if something happens to that person?

It starts with management support. That’s going to drive accountability, that’s going to force resource dedication to the plan. Then you develop the team to execute on that plan. I would really think of it as a team concept. It doesn’t need to just be those folks that are at the office level or the leadership level. It should trickle down into all arms of the company.

by Christopher Durso

Chris leads Construction Executive’s day-to-day operations—overseeing all print and digital content, design and production efforts, and working with the editorial team to tell the many stories of America’s builders and contractors. An experienced association magazine editor, writer and publications strategist, he is a graduate of Saint Joseph’s University and lives in Arlington, Virginia.

Related stories

Business
Empower Your Employees and Profits With a Meaningful Metrics Strategy
By LeAnne Good
Employing a straightforward strategy to manage your company's money and money goals is sometimes the best path to success.
Business
Construction Executive's 2024 Photo Contest Is Now Open for Submissions!
By ABC
CE's photo contest is now open for submissions. Enter today for a chance to win the grand prize and land on the cover of the December issue. Hit us with your best shots!
Business
Taking Control of Quality Control
By Matthew Kleiman
Neglecting work quality costs the industry hundreds of billions of dollars in rework every year—and endangers workers’ lives. Commit today to developing a quality-management system.

Follow us




Subscribe to Our Newsletter

Stay in the know with the latest industry news, technology and our weekly features. Get early access to any CE events and webinars.