The British weather-in particular heavy snow has continued to catch UK businesses unexpectedly in 2012, according to new research released by the Chartered Management Institute (CMI).
Bad weather conditions are revealed as the top cause of disruption to UK businesses over the last 12 months, with over 77 per cent of organisations affected by this winter’s snow.
The report reveals that the most common snow-related disruptions were childcare and travel issues stopping staff from getting to work. Three in five businesses suffered financially as a result, with managers calculating the average cost to their organisation over £52,000, and some going as far as £1 million, according to the research released in association with the Business Continuity Institute (BCI), British Standards Institution (BSI) and the Cabinet Office.
Weathering the storm explores how organised businesses are for disruption and the steps being taken to alleviate those risks. It shows that extreme weather is increasingly impeding organisations: a decade ago, it affected with just 15 per cent of businesses over a year, increasing to 29 per cent five years ago and 49 per cent last year.
Yet, disturbingly, many businesses still underestimate the risk that extreme weather — including snow — can pose. Despite being the top source of business disruption for three years consecutively, the weather scarcely makes the top 10 when managers are asked to forecast which threats are most likely to disrupt them in the future. Nonetheless, it’s clear that business continuity preparations help reduce snow disruption; 90 per cent of organisations with procedures were ready for this year’s snowfall, compared to 68 per cent of those without.
Chief Executive of CMI, Ann Francke said: “Snow in the UK is hardly unusual — yet too many businesses are allowing it to hit them hard. The results are clear — your business will cope better and recover faster if you plan ahead. Managers that don’t are left counting the cost in lost business, damage to customer trust and reputation.”
Francke further added: “With the recent snow alone costing organisations an average of over £52,000, those that do prepare have a competitive advantage and a real edge when it comes to building their customers’ trust.”
The research established the biggest business impacts of disruption as reduced income, damage to reputation and lost new business opportunities. It suggests organisations are gradually turning to business continuity management to protect themselves against these risks — 63 per cent now have measures in place, up from 61 per cent last year and 58 per cent in 2011.
The report makes a strong business case for business continuity management as a cost-effective way to reduce disruption:
With the ongoing horsemeat scandal hitting business reputations, CMI and its partners are also warning organisations not to lose sight of their supply chains when it comes to business continuity planning. Less than one in 10 businesses with business continuity strategies in place for their own operations (seven per cent) expect the same of their suppliers and just three per cent see this changing in the future.
To develop management and leadership CMI and its partners are calling for businesses to incorporate its top five ways to protect operations into their planning. There is a huge amount of help available through membership bodies. Businesses can also put their crisis management skills to the test as part of Business Continuity Awareness Week, which runs from 18-22 March 2013.
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