Last month, businesses north and south of the border were faced with a potential problem – what if Scotland were to withdraw from the UK?
Now, of course, we know that Scotland voted to stay part of the UK, and the consequent sigh of relief issued from businesses was palpable. Many had been drawing up business continuity plans, and some organisations even claimed that they would move their Headquarters to London in the case of a ‘yes’ vote.
Political change is inevitable, planning is essential
Not all political change is as potentially difficult as a constitutional crisis. A change of government can have an impact on continuity, as one government’s policies are replaced by another.
For instance, HR professionals will be all too aware of the amount of employment legislation handed down by each government and often, subsequently repealed by the next government. Failure to comply with some of this employment law can sometimes result in significant fines.
For small businesses, large fines can be hugely damaging, and potentially business-ending. Wrapping these potential events into a business continuity plan is essential so that the right measures can be activated.
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That could be insurance (and premiums are usually reduced if there is a plan, creating something of a virtuous circle), but it could be changes to procedures within the business.
The increased globalisation of business today means that there are very few businesses that do not have some kind of dealings on an international basis. For instance, businesses with supply chains across the Middle East will all have built Business Continuity plans that incorporate political instability.
Those with supply chains across Asia will have to factor in breaks in the supply chain due to natural disasters or a slowdown in the local economy.
Knowing where your potential risks lie is essential, and extends far beyond the ‘planning for floods’ that appears to be a traditional factor to schedule in every year in the UK.
Indeed, just as part of the European Union, there is legislation being handed down on a near continual basis, for instance the new data protection legislation, which could seriously affect a company’s reputation in the case of an error.
Planning for political change
There are two distinct layers to the Business Continuity challenge here. Firstly, getting buy-in across the business around political change and its impact.
Secondly, there is the knowledge from the business of what processes and systems could be affected by any political upheaval.
Let’s tackle the buy-in first. One of the problems with getting buy-in for Business Continuity is the “So What” factor – the response from some individuals that these eventualities will probably never happen. This should never be allowed to happen.
The company has to be prepared to tackle political fall-out at all levels, so involvement of all levels of management is key in order to fully develop the Business Continuity plan.
Then there’s the understanding of what those risks are that might influence Business Continuity. In the case of Scotland leaving the UK, the risks were multiple, from currency questions to tax and even personnel.
The business needs to consider the risks of financial loss, stock devaluation, disruption to supply chains, even physical harm to employees or customers.
Indeed, in some cases, the business has to consider its reputation as well, and the associated risks of operating in certain countries.
So while Scotland remains part of the UK, we still face the prospect of a General Election next year, while the Eurozone remains unstable. Planning for political instability as part of Business Continuity is not just a good idea, it’s essential.