Part 2 of 2 - Principles and protocols for responding to unexpected catastrophic events, a Black Swan
Response Protocols for a Catastrophe
The paper includes some basic protocols for responding to a Black Swan. The following protocols are not designed to be a step-by-step process but rather a general basis for responding:
1. Develop risk recognition criteria in order to know when and how to respond.
2. Develop a quick response team led by a senior manager, typically the COO. This team should include personnel from across the business functions and external advisers. The team should concentrate on containing and minimizing the event.
3. Create a response team of leaders who should assess the situation, understand the risks faced, and response goals in order to quickly initiate the correct response plan.
4. Develop multiple response options and categorize them base on largest contribution toward response goals.
5. Evaluate each option by considering its risk/reward and whether the organization has the capabilities to carry out the plan. Critical assumptions should be documented during this process for future reference.
6. Implement the response following the guidelines and procedures previously established during pre-event planning.
7. Assess continually the effectiveness of the response by making corrections as need. After the event, management should discuss lessons learned and incorporate these lessons into training and future response planning.
Black Swans are unpredictable but can be prepared for by establishing identification methods, response goals, and quick response strategies before the event occurs. The principles and protocols that Ernst and Young provided in this thought paper are intended to help guide your organization to establishing a response strategy. Taking this approach can provide your organization with a number of benefits including but not limited to reputation protection, a faster return normal business and minimization of the impact.
Click the link below to download the thought paper.
Responding to a Black Swan