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Your business isn’t ready for another crisis, is it?

When writing my doctoral thesis I was staggered to discover most businesses confront a crisis of such magnitude their ongoing viability is threatened every five years. These crises, most frequently caused by poor management decisions, could have been avoided if only managers had engaged more diligently in crisis planning and disaster preparation.

Planning for a potential disaster can take a number of different forms. These include disseminating knowledge among stakeholders, writing response plans, conducting drills, distributing supportive resources and implementing protective measures for life and property.

This is where relevant new research comes in led by scholars at the University of Central Florida. They asked 2000 employees for their views on how well – or even whether – their organisation is engaging in crisis planning or disaster preparation.

The reason it’s important to explore what employees have to say is that prior studies have revealed employers are more inclined to overstate their preparedness activities. By asking employees instead, a more honest picture emerges, one that isn’t susceptible to exaggeration.

Cynically, the researchers suspected businesses in the private sector would fare worse than their public-sector counterparts simply because the profit motive, along with less red tape, compels them to take greater risks. Those risks, for instance, could involve cutting corners or saving costs when they pertain to a future event so unpredictable it’s perceived not as improbable but as impossible.

(As an aside, that is essentially the definition of a crisis. It is rare. It threatens the organisation’s survival. And it’s almost impossible to believe it could ever happen until it invariably does.)

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The researchers’ suspicions turned out to be accurate. On each of the ten most common activities, private businesses had lower rates of involvement. Much lower rates. As an example, the basic task of giving employees information on what to do in the event of a disaster was adopted by just 49 per cent of private businesses. In the public sector it was 72 per cent.

A second stark example relates to training, such as providing employees with coaching on how to identify, control and eliminate hazards, or how to perform First Aid and CPR. Only 61 per cent of people employed in private businesses reported having received this type of training. Among those in the public sector it was 82 per cent.

Most concerning is that, of the private operators, those found to be the least prepared were small businesses. Even more so if they were operating from just one location.

Which means if you stumbled across this column while browsing The Age and The Sydney Morning Herald’s small business section, there’s a solid chance the findings of this research apply to you. Now more than ever.

Follow James Adonis on Twitter.

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