Crisis and business continuity planning have been given a renewed focus in recent years as man-made and natural disasters have increased in both frequency and severity.
How fund firms plan for these disasters goes beyond ensuring that their operations remain uninterrupted, and now must also include a communications strategy that lets employees, clients and investors know that the firm is equipped to weather the proverbial storm.
After Hurricane Katrina in 2005, regulatory examinations revealed that investment advisory firms in Louisiana and Mississippi had to relocate their businesses if they wished to continue operations. Regulators said that while most of the advisors examined had a written Disaster Recovery Plan in place, not all of those plans addressed the very real threats of hurricane damage and substantial flooding.
Since September 11, the Securities and Exchange Commission has dramatically stepped up its focus on business continuity and disaster recovery. The impact of Hurricane Sandy on the Northeast only renewed their urgency. Soon after the storm struck, the SEC announced it would once again examine how registered investment advisors responded to the storm.
But as disaster planning has evolved, communicating the specifics of the plan has not. Too often these plans detail only the tactical matters of protecting property-both real and intellectual-and employee well-being, while overlooking the importance of internal and external communications as part of the overall crisis response. Increased scrutiny from regulators has forced firms to be proactive in their operational procedures surrounding disasters, but they must also put equal weight on communicating their preparation plans and responses to key stakeholders.
Fund firms must identify potential threats while ensuring that crisis or continuity plans are continually tested. Crisis planning boils down to three questions: What can happen? What are you going to do about it? How can you improve your response?
Gone are the days of preparedness plans serving the singular role of outlining logistical strategies to maintain mechanical stability; today's plans must also work as employee safeguards and customer protections-vehicles of security that are a natural extension of a firm's brand.
The time to start communicating disaster preparedness is not when a threat becomes apparent. Fund firms should consider showcasing their plans for weather disasters, terrorist attacks and other threats prominently on their websites, explaining how each plan addresses a multitude of business operations, and how the plan will minimize a crisis' impact on clients, customers and vendors. Firms should also stress how often plans are reviewed and how they are tested to give all stakeholders greater confidence.
Fund firms should also use the opportunity to engage stakeholders with detailed information about how they seek to meet the highest standards of disaster preparedness, and communicate that those preparations are a good investment to safeguard assets and the workforce. Firms should convey a sense of confidence in the readiness of any prepared plan, and assure the investing public that they have been crafted with the utmost care and attention to detail. In this regard, it's much easier to answer the questions that could arise in investors' minds about the preparedness of the firm before they are even asked.
Once the plans are ready for public viewing, fund firms should use a variety of communications channels to disseminate this information on an ongoing basis. A robust communications plan has messaging, press statements and even social media content prepared for a variety of potential situations in order to quickly get the message to stakeholders. Messages must be consistent across every channel and communicate that the firm is both prepared for the situation and experiencing no impact to operations or service.
Firms also need to ensure that disaster contingency plans are communicated to employees so they understand the resources available to them to handle any issues that arise, while still accessing the necessary tools and systems to maintain seamless operations. Involving employees in crisis planning can help firms better prepare and understand the specific needs of various departments. It will not only ensure greater employee engagement, but also result in a plan that is customized to each department's specific functions and concerns.
Whether natural or man-made, when a disaster strikes firms must implement a three-pronged external communications strategy that humanizes their brand, demonstrates a commitment to the local community and ensures that investors will not experience any interruption in service or management. All of these paths lead to the same destination: trust.
People want to work for, and are more likely to invest with, a company they trust. Giving key stakeholders confidence in the wake of tragedy can not only reassure them in the moment, but also can have a long-lasting impact on a brand's overall perception. Communicating care, concern and confidence in their ability to protect their operations is the common thread of firms that not only survive a crisis, but continue to thrive for long after one occurs.
Jennifer Connelly is chief executive officer of Jennifer Connelly Public Relations.