Organizations thrive in thriving environments. Achieving sustainable success in modern operating contexts does not only depend on the results of one actor, but on the conditions that surround an entire area. Much the same way entire supply chains are responsible for the survival of the focal company, the same is true for geographical areas. In most cases, a single organization will have a hard time achieving its strategic objectives in geographical contexts that are affected by recurring disruptions. Even the largest players rely on critical infrastructures such as utilities or transport to operate, and the Covid-19 pandemic showed this very clearly.
Disaster risk reduction plays a key role in creating fertile conditions for business to thrive, since it adopts an area-wide perspective in building resilience towards natural disasters. After all, the idea of resilience has often been applied in the world of ecology, where researchers examined at complex ecosystems. The ability of a tree to resist to storms and flooding is dependent on resilient features that have been developed as a result of an adaptive environment. In the same way, a resilient organization will be able to withstand a natural disaster and remain operational only if its operating context is resilient enough. A food company cannot continue to operate if customers have no access to its stores or cannot deliver its products. Even digital based services such as e-banking or IT cannot be provided if the critical infrastructure supplying the network is disrupted.
Therefore, building resilient organizations is not enough without resilient areas. Based on this idea, the Japan International Cooperation Agency (JICA) developed a framework called Area Business Continuity Management (BCM), as a response to the Great East Japan Earthquake and Tsunami in Japan and the Flood of the Chao Phraya River in Thailand in 2011. The disruptive force of the seismic events led not only to business disruptions but to the halt of entire regions, with national and international repercussions. It became clear that in such a large-scale phenomenon, even those organizations with resilience arrangements struggled to operate, due to the lack of basic services such as energy, water, and transportation. Thus, the JICA worked at a cooperative framework for BCM, which can extend to entire municipalities or region.
Area BCM rests upon international good practices deriving from standards such as ISO 22301, applying them to a broader context. In this sense, Area BCM is not a substitute of BCM practices at the organizational level; differently, it helps coordinate BCM efforts among organizations. This approach follows the same macro steps that professionals would adopt in their daily activities, but on a larger scale. These include:
- Understanding the operating context of the area.
- Establishing a BCM strategy.
- Building a BCP for the entire area.
- Implementing the solutions designed and reviewing them.
- Embedding lessons learned and ensuring continual improvement.
Area BCM relies on a public-private partnership, which is something that is rarely the centre of discussions in business continuity. Stakeholders taking part to Area BCM include national, regional, and local administrations, industrial conglomerates, providers of critical services (e.g., utilities), local businesses, and research entities that can help perform some of the tasks (e.g., risk assessments). These stakeholders must form a hierarchical structure – similar to that found within organizations in some ways – where there is a leader of the Area BCM programme, followed by members and supporters.
The leader of the programme is likely to be the institution that manages the territory, which will usually be the local government. Its role is to coordinate the efforts of both members and supporters, as it is the actor responsible for the ownership of the program. Differently, members are all those stakeholders that operate in the area, including first responders, critical infrastructure operators, and private organizations. Their role is similar to that of process owners in a BCM programme at the organizational level. They should carry own BCM activities within their own organization, identify their risks, vulnerabilities, and critical services and provide this information to the coordinator of the Area BCM program. The leader will then proceed to analyse this information and formulate an Area BCP, adopting a wider perspective than the organizational one. The plan will then be validated through exercises or tests, to ensure continual improvement. However, the leader will not be operating alone. Just as in any BCM programme, there will be a steering committee with members belonging to the management of key stakeholders.
The concept of Area BCM is not particularly complex or elaborated, but it offers a very sensible framework to improve area-wide resilience and disaster risk reduction. While it has been mainly applied to natural disasters, it could also extend to threats of different nature. Specifically, Area BCM can provide the following benefits:
- Merging the information from different risk assessments and horizon scanning activities to have more complete picture of the various disruption that may affect the area.
- Analysing the history of disruption from several organizations, trying to understand the level of preparedness and possible area-wide vulnerabilities.
- Understanding dependencies among different actors, such as the provision of utilities and transport.
- Performing joint exercises with multiple stakeholders, which can coordinate their response measures and increase time and efficiency.
- Sharing knowledge on lessons learned across different stakeholders in the area.
This article was based on the document published by the Japan International Cooperation Agency (JICA) at this link: https://openjicareport.jica.go.jp/pdf/1000023389.pdf
Author: Gianluca Riglietti
If you liked this article, you might enjoy reading this one.