With the outbreak of the COVID-19, national and local authorities are taking strict actions in order to fight against the outbreak. Social distancing, closing of companies, schools, shops businesses all around the globe are already feeling the impact of the outbreak in connection to supply chains, capital markets M&M actions, and economical system in broader sense is under threat. Boards are urged to take action to ensure the health of their employees, develop contingency plans, mitigate risks and ensure business continuity and stability as fast as they can, if that has not already been done in the past. Coronavirus COVID-19 outbreak is one of possible unexpected circumstance that business can endure during its existence, therefore a business contingency plan is a must and it can determine which business will successfully manage and withstand an unexpected event, crisis or disaster, successfully recover from it and if done right even continue to make profit during that period.
A contingency plan is a proactive strategy that describes the course of actions or steps the management and staff of an organization need to take in response to an event that could happen in the future. It plays a significant role in business continuity, risk management and disaster recovery. 
In short contingency plans consist of: emergency response, activities that reassure business continuity, considerations regarding supply chain disruptions, crisis communications, employment/workplace management, financing, insurance, restructing and reaction and deactivation, distribution and maintenance of the plan. There is usually more than one plan (one for each possible event) and a backup plan. While contingency plan in general covers the important aspects of distribution, continuality of work and business, protection of workers and tangible assets, often the protection and management of intangible assets is overlooked. (Few examples of business contingency plan http://templatelab.com/contingency-plans/)
It is still very important to include management and protection of intangible assets such as intellectual property, competitive advantages, structural and relationship capital, proprietary know how, which today represent more than 80% of most company’s value, sources of revenue, reputation, etc. If those assets are not properly integrated into continuity-contingency planning it becomes difficult for sustaining, safeguarding, owning, valuing those assets in recovery. In contrast to tangible assets, they cannot be purchased or replenished when lost.
When developing business contingency plan, it is important to determine essential intangible assets, which help to achieve efficient, speedy economic and competitive advantage recovery. Ensure that during catastrophic event, business misfortune company is able to sustain, control, use, own and value those assets.
Basic planning considerations:
- Identify potential data privacy/leakage risks due to loss of business-critical functions. Evaluate the use, transfer, storage of new data gathered.
- Check your IT network and cyber security measures and rules
- Collaboration with intellectual property/legal counsel. The counsel should help to conduct asset inventories, re-establish control of the assets commence investigations of misappropriation, breaches, legal documents, employee obligations and guidelines for them, compromises, infringement, and/or counterfeiting that are likely to occur during adverse event if necessary.
- Evaluate employee non-compete, non-disclosure, non-disparagement, internal rules and agreements so that intellectual-relationship capital and propriety know-how can be retained during recovery.
- Structure business transactions to mitigate risk of intangible assets in costly and time-consuming legal disputes, etc.
- Develop a plan how to sustain ‘trade secrecy – proprietary status’ of designated information assets when there was required evacuation of knowledge holders and knowledge-based assets
- Maintain appropriate data and documents (certificate, GDPR,…)
Many businesses do not have contingency plans. But in times like these, we can see how important it is having such plans at hand instead of rushing to extinguish the fire.
How did your company develop contingency plan? You can leave a comment below.