How to Write a Contingency Plan

Planning for the unknown can be the difference between success and failure.
Planning for the unknown can be the difference between success and failure. (Image: Jupiterimages/Creatas/Getty Images)

Although people may equate contingency planning with the world of information technology, planning for business contingencies goes beyond making certain a company's data and systems have backup plans. And, in a very real sense, contingency planning is just that: a backup plan for problems that can occur in either the day-to-day management of a business or as a result of catastrophe. Businesses often require multiple contingency plans to address a number of possible problems occurring. These can range from the power going out and the impact on data and employee safety to the loss of one or more key employees and planning for the impact of these losses. With that said, there are common methods to writing a contingency plan, regardless of what the plan is for.

Gather key employees and senior staff together to provide input and lead the contingency plan writing efforts. Not only is the input of key people imperative in the process, selecting a person to drive the planning efforts can be done from this group. Although not responsible for writing all of the contingency plans, the project leader can facilitate the process and act as a primary contact for questions and concerns of other team members.

Review existing risks and closely examine business processes. The business owner or senior executives should be a part of this process to help determine the primary, potentially harmful possibilities that could occur to put the business at risk. These may include key people leaving, new technology to make company services obsolete, a building lost due to fire, or a host of other possible problems that could befall the business.

Prioritize the risks above to help determine where to begin. Following that should be a close examination of the potential impact the high-risk activity or process will have on the business. This further helps to prioritize the planning efforts, focusing on those that are the most potentially harmful to the company. Better understanding each step in the process, and the tangible impact on the company, helps to formulate contingencies.

Develop tangible, realistic strategies to make up the contingency plan. This phase quite often requires key employees, usually those involved in the development of the plan, to brainstorm ways to address the risks determined by the planning process. For example, if losing a key person or two is seen as the highest priority risk and a contingency plan is written, it may include a strategy to develop ongoing sources of potential key employees — e.g., staffing agencies, networking and internal career development programs — so if the situation should arise, the company is better able to address the situation.

Monitor the contingency plan on a systematic basis. Business environments, markets and needs change regularly, requiring an ongoing review of contingency plans. As new processes, systems and people are brought into the company equation, there are real chances of contingency plans becoming obsolete without continual review and enhancements. Meeting with the core group of associates involved with the development and implementation of the contingency plan on a quarterly basis, more if there are breakdowns, helps ensure continued success.

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