John Kenney, CPRC, CEO, Cotney Consulting Group
The construction industry, especially the roofing industry has never had a more significant wave of risk than in the last few years since the pandemic’s start. It put the entire world in partial lockdown, leading to shortages, supply chain issues, inflation and many other issues.
As an owner or manager, you must understand how any risk of interruption impacts operations and the customer experience. It would be best if you learned how to contain the impact of risk by planning and preparing for those times when a threat rears its head.
The pandemic is only one example of the many unexpected challenges. No one can predict the disruptive forces that lie ahead that will throw your business world into chaos. Your best weapon is to dig deeper into your core business processes to prepare them for the next risk wave.
Every company needs a pre-operational plan to reduce risk. There are many complex challenges to anticipate and it is essential you have a plan established, an effective risk management plan.
When developing a pre-operational plan, you must capture every critical object that risk will impact. While many companies take an IT-heavy approach – and technology is essential – the scope is too narrow. Include people and processes, two areas often ignored during such planning in a business transformation platform.
Complex relationships exist between people, capabilities and strategies and each has risks. Add the technology – the applications and systems infrastructure – and you will see multiple overlaps across processes. Find the tools to deal with these complexities, including a process-oriented business model. For continuity, you must manage the risk of impacts and maintain your business operations. Like the COVID-19 pandemic, use this kind of model for an overall business transformation to manage massive risk. A process-oriented model shows you how to improve your work.
Use technological developments such as workflow automation and process mining to identify where you can achieve the most effective return on investment. This approach can reduce the impact of significant disruptions and clearly define what actions to take to restore your business operations.
You need a tool that considers the context of your overall business structure to allow for better decision-making. As you model the potential for risk and impacts of a pandemic, for example, models need a common denominator, a complete data set.
Impact models allow you to make better choices and to better understand the potential impacts of a crisis and how to manage it. Ask these questions:
■ What effects will your company feel if the economy shuts down?
■ How will this shutdown affect your daily work routine?
A business transformation platform is crucial to understanding your business’s complexities and managing its risk effectively. Today, nobody manages their financial data without a spreadsheet. So, do not try to address other complex processes without a process-oriented business model. While it can be helpful to look at past experiences, risk assessment makes it possible to imagine what may happen next and the potential impacts of the event. A process-centric business model shows data and impact together in the process context, so you can fully understand the effects of a risk incident.
Identify your most critical processes. This is important to reduce risk at high strategic and operational process levels. Are your current controls effective enough to handle the increased risk?
Identify your critical supply chain. With this, you can analyze your workflows regionally and identify the regional and global potential for disruption. Understanding your supply chain will help you restore these connections quickly.
Identify your critical people. Have a backup strategy of responsibilities to ensure your key processes are covered during a large-scale disruption. This leads to a continued positive customer experience and helps you maintain your operational business. Using a process-centered business model reduces the time lost determining who is responsible for what decisions and getting problems solved as they occur.
A process-centered model allows you to onboard people quickly and effectively. This includes processes that allow employees to work remotely where possible. This is also a great reason to document processes and keep them up to date.
Understanding the degree of impact on various parts of your business will help you when it is time to bring people back online. So, know which processes belong to which departments and how they matter. There may be a role and a function that go hand-in-hand. Suppose multiple people are capable of filling that role. In that case, you can mitigate any potential risk by plugging people in based on their location and ability to perform.
Knowing your suppliers and partners, you can identify potential backup suppliers to help mitigate risk and ensure continuity.
And, of course, you must understand your IT landscape and its effect on all your business processes. Have a mitigation plan in place in case your IT is suddenly unavailable. Store all this information in a cloud repository where it will be accessible when risk hits. This will help you prepare to move from “normal mode” to “emergency mode” when necessary.
Act now while chaos and its risk are fresh on your mind. This will give you and your team more confidence, knowing you have the tools to handle any trouble as it arises.
John Kenney, CPRC has over 45 years of experience in the roofing industry. He started his career by working as a roofing apprentice at a family business in the North-east and worked his way up to operating multiple Top 100 Roofing Contractors. If you would like any further information on this or another subject, you can contact John at jkenney@cotneyconsulting.com.