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February 3, 2012

Operational Risk

Summary:

Business continuity protection begins with a proprietary benchmark/gap analysis of an organization's existing plans, processes and procedures and focuses on operations, emergency response, employees, organization, systems, facilities, communication, and risks — internal and external — that an organization faces.

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Summary: About $5.5 million in damage was done to a Cerritos shopping center early on the morning of October 23, 2011 after firefighters were too late to save the building, Los Angeles County Fire Captain Mark Savage said. “It started collapsing when we were here so we had to pull out,” he said. Firefighters were called to the blaze at the Fountain Plaza Mall at South Street and Gridley Road about 2 a.m. on that morning.

Read more about the fire here.

Analysis: How much do you know about the other tenants in your building?

Unless you own and occupy the entire facility your business is housed in, you are vulnerable not only to natural and man-made disasters, terrorism, and communicable illness / pandemic exposures, but also to the side effects of those same hazards as they happen to other tenants and businesses located around and adjacent to your business.

In this unfortunate case, the flames from the restaurant fire quickly spread through the remainder of the building to engulf 10 businesses on the top floor.

  • Who knew about this incident, and finally notified the fire department?
  • Was it someone from the restaurant, or a concerned passer-by?
  • Did the restaurant's plan include some sort of automatic notification system alerting the incident response team when the internal fire suppression system became engaged?
  • Did the restaurant have an emergency response plan?

These questions lead easily into other questions that we may ask ourselves &nmdash; do you know your property management's emergency notification process and incident management plan? What is the building or property management's business continuity plan for your facility? Does your property management require tenants to have and maintain business continuity plans?

Even the best laid plans may prove useless if your business plans do not coordinate, even slightly, with the other plans in place by building or property management for the site you occupy.

Other threats to your business may arise from tenants near or in your building that may invite terrorism or other threats, such as an FBI or other government branch, a foreign nation's consul, etc.

What is your plan for dealing with events that may affect those businesses?

As this unfortunate instance shows, business may not have control over the timing of events affecting the organization when you share tenancy with other business owners. However, it is best to start planning a risk mitigation process with a full understanding of the risks entailed before the lack of adequate planning results in a future disruption becoming a real disaster.

Business continuity protection begins with a proprietary benchmark/gap analysis of an organization's existing plans, processes and procedures and focuses on operations, emergency response, employees, organization, systems, facilities, communication, and risks — internal and external — that an organization faces.

Using such an analysis, businesses and organizations are able to further understand the risks to the organization, and develop plans that can address or mitigate the risks. Understanding the depths of exposure your organization has can ensure performance goals and objectives are achieved.

Authors
Ken O'Dell collaborated with Marisol K. Shankar in writing this article. Marisol K. Shankar is a Project Coordinator at Firestorm Solutions, LLC.