ArticlePDF Available

Business Continuity Management: Time for a Strategic Role?

October 2004
Long Range Planning 37(5):386-386

DOI:10.1016/j.lrp.2004.07.010

Authors:

Brahim Herbane

De Montfort University

Dominic Elliott

Dublin City University

Ethné Swartz

Montclair State University

Against a background of increasing threats, business continuity management (BCM) has emerged in many industries as a systematic process to counter the effects of crises and interruptions, although its potential to play a more strategic role is still largely under-explored. This article examines the organisational antecedents of BCM and develops a conceptual approach to posit that BCM, in actively ensuring operational continuity, has a role in preserving competitive advantage. Such value preservation is central to the business continuity/business strategy relationship, and gives rise to the central purpose of the paper; to discuss whether firms’ BCM can be seen as strategic rather than purely functional.If so, what form does such provision take in terms of planning, organisation and culture? Evidence from six UK-based financial services firms illustrates differing approaches to business continuity, with two firms showing BCM provision more clearly aligned towards a mission-critical strategic role. Practical precepts for implementation are presented, together with a diagnostic drawing attention to the key determinants of enhanced value preservation.

Continuity diagnostic.

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Key to respondents and teams

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Summary of evidence

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Long Range Planning 37 (2004) 435–457

LRPlong range planning

www.lrpjournal.com

Business Continuity

Management: time for a strategic

role?

Brahim Herbane, Dominic Elliott and Ethne

´M. Swartz

Against a background of increasing threats, business continuity management (BCM) has

emerged in many industries as a systematic process to counter the effects of crises and

interruptions, although its potential to play a more strategic role is still largely under-

explored. This article examines the organisational antecedents of BCM and develops a

conceptual approach to posit that BCM, in actively ensuring operational continuity, has a role

in preserving competitive advantage. Such value preservation is central to the business

continuity/business strategy relationship, and gives rise to the central purpose of the paper;

to discuss whether firms’ BCM can be seen as strategic rather than purely functional.

If so, what form does such provision take in terms of planning, organisation and culture?

Evidence from six UK-based financial services firms illustrates differing approaches to business

continuity, with two firms showing BCM provision more clearly aligned towards a mission-

critical strategic role. Practical precepts for implementation are presented, together with a

diagnostic drawing attention to the key determinants of enhanced value preservation.

Introduction

As individuals we aim to prevent or minimise damage or loss of our personal property by tak-

ing a mixture of measures including physical security, alarms, adequate insurance cover, as well

as adopting vigilance and caution. We may also have emergency telephone numbers at hand

for such services as plumbing and rooﬁng. In essence, we anticipate threats to our possessions

(both deliberate and accidental) and make provision to meet these threats should they arise.

Planning is combined with ongoing changes to lifestyle stances to minimise impact and losses.

In an organisational context, business continuity management (BCM) has evolved into a

process that identiﬁes an organisation’s exposure to internal and external threats and synthe-

sises hard and soft assets to provide effective prevention and recovery. Essential to the success

of BCM is a thorough understanding of the wide range of threats (internal and external) and a

recognition that an effective response will be determined by employees’ behaviour during the

doi:10.1016/j.lrp.2004.07.011

business recovery process (see Exhibit 1). Business-process experts should ideally be involved

and take ownership of and responsibility for business continuity activities under the coordinat-

ing umbrella of a central BCM team. Organisations which can recover quickly and thoroughly

from crises will sustain little damage to their competitive position. If an organisation is unable

to recover quickly, or if it is perceived by stakeholders to have managed the recovery process

ineffectively, the effects on its reputation may outlast direct effects of the crisis.

While strategic planners have focussed on how organisations can improve organisational

performance by having a clear understanding of their competitive, political and organisational

environments, planned responses to occurrences which might interrupt normal operations and

threaten the survival of their business have been more fragmented. We propose that BCM has

the potential to play a more integrated, strategic role, and ask whether and how this might be

Exhibit 1. Business continuity in action

Morgan Stanley’s response to the September 11th attacks is an example of the beneﬁts

and limitations of business continuity planning. The company’s approach took a socio-

technical view that was not simply about computer systems recovery, and their organis-

ation-wide philosophy demonstrated both ongoing organisational learning and adap-

tation before and during the crisis.

Continuous training following the 1993 World Trade Centre bombing meant that most

of the company’s 3,700 employees survived the evacuation of the south tower in 2001.

Having achieved this ﬁrst goal in the chaotic aftermath of the evacuation, the company

proceeded to re-establish contact with its dispersed employees using house calls, public

broadcasts and one of its own call centres located in Arizona. Within three days nearly all

the staff based in the south tower had been located. Simultaneously (but not preceding

staff contact activities) Morgan Stanley set out to recover its operations at alternative

facilities, but not those that were originally designated which were also in the inaccessible

lower Manhattan area. Recognising the differences in strategic importance between

business units, operations and facilities, a temporary recovery centre was established

in Brooklyn until the ﬁrst recovery centre could be accessed. By Friday morning, testing

activities were in progress and the recovery—both physical and emotional—was

under way.

Other ﬁrms similarly affected drew on emerging processes in creative ways to reduce

the impact and loss from the denial of access scenario which affected hundreds of ﬁrms

on the day. Over half of Lehman Brothers’staff worked from home in the immediate

aftermath as result of the previous roll out of an extensive remote access programme. One

of its senior managers commented that ‘crisis adaptability is the key to continuity’.

For most organisations, people and processes are inseparable. The Senior Vice President

of the Federal Reserve Bank of New York (Christopher McCurdy) commented that existing

models of contingency planning in which single-site technical crises are considered should

no longer be the order of the day: instead, the priority should be the loss or lack of access to

staff.

Without them, nothing can be recovered, restored or retrieved. In the most severe of

crises—theworst-casescenario—physical survival is an indicator of the performance.

Business continuity processes are more vital than ever. Organisations such as Morgan Stanley

and Lehman Brothers have recognised that the creative and ﬂexible use of their resources

supersedes the value gained from mimicking emergency plans. Such an approach requires

ongoing commitment and leadership, the foundations of which are provided by adopting a

business continuity management approach.

436 Business Continuity Management: time for a strategic role?

fulﬁlled. Our review of ﬁnancial service ﬁrms indicates that, while not all ﬁrms have reached

this ideal state, they are clearly making changes towards further value creation and capability

development through BCM, and, taken together, demonstrate some of the important steps

necessary for the organisational journey towards an approach that could be termed strategic.

This article is organised into two sections. In the ﬁrst part, we consider the origins and

development of BCM and posit its potential to play a strategic role in organisations. This

section focuses on how BCM has evolved along with a four-point conceptualisation of a poss-

ible strategic role for BCM. The second section uses evidence from organisations in the UK

ﬁnancial services industry to identify the extent to which organisations exhibit a strategic

orientation in their business continuity practices. Bringing our conceptual and case analyses

together for synthesis, we recommend lessons to be learnt for organisations starting or pro-

ceeding on the journey towards improved resilience to crises

Genesis of a strategic role—initial considerations

Our initial proposal for BCM to be considered as strategic is that BCM offers organisations an

approach by which to improve the continuity of operations in the event of a crisis or disaster.

Without this organisational capability in place, the strategic dimensions of competitive advan-

tage may not have a secure platform to generate further value. Concepts such as tacitness, com-

plexity and speciﬁcity are associated with the idea of path dependency and the historical

dimensions of resource development within organisations, which reﬂect a resource-based view

of capabilities and competitive advantage.

Without operational continuity, the development

of mission-critical resources can be jeopardised as organisations race to isolate their competi-

tive advantages from imitation. Furthermore, seeking competitive advantages in the face of

known vulnerabilities that threaten the reputation, solvency or survival of the organisation, raises

the question of whether senior managers have adopted the long-term, company wide perspec-

tive that is at the core of good strategic management practice.

In terms of a competitive advantage hypothesis in which superior performance (the depen-

dent variable) stems from competitive advantages (independent variables) that include, inter

alia,ﬁrm resources and routines, factor market conditions, and industry structure,

one might

logically add an ability to preserve value that has been created. Operational continuity thus

helps to preserve value. The capability of an organisation to resist crises or to recover quickly

and minimise the impact of loss is what we term value preservation. Value preservation is a

background capability (comprising of business continuity resources, processes, routines and

know-how) that is underpinned by BCM and provides an improved operational stability in

which the competitive advantages achieved through the implementation of strategic initiatives

can ﬂourish. We are not suggesting that BCM necessarily leads to competitive advantage—but

without BCM the risk exposure of the organisation may well be heightened. Therefore, its

potential contribution to the organisation is that of value preservation.

[BCM’s] potential contribution to the firm is that of value preservation.

Increasingly, echoing some well established concepts in the ﬁeld of strategic management, it

becomes possible to see business continuity as having a strategic role. Where a number of orga-

nisations are affected by the same incident, those with more effective recovery and restoration

practices will emerge with a recovery advantage, which not only underpins the quicker resto-

ration of operations and activities, but also actively militates against the threat of impaired

reputation in the post-crisis phase.

BCM is not simply a functional process with a limited remit and impact. Instead, it can be

considered as a capability (i.e. a mix of routines and skills that is observable but not necessarily

tangible or transferable) that underpins organisational development in complex environments.

Long Range Planning, vol 37 2004 437

Next, we consider some antecedent approaches and how BCM differs from competing

approaches to the improvement of crisis resilience.

Antecedents and influences upon BCM

The ﬁeld of crisis management theory points towards a strategic role for the capability to resist

and recover from crises. Crisis management (CM) can be considered the roots of BCM, estab-

lishing its core assumptions. Disaster recovery planning (DRP) can be considered to be a less

socio-technical predecessor to BCM: the differences between them highlight how approaches

to planning for crisis recovery have developed in recent decades.

Mitroff et al. have suggested that, since crisis management is a process in which an organis-

ation engages with its environment (thereby having an impact across its many parts and affect-

ing a complex collection of stakeholders), such a process ought to be regarded as strategic in its

nature.

Furthermore, they point to another similarity between BCM and strategy, in that cri-

sis-related decisions are taken by senior managers and may be incremental in nature. Preble

also characterises the crisis management process in a manner which resembles that of a stra-

tegic planning process. First there is an initiation of a planning process followed by an organis-

ation and environmental analysis (risk assessment) and the subsequent development of plans

for prevention, back-up and recovery. The next step involves documentation, implementation

and periodic reviews. Such a process is not dissimilar to a process involving goal setting, analy-

sis and selection and implementation of strategy. Where crisis management and strategic man-

agement complement each other, is that the former enhances the organisation’s‘defensive

capability’against crises, whilst the latter augments ‘offensive capabilities’in respect of the

competitive environment.

Richardson offers a further rationale for crisis management and

strategy to share a common purpose, as crises ‘are incidents which threaten the strategic goals of

organisations’. Furthermore, it is argued that an organisation’s strategies should deliberately set

out to avoid crises by adopting a long-term, stakeholder driven process of collaboration.

BCM has developed into a socio-technical (often organisation-wide) approach to crisis and

risk management. In both theory and practice, BCM draws upon both CM and DRP approa-

ches. These alternatives differ in the emphasis they place upon the three basic stages of a crisis:

pre-crisis, trans-crisis and post-crisis. The disaster recovery planning approach (with its infor-

mation technology focus) emphasises recovery over prevention (since the causes of crisis are

perceived to be beyond the control of individuals and organisations).

DRP has traditionally

been oriented towards information technology failures and natural disasters. In contrast, the

crisis management approach is more akin to BCM, positing that a crisis incubates during a

pre-crisis period/phase, awaiting a triggering event to transform the latent crisis into an active

one. Indeed, given that organisations’systems are both complex and coupled, some crisis man-

agement theorists have described accidents as being ‘normal’.

Although, strictly speaking, this

notion of the normality of accidents corresponds with a presumed inevitability of crisis that

cannot be prevented by human intervention, a more appropriate view is that if there is an

expectation that crises will not happen then there will be little effort to put prevention or

recovery measures into place. The incubation of a crisis has, in contrast to the ‘normal-acci-

dent’perspective, been attributed to sloppy management avoiding or ignoring warning sig-

nals.

An acceptance of the normality of accidents leads to a further, inevitable, conclusion:

that a remedy or solution is inﬁnitely preferable (hence the need for BCM as advocated in this

article). Although clear distinctions may not easily be drawn, BCM tends to be business-centric

(the organisation, customers, suppliers, etc.) whilst crisis management tends to be socio-

centric (government, public bodies, local community, etc). Each has associated techniques for

the risk analysis and planning, although, increasingly, the terms ‘continuity management’and

‘crisis management’are becoming interchangeable.

The vulnerability of individuals or organisations does not automatically change with such

realisations—knowing that one is vulnerable does not make one more or less vulnerable.

438 Business Continuity Management: time for a strategic role?

Instead, we ﬁnd that, if we look at the propensity for crisis in a system, we can identify how a

crisis may be being incubated or hidden, rather than merely responding to the crisis event,

which is effectively a DRP approach. Sharp makes a useful distinction between DRP and BCM

when he notes that ‘[Disaster recovery] of computer systems [is] simply part of the technical

implementation of the overall business strategy. Unlike disaster recovery planning, business conti-

nuity is about anticipating failures and taking planned and rehearsed steps to protect the business

and its stakeholders’ interests. It is about co-ordinating and integrating all the planning processes

across departments and presenting a conﬁdent image to the outside world.

Next, we propose the

case for BCM to be considered as strategic, following which we examine our proposition using

case evidence.

Business continuity management as a strategic precursor

For commercial organisations, the adjective ‘strategic’evokes the idea of a long-term competi-

tive advantage. BCM is not only wholly compatible with this view but (as we discussed above)

it is also a strategic precursor since a threat to the advantage (due to lack of crisis resilience)

threatens the continuity of operations over a prolonged period. And just as planning is con-

sidered strategic when it facilitates the long-term development of competitive advantages, it

can be argued that BC management which readies an organisation to preserve value derived

from competitive advantage is also strategic.

Figure 1 distinguishes between different approaches to crisis management and business con-

tinuity preparations according to whether the scope of the activity is designed to address tech-

nical or socio-technical crisis, and according to whether the activity is potentially strategic in

nature. A strategic orientation, for our purposes, is deﬁned as an approach that is business-

driven, based on a combination of planning and management, and potentially leads to long-

term value creation and organisational advantage. Accordingly, we see that an organisation

with a technical operational focus only has little more than the ability to respond to a crisis, as

opposed to anticipating and limiting losses.

Where an organisation follows either a route towards planning for technical interruptions

across the organisation (DR planning) or for socio-technical interruptions across the organis-

ation (BC planning),

organisations are taking one step toward the goal of BCM which is not

Figure 1. Typology of continuity approaches.

Long Range Planning, vol 37 2004 439

only strategic in orientation, (with the attendant potential beneﬁts as signposted above) but

also ready to address a wider set of crises than those arising from an IT or facilities interrup-

tion alone. Whilst BCP and DRP are not strategic in nature, it does not preclude the possibility

that an organisation can develop its DRP provisions into those more closely resembling BCM.

In addition to the general parallels between strategic management and continuity manage-

ment outlined above (in terms of planning processes, capability development and socio-techni-

cal approaches), a number of addition facets evoke the possible convergence between the two

disciplines (thereby suggesting the proposition of a strategic role for BCM). These include:

.Speed—a critical determinant of recovery advantage;

.Conﬁguration resilience—the reduction of supply chain and business network vulnerability;

.Obligation—regulatory and legislative drivers; and

.Embeddedness—achieved over time and necessary to make a transition from planning to

management.

Speed

The concept of time as a source of organisational advantage is long held in the strategic man-

agement ﬁeld, and the ability of an organisation to achieve an objective more quickly than riv-

als, whether this be the reduction of lead time, time-to-market, production cycle time, or

imitation time, has long been considered to be a source of competitive advantage

Equally

valid is the ability to recover more quickly than rivals who face the same crisis or interruption.

In the event of a crisis or interruption to business operations, such as where two or more

ﬁrms suffer from the same power outage, the ability to relocate and restore systems, people and

data will affect the race for resumed operations. Those organisations that are better able to

recover quickly will have to endure less (if any) time turning away new customers, delaying

transactions with existing ones and facing the inherent loss of goodwill that develops as a ﬁrm

is perceived as slower to recover than others. Similarly, an organisation may ﬁnd itself losing

ground to imitators once its product has been compromised.

organisations able to recover quickly will [avoid] turning away

customers, delaying transactions and loss of goodwill.

The speed of recovery is the surface exposure of a more profound capability in the form of

organisational alertness (prior, deep knowledge, notiﬁcation, invocation and emergency team

procedures) and preparedness (alternative sites, well exercised plans, resource redundancy).

Speed, expressed as the reduction of process lead-time, preserves value on each occasion that

an emergency response is required, thereby reducing the length of discontinuity periods while

the organisation recovers from interruption. Over a longer period of time, an organisation’s

alertness underpins the development and maintenance of competitive advantages. Thus whilst

there may only be an occasional need (varying between organisations and between industries)

to deploy business continuity plans, the underlying capabilities which facilitate responsiveness

also inﬂuence the organisation’s preparedness and resilience. Speed of recovery or appropriate

response may also contribute to limit negative impacts on an organisation’s reputation.

A note of caution needs to be sounded, however: despite the requirement for speed, a thor-

ough recovery is preferable to one which merely patches over the damage caused by the inci-

dent. For instance, an e-tailer may be able to restore order-taking operations within a few

hours of an interruption, but if stock information is incorrect (due to inaccuracies in restoring

data), a new set of problems will arise when clients ﬁnd their orders delayed or incorrect.

440 Business Continuity Management: time for a strategic role?

Configuration resilience

Long-term sources of competitive advantage are vulnerable if organisations are ill prepared to

deal with major operational interruptions. Although the avoidance of crises through well

developed and tested business continuity provisions is a starting point, since organisations do

not operate in isolation, it is the capability of an organisation to resist crises when those

around it (or within its extended supply chain) encounter difﬁculties that is increasingly vital

in stockless, high volume and rapid transaction supply chains.

Business risk can take many forms, not least those traditionally associated with insurance.

However, a further view of risk is that of a heightened vulnerability/exposure to interruptions

arising from the conﬁguration of the organisation’s supply chain. For instance, a legal dispute

in 2002 between Land Rover and one of its chassis component suppliers UPF-Thompson

threatened production of its Discovery model, affecting some 1,400 employees directly, and

around 10,000 indirectly

This stark case exempliﬁes the vulnerability to interruption that

organisations face where they have chosen a single supplier rather than adopting the parallel or

multiple sourcing approach essential to strategic procurement

And as the English Football

League discovered in the same year when its main TV rights customer collapsed, the down-

stream supply chains are not simply a domain for trade, but may also be a potential source of

threats. Such purchasing decisions are strategic: and so are their implications for the organis-

ation should a crisis arise.

Equally important in the event of a crisis is the use of support services (such as data salvage,

data restoration, telecommunications, staff counselling, emergency accommodation, etc.) from

recovery suppliers, who may not necessarily be a ﬁrm’s normal operating suppliers. Clearly such

a supplier (for instance of hot site user workspace facilities) must be chosen with care—they

may have little day-to-day contact with a client organisation but, in the event of a crisis, will

become the focus of company attention and reliance, and key to its ability to achieve a satisfac-

tory recovery (both in terms of quality and time). Without the adoption of a strategic mindset

for business continuity (and thus for supplier identiﬁcation), one might only discover the stra-

tegic importance of such a supplier when it’s too late!

Once again, the outward signs of successful conﬁguration resilience might only be appreci-

ated periodically in the event of a crisis that is mitigated quickly and without delay to oper-

ational supply chain. But BCM will still be delivering value preservation in the forms of

increased resistance to crises and higher reliability conﬁgurations.

Obligation—regulation and legislation

Value preservation within organisations is increasingly a concern for external parties such as

regulators and legislators who consequently oblige many organisations to introduce business

continuity provisions.

While such external drivers have elevated BCM to a higher level of importance within the

corporate governance agenda, they have also challenged organisations to examine whether

their response should be merely to comply with minimum necessary requirements or to adopt

what we would term a more strategic approach, to exceed minimum requirements in favour of

leveraging their BCM capabilities further. Just as good strategic planners will pay attention to

changes in their competitive environments—and in some cases attempt to shape it—there is

scope for business continuity managers to move beyond the legal or regulatory pull factors of

national, industry or technology obligation. However, since these pull factors provide the ana-

lytical baseline for planners, they merit identiﬁcation.

State responses to natural disasters or terrorism highlight the need to

address potential responses to business interruptions.

Long Range Planning, vol 37 2004 441

At a national level, the understanding of the inescapable links between business and risk

takes various forms. State responses to natural disasters or acts of terrorism have highlighted

the need for organisations to address their potential responses to business interruptions.

Fur-

thermore, business continuity is echoed in further developments that have taken place in the

arena of corporate governance. Recent initiatives in corporate governance such as Turnbull’s

1999 Guidance for Directors on Internal Controls for Risk Management (UK) identify four

broad categories of risk (business, ﬁnancial, compliance and operational), and highlights the

need not only for clear totemic and practical links between the senior management and the

management of risks to preserve value, but also the long-term commitments that are necessary

to achieve them. (An organisation’s need to mitigate so many levels of risk supports the case

for the embeddedness of its BCM process beyond planning and into management (see below)).

The role of the state in requiring organisations to pursue risk reduction is not new. The US

Foreign Corrupt Practices Act (1977), in which corporate managers would be held liable for

the protection of corporate assets, is often cited as a primary driver of business continuity in

the US whilst, more recently, Presidential Decision Directive 67 (PDD67) has required US Fed-

eral Agencies to put in place provisions for the ‘continuity of operations’(a public sector syn-

onym for business continuity)

At an industry level, the ﬁnancial services industry is recognised to be at the forefront of

business continuity practice. This is hardly surprising, given the highly regulated nature of day-

to-day activities which require technical disaster recovery preparations to be ever-available.

Finance organisations have long demonstrated an ability to extend the state of the art and lead

where other industries follow. This volition is driven by the sector’s reliance on Information

and Communication Technologies (ICT), the clustered nature of location (e.g., ﬁnance ‘capi-

tals’), and its attractiveness as a target for individual and organised crime as well as for terrorist

groups. This clearly demonstrates the context-dependent nature of the drivers for BCM.

Nevertheless, the potential to purposefully exceed generic levels of competence at an industry

level exists, as is shown in this study.

Within technologies—in particular ICT—external drivers for business continuity provision

are increasing: the ISO 17799 standard contains recommended practices for business conti-

nuity, IT security and data back-up, while (at an operational level) the Australian/New Zealand

4360 standard has set down the ﬁrst generic risk management standards in the world. The gen-

eric competencies which follow such standards are likely to become qualifying rather than win-

ning criteria as stakeholders come to expect more coordinated and proactive approaches to

value preservation.

For those organisations operating in contexts of high obligation towards business continuity,

BCM can be seen in the strategic role of extending value preservation to a wider set of stake-

holders. In their turn organisations in less mature industries—in terms of continuity obliga-

tions—have an opportunity to differentiate through the mimetic adoption of processes and

practices from elsewhere. Each level of obligation, whether national, industry or technological,

provides an opportunity for mere compliance or for exceeding prevailing norms to identify

greater possibilities for value preservation.

Embeddedness

The fourth dimension that inﬂuences the potential for a strategic role is the extent to which

BCM processes become embedded. This transition arises when strategic thinking and partici-

pation in the business continuity process is not only evidenced among the top management

team, but also manifests itself throughout the organisation. BCM is then not merely ‘a plan’

but constitutes the organisational processes of leadership, commitment to which may be seen

operating at individual and group levels. As this process becomes ongoing, BCM is more likely

to become aligned with strategic initiatives within the organisation, and as the organisation

grows and changes, so does its recovery planning. While embeddedness does not immediately

442 Business Continuity Management: time for a strategic role?

lead to the attainment of an advantage, its reorientation as a strategic matter supports

improved value preservation.

As an antecedent to BCM, DRP was a process dedicated to the creation of a plan, char-

acterised as reactive and concerned with hardware and facilities and focused with functionally

isolated organisational structures. The purpose of such planning is to protect core computing

operations rather than to adopt a macro-organisation stance. Whilst containing more than

adequate detail for technical recovery, such an approach may take too little account of people

and communications issues: thus when an emergency plan is invoked (or tested) it will be seen

to have inadequately accounted for the variations of authentic human behaviour.

Managing

behaviour (rather than prescribing it in the form of a plan) is a difﬁcult balance to achieve,

especially under conditions of a crisis. Whilst simulations and testing are beneﬁcial, organisa-

tions cannot (for reasons of cost and stress upon their employees) always undertake the most

realistic forms of training. The dangers of taking the search for realism too far were dramati-

cally illustrated in the ‘fatal’Nairobi Airport ‘air crash’in August 2002, when what was repor-

ted round the world as a genuine incident later transpired to be an exercise designed to the test

the response of the emergency services.

For business continuity to succeed in a genuine

emergency, it is the combination of managing the process of recovery as the incident unfolds

(revealing surprises and complexities for staff and management to address) with the established

plans that will make for an effective recovery. This is evidenced by the increasing appearance of

incident management and command and control practices drawn from the emergency services

in the BC provisions of private organisations.

The combination of effective plans coupled

with ﬂexibility, creativity and adaptation, is a necessary characteristic of both strategic plan-

ning and business continuity. Whilst in both there is uncertainty of outcome (in the latter,

unexpectedness is inherent) the necessary tension between deliberate and emergent processes

from the former still remains.

An embedded process is an essential condition that transforms BC Planning into BC Man-

agement, and it is the latter that has the potential to exhibit a strategic role. If the process is not

embedded, it cannot contribute to the long-term strategic goals of an enterprise, and will only

offer episodic manifestations of high quality BC responses: consistent manifestation assumes

that it is embedded.

If the BCM process is not embedded, it cannot contribute to the long-

term strategic goals of an enterprise.

Thus far our discussion has posited that there is the possibility for BCM to offer a greater

contribution to organisations, and one which could be seen as strategic. It is therefore oppor-

tune to examine, from an empirical perspective, whether ﬁrms have in place BCM processes

which are strategically oriented—and if so, what form do they take in terms of organisation,

planning and culture.

Methodology

Validation through empirical observation of what occurs within organisations, and this

necessitates a framework for data collection and analysis. We have highlighted four factors

that could affect whether BCM could play a strategic role in the preservation of competitive

advantages: speed, conﬁguration resilience, embeddedness and obligation (external drivers).

With the exception of external drivers (which are observable at an industry or national level),

the three other factors could potentially be observed in organisations’continuity practices. The

research team concluded that case-based observational and semi-structured interview data

focussing upon four critical areas would be used to identify the approach taken by the organis-

Long Range Planning, vol 37 2004 443

ation to deal with business interruptions and determine whether this amounted to a ‘strategic

BCM’. The four dimensions below represented the general structure of the research interviews:

.Human resources and responsibilities;

.Business continuity planning and processes;

.Communications and structure; and

.Attitudes toward business continuity and ownership of the process.

Six UK-based ﬁnancial services organisations were chosen to provide a basis for the examin-

ation of four process dimensions which characterise their continuity practices. The choice of

the UK ﬁnancial industry for our sample was based on a twofold rationale. First, as noted ear-

lier, the industry has a long history of business continuity practice and has indicated the poten-

tial for BCM to have a strategic role. Secondly, the researchers were familiar with the sector

and, importantly in methodological terms, had access to organisations for data collection. In

our experience, ﬁrms often express initial reluctance to participate in studies dealing with busi-

ness continuity, since the subject under discussion is highly sensitive (particularly if no

adequate plan exists within the ﬁrm). It is therefore absolutely imperative that participants

cannot be identiﬁed nor any data associated with the participants be identiﬁed, and for this

reason organisations are referred to in the research report only by pseudonyms. While all the

ﬁrms are from the same sector and facing similar business conditions, the ﬁndings show their

operations are by no means homogenous.

Semi-structured interviews were conducted with continuity managers and members of their

headquarter teams—all with operational responsibility for the BCM process—from six ﬁnance

organisations, (two insurance companies and four banks), selected from the Finance Sector

User Group member list of Survive.

Two members of the research team were present at each

interview, one actually conducting the interview, while the second ensured that interviewer

bias was reduced by checking that all questions had been covered in sufﬁcient detail to enable

comparisons within the sample. The tape-recorded interviews were transcribed and respon-

dents consulted for veriﬁcation purposes. The principles of grounded theory were used to

guide data analysis. Interview data was analysed, classiﬁed, and coded by three researchers with

experience in content analysis, using the interview schedule as a template, together with related

documents.

The research is clearly limited in its generalisability given the small sample in what was only

intended as an exploratory study. As Bryman notes, ‘case studies should be evaluated in terms of

the adequacy of the theoretical inferences that are generated. The aim is not to infer the ﬁndings

from a sample or population, but to engender patterns and linkages of theoretical importance.

Like all other research, the work is also subject to limitations in its validity and reliability, but

the aim of the research was not to generate ‘objective’knowledge per se, but to examine the

under-researched area of BCM and question its normal deﬁnition as ‘non-strategic’

The composition and background of the BC team [governs] its scope of

activities and...its potential to behave strategically.

Empirical findings

Human resources and responsibilities

The composition and background of the BC team is an important determinant of its scope of

activities and indicates its potential to behave strategically. Respondents were drawn from a

444 Business Continuity Management: time for a strategic role?

wide range of business backgrounds, with IT the focus in two and identiﬁed in a third. (The

backgrounds of business continuity personnel interviewed for this study along with the pseu-

donyms used to refer to respondent organisations in the study are shown in Table 1.) Two

organisations (Celtbank, Ambank) took a multi-functional view, which held that business con-

tinuity managers should be drawn from business rather than technical IT areas. The Ambank

respondent told us that they felt leadership of the BC process by an IT specialist would have

resulted in an emphasis on technical aspects. They felt this would create cognitive blinkers

which would impede the search for potential problems and solutions, and adversely affecting

conﬁguration resilience by hindering the dissemination of the BC process across all functional

areas: these feelings were echoed at Celtbank and Usbank.

In the four organisations whose teams were not dominated by members with an IT back-

ground (USbank, UKinsco, Celtbank and Ambank), previous experience of business process

reviews and internal strategic audits were identiﬁed by team members as an important strength

in their business continuity processes, since such analyses would reveal the human and stra-

tegic consequences of a crisis. A clear understanding of competitive and strategic analysis was

also considered essential in the composition of the business continuity team. USbank, Celtbank

and Ambank signalled a broad scope of activity (Figure 1) through the decisions of senior

managers to delegate responsibility for business continuity to a multi-skilled team. Such an

approach to the selection and composition of the BC team reﬂects a more holistic remit for

BCM. In contrast, the remaining three organisations considered business continuity to be an

IT task undertaken by suitably qualiﬁed staff.

A further observation made about human resources and responsibilities was the absence of

an explicit role for legal affairs and compliance-based know-how within teams. With the

exception of Ambank, all others relied on such expertise being brought into the team rather

than residing permanently (or semi-permanently through secondment) within the BC team.

Given the increasing obligations of organisations through legislation and regulation, such an

omission is an important impediment to the improvement of value preservation processes.

Business continuity planning and process

Several approaches to planning emerged from our case study organisations. The ﬁrst approach

distinguished sharply between the ‘disaster recovery’and ‘business dimensions’of the business

continuity process in favour of the latter as the dominant focus. In Celtbank and Ambank

these processes were clearly separated, with business continuity existing almost as a ‘meta-

department’which retained an overview of IT disaster recovery planning (i.e. DRP was a sub-

ordinate activity to Business Continuity activities). At Ambank, business continuity was the

umbrella for two types of planning which varied according to severity and type of failure,

rather than making a distinction between types of resource (IT, facilities, etc.). Disaster

Table 1. Key to respondents and teams

Name/pseudonym Number

of staff

Age of team Qualiﬁcations and background of team

USBANK Three Since 1994 Banking, strategy and IT experience

UKINSCO Two Since 1989 Organisation and methods, business analysis

CELTBANK Five Since 1992 Internal consultancy, organisation and methods, total quality

management

AMBANK Three Since 1987 Accounting, sales/marketing, internal auditing

LONBANK Three Since 1989 IT and facilities management

EUROINS Three Since 1990 IT management and contingency planning

Long Range Planning, vol 37 2004 445

recovery planning dealt with the ‘worst-case’scenarios whilst contingency planning dealt

within speciﬁc incidents within the organisation.

A second approach used planning to provide a contingency for the recovery of speciﬁc facili-

ties. Although the aim was to enable the business to continue operations in a functional rather

than cross-functional way (i.e. several business activities simultaneously), at USbank and Lon-

bank this was restricted to IT disaster recovery planning alone. By contrast, UKinsco and Euro-

ins used planning to achieve facility restoration, concentrating on those facilities in their

possession rather than the business activities they would need to restore (which might span

several facilities). Those organisations which exhibited a DRP approach (USbank and Lon-

bank) limited their planning to a technology focus. Plans were researched and prepared (in

their entirety) by the continuity team and no wider participation in the planning process was

sought. The broader scope of business continuity evident at Celtbank and Ambank ﬁts with

what has been associated with leading practice within the UK ﬁnance sector.

Such leading

practice organisations recognised that business continuity should be tailored to the needs of

particular functions or product markets, rather than be offered as a generic solution to all,

reﬂecting the context-dependent nature of planning that we noted in our conceptual presen-

tation. This was evident at Celtbank, where a variety of criteria was used to rank their product

markets and subsidiaries according to ‘their risk in terms of location, their amount of security,

technology exposure, revenue ﬂows, and their value in a strategic sense.’(Celtbank’s BC Man-

ager). Here we can observe an organisation seeking to preserve value by identifying areas of

risk throughout the product and property portfolio. Whilst UKinsco and Euroins were largely

concerned with the integrity of their systems, with continuity efforts that were hardware

focused and internal (an example of internal resilience), at Celtbank and Ambank the scope

incorporated internal, external, hardware and software elements, and evidenced a key concern

for protecting the interests of their customers (conﬁguration resilience).

In addition, further examination of Celtbank and Ambank’s planning approach and pro-

cesses revealed the intention to develop a more strategic role for their business continuity

activities. In these organisations, business continuity did not deal with units (departments, sec-

tions of divisions) in isolation, but actively sought to identify the strategic signiﬁcance of

different units and key linkages both within and beyond their organisational boundaries, seek-

ing to improve their conﬁguration resilience by identifying links, threats, vulnerabilities and

impacts along the supply chain. In contrast to the other four organisations in this study, they

involved corporate customers in the business continuity review process, and business

continuity issues were also considered during the development of new products. For example,

Celtbank’s evaluation of a new stock exchange system involved the business continuity team,

both to advise on technical and recovery issues and solutions that might be incorporated at the

design stage of the project, and to consider explicitly the strategic implications for the organis-

ation were the new system to fail. At the same time, the speed of recovery and its implications

for the company’s competitive advantage were brought to the forefront of the BC agenda.

Four of the respondent organisations (Euroins, UKinsco, Celtbank and Ambank) indicated

that they had adopted a variety of strategic planning tools to aid their understanding of them-

selves and the markets in which they operated. Three—UKinsco, Celtbank and Ambank—

reported the use of value chain analysis to help identify the linkages between their various

primary and support activities. The use of this analytical framework within a BC context

demonstrates an understanding of the relationship between value creation through strategic

planning and value preservation through BCM. Respondents suggested that understanding this

relationship was a key determinant of the effectiveness of any such process. Celtbank and

Ambank reported that they were able to relate and direct the resources invested in business

continuity to strategic initiatives and, therefore, to demonstrate that they had extracted value

from the business continuity process. Ambank’s BC manager reported that the bank had suc-

ceeded in attracting new corporate clients due to their ability to demonstrate competence in

business recovery. This success in demonstrating conﬁguration resilience, the respondent

446 Business Continuity Management: time for a strategic role?

added, was invaluable in encouraging the bank’s employees to see business continuity activities

as more than simply a ‘negative administrative task’, but as something which actively con-

tributed to revenue creation. A secondary beneﬁt of a more strategically oriented BCM focus is

that a thorough analysis of the organisation’s value system can aid the process of prioritising

which processes and resources are most fundamental and need to be restored ﬁrst. This is not

dissimilar to the results of Business Impact Analysis, one of the most popular tools used by BC

planners (including respondents at Celtbank and Ambank).

commitment to BC [was] part of appraisal system for middle

managers...and seen as an integral and ongoing part of daily

routines.

Communications and structure

Organisations seeking to embed the BC process can utilise a combination of means to com-

municate its relevance, including training sessions, awareness raising exercises and ongoing

communication tailored to meet the needs of their target groups. These measures also signal

the extent to which BC is a one-off process, or is embedded and on-going. For example,

Ambank’s continuity team took the trouble to understand the operations of diverse business

processes and departments and their practices and subcultures in order to tailor training and

communications to their individual departments’needs. They believed this would improve

the effectiveness of training, documentation and presentations. A commitment to BC also

formed part of the appraisal system for middle managers, and was seen as far more than simply

preparing plans but to be about business continuity as an integral and ongoing part of daily

routines. At Celtbank and Ambank the BC teams have a clear position in the hierarchy, report-

ing to senior management, and supporting structure which enhance their multi-disciplinary

focus and know-how. The absence or ambiguity of formal structures in the others indicated

the presence of a rigid, function-based disaster recovery planning approach rather than a trans-

functional (more strategic) form of management.

In order to establish permanent communications and structural arrangements, Celtbank and

Ambank had developed systems of formal departmental co-ordinators to complement the

business continuity team, whilst other respondents (USbank, Euroins) had only a voluntary

co-ordination scheme in place. The role of the co-ordinators was to aid the collection of rel-

evant data and to disseminate information throughout the organisation. Respondents reported

that this appeared to have worked with varying degrees of success, with the greatest success

enjoyed by those organisations (Celtbank, Ambank) with formal coordinators and where line

managers were responsible for business continuity in their own areas, enabling them to take

some ownership of the BC process. These formal coordinators functioned as an active and

ongoing nexus between the head-ofﬁce based business continuity team and operating func-

tions, business-processes and departments. In contrast, voluntary involvement was over-reliant

upon goodwill (which could be abused or exhausted) and led to a more fragmented involve-

ment and participation by coordinators. This also signalled that BC activities were not

considered to be strategically important.

Attitudes and ownership

The structural arrangements identiﬁed above were also reinforced by control and rewards sys-

tems which shaped and determined attitudes towards BC activities and the ownership of

responsibilities and outcomes within the process (such as the plan itself). At Celtbank and

Ambank, line managers were given formal responsibility for continuity management and plans

Long Range Planning, vol 37 2004 447

within their units with continuity targets negotiated and set during their annual appraisals. To

complement these formal provisions, informal peer pressure prevailed in which line managers

monitored the development of continuity initiatives. The ongoing failure of any manager to

contribute to continuity management was seen as a betrayal of collective responsibility and the

commitment shown by those who had already invested their time and resources. Celtbank and

Ambank reported this as a powerful control mechanism in engendering an organisation-wide

rather than parochial outlook. In contrast, appraisal systems were not used at all at Usbank,

and little attempt at evaluation was evident.

Assumptions concerning the nature of crises were revealed, in part, by the reported stimulus

for developing the continuity process. The two US based organisations of our survey reported

the important role of Federal Law and wider obligations highlighted earlier. For USbank com-

pliance with the law was seen as an end itself. However, for Ambank, although the trigger had

been legal requirements (obligation), the incentive to develop continuity practice came in the

form of the business’s own strategy and mission critical activities. Nevertheless, Ambank and

USbank highlight how geographical and regulatory antecedents drive the core need for busi-

ness continuity provisions.

Without exception, the four European organisations identiﬁed the threat of terrorism as the

key stimulus for initiating BC activities. For UKinsco, Lonbank and Euroins, the perception of

continuity management as a contingency against potential terrorist activity appeared to have

led to little alteration in their provision (which was still primarily concerned with IT and facili-

ties recovery) despite the possibility of gaining a recovery advantage by more successfully react-

ing to a terrorist event which threatened both them and their competitors. For Celtbank,

although the threat of terrorism had been the starting point for the introduction of business

continuity, the process had highlighted the interdependencies and vulnerabilities of the bank’s

supply chain. As with Ambank, business continuity activities had evolved which resembled,

supported and were driven by their organisation’s strategies. This contrasted sharply with prac-

tice found elsewhere: for example, USbank reported a complete failure to enlist the partici-

pation of key staff in the continuity process, since they did not consider business continuity

activities to be their responsibility, and the USbank continuity team produced plans without

any input from line managers. The resulting plans were prepared to meet the obligations of

regulatory requirements and reﬂected the dominant self-interest of functions along with the

absence of formal BC roles beyond the team based at corporate headquarters.

Analysis—time for a strategic role?

The case data offers a revealing if mixed picture of continuity practices in the UK ﬁnancial ser-

vices sector. Earlier in the paper we proposed that BCM had the potential to contribute to stra-

tegic value preservation along the dimensions of speed (recovery advantage), conﬁguration

resilience, embeddedness and a superior response to external obligations. These dimensions

help to differentiate between a ‘standard’approach and an approach to BCM that could be

termed ‘strategically oriented’. There are two steps to such an approach; the ﬁrst step involves

robust organisational systems, practices and attitudes that resemble BCM, while the second

step involves a shift from standard business to a strategic continuity management approach.

Let us consider the ﬁrst step.

Differences in practices—some clear leaders

At the time of the study, the concerns of Ambank and Celtbank lay very much with the preser-

vation of value through the business continuity process. The delegation of responsibility to line

managers and the use of coordinators also ﬁt with this broader view. There is also evidence

that their orientations had evolved from more limited approaches triggered by Federal require-

ments in one case and the threat of terrorism in the other. As the only two organisations con-

sistently exhibiting some characteristics of a strong strategic orientation, it is interesting to

note that responsibility for continuity management had originally been placed within an IT

448 Business Continuity Management: time for a strategic role?

department, implying its scope was initially considered to be technological. However, it was

evident that cultural change had occurred, from a position of relative disinterest amongst

employees to one in which the majority of line managers were fully committed to the process.

This reorientation of continuity activities was not an overnight endeavour—it required man-

agers to link, leverage and lead their resources in more imaginative and less parochial ways.

These differences in approach are highlighted in Table 2, which provides a summary of our

ﬁndings according to the four process dimensions of human resources and responsibilities; BC

planning and process; communications and structure; and attitudes and ownership, and high-

lights where and how each organisation reﬂects the differing approaches of disaster recovery

planning, business continuity planning or BCM approaches.

Whilst Celtbank and Ambank are similar in terms of the four groups of characteristics in

Table 2 that indicate a BCM approach, the picture is less clear with the other organisations

within the DR planning and BC planning approaches. UKinsco and Euroins both exhibited

traits largely consistent with a BC planning approach. Their shortcomings (as far as achieving a

strategic orientation are concerned) arose in their rigid structures, and the (perhaps resultant)

lack of ownership of the BC process.

If BCM has evolved relatively quickly at Celtbank and Ambank, the slower pace of develop-

ment elsewhere highlights the task at hand for organisations that are setting out on, or are part

way into, the development of continuity processes. For example, although USbank and

Lonbank appear most frequently in the DRP column of Table 2 they exhibit some limited

characteristics of the BC planning mindset. The reverse is true in the cases of UKinsco and

Euroins. The evolution of practices is not necessarily straightforward and few ﬁrms excel in

conﬁguring all four dimensions of continuity practice in their most effective form in parallel. A

comparative snapshot of the six organisation’s continuity approaches can be seen in Figure 2

where the continuity approach level (whether DRP, BCP or BCM) of the individual process

dimensions are mapped to highlight a number of differences that are germane to our central

questions of whether ﬁrms’BCM structures can be said to be strategically oriented and if

so, what organisational, planning and cultural form does such provision take. Four of the six

ﬁrms’continuity approaches have all process dimensions at the same overall level, although

only two have achieved a standard BCM approach. Figure 2 also illustrates the more irregular

approaches of the other two organisations. UKinsco has developed reasonably sophisticated

planning processes that consider more than merely IT disaster recovery scenarios, whereas the

supporting formal and informal infrastructures reﬂect this antecedent and lag somewhat

behind. The danger with UKinsco’s conﬁguration is that planning activities may seek to

address continuity issues that fall beyond the sphere of inﬂuence and responsibility that is

assigned to DRP. Such planning will be futile if the remaining process dimensions impede its

implementation.

Conversely, USbank has far exceeded the DRP it has in place with its human resources pro-

vision. It has a talented and multi-skilled central team in place, but their remit is narrow and

isolated. This narrow focus of activities (hence the restriction of planning to disaster recovery)

has constricted the exposure of the company’s wider workforce to continuity issues, and there

has been too much focus upon gaining the commitment of the central team. Consequently, it

is no great surprise to ﬁnd that there is little commitment to continuity issues, and processes

beyond the central team. Such advancement in one dimension may prove to be short-lived if

others lag behind, and the priorities for change at USbank should focus on those dimensions

which retain a DRP focus and militate against value preservation being more widely achieved.

Planning and process activities need to be expanded to include non-IT resources, and attitudes

and ownership developed to ensure ongoing commitment from the wider functions. The

central staff’s commitment to the ongoing management of the process is the major resource in

this endeavour.

The example of USbank shows the problems of developing some dimensions so that they

far exceed others. The visualisation of process dimensions shown in Figure 2 offers a useful

Long Range Planning, vol 37 2004 449

Table 2. Summary of evidence

Disaster Recovery

Planning

Business Continuity

Planning

Business Continuity

Management

Human resources and

Responsibilities

Solely IT members:

.UKINSCO

.LONBANK

IT leads business continuity

team:

.EUROINS

Business team leads BC team:

.USBANK

.CELTBANK

.AMBANK

BC planning and Process Scope limited to

technology:

.USBANK

.LONBANK

Scope concerned with all

facilities and hardware:

.UKINSCO

.EUROINS

Scope includes supply chain:

.CELTBANK

.AMBANK

Plans prepared by

continuity team alone:

.USBANK

.LONBANK

Plans prepared by conti-

nuity team within business

unit (BU):

.UKINSCO

.EUROINS

Plans prepared by BU and BC

team:

.CELTBANK

.AMBANK

Involvement in new product

development:

.CELTBANK

.AMBANK

Communications

and Structure

Formal lines only:

.UKINSCO

.LONBANK

.EUROINS

Formal lines monitored

through internal audit:

.USBANK

Combines formal and informal

means:

.CELTBANK

.AMBANK

No co-ordinators:

.UKINSCO

.LONBANK

Informal co-ordinators

across organisation:

.USBANK

.EUROINS

Varied media:

.CELTBANK

.AMBANK

Formal co-ordinators:

.CELTBANK

.AMBANK

Attitudes and Ownership ‘Not my job’attitude:

.USBANK

‘Tick box’approach:

.UKINSCO

.LONBANK

.EUROINS

Maintain competitive advantage

through BC:

.CELTBANK

.AMBANK

Functional self interest:

.USBANK

.UKINSCO

.LONBANK

.EUROINS

Peer pressure used:

.CELTBANK

.AMBANK

Collegiality is deemed essential:

.CELTBANK

.AMBANK

No appraisal system:

.USBANK

.UKINSCO

.LONBANK

.EUROINS

Formal appraisals used:

.CELTBANK

.AMBANK

450 Business Continuity Management: time for a strategic role?

diagnostic to identify and focus upon speciﬁc process dimensions in which an organisation is

falling behind.

Shifting the approach

The second step toward seeing continuity management as a strategic entity is the integration of

BCM with strategic planning. From the sample of organisations in this study, it is clear that

(unlike DRP and BCP) BCM presents the greatest potential for value preservation, since it puts

into place planning approaches, structures and skills which are multi-functional, proactive, and

organisation-wide. As a foundation for value preservation, two of our respondents—Celtbank

and Ambank—have BCM structures in place which we would argue have the potential to be

regarded as a truly strategic activity. But although their BCM practice has been successfully

standardised across four organisational dimensions, they have only partially realised some of

its strategic beneﬁts. These include some limited links between BCM and new product devel-

opment, supply chain resilience and the adoption of practices designed to engender an ongoing

climate of caution, commitment and conﬁdence. Indeed, these organisations have yet to dem-

onstrate substantive beneﬁts from their investments: however, in relation to their con-

temporaries in this study, they have the basic structures in place and the desire to develop a

greater strategic contribution for BCM. For them, continuity processes are no longer designed

to be palliative, but to improve resilience. The remaining respondents have neither achieved

the requisite standard BCM practices nor sought the beneﬁts of speed, conﬁguration resilience

or embeddedness. However, involvement in this research will have helped identify the path via

developing standardised activities towards full strategic orientation for their BCM processes.

Figure 2. Continuity diagnostic.

Long Range Planning, vol 37 2004 451

[For the leaders] continuity processes are no longer designed to be

palliative, but to improve resilience.

Discussion

Our case study companies provide an insight into the resource conﬁgurations of ﬁrms with

differing levels of business continuity provisions in place. Differences in the organisational

design dimensions of HR and responsibilities, BC planning processes, communications and

structures, and attitudes and ownership denote the extent to which each ﬁrm has moved from

functional, reactive and IT driven approaches towards a proactive, organisation-wide, and

socio-technical attitude.

The differences in the approaches seen in these cases illustrate a journey that is of wider

interest to organisations seeking to enhance value preservation. Our discussion considers the

wider impact of this evidence for organisations aiming to introduce or enhance BCM practices,

and we then broaden our evaluation to consider how our ﬁndings are relevant beyond the

ﬁnancial services context.

Our analysis of the data provides support for the main purpose of the paper: to suggest that

a greater strategic role though value preservation is both an attractive theoretical proposition

and an achievable reality. A key ﬁnding is evidence of a desire to improve recovery speed and

advantage, resilience of supply chain conﬁgurations, embeddedness of planning and manage-

ment processes and an orientation beyond regulatory and legal obligations. It is the organisa-

tions that have reached BCM status in terms of the four process dimensions which offer useful

exemplars of how ﬁrms both in and beyond the ﬁnance sector might usefully set about enhanc-

ing their activities, while the others, while they differ in terms of process dimensions and value

preservation, demonstrate continuity provision at intermediate states of development.

Table 3 offers a conﬁguration for BCM which, while idealised, is nevertheless worth aiming

for. It identiﬁes a number of precepts which managers can compare to their current BC prac-

tices and seek to implement within further BC initiatives, as well as highlighting six key attri-

butes for ﬁrms seeking a greater strategic contribution from BCM:

.Leadership—to symbolise the importance assigned to BCM by senior management;

.Partnership coordination—to reﬂect the coupled, complex nature of organisations’supply

chains;

.Longevity—to prevent business continuity from being regarded as a temporary project;

.Ownership—to engender commitment and responsibility to the process;

.Understanding—to facilitate greater insight into the strategic implications of a business cri-

sis, and

.Management infrastructure—to generate links and support communicative working

between the BC and functional management teams.

Once these foundations are in place, companies need to ensure that there are explicit links

between strategic planning, new product/service development and business continuity plan-

ning. They should envisage how any new strategy could effect, or be affected by, a business

interruption. The implications of the interruption should be considered from ﬁnancial, legal,

regulatory, supply chain and reputation perspectives, and the likely response to worst-case sce-

narios examined. How could advantage could be lost if the company had to invoke its conti-

nuity plans at a critical point in the implementation of a new strategy? As risk mitigation,

prevention is always better than protection: but protection that reﬂects an understanding of

the strategic implications of a threat is a worthwhile second line of defence. In essence, value

452 Business Continuity Management: time for a strategic role?

preservation is a second order organisational advantage that may underpin the continuity of

the resources from which competitive advantages originate.

Although our case study organisations have all had continuity teams in place for at least 10

years, substantial differences between them still remain. Our ﬁndings suggests that those orga-

nisations which appreciate the value of a strategic approach have developed business conti-

nuity provisions that differ greatly from the rather more functional and technical provisions of

their peers. Thus, a ﬁnal necessary dimension is an understanding and desire to make the pro-

cess more strategic.

value preservation is a second order organisational advantage

underpinning the continuity of resources from which competitive

advantages originate.

In both theoretical and practical forms, BCM has the potential to play a strategic role in

helping ﬁrms gain increased resilience against crisis events and business interruptions. The

leading exponents of BCM in this study show encouraging signs of a strategic approach to con-

tinuity management. Managing BCM alongside (and along similar lines to) strategic planning

represents a development of traditional crisis management and disaster recovery planning.

Furthermore, we recommend that managers use our study as an aide memoir to consider whe-

ther they have put into place the conditions for business continuity to blossom into its most

strategic form—as a management process in which business process experts have ownership,

rather than merely a rigid planned response to crises. The four key process dimensions (HR

and responsibilities, planning and process, communications and structure, and attitudes and

ownership) have been found to distinguish between organisations’approaches to dealing with

business interruptions. This diagnostic (coupled with our precepts in Table 3) highlights the

priorities for action in organisations that have yet to achieve balanced BCM processes.

Table 3. Is your business continuity provision strategically configured?

BCM dimension Precepts necessary for a strategic role

Human Resources and

Responsibilities

Ensure that the BC team is led by business managers rather than technical/specialist man-

agers—leadership rather than domination is necessary.

BC Planning and

Processes

Include strategic partnerships beyond the organisation’s boundaries.

Planning undertaken by functions/business units with coordination supplied by the BC

team to improve ownership of plans.

New products and services considered within BC plans to add longevity to provisions.

Communications and

Structure

Use formal and informal communications management infrastructure to disseminate mes-

sages about BCM’s importance.

Tailor choice and use of media to improve the trajectory and understanding of BCM

related communications.

Appoint formal coordinators to underpin communications endeavours across the organis-

ation and augment longevity.

Attitudes and

Ownership

Functions and departments must have (part) ownership of the planning process coupled

with formal appraisals.

Functions and departments must have an understanding of how crises and interruptions

can threaten the organisation’s operations and advantages.

Long Range Planning, vol 37 2004 453

Derived from disaster recovery and crisis and risk management, BCM has evolved to

encompass a wider constituency of participants, threats, techniques and responses. Our case

organisations study show the differing degrees to which the BCM constituency has been

widened and the change from a functionally isolated approach to one which can yield wider

beneﬁts in terms of better recovery and value preservation. Although our study is based in the

ﬁnancial services industry, which has been obliged by legislators and regulators to implement

business continuity, our ﬁndings are relevant to other sectors. Other research has reported on

BCM in vehicle breakdown services, gas suppliers, water utilities, supermarkets and local

authorities. Despite their operational differences, all of the companies have characteristics that

are aligned with those of our study. First, they recognise that in the face of internal and exter-

nal threats to the continuity of operations, a socio-technical approach (beyond mere IT disas-

ter recovery) is vital to improve business recovery from crises. Secondly, the organisations have

explicitly linked BCM to strategically important dimensions of their operations. The vehicle

breakdown recovery ﬁrm (involved in assisting its customers to recover from crises) needs to

be resilient, since its image, marketing and operations would be damaged by an inability to

respond to a crisis itself. The gas supplier recognised that its head ofﬁce building was vital to

the operational coordination of sales and distribution operations. The water utility company

reﬂected its important role in health and sanitation by adopting a stakeholder-driven approach

to BCM which involved the prioritisation of the most vulnerable stakeholder groups. A charac-

teristic of all these ﬁrms is the high degree of consumer dependence on their products or ser-

vices, which underline the necessity for them to enhance their provisions for dealing with

unplanned interruptions and crises.

We believe that BCM has a potential value not only in the ﬁnancial services sector, with its

high levels of ICT coupling and complexity, but for any organisation that would beneﬁt from a

socio-technical, organisation-wide, strategically–cognisant approach to crisis management.

Indeed, any organisation that cannot afford to experience business interruptions and losses

needs to have BCM in place.

Conclusion

In developing a conceptual proposition for BCM to be regarded as having a strategic role we

asked whether ﬁrms had strategically oriented BCM in place and, if so, what form this would

take in terms of organisation, planning and culture. Our analysis offers a synthesis of both con-

cepts and practice to highlight how and why organisations should adopt, integrate and

enhance systems to preserve value, whilst other organisational resources concentrate on the

creation of value through competitive advantages. In so doing we have seen the possibility of a

role for BCM that can be more integrated with the more conventional strategic activities of a

ﬁrm.

This study represents an initial examination of the potential for a strategic role, but further

study is required, in particular into ﬁrms in other sectors. Through the additional clarity of

insight allowed by our data collection we have observed some convergence of business conti-

nuity and strategic approaches in terms of providing organisations with an integrated defensive

and offensive capability towards their competitive environments. We believe that this will

increasingly represent the norm in the future as greater attention is given to how organisations

respond to crises and business interruptions. With events such as the start of the new millen-

nium, terrorist attacks, corporate ﬁnancial scandals, hi-tech crime and changing weather pat-

terns, today’sﬁrms require a coherent and well-resourced response which is predetermined

and integrated, but also ﬂexible and manageable.

Organisations in this study with leading practices had multi-disciplinary/multi-functional

teams, a wide scope of coverage to include supply chain interruptions, involvement in new

product development and shared authorship and ownership of plans with business units. Sup-

porting this orientation, our leading exemplars had introduced formal coordinators across the

454 Business Continuity Management: time for a strategic role?

organisation and used a variety of communications mechanisms. Coupled with a mindset that

emphasises the importance of partnership and strategic awareness, this approach to business

continuity presents an approach against which incumbent managers can assess their perform-

ance and identify scope for further improvement. Our diagnostic and the identiﬁcation of pre-

cepts in the form of leadership, partnership coordination, longevity, ownership and

understanding, and management infrastructure provide further guidance in these endeavours.

For senior managers, our study ought to prompt an examination of business continuity in the

context of value preservation, for without the continuity of operations, the pursuit and susten-

ance of competitive advantage could be undermined. Senior managers should ask

whether there is the scope and opportunity to integrate their business continuity resources fur-

ther to generate the potential for more enhanced value preservation.

With the new millennium, terrorist attacks, corporate financial

scandals, hi-tech crime and changing weather patterns, firms require a

coherent, well-resourced response...predetermined and integrated, but

also flexible and manageable.

As business continuity becomes more of a mainstream operational reality, strategy research-

ers should be more attuned to its existence and its cross-functional impact in terms of plan-

ning, organisational learning and technological dependencies. Herein lies an opportunity to

understand some of the underlying dynamics of organisational behaviour, as organisations

prepare for the worst whilst planning for the best. Furthermore, researchers should also be

more attuned to the efforts of senior managers to introduce continuity management as part of

their new strategies and their attempts to deal with uncertainty. Such patterns of development

can be observed within the framework proposed in this paper (Figure 1). The uncertainty of

the competitive, legislative and social worlds around us demands ﬂexible strategic thinking

about business continuity: when things go wrong, those better able to think, act and adapt to

business interruptions will have demonstrated the value of superior BCM.

Acknowledgements

The authors would like to express their gratitude to Professor Charles Baden-Fuller and the

two anonymous referees whose valuable comments have helped enhance the manuscript.

References

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Quarterly 4(4), 263–276 (1990); B. Turner, The organisational and interorganisational development of

disasters, Administrative Science Quarterly 21 378–397 (1976).

7. Although we contextualise DRP as a predecessor to BCM, there are instances in which ﬁrms presently

retain activities that remain focussed on technical scopes of activity.

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Springer. p. xi (2002).

15. It might be argued by some that DR planning is strategic in nature. We, however, argue that it is less so

than BCM by virtue of its strong focus on hard planning and the focus on documentation rather than

people and practices.

16. M. Lieberman and D. Montgomery, First Mover Advantages, Strategic Management Journal 9, pp. 41–58

(1988); W.C Patterson, First Mover Advantage: The Opportunity Curve, Journal of Management Studies

30 (5), 759–777 (1993); L. Rosenkopf and A. Nerkar, Beyond local search: boundary spanning, explo-

ration, and impact in the optical disk industry, Strategic Management Journal 22, 287–306 (2001); Howell,

Leland L., Planned innovation as a marketing tool, California Management Review 4(4) 66 (Summer

1962); K. D. Gartrell, Innovation, industry specialization, and shareholder wealth, California Management

Review 32 (3) 87–101, (Spring 1990) for studies which deal with the importance of innovation for the

ﬁrm. The wider competitive consequences of time are considered in T. K. Das, Time: the hidden dimen-

sion in strategic planning, Long Range Planning 24 (3) 49–57 (1991); G. Stalk Jr., Time: The Next Source of

Competitive Advantage, Harvard Business Review, July–August, pp. 41–51 (1988).

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Available at http://www.ft.com.

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tegic Management Journal 14, 339–350 (1993).

19. For instance the UK Home ofﬁce has published on-line guides to Business Continuity Planning and

related business risk matters and the USA has its Department of Homeland Security.

20. Issued in late 1998, details of FDD 67 (known in full as ‘PDD-NSC-67 Enduring Constitutional Govern-

ment and Continuity of Government Operations (U) 21 October 1998’) are not publicly available

although it is known to dovetail with the detailed Federal Preparedness Circular 65 http://www.fas.org/

irp/offdocs/pdd/fpc-65.htm.

21. Most of the recommendations of regulators across ﬁnance sectors in Europe dealing with IT security and

data back-up are detailed in K. Gerlach, The role of states and international and of national organisations

as Super-Risk Managers. In M. Wierczorek, U. Naujoks, and B. Bartlett (eds), Business Continuity,

London, Springer, pp. 32–63 (2002). A US perspective on the same issue can be found in T. Schreider,

The Legal Issues in Business Continuity Planning in K.Doughty, Business Continuity Planning—Protecting

Your Organization’s Life, London, Auerbach, pp. 15–20 (2001).

22. See, for example, E. Swartz, D. Elliott and B. Herbane, Out of sight, out of mind. The Limitations of Tra-

ditional Information Systems Planning, Facilities 13 (9/10), 15–22 (1995); J.R. King, Details overlooked in

contingency plans in K. Doughty, Business Continuity Planning—Protecting Your Organization’s Life,

London, Auerbach, pp. 161–168 (2001).

23. J. Mwende, Kenyans add too much realism to their crash exercise, The Times, London Edition August 22

(2002).

24. This observation is made by the authors having viewed the contents of many corporate BC plans. These

issues are also addressed and illustrated in R. Flin and K. Arbuthnot, Incident Command—Tales from the

456 Business Continuity Management: time for a strategic role?

Hot Seat, Aldershot, Ashgate (2001) and B. Doswell, A Guide to Business Continuity Management, Leice-

ster, Perpetuity Press (2000).

25. Survive! is an industry-wide disaster recovery and business continuity interest group.

26. A. Bryman, Research Methods and Organization Studies, London, Routledge, p. 173 (1989).

27. B. Herbane, D. Elliott and E. Swartz, Contingency and continua: achieving excellence through business

continuity planning, Business Horizons 40(6), 19–25 (1997).

28. D. Elliott, B. Herbane and E. Swartz, Business continuity management: A test of continuity between econ-

omic sectors, Risk Management 2(1), 27–38 (2000); D. Elliott, E. Swartz and B. Herbane, Business Conti-

nuity Management—Preparing for the Worst, Incomes Data Services, London (1999).

Biographies

Dr Brahim Herbane is Principal Lecturer in Strategic and Continuity Management at Leicester Business School (De

Montfort University). His research work currently focuses on resource-based approaches to strategic management

and organisational advantage, and the application of strategic perspectives on business continuity methodologies for

crisis management. He is Reviews Editor for Risk Management—An International Journal, and has recently pub-

lished ‘Business Continuity—A Crisis Management Approach’with Elliott and Swartz. (Routledge) Leicester Busi-

ness School, De Montfort University, The Gateway, Leicester LE1 9BH, UK. Tel.: +44-116-255-1551; fax: +44-116-

250-6331. Email: bhcor@dmu.ac.uk

Dominic Elliott is Paul Roy Professor of Business Continuity and Strategic Management at the University of Liver-

pool Management School. His current research projects include an examination of how organisations within the

retail and ﬁnance sectors prepare for adverse events, a longitudinal study of the demerger of a large Chemical ﬁrm

and an examination of how organisations learn from crises and a study of corporate crisis communications strate-

gies. He is Editor of Risk Management—An International Journal. University of Liverpool Management School,

Chatham Building, Chatham Street, Liverpool L69 7ZH, UK. Email: d.elliott@liverpool.ac.uk

Dr Ethne

´M. Swartz is Assistant Professor of Management at the Silberman College of Business, Fairleigh Dickinson

University, Madison, New Jersey. She has published and taught in the ﬁelds of crisis and continuity management,

entrepreneurship and strategic management and consulted with organizations in the UK, South Africa and North

America. She is on the editorial board of Risk Management—An International Journal. Fairleigh Dickinson Univer-

sity, 285 Madison Avenue (M-RI0-01), Madison, NJ 07940, USA. Email: swartz@fdu.edu

Long Range Planning, vol 37 2004 457

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Organizational resilience is essential to mitigate severe consequences from crises such as pandemics, geopolitical conflicts, and climate‑related disasters. Enhancing resilience often relies on business continuity management (BCM) and associated continuity plans, which may sometimes fall short. This study introduces and implements a novel Continuity Governance (CG) model as an additional stage within BCM standards. The CG model strengthens organizational resilience by optimizing daily operations, minimizing the need for activating contingency plans, and ensuring smoother functioning in non‑crisis scenarios. The research employs a contextual analysis of the CG model, validated through a case study in a Research Technology Organization (RTO), involving interviews and questionnaires. Results demonstrate the model’s effectiveness in mitigating continuity incidents, with evidence from its successful application in the participating RTO. Beyond this specific implementation, the CG model is designed for adaptability and replicability, making it applicable to a wide range of organizations across various sectors. This innovative approach contributes to the literature by addressing continuity management within routine operations, reducing over‑reliance on formal plans while enhancing resilience. The findings offer valuable insights for organizations aiming to strengthen their capacity to navigate disruptions effectively and maintain operational stability in increasingly complex environments.

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Book

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Yewande Adewunmi

This book introduces the reader to contemporary issues in the management of facilities in the African context and includes case studies from across the continent and internationally. It consolidates theory and practical information useful for managers and researchers across Africa and other developing countries. It covers a cross section of the key elements of facilities management, including customer relations management, emergency preparedness, development of a facilities strategy, sustainable buildings management, and management of intelligent buildings in developing countries. The book has been developed from a combination of degree level and professional course materials and academic resources and is therefore suitable for use by students on undergraduate and postgraduate degree programmes, professional short courses, and for practicing facilities managers and members of professional bodies as a key reference. This book is key reading for anyone: -Studying for a degree in Facilities Management, Real Estate, Estate Management, Workplace Management, or Surveying Wanting to be more strategic in their facilities management and operations -Transitioning into a facilities management role from another profession -Benchmarking and analysing the performance of their built assets -Training themselves or their staff in emerging areas such as workplace productivity, sustainability, and intelligent buildings systems -Interested in researching emerging areas of facilities management in developing countries This is the essential guide to the growing field of facilities management in some of the world’s fastest developing countries.

The legal issues of business continuity planning

Chapter

Jan 2000

T. Schreider

Data center managers often must assume the role of business continuity planners. And whereas they are not expected to be as knowledgeable as lawyers in this role, they are encumbered with the responsibility of understanding the minutiae of existing regulatory guidelines and the legal consequences of their companies’ failure to implement an effective business continuity plan. No specific laws categorically state that an organization must have a business continuity plan (BCP), but there is a body of legal precedents that can be used to hold companies responsible to those affected by a company’s inability to cope with or recover from a disaster. This chapter outlines those precedents and suggests precautions.

Details overlooked in contingency plans

Chapter

Jan 2000

J.R. King

There are many details that should be included in a contingency plan but, in fact, rarely are. This chapter stresses the importance of some basic, commonly overlooked details that IT auditors and contingency planners must plan for.

Crisis management and strategic management: Similarities, differences and challenges

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Jan 1992
ADV STRATEG MANAGE

Causal Ambiguity, Barriers to Imitation, and Sustainable Competitive Advantage

Article

Jan 1990

This article addresses the issues of competitive advantage and competitor imitation. It is argued that tacitness, complexity, and specificity in a firm's skills and resources can generate causal ambiguity in competency-based advantage, and thus raise barriers to imitation. Reinvestment in causally ambiguous competencies is necessary to protect the advantage. Without reinvestment, attritional effects of continued competitive action will cause decay in the barriers to imitation. From this theorizing, research propositions are suggested, which, ultimately, will lead to an improved understanding of competitive advantage sustainability.

Planned Innovation as a Marketing Tool

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Jul 1962

Leland L. Howell

In a new industry technology and invention are in the driver's seat, and marketing, which must conform to their often erratic timing, relies heavily upon product innovation and segmentation of its buying public for success. But, this writer observes, as an industry matures and settles down, marketing assumes command, and, by integrating research with the sales function, harnesses R & D to make it serve marketing considerations instead of its own technological drives.

The Organizational And Interorganisational Development Of Disasters

Article

Sep 1976

Barry A. Turner

Public inquiries into behavior connected with three major disasters are examined and classified to study the conditions under which large-scale intelligence failures develop. Common causal features are rigidities in institutional beliefs, distracting decoy phenomena, neglect of outside complaints, multiple information-handling difficulties, exacerbation of the hazards by strangers, failure to comply with regulations, and a tendency to minimize emergent danger. Such features form part of the incubation stage in a sequence of disaster development, accumulating unnoticed until a precipitating event leads to the onset of the disaster and a degree of cultural collapse. Recommendations following public inquiries are seen as part of a process of cultural readjustment after a disaster, allowing the ill-structured problem which led to the failure to be absorbed into the culture in a well-structured form. The sequence model of intelligence failure presented and the discussion of cases are intended to offer a paradigm for discussion of less tragic, but equally important organizational and interorganizational failures of foresight.

Research Methods and Organization Studies

Article

Jun 1991

Normal Accidents

Book

Jan 1984

Charles Perrow

Time-The Next Source of Competitive Advantage

Article

Jan 1988
HARVARD BUS REV

G. Jr. Stalk

Cutting-edge Japanese companies today are capitalizing on time as a critical source of competitive advantage: shortening the planning loop in the product development cycle and trimming process time in the factory - managing time the way most companies manage costs, quality, or inventory. In fact, as a strategic weapon, time is the equivalent of money, productivity, quality, even innovation. Managing time has enabled top Japanese companies not only to reduce their costs, but also to offer broad product lines, cover more market segments, and upgrade the technological sophistication of their products. These companies are time-based competitors.

Business Continuity Management: A Test of Continuity between Economic Sectors

Article

Jan 2000

This paper builds upon previous research undertaken to identify the nature of business continuity practices within the UK finance sector. Its broad purpose is to examine the applicability of a framework of best practice developed within this one sector to other sectors. Retail and local government were chosen as two widely differing economic sectors. The paper adopts a case study approach and examines J Sainsbury, a leading UK retailer, and Coventry City Council, a large local authority. Previous quantitative studies, whilst benefiting from large sample sizes, yield only superficial insights into the nature of business continuity practice. The findings of this study provide support for the view that generic factors can be identified across economic sectors through in-depth qualitative research.

Business Continuity Management: Time for a Strategic Role?

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