Disaster Recovery for the Human Assets of Your Business

Published by Pharmaceutical Commerce

For years when someone talks about “disaster recovery” the focus was on a company’s infrastructure; buildings, equipment and computer systems. From natural disasters like earthquakes, tornadoes or hurricanes, to the California fires, or serious infrastructure impacts like cut communication cables, or building fires, disaster readiness has meant recovering infrastructure. If a given event occurs, what backup scenarios are in place to reestablish normal operations in the shortest possible timeframe? This planning in best-in-class companies has always been viewed as critical and essential.

The other side of disaster recovery is the human side. Staff members retire, resign and move to another company, get seriously ill and cannot return to work, and sometimes die due to an accident or an illness. These are the calls we never want to receive. The problems and challenges get more complicated if the staff member is an extremely critical member of your team. Right behind the shock is the business reality of how does the company recover and continue normal operations without this extremely key resource.

There is a term we have used for human resource disasters and it is called “succession planning”. The issue with this term is that the majority of companies view this as career planning and an open-position filling process. Succession planning is normally triggered by a retirement event of a higher-level manager, and a plan is in place to move everyone up the ladder one notch. Since human nature causes people to prefer to deal with positive events, succession planning is designed to be ready for a well-earned retirement and the following well-earned promotions and changes in offices. Succession planning is not always ready and able to deal with the sudden resignation or the unexpected loss of an extremely critical staff member on your team.

Another factor impacting corporate America is the aging of the baby boomer generation and the anticipated shortage of skilled talent to fill the thousands of openings that will be created. Over the next 5-10 years, 20-30 years of experience, knowledge and skilled talent will be exiting companies as individuals leave the workforce. Replacing this human resource or human capital as it is sometimes called will become a greater challenge than most companies have experienced in the past.

Companies are already experiencing a drop in the numbers of qualified talent for non-management or entry-level management positions. Identify your top 5 senior staff members and if that collective set of experience, knowledge and skills will be leaving your company in the next 5 years, by choice or otherwise, given the talent available on the street today or tomorrow, how do you replace this critical human asset?

Two approaches
Disaster recovery for human assets can be approached in two distinct ways.
The first approach is viewing these critical human assets similar to critical infrastructure assets of your company. As people plan for an infrastructure event, we approach the human assets in a similar fashion. Take one of your highly valued human assets who would rank as one of your top 5 or top 10 employees in terms of providing operational stability and integrity to your company. Whether it is their cross-functional experience of your operations, their knowledge of your industry, products, services and customers, or their attitude that lives and communicates the culture of your company to your employees, the loss would shake the foundations of the company. People would be actively concerned as to how the company will operate without this person.

In this disaster recovery or succession planning model, you create a disaster plan for this critical asset. Since you cannot transfer this person’s knowledge, experience and skills into another human asset easily, you identify his/her specific assets and attempt to document them for others to emulate in his/her absence. Process expertise assets may find a backup in another staff member who is process-focused. Industry or product knowledge expertise could be targeted to a team of other industry/product specialists. Customer-focused expertise could be targeted at your best interpersonal skilled staff member.

The key of this model is that none of these backup resources necessarily have any interest in this person’s position. Like a backup computer center that is a temporary solution, the backup resources are at the ready. They know their role. They know they are temporary, but critical to maintain the stability of the operational components of the company for some period of time. The entire focus of this model is maintaining operational integrity and company viability going forward. A search for the replacement, either a compatible internal person or an outside resource, is initiated but as a secondary task to activating the backup assets to begin executing required tasks to ensure business continuity.

Developing human capital
The second model of human disaster recovery is based upon the traditional career path and succession planning approach. Define your 5 or 10 most critical human assets; in their absence, serious challenges will be presented to the company. For each person you quantify why you have ranked them so high, identifying their strengths, their knowledge, their experience and skills.

Next, you look down into the organization and identify all the stars or potential stars that could become candidates for successors to your critical assets. From a human capital perspective, you are formally evaluating the value of your second- or third-level human assets. This could include education, positions held at your company and all previous employers, performance history, process experience, proven industry knowledge, identifiable skills, interpersonal skills, special project assignments and the success of the effort, formal training, etc.

The reason for this thorough analysis is to match candidate successors to your existing critical human assets. Remember this is succession planning through the career development model. Candidates will not match perfectly; they will need time and a formal development plan to enable them to grow into the open position when it occurs. And the development plan is active, not passive. You do not simply hope that a candidate develops and grows into the future role. You are actively investing time and resources to ensure it does happen.

Building a mentoring program where the candidate starts working side by side with the critical asset is one approach to consider. The advantage of this model is that if your matching process is effective, your candidate successors are more than willing to follow this path since it directly supports their career goals. The result is a win-win situation; you are building valuable bench strength if a human asset disaster does occur, and you have energized the candidate successor through a commitment to develop his or her career.

Neither model is right or wrong. In Model 1 you avoid the training costs and time involved. Conceptually in a relatively short time, you have the key backup human assets at the ready and prepared for action if needed. Model 1 also gives you the opportunity to bring new staff with fresh ideas and new perspectives into the company if the talent is available externally.

Model 2 takes more time and potentially a significant training investment, but you build on known and proven human assets versus going outside and dealing with the unknowns in hiring new people, or being unable to find someone in this shrinking talent pool. Model 2 also can positively impact staff retention if the second or third human asset group level begins to see value in staying with the company since their career goals are being achieved.

In some companies, Model 1 and Model 2 may make sense subject to the kind of critical human assets you are dealing with, the realities of the downstream talent within your company and the availability of external talented people.

In summary, you most likely have a formal computer disaster plan at the ready. And in best-in-class companies you have formal disaster plans ready to handle the loss of key facilities, infrastructure or offices. If you had to rate the criticalness of your infrastructure assets and capital to your human assets and human capital, which would rank higher? Today most companies can have their computer hot site operational or a new facility running in less time than recovering from the loss of a critical human asset. And if the competitive pressure for valued talent in 3-5 years exponentially increases, does that dramatically increase the value of the human assets you presently have?

Consider disaster recovery for your human assets as a key topic at your next strategic planning meeting. PC

ABOUT THE AUTHOR
Bill von Rohr has worked at DDN Pharmaceutical Logistics for the past 11 years, and most recently was the project coordinator for the company’s California pedigree initiative. He is currently building a performance metrics program for DDN’s 200 employees. His career has spanned positions in formal education, IT, account management, regulatory compliance, quality assurance and project management, in healthcare, group health organizations and the pharma industry.