Monday, 18 August 2014

Scottish independence - for better for worse

Throughout Scotland, at the moment, all conversations seem to quite quickly move on to the topic of the independence debate. I was sitting in the lounge bar of the Coll Hotel, on the Island of Coll, and could hear a lively debate going on in the public bar. It was a measured conversation and good points were being made on both sides. Then again, when I was at lunch with my parents we started discussing our latest thoughts on the debate. Most people I know seem to have made up their mind, so when I hear the issue being discussed it is usually just a rundown of the latest news and developments.

In terms of the debate within businesses there is a rather different attitude. Many public sector organisations have been told they are not allowed to talk about independence at all. Other organisations are keeping their head down, saying nothing publicly as they know they don’t want to be seen to belong to either camp, for fear the vote goes the wrong way and then there is a backlash against those who spoke out. For me it seems only the large companies such as Standard Life and Shell, that Scotland needs as much as they need Scotland, that have the luxury of making their feelings on independence clear.

So what has Scottish independence got to do with business continuity?

According to many in the ‘No’ camp, independence will be a disaster for Scotland. They are even discussing invoking their business continuity plan if the vote goes wrong! But what about the rest of us? What should we do to prepare for the independence vote?

1. First of all this is a foreseeable event so we have time to prepare for it and do something now. The first thing I think that you should do is understand your organisation’s vulnerability to Scottish Independence. In examining this you need to look both upstream towards your suppliers and then downstream to your customers. By mapping both you can understand your exposure. In looking at your suppliers then you need to look to your Tier 2 and 3 suppliers to check their exposure.

2. In looking at your exposure you want to take into account a number of factors. Business hates uncertainty and the period up to the independence vote may prevent businesses in the rest of the world making orders to Scottish companies. At PlanB Consulting we have not had any enquiries from English companies for the last three months. If the vote is for independence there will be immense uncertainty for the following 18 months, as the details of a new Scotland are being sorted out. This may cause your suppliers and customers to behave differently and so you might want to identify the critical ones and then make contingency plans if they stop purchasing from you or supplying to you. This will be made much worse and complex if Scotland has to change its currency.

3. If you are a public sector organisation then independence could affect you in a number of ways. If you are a national organisation which operates across the UK, such as the Police, then there will be an immense amount of work in separating databases and separating the parts of the organisation. As an aside, it has been shown that criminals thrive on uncertainty and a fractured police force. For other public organisations there may be a new regulatory regime or different priorities. It will be the same for financial organisations and other regulated industries. There will be uncertainty until it is made clear if the regulatory regime the same as before or has it changed.

4. For business continuity managers, whose organisations span Scotland and the rest of the UK, then it might mean having to change to structures of their plans to take into account organisations having to restructure themselves. Having operational teams during a disaster in Edinburgh, reporting on an incident to a Tactical Team and Strategic Team in London, may no longer be appropriate.

5. In all incidents, or when rapid change occurs, there are always opportunities. The Business Continuity Manager should make sure that when their organisation is discussing the effect of Scottish independence they make sure that identifying opportunities is on the agenda. This could be the opportunity to change suppliers and choose ones closer to where their products are consumed, eliminating the long supply chains with their inherent risk of disruption. If Scotland is not within the EU, having short local supply chains may be essential. It could also be an opportunity to completely review your business continuity plans, structures and strategies and change them for the better.

My feeling is that most organisations, in Scotland and also in the rest of the UK, are hiding their head in the sand and hoping that this problem goes away. They see the ‘No’ vote being ahead in the polls, not taking into account the undecided votes, and think this whole problem will not materialise. We as business continuity people know that if you shut your mind off to unlikely events then they tend to catch you out. So my call to action is for business continuity managers to examine their exposure to Scottish independence and then identify and mitigate any potential risks.

Charlie Maclean-Bristol is a Director at PlanB Consulting in Scotland.

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