By creating a contingency plan, you’re empowering your team to respond quickly to a risk, but you want to make sure that course of action is the right one. Plus, pre-approval will allow you to set the plan in motion with confidence—knowing you’re on the right track—and without having to ask for approvals beforehand. While severe earthquakes aren’t particularly common, being unprepared when “the big one” strikes could prove to be catastrophic. This is why governments and businesses in regions prone to earthquakes create preparedness initiatives and contingency plans. Businesses that create strong plans recover faster from a disruptive event than businesses that don’t. When a negative event occurs, the faster the business recovers and gets back to business-as-usual, the lower the risk to the company, its customers and its employees.

Google Docs Contingency Plan Template by Template.net

This would significantly impact normal operations, so you want to create a contingency plan to prepare for it. Each person on your team has a very particular skill set, and it would be difficult to manage team responsibilities if more than one person left at the same time. Your contingency plan might include who can cover certain projects or processes while you hire a backfill, or how to improve team documentation to prevent siloed skillsets. You can create a contingency plan at various levels of your organization. For example, if you’re a team lead, you could create a contingency plan for your team or department.

Report on key metrics and get real-time visibility into work as it happens with roll-up reports, dashboards, and automated workflows built to keep your team connected and informed. Keep in mind that a contingency plan is only effective if you regularly review and update it to reflect changing circumstances and new risks that may arise. Markets and industries are constantly shifting, so the reality that a contingency plan faces when it is triggered might be very different than the one it was created for. Plans should be tested at least once annually, and new risk assessments performed. Think of the supply chain problems and critical shortages wreaked by the pandemic or the chaos to global supply chains brought about by Russia’s invasion of Ukraine.

For many projects, experts do not recommend using a broad contingency estimate. Instead, project leaders should estimate contingency with more precise tools. Some options include team estimates, Monte Carlo simulations, and phase contingency estimates.

1. It may be helpful to have an example of a contingency plan, so we’ll go over one below.
2. The document takes the guesswork out of emergency planning, so you can protect resources, minimize interruptions, and identify go-to team contacts.
3. ClickUp’s Workplace Emergency Action Plan Template offers a structured approach to planning and responding to these emergencies for contingency planning.

List of risks

If and when that hazard actually jumps in your way, you have that backup plan ready to go — rather than having to scramble to figure your next steps out in the heat of the moment. From simple task management and project planning to complex resource and portfolio management, Smartsheet helps you improve collaboration and increase work velocity — empowering you to get more done. The below graphic shows how a team might track its contingency reserve for a project, month by month. It would track the contingency reserve in concert with the project’s total budget and the running costs for the project. Organizations will often use estimates and detailed calculations to determine the amount of contingency reserve they need for a project, either in costs, time, or both.

It’s your road map to continuity in the face of unexpected events and hurdles, be it a financial downturn, a tech malfunction, or an operational interruption. For example, you might create a contingency plan outlining what you will do if your primary competitors merge or how you’ll pivot if you lose a key client. You could even create a contingency plan for smaller occurrences that would have a big impact—like your software service going down for more than three hours. Many organizations use a strong contingency plan to show employees and customers that they take preparation seriously. By planning for a wide range of potentially damaging events, business leaders can show investors, customers and workers that they’ve taken the necessary steps to minimize risk. The contingency planning process begins with a risk assessment to gauge the potential impact of each risk.

You want to make sure you have all the necessary information before drafting your plan, so this step should be the longest. Once you’ve created your plans, distribute them to key stakeholders in each scenario, so everyone understands what they are responsible for and can prepare ahead of time. The Smartsheet platform makes it easy to plan, capture, manage, and report on work from anywhere, helping your team be more effective and get more done.

Contingency planning vs. risk management

It also outlines the specific actions organization staff will take to respond to them. Next, determine your recovery time objectives (RTOs) to develop an effective emergency response and mitigation strategy. These objectives outline how quickly you must restore each function to avoid consequences.

A contingency plan is a strategy for how your organization will respond to important or business-critical events that knock your original plans off track. Executed correctly, a business contingency plan can mitigate risk and help you get back to business as usual—as quickly as possible. Here are five steps companies use to create effective business contingency plans. Businesses need a plan to get back on track when a disaster interrupts daily operations. Contingency plans, also known as “business continuity plans,” “emergency response plans” and “disaster recovery plans” help organizations recover after a disruption. Contingency planning and risk management are closely related but different processes.

What to Include in a Contingency Planning Policy Statement

Others deal with data breaches, unexpected network downtime or the loss of a key employee such as a CEO or founder. Here are a few examples of contingency plan templates that deal with broadly different scenarios across a range of industries. A contingency plan is a “plan B” that helps a business address specific situations or incidents that may contingency plan example or may not be out of its control.

Once you start thinking about it, you’ll realize how many things you rely on to avoid going wrong, even for fundamental processes. Without that backup, the team might have to recreate the entire website from memory or build a website from scratch. That’s a significant expense and can mean several extra days (or weeks!) of downtime.