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Introduction

In the previous 2 weeks we looked at the terms:

• Strategic Planning
• Operational Planning
• VMB board
• KPI – Key Performance Indicator

All these terms need to be seen in relation to applying an operational plan.

Today’s class is about contingency planning.

Contingency Planning

Contingency planning is an important part of operational planning. A contingency plan is basically an alternative plan or a ‘Plan B’, when events do not turn out as planned.

You could refer to it as Planning for Disaster by anticipating potential problems, or events that could have a negative impact if not dealt with (by using an alternative plan).

‘Events not turning out as planned’ could mean either an emergency or simply a change of events (leading to a change of plans). Life is really a lot about change, so life is in a sense about contingency plans.

Here are some examples:

• (Events as planned) You were going to make Sticky Date Pudding for desert at a dinner party > (Emergency or problem) You realise too late that you have forgotten to buy an important ingredient, eg cream > (New or Contingency Plan) Your contingency plan may be to use an alternative or to quickly go to the 7/11 and buy cream at a higher price
• (Events as planned) You are about to start a group assignment with 2 other students > (Emergency or problem)  One students gets very sick and will not be able to meet you in person > (New or Contingency Plan) You decide to collaborate online, using Google or other online conference and sharing tools or You decide to drop that student from the group and approach someone else
• (Events as planned) Rudi B has 3 children and and his wife is a full-time mother > (Emergency or problem)  Rudi loses his job and monthly income. > (New or Contingency Plan) His Income Protection Insurance provides him with an ongoing income for 18 months. He has time to look for a new job.
• (Events as planned) We are in class at Kangan. It is a beautiful day (Yong is sleeping, Lucine is not on Facebook and Adam is glad that Toni is back in class).  > (Emergency or problem)  The fire alarm rings! > (New or Contingency Plan) We follow the Contingency Plan which is the Emergency Plan. We leave the class room, the teacher locks it and we assemble in the car park.

You see that all these examples are simple and easy to deal with. Each requires a different level of foresight and each emergency or change of events may be dealt with differently.

Contingency Plans are necessary on many levels:

• Supplies of ingredients for a restaurant – it is worse to run out of an ingredient when someone pays for the food!
• Anti Terror Laws and Measures are a form of contingency plan.
• Increase of petrol prices will require transport businesses and suppliers to react (this may be an increase in their fees)
• A cheaper competitor that undercuts the prices of an established brand and wins customers over will have an impact on the prices of the established brand.

Contingency Task

Think of 5 scenarios for something going wrong or not to plan in your life and write down:

• the event as planned (eg driving to TAFE)
• the change of events or emergency (eg the car breaks down)
• the contingency plan (eg SMS Federico and come by Public Transport)

Keep it simple and have ready for next class. 😉

Here are some simple examples and explanations online:

Example of Contingency Planning for a student

Contingency Plan for Music Video