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Getting rid of things that are “no longer needed or useful” is what administrators, accountants and consultants are constantly trying to do.  They point out ways to “cut the fat” and create lean businesses with minimal waste and without superfluous people or processes.  In fact, the second principle of building a lean, agile business is to “cut waste”, according to LivePlan.  Business journals, such as Entrepreneur, Harvard Business Review, and Forbes, regularly tout the need for startup and small businesses to be lean, avoid waste, and eliminate or avoid superfluous processes and positions.  And, following this mandate, it would follow that redundant systems, processes and people should be eliminated.  And yet there is another management philosophy that advocates for businesses having redundant systems, processes and people.  So which is it?  Is redundancy a good thing or bad thing for business?

The answer is that every business leader, manager or department head should build in some redundancy for every major system and process and every key person on a team.  The only real question is how much.  Startups, small businesses and highly-technical and niche businesses actually need redundant systems, processes and people more than larger organizations.  Losing a key system, process or person in a small business could kill the business.  Whereas mid-sized and large organizations with ample capital and resources need some redundancy but might also have too many redundancies and need to eliminate some.  That would be equivalent to “too much of a good thing.”

Why Have Redundancies?

To understand why redundancy is a good thing but there can also be too much of a good thing, we must consider why redundancy is needed in the first place.  A good place to start is with the definition of the word “redundant”.  U.S. dictionaries define redundant as “no longer needed or useful; superfluous.”  While a British dictionary, it says “no longer employed because there is no more work available.”  But perhaps the better definition for redundant is “able to be omitted without loss of meaning or function.”   In business, the ability to eliminate a system, process or person without losing meaning or function is key. 

For startups, small businesses and niche businesses, the ability to function may cease in the event that there is the sudden omission of a key system, process or person.  Hence the need for redundancies.  And even in mid-sized and large businesses, a certain amount of redundant systems, processes and people are needed in most areas of the organization.  This is generally referred to as a “backup.”

Embracing Redundant Systems

With the infusion of technology into virtually every aspect of life – whether it is health records and billing for a doctor’s office, use of VOIP for most organizations’ phone systems, the use of video conferencing in education from kindergarten to grad school, or the ability to conduct banking transactions online – virtually all businesses require 24/7 uninterrupted network connectivity and internet availability.  To guarantee the uptime of the total IT environment, redundancy of data and internet connectivity is no longer a nice-to-have.  It is mission critical for practically every business. That means data storage needs to be redundant — stored in real time in more than just one place — allowing a business to recover files right away should the primary source become unavailable due to infrastructure problems or a cybersecurity attack.  We generally refer to this as a backup.  Redundancy is just that… a backup in case of an unforeseen problem.

Imagine what would happen if Chase Manhattan Bank, Amazon, the IMF or the New York Stock Exchange did not have redundant systems and suddenly experienced a sophisticated cyber-attack.  It would be catastrophic not just for the organization but it would cause chaos globally.  For mid-sized, large and global organizations, having a redundant system means the technology infrastructure is hosted both in a primary location and in a separate cloud space or facility so that servers can continue running even in the most extreme situation. In the case of a business, redundancy ensures:

1. Business continuity – Data loss for a business can have a huge impact.  And unexpected outages can lead to situations from which it may be difficult to recover.  But with the proper redundant system coupled with a full business continuity and disaster recovery plan, a business is able to continue with minimal disruption.
2. Brand reputation protection – In the case of a system failure, an organization’s ability to continue functioning unabated and demonstrating a high level of availability protects the brand’s reputation.  In the event of a crisis, an organization with redundant systems has better marketplace positioning over competitors who are less prepared.
3. Uninterrupted productivity – If a service is unavailable, employees can’t do their work.  And this has a ripple effect as some employees depend on services provided by others in order to do their work. To keep productivity consistently high, it is crucial to keep systems and processes running.

When thinking about having redundant systems and/or equipment, there are two options.

Cold-spare redundancy.  This extra equipment is not powered up or plugged in. In fact, it may still be in the box from the manufacturer.  If a company does printing, then the piece of equipment might be a press, or major parts for a press.  Those can be stored and ignored.  But, if it is a server that needs a lot of software installed on it, a company might decide to do the installation so it is ready to be put into service quickly if necessary.  Cold-spare redundancy requires minimal preparation before a crisis so it is a less expensive option.

Hot-spare redundancy:  It takes a lot of design and setup work to put hot spares in place. This equipment is pre-configured and has access to whatever systems or utilities needed so they can be ready to use within minutes or even seconds.  If it is a server or a generator that provides electricity in a hospital, it can be put to work in minutes with the flick of a switch or might even be set up to take over automatically when there is a system failure.  

The right amount and type of redundancy for a business depends on the level of risk to the business in the event of system or equipment failure.  Is the business in a location where it is easy to get spare parts or could it take days or weeks for a vital item to arrive?  How long would it take a company based in New Orleans or Miami to get operational if there is a power failure which knocks out internet access as well?   Or what happens to a company if a server or a main piece of equipment is down for hours or days or week?  Would it kill the business?  For example, in the case of an Imaging Center, what happens if the Open MRI equipment stops working?  What happens to a small CPA firm whose server is hacked and they are unable to access their client’s records two days before the April 15 tax deadline?  These risks must be weighed against the cost of purchasing redundant equipment or systems.  Factors to consider include the cost of downtime and the redundancy options available for the specific business.

Creating Redundant Skills and Staff

Most would agree that having some redundant equipment makes sense – especially given how tight and unreliable the supply chain has been since Covid.  But what about redundant people?  Does a company need to have redundancy in their staff?  After all, labor is one of the most expensive costs for businesses.  So carrying the wages of redundant employees in every department can be untenable, especially for startups, and small businesses.  What’s a company to do?

Well, any sports fan can tell you that a major injury to a key player can wreak havoc for a team during a season.  What happens when a team’s star baseball pitcher tears his rotator cuff and is out for a prolonged period of time?  Chances are, the team has someone nearly as heralded to take his place. Baseball teams have well-qualified back-ups able to step in and take over the role, and they have minor league team players on the ready to become the new backup, if need be.  

But getting highly-trained replacement staff in the business world is trickier.  In the business world, very few companies have the luxury of having back-up execs and experts waiting in the wings.  Nearly every experienced manager has run into the issue of having to find a solution when a key contributor is unexpectedly unavailable to work.  And, given the low unemployment rate of 3.6% and tight labor market, finding someone with the right skills to take over a key position is a lot like finding a needle in a haystack. Since having redundant people is difficult and expensive, there is another option.  Cross-training and skill redundancy. 

Every business should have redundant skills in their staff, even if not redundant staff.  Various people in a department should be cross-trained to do routines tasks and be knowledgeable about the processes and campaigns that everyone is handling.  After all, people run a business and a business is only as good as its people. An effective cross-training program is an organization’s key tool to ensure consistency in product and customer service, which is a basic tenet of any successful company.  It ensures that no matter what happens to an individual within the organization, there is likely to be another person that can fill in should there be an emergency, illness or sudden departure.  This makes an organization resilient, even in the face of something like the recent Great Resignation.

The goal should be that every department, team or company should have several “utility players”… people who can work in different capacities and have a wide array of skills to be able to fill in as the need arises.  Those utility players provide the staff skill redundancy that ensures that there is no loss of meaning or function for the organization if an employee leave out of need or choice. 

Does your organization have skill redundancy in all its departments?  Are there utility players that can step in and do a variety of jobs with little or no direction?  Are there backups for all of the key equipment, machinery and systems?  Is there a plan in place for if there is a major failure in system or staff?  These are the questions to ask now, before the next recession or crisis arises.

Quote of the Week

“When planning for a year, plant corn. When planning for a decade, plant trees. When planning for life, train and educate people.” Ancient Proverb

© 2022, Keren Peters-Atkinson. All rights reserved.