In 1998, a near-disastrous event at Pixar highlighted the crucial importance of contingency planning when 90% of "Toy Story 2" was accidentally deleted due to a command error, with recovery only possible thanks to a remote employee's backup. This incident underscores the necessity for businesses to develop effective contingency plans to manage risks, distinguishing them from mitigation plans that aim to prevent risks. A robust contingency plan involves identifying potential risks, prioritizing them based on impact and likelihood, and creating a response strategy that details who will act, what actions will be taken, and under what conditions. Testing and sharing these plans are vital, as exemplified by Apple's strategic contingency planning in its supply chain, which allows for rapid adaptation to various disruptions. A well-executed contingency plan can significantly reduce operating costs, enhance customer and employee satisfaction, and prevent loss of business due to poor experiences, emphasizing the need for regular review and updates to ensure effectiveness.