Cyberattacks don’t just expose technical weaknesses—they expose operational failures.
Many organizations believe that they are ready because they have an incident response (IR) plan on paper. But in reality, most plans fail miserably during crises.
The only way to truly validate your organization’s preparedness is through functional exercises—real-world simulations that test your response capabilities. These exercises move beyond theoretical discussions and challenge teams to activate their incident response, make real-time decisions, manage information flow, and communicate effectively.
What is a Functional Exercise?
Unlike a tabletop exercise, which is a discussion-based scenario, a functional exercise is an interactive, real-time simulation that can:
✔ Test the activation of your incident response team
✔ Test decision-making under high-pressure conditions
✔ Validate internal and external communication workflows
✔ Simulate technical containment and recovery efforts
This type of exercise bridges the gap between planning and execution, ensuring that your team responds instinctively and effectively when a real cyberattack occurs.
Three Reasons Why Your Incident Response Will Fail Without Functional Exercises
- Your Team Won’t Mobilize Fast Enough
Speed is everything during a cyber incident. If your team takes too long to activate, attackers will have already caused irreversible damage.
Questions to Consider
- Who makes the first call?
- Does IT have the authority to shut down systems?
- Are decision-makers reachable 24/7?
- How quickly does the Security Operations Center (SOC) detect and escalate the issue?
Case Study: The SolarWinds Cyberattack (2020).
The SolarWinds cyberattack impacted thousands of organizations, including U.S. federal agencies and Fortune 500 companies. One of the biggest issues was delayed detection and response.
- Attackers compromised SolarWinds’ Orion software updates, giving them months of undetected access to organizations worldwide.
- Some affected companies had no formalized team activation protocols, delaying their ability to contain the breach.
Had more organizations conducted functional exercises simulating supply chain attacks, they may have detected the compromise sooner and minimized damage.
Action Items
✅ Conduct a team activation drill every quarter.
✅ Ensure clear escalation protocols for cyber incidents
✅ Establish 24/7 availability and backup roles for critical responders
- Your Leadership Won’t Make Decisions Fast Enough
Executives are often unprepared to make high-stakes decisions in real-time—and hesitation costs millions.
Key Decisions That Leaders Must Make Quickly
- Do you pay the ransom or attempt recovery?
- Do you shut down critical systems to contain the attack?
- When and how do you inform the public, regulators, and customers?
- How do you manage legal and compliance risks?
Case Study: The Colonial Pipeline Ransomware Attack (2021).
Colonial Pipeline, which supplies 45% of fuel to the U.S. East Coast, suffered a crippling ransomware attack that led to a shutdown of its entire pipeline operation.
- Executives hesitated before deciding to pay the $4.4 million ransom, unsure of the long-term impact.
- Delays in communication led to public panic and fuel shortages across the U.S.
A well-executed functional exercise could have prepped leadership to make a faster, more informed decision, reducing downtime and minimizing public impact.
Action Items
✅ Run decision-making exercises for executives quarterly
✅ Simulate real-world pressure scenarios, such as ransom demands or regulatory actions
✅ Create a pre-approved decision matrix for critical situations
- Your Communication Response Will Make Things Worse
A poorly managed crisis response can cause more damage than the attack itself.
Potential Pitfalls
- Employees panic and leak sensitive information
- Customers hear about the breach from the media first
- Executives provide contradictory statements, causing further reputational damage
- Regulatory agencies are not informed in time, leading to legal consequences
Case Study: Equifax Data Breach (2017).
After Equifax suffered a massive data breach affecting 147 million customers, their response was a communications disaster.
- Public disclosure was delayed, leading to accusations of a cover-up.
- They set up a poorly secured breach response website, worsening customer trust.
- The CEO and senior leadership gave conflicting statements, eroding confidence.
Had Equifax tested their communication workflows in a functional exercise, they could have avoided missteps and maintained control of the narrative.
Action Items:
✅ Test internal coordination between IT, PR, legal, and compliance
✅ Simulate press conferences and regulatory inquiries
✅ Establish clear, pre-approved messaging for different cyberattack scenarios
Related: PreparedEx Podcast – Why Your Cyber Incident Response Will Fail – And How to Fix It
How to Conduct a Functional Cyber Exercise
A functional exercise should be as close to a real-world attack as possible. Here’s how to build an effective one:
Step 1: Define the Scenario
- Choose a realistic cyber threat (e.g., ransomware, insider threat, cloud compromise).
- Tailor it to your organization’s industry and risk landscape.
Step 2: Activate the Team in Real-Time
- Alert responders as if an actual attack is unfolding.
- Observe how quickly teams mobilize and coordinate.
Step 3: Test Critical Decision-Making
- Force leadership to make high-pressure containment, public disclosure, and ransom payment decisions.
Step 4: Validate Information Flow & Communication
- Simulate how IT, legal, and PR teams coordinate responses.
- Run mock press interviews and regulatory notifications.
Step 5: Capture Lessons Learned & Remediate Gaps
- Conduct an after-action review (AAR) to identify strengths and weaknesses.
- Implement changes immediately and schedule follow-up tests.
Final Thoughts: If You Haven’t Tested It, You’re Not Ready
Functional exercises separate organizations that survive cyberattacks from those that collapse under them.
If you haven’t validated your plan under near-real conditions, then your plan doesn’t work.
Immediate Actions to Take
1️⃣ Schedule Your Next Functional Exercise – Identify a scenario and run a full-scale activation.
2️⃣ Ensure Your Leadership Team is Ready – Conduct executive decision-making simulations.
3️⃣ Test and Improve Communication Response – Validate messaging, regulatory notifications, and customer outreach.
Cyber attackers don’t give you second chances. The only way to ensure your organization is truly ready is to put your response capabilities to the test—before an actual breach does.
Need Help Running a Functional Cyber Exercise? If your organization hasn’t tested its incident response capabilities under real-world conditions, we can help.
Contact us today to learn how functional exercises can enhance your preparedness.