Preparing for the worstReprints
When disasters or other incidents disrupt the workplace, emergency preparedness experts say companies that have a well-thought-out advance plan are the ones that will be the most resilient.
“When you look across industries, those companies that understand the risk and know the hazards that they are going to confront and have plans for high-probability, low-impact scenarios, and have a communication plan for their employees and customers ... those are the companies that are far more resilient than those companies who wing it,” said Rob Glenn, the Federal Emergency Management Agency's Washington-based private-sector division director.
Laurie J. Holien, deputy director of Oregon's emergency management office in Salem, advises businesses to prepare for incidents of epic proportion.
In Oregon, the state's largest threat is an earthquake along the Cascadia subduction zone followed by a tsunami, which geologists predict has a 37% chance of occurring within the next 50 years.
“It is the high-water mark of all of the potential worst days we can have here in Oregon,” Ms. Holien said. “Don't develop a plan for what's easy; develop a plan for things that are really hard.”
Risk managers and other executives overseeing organizational risk should have a critical role in business emergency and continuity planning, said former Risk & Insurance Management Society Inc. President John Phelps.
“Risk management should not just be at the table, but should be one of the authors of the plan and be on the team for implementation,” said Mr. Phelps, director of business risk solutions at Blue Cross & Blue Shield of Florida Inc. in Jacksonville.
Organizations should have four other key elements in place, said Randy Nornes, Chicago-based executive vice president at Aon Risk Solutions.
The first element is visibility, having the technology to see what's actually going on in a supply chain: Companies that use multiple systems that don't connect suppliers may not have visibility. “If you can't see it, it's pretty hard to manage it,” Mr. Nornes said.
The second element is flexibility, or having a system that can adjust when a disruption occurs. “An example of that is when the ports had the (labor) issues on the West Coast (last year). A lot of people moved ... goods by air. There was an additional cost, but it was a quick work around,” Mr. Nornes said.
Collaboration to get everyone to work together and share information with clearly defined responsible parties to handle various aspects of a business disruption is the third element, one where a risk manager can add tremendous value, he said.
The final element is control, or monitoring events.
“If any one of these is not in place, then you are leaving a lot to chance,” Mr. Nornes said.
Scott Landry, New Orleans-based senior vice president of facilities at LCMC Health, said Hurricane Katrina and massive flooding that inundated much of New Orleans in 2005 taught many risk management lessons.
“The coordination that takes place between us and the city and the state is much more deliberate and more frequent to ensure we are all in step with each other,” Mr. Landry said. “Take the Ebola scare just last year as an example: The city called our leaders into city hall, and we all discussed our plan and understood what our capabilities were. There is a lot more collaboration between us now than pre-Katrina, and each year we get better.”
Mr. Phelps said coordination plays a significant role in resiliency, such as during a flood in the South Florida office in the past several years.
“The local and central corporate response teams worked together to move employees so they could continue to work using resources that had been put in place previously, like the ability to work from home and using vacant space in one of our other buildings. From an emergency response standpoint, it was a very successful event,” he said.
Backup generators to power data centers and phone systems, for example, also are essential, experts said.
Know in advance which police, fire and other emergency personnel would respond if there is a disaster, FEMA's Mr. Glenn advised. Email or text employees to tell them whether to come to work or specifics of where to go, and social media can help alert employees if the phones are tied up, he said.
“Now we operate a hospital where everything that is critical is not on the first floor,” Mr. Landry said. “In the past, we thought we didn't need 100% air conditioning in the entire building. We learned in Katrina that it is necessary to keep our staff fresh and ready to take care of patients.
“In the past, we thought in two or three days in post-event the cavalry would come, but in Katrina we learned that may not be the case. Now, all of our facilities are designed to run for seven days without any outside support, from generators to water,” he said.
Risk managers in high-hazard and severe weather-prone locations often test their resiliency plans.
“Over the years, we've had a hazardous material event, multimillion-dollar floods, fires and more hurricanes and tropical storms than I can count,” Mr. Phelps said of his 26 years at the Blues affiliate. Despite the disruptions, the health insurer was able to “successfully maintain those critical services through an emergency response program, several resources we have in place and business continuity plans.”
For a business continuity plan to be successful, it does not need to address every contingency.
“One of the biggest strengths is the concept of minimizing the plan and maximizing the team, from an emergency response standpoint,” he said. “Have a high-level plan and strategies used to address any emergency, and have available multiple resources to address whatever the event throws at you.”
That includes a team whose members each understand their role in maintaining critical functions, making decisions, communicating information and acting to maximize the resources that are in place.
“Very specific detailed plans for tornadoes or whatever will not fit the mold of an individual emergency, whereas if you have an emergency response structure that has been exercised several times with experienced people and solid resources behind it, then every time there's an emergency it can be addressed effectively and efficiently,” Mr. Phelps said.