Disaster Management: Plan Ahead

Sometimes after a meeting or a difficult interaction we think, “What a disaster!” Sadly, there have been many recent disasters, real ones, that have put families, businesses and communities at risk or out of commission. Most people avoid the topic of disaster planning like the plague — but it’s the plague that might be coming.

An AT&T survey on disaster planning found that, on average, more than 30 percent of U.S. companies have no disaster recovery plan at all. What’s more, of the companies surveyed, more than 20 percent have neither updated nor tested their plans during the previous year, and more than 15 percent never tested their plans at all.

If the unthinkable or the unanticipated happens to a catalog business, whether a tornado takes off your roof or a back hoe clips your power line, how will you manage your staff, your facilities and your data to maintain essential business activities? Will your employees be able to show up for work? Will you be able to deliver product? If you intend to stay in business, it’s almost as important to plan for the recovery and continuity of your business as it is to survive the original crisis.

Even companies that recognize the need for disaster and continuity planning often aren’t energized about the subject until something goes wrong. Don Rogers, vice president of operations for Chicago-based gadgets cataloger Hammacher Schlemmer, describes his big wake-up call.

“Our mainframe is in Ohio,” he says, “and we had what we thought was a power outage. Somehow the main breakers got cut over a weekend. Our generator, which runs on propane with a natural gas line to back it up, ran out and the gas line failed. So we were out of business. After that, we said, ‘We have to get more serious about this.’”

Pull It Together

It’s not easy to get the various functional groups to take time from the urgency of their regular work to do the necessary planning. “It’s a very daunting task, just the scope of trying to get it all worked out,” cautions David Crow, corporate manager of asset protection at Atlanta-based Home Depot Direct. “For example, we have three call centers in different locations. So I need three different contingency plans and staffing plans. One plan won’t address all three facilities,” because the physical and labor conditions vary at each.

When you start the planning process, Crow explains, focus on one step at a time. “Each area of the business has its own issues,” he says. “You just have to bring them together. We’ll pull the IT people or the inventory management people, or the call center people into a room and ask, ‘If this happens, what do you do?’ We pick their brains and then streamline. Then we ask them, ‘If we did it this way, would it be easier, better or worse?’”

Rogers and Crow agree that you can divide the subject of business continuity into a few main areas:
• people;
• facilities and their contents, including merchandise; and
• data and data management systems.

No one area necessarily is harder to plan for or harder to implement. It depends on the specific nature of any given disaster, which can be natural, technological or human in origin.

For example, if there’s a hurricane, you may have plenty of time to transfer your data to a backup site. But you may not be able to get your people back to work if their homes have been damaged or their families are harmed. After enduring a power failure, Hammacher Schlemmer’s people were ready to work, but the sustained loss of electricity took a toll on systems and facilities. Crow described the tools of surviving a disaster as similar to a deck of cards: “Hand me your crisis and I’ll pull out the cards to deal with it.”

So what should you focus on first? Certainly, safety at the moment of the disaster is the most important issue. But immediately after protecting your people, Crow says you need to be able to communicate with customers. Be able to “route your telecommunications, manage data entry and integrity, maintain physical inventory and the movement of inventory so you can fulfill orders,” he says. “We want to be as seamless as possible; the end consumer experiences the effect of the disaster even if not the disaster itself.”

Don’t Lose One Call

Rogers also starts with the customer experience. “The call center experiences this stuff,” he says. “Those guys are the ones who’ll be around in an emergency. We don’t want to lose one call. The first thing is to move the customers.” So Hammacher transfers its calls to an outside supplier and confirms the allocation.

When it comes to your systems, in addition to frequently backing up computer data, you can consider telecommuting, co-locating and outsourcing disaster recovery for your data center. Hammacher conducts a full backup every day that goes to an outside vendor for storage. The company also continuously backs up to a network server. In the event of a disaster, IT brings the disk of archived backup from the outside vendor to a host site and pulls the day’s transaction file from the network server to bring it up to the time of the interruption.

Your internal efforts, no matter how good, still are affected by the post-disaster condition of your suppliers. While his company survived Katrina without any safety or property damage issues, Crow says Home Depot Direct struggled with getting merchandise out without transportation. With that in mind, diversify your telcom suppliers, couriers and product sources. Some small, local suppliers can keep working even when national companies are out of commission, just because they absolutely have to. And they don’t necessarily triage their customers the way big companies do. Rogers points to Hammacher Schlemmer’s tradition in reeling off his company’s preparedness.

So you may want to consider a mix of both national and local suppliers as backups.

How to Start
1. Have good people
2. Have an active safety committee (which Hammacher has).
3. Inspect your facilities a few times a year.
4. Distribute a company disaster manual, detailing what to do when something bad happens.

“Every supervisor in the building is supposed to have [the disaster manual] so they’ll know who to call in the management team and the emergency phone number for the power provider,” Rogers says. “The basic instructions are posted throughout the building, too. I was impressed when I got the book; it’s pretty darn thorough and it gets updated by the staff.”

From Crow’s perspective, the most important thing is to know that every business is at risk for a terminal interruption. “Assess your business,” he advises. “What are your risks? If you don’t know your risks, you don’t know how to play the game. Then describe the different scenarios you might face.” Even disasters that don’t affect you directly can interrupt the continuity of your business. “What about your vendors? They might have hurricanes even if you don’t.”

Whether you’re just getting started or you’re looking to make your plan more robust, there are plenty of resources available, including the following Web sites:
• www.fema.gov/areyouready;
• www.cdc.gov;
• www.ready.gov; and
• www.redcross.org.

The Department of Homeland Security has a sample emergency plan with easy-to-use templates for businesses. The May 2006 issue of Harvard Business Review has a comprehensive checklist for dealing with an avian flu pandemic that can be modified for other kinds of disasters.

You can’t anticipate every kind of danger or damage, and in the thick of an emergency, many normal operating niceties and safeguards may be ignored. According to Crow, the crucial thing is to build a basic and actionable level of functioning. After a disaster, he says, “You don’t need to be the Cadillac of operations. At the end of the day, what are the basic operations that you have to have in place to sell product A to customer B and deliver it on time?” Sounds like a plan. «

Liz Kislik is president of Liz Kislik Associates LLC, a consultancy that focuses on customer satisfaction and employee success as the building blocks of a resilient, effective enterprise. You can reach her at (516) 568-2932 or lizk@lizkislik.com.