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Dealing with Disaster

November 1, 2004
Related Topics: Change Management, Featured Article

In the early morning hours of September 16, 2004, a flashing red sign beneath a water tower on the beach warned residents: "EVACUATE NOW."

    Hurricane Ivan’s 105-mile-per-hour winds, capable of ripping trees out of the ground as if they were weeds, swirled toward the city of Pensacola, Florida.

    Meanwhile, just 10 miles away at Baptist Hospital, human resources director Celeste Norris was holed up in an office, trying unsuccessfully to ignore the screeching winds and crashing sounds outside as she waited to begin her task of helping the hospital survive the storm.

    Norris and Teresa Kirkland, director of employee relations, and Steve Infinger, director of benefits, had brought sleeping bags to work, figuring they would be trapped overnight. As it turned out, they were stuck for the next two days on the job--without running water, plumbing or air-conditioning to cope with the late-summer Florida heat.

    At times, they dined on packages of military-style emergency rations, and were cut off from the outside world because phone lines and cell towers were down. Norris wasn’t able to reach her husband and teenage son for two days, but fortunately learned from a neighbor that they were safe.

    Like other business executives who must shepherd their companies through crises, Norris and her colleagues juggled a series of urgent problems, from locating missing employees to arranging emergency housing and day-care services for those whose lives were in chaos.

    Disaster response--whether it’s for a hurricane, a power blackout, a toxic chemical leak or terrorism--is one of the toughest challenges a business faces. In addition to the immediate danger to employees and their families, a natural or man-made catastrophe can wreak havoc on a business, destroying workplaces and crucial equipment and disrupting essential internal functions ranging from staffing to payroll.

    Government and insurance-industry research shows that resulting business disruption ultimately can cost as much as property damage. While the losses from Hurricane Ivan are still being tabulated, a recent analysis by Mark Vitner, senior economist at Wachovia Bank, estimates the business losses from hurricanes Frances and Charley, which hit other parts of Florida this summer, at around $4.2 billion total.

    With lives, property and millions of dollars at stake, it’s crucial for human resources professionals to help management and employees weather the storm. They may have to help workers evacuate or, if they remain on the job, to stay safe.

    As the immediate danger fades, they must reassemble a scattered workforce and get the business functioning again. They must also deal with the disaster’s long-term effects, such as employees who’ve lost their homes, and make sure that everyone is paid--and able to cash their checks.

    They may have to accomplish all that without telephones, e-mail, air-conditioning or clean clothes. And if they have any moments to spare, they have to join the rest of the staff in attending to whatever pressing emergency task is at hand, such as forming a bucket brigade to keep the toilets flushing.

    Fortunately, Pensacola companies’ response to Hurricane Ivan showed that it’s possible to do all that.

    Effective disaster response requires careful planning and attention to seemingly insignificant details that suddenly loom large in a crisis. It also requires improvising in the face of the unexpected, and a willingness to bend rules and bust budgets, if necessary, to get by.

    The September 11 attacks that killed 3,000 Americans graphically illustrated the need for emergency preparedness, but they also raised awareness of the severe economic damage that a disaster can cause. According to the Insurance Information Institute, the $11 billion in business disruption caused by the terrorist attacks exceeded the amount of property damage by $1 billion.

    In the hurricane-prone regions of the southeastern United States, bracing for the worst is already an ingrained practice. Pensacola, a city of 56,000 situated in the Florida panhandle along the Gulf of Mexico, was hit by two hurricanes, Erin and Opal, in the same season in 1995. Opal alone caused more than $2 billion in damage to Pensacola and other coastal communities.

    "When a big storm reaches the gulf, it’s going to hit land someplace," says Baptist’s benefits manager, Steve Infinger. "You have to get ready, in case it’s your turn."

    The best disaster planning begins months and years before a storm hits. In Pensacola, most employers--ranging from hospitals to manufacturing firms--already had a detailed plan in place to deal with a hurricane, with human resources playing a pivotal role.

"You can patch a hole in the roof or fix most things that are damaged by a storm," says Robert Peters, human resources director at Daws Manufacturing Co. Inc., a Pensacola firm that is the nation’s leading maker of aluminum toolboxes and other accessories for pickup trucks. "But you can’t do anything without workers."

Warning signs
    Despite their fearsome destructive power, hurricanes have one advantage that other disasters don’t provide--advance warning. Hurricane season in the gulf runs predictably from May through November, according to the National Oceanic and Atmospheric Administration’s Web site, and meteorologists track storms for days in advance.

    At GE Energy, a GE facility in Pensacola with 225 employees, human resources leader Tim Burke met with the plant’s management team several days before the storm and then touched base again at six-hour intervals in preparation for closing the plant. Timing an emergency shutdown can be tricky.

    A small, efficient manufacturer such as Daws, for example, keeps only a small amount of inventory in reserve, so shutdowns can seriously disrupt supply and finances. On the other hand, workers need as much time as possible to go home and board up their own houses--about half of Daws’ workforce chose to ride out the storm--or to flee with their families to another city or state.

    For days, Daws’ top management watched the weather bulletins intently. After lunch on Monday, they gave the order to close up shop by noon on Tuesday, about 36 hours before the storm was expected to hit. That wait was possible because they’d already developed a detailed plan, down to the 500 man-hours it would take for workers to shut down the plant, secure the aluminum-shaping machines from damage and evacuate the premises.

Regrouping in the storm’s wake
    At WAVEnet Technologies, a computer-management firm whose clients include the city of Pensacola, preparations weren’t as complex. Operations manager Melissa Deloach closed the office and got on the highway to Atlanta, where she would stay with family members during the storm. Another manager stayed behind in Pensacola to make sure the company’s servers went back online as soon as possible afterward.

    From Atlanta, Deloach kept in touch via cell phone and e-mail with the firm’s 10 employees, who also could work from remote locations. "We were a bit worried because our company is only five years old and we’d never been through a hurricane before," she says. "But it all worked out okay."

    At Baptist Hospital, the safety issue was even more complicated, as the facility didn’t have the luxury of closing. "This is the sort of time when people really need us," says Baptist spokeswoman Karen Smith.

    Instead, the hospital started physical preparations virtually from the moment that Ivan was spotted in the Caribbean in early September. Good disaster planning involves far more than boarding up windows and laying down sandbags; it requires attention to the tiniest, seemingly most insignificant details, which have a tendency to metamorphose into massive obstacles in the midst of a storm.

    The hospital brought in backup generators and portable toilets--a wise move, since the local sewage plant broke down. Though Baptist doesn’t usually provide child care, it converted two spare rooms into a temporary 24-hour facility, so employees wouldn’t have to be separated from their kids when they came to work.

    As the hurricane moved toward the Florida panhandle, the hospital handed out paychecks two days early. That enabled employees to deposit them and withdraw cash to use for food, gasoline and other necessities before the storm knocked out local ATMs.

Disaster response--whether it’s for a hurricane, a power blackout, a toxic chemical leak or terrorism--is one of the toughest challenges a business faces. In addition to the immediate danger to employees and their families, a natural or man-made catastrophe can wreak havoc on a business, destroying workplaces and crucial equipment and disrupting essential internal functions ranging from staffing to payroll.

    After the roar of the wind was replaced by the rumble of portable generators, the real work began. A critical early task was locating and reestablishing contact with employees--to make sure they were safe, to see whether they needed assistance and to get as many of them as possible back to the workplace.

    At Baptist Hospital, the human resources staff asked managers to locate all their staff, and made a chart on a corkboard, using indexes to denote each missing person they were trying to locate. "We didn’t want anyone stuck in a wrecked house someplace," Norris says. The board served as a clearinghouse for the hospital and for relatives trying to contact employees.

    Gathering and disseminating information was far tougher than usual. The hospital’s phone system was down, and the storm had wrecked cell-phone towers.

    Fortunately, however, Norris and her colleagues had walkie-talkies, which they used to communicate with others inside the hospital. The network was down, preventing them from using e-mail, but the office computers and printer still worked, so they created regular bulletins with vital information--transportation availability, where to get water, community closings and openings--and delivered them by hand.

    Hospital administrator Bob Murphy also gave twice-daily briefings in the company cafeteria. He provided another much-appreciated information source--a TV monitor showing aerial video footage of storm-damaged neighborhoods, shot from a medical helicopter. "Even if you couldn’t get back to your house, you could check on it," Norris says.

    Gradually, hospital employees who’d been home managed to navigate the debris-strewn roads and reported to work. Many non-medical departments were still closed because of flood damage, so Kirkland organized a labor pool and assigned new arrivals to wherever help was needed.

    "We made sure that everyone understood that they were part of the health-care team, no matter what job they usually did," Kirkland says. Managers, for example, might be given plebeian tasks such as moving damaged furniture or distributing supplies. But instead of resentment, it promoted camaraderie.

    "We had people who’d never even met, working side by side," Infinger says. "A physician actually brought cold drinks to the workers. That just blew people away."

    Other Pensacola employers utilized ingenious tactics to deal with the unexpected. When GE Energy’s plant lost both electricity and phone service, the company had Bell South reroute its emergency phone line to a number in Atlanta, so workers could still get information.

    Daws human resources director Peters--who evacuated during the storm and had to drive nearly 600 miles to Paducah, Kentucky, to find a hotel room--kept in touch with other scattered members of the management team by cell phone. The original plan to broadcast announcements to employees fell apart when the radio station itself was knocked off the air.

    Fortunately, Daws employees had already been told that unless informed otherwise, they were to show up at the plant on the Monday after the storm. Only about 25 percent made it back, but they were enough to repair a 1,000-square-foot hole in the roof and other damage. By Tuesday, production had resumed.

In the aftermath, different needs
    Even as Pensacola gradually returned to business as usual, some impacts on workers persisted, and human resources managers say it’s been crucial to deal with them.

    "We’ve got people who’ve literally lost everything beyond what they could fit in a suitcase," says Baptist Hospital’s Norris. "Their homes were wrecked. They didn’t have anyplace to go."

    The hospital came up with a quick solution by opening up apartments in buildings that it had planned to demolish for expansion. GE Energy put up some of its staff in hotel rooms so they could get back to work.

    Daws loosened its attendance policy, allowing workers to leave the workplace if they needed to go home to get an estimate from a roofer or rebuilding contractor. "Seventy percent of our employees have been with us for at least three years," Peters says. "We’ve known these people long enough that we can trust them."

    The storm also left employees financially strapped. Baptist created an emergency fund with $110,000 in cash grants that the human resources department could dole out to workers in $100 increments, to help them out of immediate jams such as paying utility bills or buying groceries and gasoline.

    At Daws, Peters convinced top management to spend "many thousands of dollars" to fund workers’ contributions to their benefits plans for the week of the storm, when they didn’t work their usual hours. "Otherwise, we’d have had people who wouldn’t have had much money in their paychecks," he says.

    Over the longer term, Baptist is exploring ways to deliver financial assistance to employees through its nonprofit foundation, which has about $3 million in assets and takes in $775,000 a year in revenues and contributions, according to a recent tax return. Norris says the cost of post-hurricane long-term benefits is difficult to estimate. "We’ll have to find the money somehow," she says.

    In the meantime, Norris and other human resources professionals in Pensacola are already trying to learn from their Hurricane Ivan experience. "I’m sure there are things we could improve--communication, for example," she says.

    With more hurricanes inevitably coming in the future, complacency isn’t an option.

Workforce Management, November 2004, pp. 30-38 -- Subscribe Now!

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