Bracing For Emergencies
The answer was not found easily. Key executives had to climb six flights of stairs in the dark even to attend their first few strategy meetings. Because emergency services were nonexistent, the first step was to form their own fire-watch brigade to convince local government officials that they could safely operate. Next, it was time to figure out how to publish the newspaper.
Management scrambled to set up a newsroom at a Holiday Inn in West Des Moines, which still had water and electricity. Reporters and editors lugged in typewriters and pencils to piece together an eight-page special edition on July 12. As a member of the Gannett news chain, the Register had the advantage of some ready resources. Editors faxed stories to a sister paper, the Indianola Record-Herald in Indianola, Iowa, which produced pages and negatives. These elements were then flown to another sister paper, the Iowa City Press-Citizen,which printed 100,000 copies and trucked them back to Des Moines. The Register's production department then contacted a printing plant for The Wall Street Journal in West Des Moines. The Journal agreed to help out during the crisis and began printing the paper. Every day, the Register got bigger and expanded circulation.
Meanwhile, Tempero kept focused on HR issues. The newspaper published using only a skeleton crew, allowing people some crucial time to cope with their personal losses. Everyone who was working was offered flexible scheduling. Everyone—working or not—continued to receive a paycheck, but bonuses were not given to those working extra hours. "It was like a war," Tempero says. She remembers that working conditions were difficult: Everyone had to endure the heat, and some had to deal with around-the-clock scheduling.
For many employees, conditions at home were equally difficult. Many people worried about child care because schools and day-care facilities were closed. People couldn't use ordinary plumbing or drink tap water. Tempero's department published a daily "Flood Update," which they used to communicate with their employees and to provide resources as needed. By the time water was restored to Des Moines, the Register was fully functioning. Tempero then used the newsletter to help employees reenter a normal work mode: Shorts and T-shirts had to be exchanged for business attire, and the company ceased offering free meals. After 12 days, it was back to business as usual.
Several months after the flood waters have subsided, the Des Moines experience offers valuable lessons for us all. It is, foremost, a vivid reminder that it can happen to us. Although human nature is quick to seek refuge in denial, any of us can come face to face with a frightening emergency. Ask those affected in recent years by the earthquakes in California, the fires in Los Angeles, the hurricanes in Miami and Hawaii, the bombing of the World Trade Center or the oil spill off Puerto Rico if you doubt it. Furthermore, each of these emergencies had profound implications for business. The least lucky (and the least prepared) have closed their doors for good.
The business issues are much broader than security systems and data retrieval. Sue Tempero and her staff can tell you that the issues that arise during an emergency are enough to make even the toughest HR executive blanch: payroll and benefits distribution, job coverage, productivity and morale, cross training and more. It's stupidly shortsighted, then, that so many organizations have delegated disaster planning to plant engineers or security officers—particularly when, paradoxically, the same HR department that can be so disrupted by an emergency also offers many tools that can be helpful in surprising ways during disaster recovery.
The Des Moines experience again underscores the point. Tempero credits much of the Register's recovery not to its skeletal disaster plan (which included only a fire-evacuation procedure and a loosely defined plan for coping with a labor dispute) but instead to team-building training. Flexibility was key. "It was very important that we knew exactly how to reach each other," Tempero says. "But if we'd had a very detailed disaster plan, we probably wouldn't have come up with so many creative ideas that worked well. In the end, it was teamwork that counted."
Most HR people probably haven't thought of team-building training as a key to emergency preparedness, but its value to the Register proves that HR's expertise shouldn't be overlooked. Of course, it isn't reasonable to expect that HR should shoulder the entire responsibility for an emergency-response plan. Facilities managers, systems experts, financial officers and others all have key roles to play, and those are separate discussions. Still, HR's expertise can be used in many ways, and the most obvious place to begin is by helping to create an emergency-response plan.
Plans must reflect a thorough analysis of the business.
Given the number of emergencies that have dominated the evening news in recent months, one could be excused for thinking that most businesses have disaster plans in place. In fact, only a small percentage of firms not mandated by government regulations have defined, well-communicated emergency procedures, says Ralph Swisher, program manager at the Office of Emergency Information and Public Affairs of the Federal Emergency Management Agency (FEMA).
"It may not be today's top agenda item because it's not affecting today's bottom line, but an emergency can affect tomorrow's profitability. It can bring a business down," Swisher says. There's only one way around this, he warns: Senior management must be committed to contingency planning, and it must become part of the culture of the company. "Unless the plan becomes a process and that process is endorsed by those who can make it happen, it's going to have limited effect," he says. The process must recognize that the welfare of employees directly impacts the well-being of the company.
At the very least, a corporate emergency-survival plan must reflect a thorough analysis of all its business functions. Consider all operational systems that, if disrupted, have the potential to result in lost revenue, capital outlay for construction and replacement of lost equipment, increased paperwork and stress or, at its most extreme, business closure. Some of these systems are large and readily apparent: communications systems—internal and external—for example. But don't overlook such hidden assets as the customer and vendor contact lists on your employees' desks.
Accept from the outset that no plan can address every eventuality. Begin with the basics, such as evaluating possible resources within the community and itemizing what's most important to take when evacuating a building (see "Emergency Plans Begin with the Basics"). To really be valuable, however, the plan must address long-term strategic issues. Although plan details must of necessity reflect specific business concerns, all plans must address two broad concerns: communication (internal and external) and assistance to displaced employees and their families.
Communication must be the top priority in any plan.
Communication plans are crucial for two reasons. First, effective communication ultimately is necessary to support all the other components of an emergency-recovery plan. Second, communication is imperative in helping employees to normalize their lives so that they can get back to business.
"Communication is the backbone of any disaster plan," says Gail Hutchens, manager of business contingency planning at San Ramon, California-based Pacific Bell Telephone Company. "If you can't communicate to employees, customers and first responders [emergency services], then your disaster plan will fail because you have no way to relay information that needs to be conveyed."
After the 1989 earthquake that shook San Francisco, representatives at Pacific Bell could tell which customers had communications plans and which hadn't. The ones who had considered what to do beforehand simply had Pac Bell forward their telephone calls; customers weren't even aware that a company had changed locations. Companies without plans had to scramble to find ways to notify employees where to report to work and to tell customers where they could be reached.
Not surprisingly, Pacific Bell's own elaborate emergency-recovery program is built on communications. Two and three alternative communication devices exist at seven emergency operating centers throughout California. In addition to addressing business communication, the Pac Bell plan also focuses on employee needs, beginning with a family notification program. Three hundred employee volunteers are available during a crisis to contact and keep track of employees who call in. If there's an event, both the employee and family members can call a toll-free number and the volunteers will match them, conveying messages.
Irvine, California-based Fluor Daniel, Inc. has a similar approach. During the 1993 Southern California fires, Vince L. Kontny, president and chief operating officer, directed the human resources department to call every employee who lived in the fire area. Lew Smith, senior director of human resources, ran a computer program to cross reference employees' home zip codes with the zip codes of the areas that the fires had devastated. Fifteen people contacted the 640 affected workers. "Employees were amazed that the company took the time to check on them," says Smith. "It bought us a billion dollars worth of goodwill alone."
In the aftermath of an emergency, however, goodwill may not be enough: Employees may need help simply surviving. Furthermore, basic communication tools (such as telephones) may not be available. That was the situation on Kauai after Hurricane Iniki ravaged the Hawaiian island. "It was critical to communicate frequently with our employees," says David Shackleton, managing director of the Westin Kauai hotel. With phone lines down, the hotel sent letters and used the island's three radio stations to convey that it would be distributing money and emergency aid. "It's a small community, so we got the word out," he says.
Any doubts about the value of a good communication plan can be erased by considering the disparate experience of those businesses affected by the 1993 bombing of the World Trade Center in New York City. At one extreme, some tenants of the 110-story towers were forced to call local radio stations to tell firefighters where they were trapped. At the other extreme, billowing smoke, ruptured water lines and 6,000 tons of rubble were only short-term problems for five international firms located in the complex. Those companies had business-resumption contracts with Wayne, Pennsylvania-based SunGard Recovery Systems, Inc., and were operating as usual the following Monday.
Once employees have been helped, they can help the business.
Communication is a key component to recovering from an emergency, but hardly the only one. After a major crisis, employees may need help with such necessities as lodging, water and food. At first glance, these personal issues may seem beyond the scope of responsibility usually outlined for HR executives. Dennis Liberson, former vice president of human resource services for Burger King Corp., doesn't see it that way.
"A company that thinks through providing paychecks, emergency cash, day care, emergency items and a liberal leave policy is likely to do much better," he says.
Liberson should know. He helped see Miami-based Burger King through the recovery from Hurricane Andrew. In retrospect, he says, "The smartest thing we did was to provide people with communications vehicles to tell us what they needed. By responding to that, we were able to get our people on their feet so they could help us get on our feet."
This reciprocal help in recovery was vital in the aftermath of Andrew. It was often difficult for people to separate what was happening in their personal lives from what was happening at work, and the scope of the devastation was such that everyone—individuals and businesses—needed all the help they could get.
Liberson's experience is a good example. In advance of the storm, he loaded up the car, collected the cash he'd withdrawn earlier and evacuated with his pregnant wife and two children to a family member's home in northern Florida. On that stifling August night, he couldn't help but think he'd been clever to pack extra cellular-phone batteries and to bring work in progress from his office.
He wasn't prepared for the news that CNN later delivered. As Liberson watched on television, a helicopter circled the world headquarters of Burger King. A camera focused on the shattered sixth-floor executive offices. The copter then dipped to the third floor, and a telephoto lens was turned on Liberson's office. "It was like seeing a scene from Beirut," he says. "There was nothing left." In the face of such loss, Liberson's cellular phone and paperwork were hardly sufficient.
During the highest winds, a 17-foot wall of water had crashed into the building, leaving its interior a mass of broken windows, downed walls and fallen ceilings. All told, the headquarters had sustained $20 million in damage. Sadly, the damage was not limited to the headquarters: 300 of the 700 corporate employees were left homeless and 30 restaurants in southern Florida were battered.
Although Burger King's buildings were at Andrew's mercy, its internal structure was protected by a well-conceived disaster plan that went into effect immediately. Before heading back to Miami, Liberson called Barry Gibbons, the company chairman, who was in London. Gibbons told Liberson to inform employees that their jobs were secure and that, thanks to a back-up location in Minneapolis, paychecks would continue uninterrupted. Payroll would be run against the previous month's files. When it was necessary, restaurant employees would be paid out of cash registers. Employees should take care of personal needs first, Gibbons said.
They needed to. If Liberson's situation was in any way typical—he returned home to find $175,000 worth of damage, a swimming pool full of Biscayne Bay and a dead barracuda in the back yard—personal problems would haunt employees for months. Given such personal predicaments, it isn't surprising that employee absenteeism is one of the major problems facing companies trying to recover from emergencies.
Burger King met the challenge head on. As employees started returning to work, they found a staffed Winnebago at the entrance to headquarters. Staff members kept track of who was reporting in, took information from them about their individual needs and entered that into an employee-needs data base. To help with temporary housing, company representatives secured banks of hotel rooms and placed deposits on dozens of apartments.
A nearby hotel served as a command post. When the first meager telephone service became available, management brought in phone lines, computers and copiers and ran Burger King from the ballroom. Its sister company in Minneapolis, Pillsbury Co., staffed toll-free telephone lines that people could call to communicate their needs, check in, and receive business updates. The next week, employees met at the war room to hear about Burger King's plans. They were greeted by contractors, insurance adjusters, disaster recovery counselors and legal services.
One example shows the creativity and partnerships that were the foundation of problem solving. During the recovery period, Burger King outsourced most of its 401(k) plan administration to IDS Financial Corp.'s Institutional Retirement Service in Minneapolis. IDS had been the company's investment adviser and recordkeeper since 1990, so the shift was natural.
As part of its aid package, IDS worked with HR and the finance department and linked with a payroll center in Seattle to create extra services. Peter Suyama, vice president of IDS, and a team of experts flew to Florida a few days after the storm to talk with employees about cash distributions and loans against their plan balances. With portable phones and laptop computers, they would sit down with an employee and make the call to IDS on the spot to determine how much money the employee had available. Some just wanted to check their balance for peace of mind. Others needed cash. In that case, IDS would cut a loan note in Minneapolis, express mail it to the temporary headquarters in the hotel, and have the check for employees in two days.
"Human resources professionals should request the details of the disaster recovery plan for their 401(k) service provider," says Suyama. "Find out the basic procedures in the event of a disaster. Then, practice it."
Liberson, like Tempero, credits teamwork and communication with the company's return to its rebuilt headquarters the following year, the reopening of all the damaged restaurants, and the closing of its business cycle on time—the month following Hurricane Andrew. Liberson says it was crucial that decisions could be made quickly because there was "no hierarchy."
Unfortunately, the Burger King experience is typical of companies facing emergencies. Even the glamorous presence of movie magician Steven Spielberg and the crew filming "Jurassic Park" was not enough to spare the employees at the Westin Kauai when Hurricane Iniki hit Hawaii less than a month after Andrew had ripped through Florida. The employees' experiences all-too-eerily mirror those of Burger King's Miami employees.
Once again, employees had warning. Managing Director Shackleton and his staff directed 1,200 guests to the ballroom, then opened the doors to guests from other hotels and residents of the island. They prepared for a 24-hour siege, stocking food, blankets, games and first-aid supplies. They even offered guests the services of a Japanese-speaking concierge.
Once again, the preparation was not enough. As the 145-mph winds abated as the eye of Iniki passed over the hotel, the ballroom started to leak. Guests had to be moved through a labyrinth of corridors to another room. As the hotel lost power and all contact with the outside world, generators (and backup from the film crew) provided some light. When it was over, the hotel had sustained $10 to $15 million in damage, 80 rooms were destroyed and Kauai's biggest employer was temporarily out of business.
As in Miami, attention turned to helping displaced employees and their families. Because the devastation was islandwide, the hotel began to house employees and their extended families. The hotel kitchen provided food. At one point, more than 250 rooms were occupied; some people stayed as long as six months. An insurance policy covered salaries for full-time, hourly staff for three months and paid salaried employees for six months. Of those willing to work at Westin locations off the island, 80% were given jobs. Other Westin hotel employees throughout the U.S. contributed $140,000 to the Iniki Fund, which was divided equally among all Kauai staff.
No plan can anticipate everything.
The Burger King headquarters and the Westin Kauai have since reopened, and life has resumed some sort of normality. Their experience underscores the value of communication and aid for displaced employees. Their experience also shows that no disaster plan can anticipate everything. That fact was proved again in Los Angeles.
When the Northridge earthquake struck Southern California in the pre-dawn hours of January 17, Lindi Funston, vice president of human resources at Saint John's Hospital and Health Center in Santa Monica, didn't rush to the hospital. It didn't even cross her mind, she says, that the hospital might be in a crisis that demanded a greater response than what was outlined in the disaster plan. Therefore, when she arrived at the hospital later that morning, Funston was stunned to see the extent of the damage.
She went directly to the command post she knew would already be in operation. Like most hospitals, St. John's has its own generators to provide emergency power. In addition, its command center is equipped with backup telephones to ensure communications and a command board where the staff can chart the movement of each patient. The hospital also has a designated telephone tree to quickly contact its 2,000 employees, each of whom is assigned specific tasks by the human resources staff in the command center. The hospital had run a disaster drill a month before the earthquake, and everything ran smoothly.
Nonetheless, Funston and others put in marathon days in the command center and elsewhere striving to keep the hospital running—until federal inspectors declared the structure unsafe and the hospital closed. That's when Funston confronted what neither she nor any of the other 12 vice presidents who constitute St. John's disaster committee had anticipated: what to do for 2,000 suddenly unemployed members of the hospital staff. "We didn't have a contingency plan, what to do with our people after a disaster," she says.
The 10-person human resources department now is responsible for administering a $517,000 relief fund that has been established to help cover some transitional housing and food needs. Moreover, Funston's staff is receiving job postings from other health-care institutions throughout the metropolitan area and is working actively to help displaced employees settle into new jobs. This is in addition to distributing the severance package that has been established and monitoring the recall of a limited number of employees to be sure all legal requirements are satisfied.
Funston finds all this daunting, not because of the nature of the task that needs to be accomplished but because of the magnitude. In earlier disasters in which a limited number of employees were affected (the riots in Los Angeles two years ago and last year's fires) the hospital provided housing, food and clothing. In retrospect, she recommends deciding in advance how much a company will do for its entire employee population before a major disaster. "It's one thing to say, 'I'll give housing to 20 or 30 employees,'" she says. "What am I going to do for 2,000?"
It's a question that too many HR executives could be asking themselves. When we look past the denial, we know that emergencies can happen to anyone, anytime. Inevitably, HR must face the issues that emergencies raise, and doing so before the crisis clearly is preferable. The secret to success may be in trying not to develop the plan, but simply a plan.
"We did what seemed right and fair at the moment. We thought about the people involved," says the Register's Tempero. "In a crisis, it's easy to focus only on the business, and that's not enough. HR can be the soul of the business."
Personnel Journal, April 1994, Vol. 73, No. 4, pp. 74-83.