For the financial-services software group, which assists finance
companies in managing the risks of energy trading, the pending arrival
of hurricane Rita poses a double whammy.
"We have our own office there, plus many of our clients are there," says
Chief Operating Officer Tom Farley, who's based in the firm's New York
facility. But even though his company is prepared, how quickly SunGuard
gets fully back to businessafter the storm will depend on the damage
done to its customers.
Farley is hoping most followed his company's procedures, which too many
in New Orleans failed to observe before the arrival of Katrina. Before
the Houston contingent evacuated Thursday afternoon, they ensured all
important files were backed up and transmitted to a sister office. The
company also established a hotline for employees to check over the
weekend, to know how ready they'll be to open for businessMonday
morning.
Knowing the whereabouts of employees and ensuring the safety of
important documents are the top two rules in dealing with a natural
disaster, according to Blue Horizons' crisis expert Craig Marks.
"Hope is not an operational strategy," he says. "Think of a disaster
before it happens."
The biggest mistake made by Louisiana companies ravaged by hurricane
Katrina, Marks notes, was too much focus on simply surviving the event,
at the expense of planning a strategy for moving on at something close
to the speed of business . Public displays of sympathy may be plentiful,
but businesscustomers around the country won't wait long for a stalled
businessbefore shopping somewhere else.
"Companies will buy the widgets elsewhere," says Marks. That's
particularly true of small companies, where 60% of those shut down by
hurricanes or other emergencies never reopen.
So how to get back to businessquickly?
Marks says it starts with knowing where employees are, and helping them
with housing if necessary. While the building may have survived the
storm, the company still loses if employees can't make it in to work.
For several days after Katrina, some New Orleans companies had trouble
keeping track of scattered workers, not knowing if they were in Biloxi,
Miss., Houston, Memphis, Tenn., or still in town somewhere. Playing a
role in securing temporary housing for employees can pay dividends in
getting the businessback up and running more quickly. Even the housing
costs themselves can sometimes qualify for reimbursement from FEMA,
though navigating that bureaucratic minefield generally calls for a lot
of advance planning and communication with its officials.
It's also imperative to know where important company documents will be
off-loaded in case of an emergency. Backing up files that keep vital
information on personnel, accounts receivable and trade secrets is a key
to avoiding a long-term shut down and future risks to the business .
Accounts payable is less than a top priority--those you owe are surely
keeping track.
For a mom-and-pop operation, document backup may just mean a handful of
CD ROMs stored in a drawer and shoved into the glove compartment of the
car as you head out of town. For a larger
business , it means a hardware
destination somewhere off site. The best bet is a branch office
somewhere out of state. If that's not an option, plans should be made to
have a computer system set up independently somewhere outside the
effected area.
"Otherwise, you're sitting there on your computer saying 'gee, we're
down, I guess we can't do anything'," says Marks. Calling the help desk
will never prove more fruitless.
And in the case of a storm that's bad enough to shut down the building,
have a plan in place for moving into new office space temporarily. Marks
pointed to the speed at which some New York financial services firms
moved from downtown to midtown Manhattan after the Sept. 11, 2001
terrorist attacks destroyed the World Trade Center.
"It's tough to have a contract already in place, but if you go through
the thinking process and make contacts with real estate agents, you can
move quickly," he says.
Meanwhile, for retailers hoping to minimize damage, spoilage and looting
in the aftermath of a hurricane, the first rule is naturally to avoid
bare glass protecting the storefront. No company knows that better than
Wal-Mart (nyse: WMT - news - people ), which suffered massive looting
after hurricane Katrina when people smashed glass doors and windows to
enter the stores. Wal-Mart execs didn't return calls on whether the
company is making any adjustments in Texas. Crisis consultant Graeme
Jannaway of Jannaway & Associates says looting is an ongoing risk that
merits more attention from most managers than it usually gets.
"Looting can happen after a hurricane or after a Super Bowl," he says.
If the store doesn't have a metal pull-down shutter--which is common at
small shops, but rare at big box stores like Wal-Mart--by all means
invest in some plywood. Experts point out that some Home Depot (nyse: HD
- news - people ) stores in high-risk areas such as Florida or Louisiana
have an aisle fully dedicated to hurricane prep, stocked with plywood,
bottled water and flashlights, among other items.
And for a retail manager who anticipates closing the store for several
days after a storm, a good relationship with vendors helps with special
requests in altering delivery schedules. Fewer items on hand means
there's less to get damaged and, for those who forgot the plywood, less
to be looted.
"Work out a plan with vendors in advance to suspend deliveries,"
Jannaway says, adding that an alternate warehouse in the area is
generally not a good option, since it rarely pays to maintain an
expensive site that is used rarely.
He also notes that it's sometimes not even necessary for a store to be
completely secure--as long as it's more secure than the competitor down
the street. That's because looters are naturally drawn to the weakest
prey as a target.
"It's like they say about running with a friend through the jungle away
from a jaguar," Jannaway says. "You don't need to outrun the jaguar, you
just need to outrun your friend."
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