How Worried Are You?


Recent events in Japan have caused some businesses to worry about whether they are prepared to keep operating after a major earthquake, especially since the greater Seattle area is situated on the Cascadia fault.

Given the economic climate, disaster preparedness is often the last thing on an executive’s mind these days, but creating a plan can save your business. It cuts the number of decisions you have to make during the disaster, reduces your legal liability and can safeguard your business brand and reputation. Absence of a plan could include your business among the 25 percent of companies that fail after a disaster, usually because they had no plans.

Having worked through these issues at Washington Mutual by managing problems caused by hurricanes, earthquakes, wildfires and winter storms, I’ve devised some questions you might use to test your preparedness strategy.

1. Which of your business functions are most critical and which can be suspended during a disaster?

2. Do you have streamlined emergency response plans that can be activated?

3. Which of your critical business functions are handled for you by vendors? What types of backup plans do those vendors have to keep your business up and running? At WaMu, we made sure that our third-party courier companies had good backup plans, since we depended upon them to move our cash around the country. Our branches could not operate without cash, and we knew that dispensing cash was a critical business function.

4. Once you have such business priorities identified, which parts of your business can be run manually, without technology’s assistance, if power is not available? Can you invoice customers? Can you pay bills? Can you supplement your existing inventory? Can you deliver goods to customers? Have employees been trained to step in and do more than one job?

5. Does your business already have phone trees with employee contact information so you can pass along vital information and ascertain employees’ safety?

6. Assuming that power is available outside the affected area, do you have alternate data centers from which you can operate in case your primary data center was damaged in the earthquake? If not, have you considered storing data in an internet cloud so it is available from your home or office via a secure internet connection?

7. Have you identified and rehearsed employees on locations in your buildings where they can “duck/cover/hold” while an earthquake is taking place?

8. If you are a larger company, do you have sufficient diesel fuel to power the generators you will use to keep on working?

From this list you can see there are a number of ways to anticipate issues and not all of them are expensive. Sharing your plans with employees is vital so they know what their roles will be in an emergency. And communicating with both customers and employees becomes even more important in the midst of an earthquake. In this situation, both email and social media tools come in handy. There is no way to communicate too much in a disaster, especially to lead your people and reinforce key points for your company.

Finally, if you’re the CEO, be prepared to be vilified in the press if you don’t move quickly enough and if you don’t communicate clearly. You’re paid to do everything possible and to think outside the box so that your company does not end up with a black eye. Given the lives and resources at stake, having a plan is the least you can do now to reduce your risk after a natural disaster ... or two or three disasters, as we have just seen in Japan.

Annie Searle is founder of Annie Searle & Associates, a consulting firm that helps clients identify program gaps and manage risks. A former executive at Washington Mutual, Searle served for seven years as chair of the bank’s crisis management team.

Editor's Note: Rule Weary in Seattle

Editor's Note: Rule Weary in Seattle

City regulations may be well meaning, but small businesses are feeling put upon.
David Lee founded FareStart in Seattle to train chefs because he believed the homeless would benefit from “the dignity of preparing food as a vocation.” He launched Field Roast, a producer of vegan “meats,” because he considers the mass industrialization of animals as “a blight on our culture.” He has nurtured a caring culture at his SoDo production facility, remodeling the space so production workers have plenty of space and natural light.
So when Seattle passed a paid-sick-leave law mandating a set number of paid days for sick leave, Lee accepted it. But the results have been disappointing.
“For the first time,” he says, “I have employees lying to me. A medical appointment becomes a paid day off.”
The city’s $15 minimum-wage mandate was another challenge.
“It hurts businesses like ours that compete on a national level against companies in places like Arkansas that pay $7 [an hour],” says Lee. But, wanting to do the right thing, this summer Lee boosted the wages of his employees to $15 an hour four years before he was required to do so under the law.
Seattle can be proud that its $15 minimum-wage law has led the way in driving up wages across the country. And because it is being implemented over seven years and at a time when the local economy is strong, there have been relatively few negative impacts (page 20). Similarly, while there may be widespread abuse of sick leave, there is evidence that the ability of workers to take the time off helps prevent the spread of the flu and other harmful viruses.
But each new layer of regulation is an added burden on business. Now the city is adding yet more regulations — one set that will require businesses to set schedules for employees two weeks in advance and yet another that requires landlords to choose tenants in the order applications are submitted. What’s next? 
A requirement that companies hire employees in the order that they applied?
While each regulation may have some logic to it, the cumulative effect is to make it harder for businesses to fulfill their important role as job creators. The rules can be particularly hard on small businesses without the resources to hire staff to deal with the complications regulations create.
Regulations also create bureaucracy. The Seattle Times reported that to enforce a law requiring landlords to select tenants in the order in which they replied, the city would hire two employees at a cost of $200,000 and launch sting operations. Really?
Meanwhile, the city isn’t enforcing basic sanitation laws to prevent the homeless from leaving excrement on city sidewalks. The Wing Luke Museum of the Asian Pacific American Experience came close to shutting down because an illegal encampment just a block away included “tents serving as drug galleries” that made it unsafe for the museum’s employees and visitors. The problem contributed to the shutting down of the nearby House of Hong restaurant and resulted in negative reviews for the museum on websites like Trip Advisor during the important summer tourist season.
It will be interesting to see if the city’s new director of homelessness, appointed in August at an annual salary of $137,500, can address this expanding problem.
“Clearly, what is happening is that government is forcing business to take on the social imperative,” Lee says.
The altruistic entrepreneur accepts that, up to a point. But the city needs to spend more time attending to basic services. And it has to stop pretending it can solve the world’s problems on the backs of small businesses.
Executive Editor