How Worried Are You?

| FROM THE PRINT EDITION |
 
 

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.

Final Analysis: Won’t You Come Home, Bill Boeing?

Final Analysis: Won’t You Come Home, Bill Boeing?

How can we celebrate such a momentous birthday when the honoree doesn’t even live here?
FROM THE PRINT EDITION |
 
 

Elsewhere in this month's issue you’ll find congratulatory notes honoring The Boeing Company on the occasion of its 100th anniversary. Allow me to add my own felicitations.

I just wonder if we all might get a little more jazzed about this upcoming centennial — the actual date is July 15 — if Boeing were still an honest-to-goodness Seattle company.

Sure, it still employs nearly 80,000 people in the Puget Sound region and helps drives our economy. But the day 15 years ago when Boeing announced it was going to move its corporate headquarters to Chicago is the day it essentially placed thumb to nose and said, “Buh-bye. We’re bigger than Seattle.”

I remember thinking at the time, “This makes no sense.” It still doesn’t. It was a move calculated by a CEO more interested in expediency than in legacy. Former Boeing CEO Phil Condit said it wasn’t unusual for a big corporation to have its headquarters distant from its factories. “What we are doing is being done for the benefit of the corporation,” Condit told shareholders at the time. “We want to grow The Boeing Company. If headquarters is to do its job, it must stand separate from any one of the business units.”

Seriously? Boeing is hardly a conglomerate. Despite the acquisitions of recent years, Boeing is and always will be a maker of airplanes and other things that fly through air and space. Condit wanted Boeing to be another United Technologies or another Textron, but it was really more of a true conglomerate in the 1930s, when it operated airlines, engine makers, propeller companies and other enterprises before the feds put the kibosh on all that vertical integration.

Boeing has prospered — and has helped thousands of Puget Sound families prosper — for generations. To suggest that the company is better off by having its corporate headquarters 1,700 miles from its main factories and most of its employees is just silly. What’s more believable is that Boeing wants to isolate itself from the fallout as it continues to ship jobs from Washington to less union-friendly states like South Carolina and Oklahoma. Since November 2012, Boeing employment in Washington state has declined by more than 10 percent — around 8,600 jobs — despite spectacularly generous tax incentives extended by the state Legislature to persuade Boeing to keep production of the 777X airliner in state.

It’s this kind of “thank you” — and the decamping of the corporate HQ staff to Chicago — that rubs Seattle the wrong way. We should be jumping up and down, waving balloons and having parades in Boeing’s honor next month. But am I the only one who gets the feeling that Boeing is still doing business in Washington state because it simply doesn’t want to spend the stupid sums of money it would take to move its Renton and Everett operations to cheaper “right to work” states?

Condit changed the culture at Boeing, and, judging from the difficult launch of the 787 Dreamliner, it’s a culture change that didn’t take. I’m inclined to believe his predecessors from Bill Boeing on would never have moved the company headquarters to Chicago, and I’d be willing to bet that the people who run the commercial airline business here would rather have the 500 or so headquarters people back in Seattle where they belong.

Whether that ever happens depends on what Boeing’s future CEOs value more: being proud of Boeing’s remarkable history or being fearful that its remarkable history somehow diminishes its opportunities.

John Levesque is the managing editor of Seattle Business magazine