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: Flying Higher

Final Analysis: Flying Higher

How a certain local airline could strike a blow for fairer treatment of college athletes.
FROM THE PRINT EDITION |
 
 
Here’s a thought: While Alaska Air Group spends $2.6 billion swallowing up Virgin America, it should wield some of its new clout — Alaska will soon be the nation’s fifth-largest air carrier — on becoming the college athlete’s best friend.
 
Alaska already showers upon the University of Washington nearly $5 million a year for naming rights to the football field at Husky Stadium and the basketball court at Hec Edmundson Pavilion. It also has sponsorship arrangements with athletic programs at the University of Oregon and Oregon State University. It even paints some of its airplanes in the colors of 11 Western universities, including the UW.
 
On the weekend that news of Alaska’s acquisition of Virgin America broke, the UW women’s basketball team was completing its improbable and exhilarating run to the Final Four of the NCAA women’s basketball tournament. It occurred to me that there’s an opportunity here for Alaska CEO Brad Tilden to start lobbying the NCAA on behalf of student-athletes everywhere, but particularly in Alaska Airlines’ own backyard.
 
Alaska’s Husky Stadium agreement — 10 years, $41 million — already earmarks half of the money for scholarships and “student-athlete welfare.” Last year, for the first time, the NCAA started allowing Division I schools to pay athletes a stipend for incidental living expenses — things like late-night snacks, student fees, incidental travel — that aren’t covered by athletic scholarships for tuition, room and board. 
 
The UW’s annual stipend for athletes is $3,085, or roughly $11.40 a day during a nine-month academic year. It’s not a lot, but it’s enough for a couple of cheeseburgers and a chocolate shake when the dining halls are closed.
 
Alaska’s naming-rights money goes into the pot that helps provide those stipends, which the NCAA instituted as a means of closing the gap between what an athletic scholarship provides — tuition, room, board, books and fees — and the “real” cost of attending college.
 
The problem is that this “cost of attendance” stipend has made a  playing field that’s not level even less fair. Some schools pay stipends of more than $5,000, which is totally permissible under the NCAA guidelines. So if you’re a poor kid being recruited by several universities, which school would you choose — the one offering no stipend, the one offering $3,000 or the one offering $5,000?
 
This is where a corporate CEO has the opportunity to say to the NCAA, “We are a major employer who believes in treating its workers equitably. As a huge supporter of our local university’s athletics program, we think it’s time you paid your athletes a little bit more than cheeseburger money — and paid them fairly acros the board.”
 
It doesn’t have to be a quid-pro-quo situation, as in “pay these athletes or we’ll take our sponsorship money elsewhere.” But airlines have become adept at squeezing travelers for every last dime via baggage fees, boarding fees, legroom fees, beverage fees and the like. I imagine an airline executive could be pretty persuasive suggesting the NCAA assess itself a “fairness fee” and pay student-athletes a decent wage from its enormous piggy bank.
 
The NCAA can still call it a stipend if it wants. Regardless, it should finally admit that scholarships are meant to provide an education but don’t begin to acknowledge that an athlete’s contribution to an institution’s bottom line — not to mention its reputation in the media and its perception by the public — deserves considerably more than free tuition. 
 
JOHN LEVESQUE is the managing editor of Seattle Business magazine.