Preparing for the Worst!

Posted on May 15, 2009 | Permalink

By Lane Casteix

SPAR, Inc. had a learning experience in August of 2005 when Hurricane Katrina hit New Orleans. Like many others we thought we had a good plan for dealing with natural disasters. We did not then but now we do.

Living in New Orleans, which is susceptible to hurricanes, we did have a disaster plan that focused on hurricanes as the main threat to business. While it is true (for us) that hurricanes are a large and fairly frequent threat, there are other potential disasters we should have been anticipating, such as tornado, fire, chemical accident, and any number of things a thoughtful person can conger up to fret over.

I am not trying to be a pessimist, but we live in a world that if full of natural and man-made threats that can seriously disrupt or even destroy even a prosperous, well-run business. Employees depend on their jobs. Clients depend on the services we provide. Management is therefore obligated to both employees and clients to anticipate a business disrupting incident and plan to continue operations as soon as possible after.

Katrina taught us some valuable lessons. For the first time in my life (I am pushing 65) my family evacuated New Orleans, and so did a whole lot of other people. Good thing we did because New Orleans took a serious hit that the city is still in the process of recovering from.

LESSON LEARNED #1: Be sure your insurance is up to date and covers what it needs to cover.

Like most who evacuated, we assumed we would be taking a “hurricane vacation” and would be back to work in three or four days. It was weeks before we were able to get back in town and for some of us months. Since the office was flooded we had no office. It was gutted by workers less than four weeks after the storm, and we did not move back in until more than three months after that. Even then it was without real furniture. We worked on folding tables from Home Depot and cheap chairs from Office Depot until we could settle with the insurance company and order new furniture. That took another several months.

LESSON LEARNED #2: The business disruption may be for an extended period of time, maybe months.

We suffered a hurricane, but other parts of the country are susceptible to other forms of business disrupting incidents. You should prepare for the possibility you will be dislocated for some considerable period of time, possibly six months or more, before operations can return to normal. What you must ask yourself is how do you sustain your business through a disruption for an extended period of time?

LESSON LEARNED #3: All computers must be portable and every employee must evacuate with their personal computer and any needed files. In other words, your business must be as portable as you can make it.

To the credit of the ingenuity and integrity of our employees, even though our disaster plan was faulty, SPAR pulled together and resumed partially servicing our clients as soon as a week after the storm. This was in spite of the fact that the organization was scattered over six states, and some were without their desktop workstations. I re-entered the city still under a lock-down order and retrieved the workstations left in the office and distributed them to employees needing them.

We replaced every computer in the company after Katrina with either a laptop or an iMac (for the designers). The iMac power was needed by the designers and is “semi-portable” with a specially designed carry case. Even these are now being replaced by laptops now that they have the computing capacity the designers need.

Every SPAR employee has a personal disaster plan stored online. And each has an “evacuation tub”, which is a large, plastic storage tub with a lid available at any Wal-Mart for about $10. They keep all supplies needed during an evacuation in there such as evacuation maps, important contact numbers, computer software, back-up data files, any work-in-progress files, and even a basic supply of office supplies. Each employee also has a small ink jet color printer that goes into the tub as well. Their computer and evacuation tub are required to be taken in any evacuation. Each employee is expected to land someplace where they can get internet access and, as soon as their safety and that of their family is established, be prepared to go back to work.

LESSON LEARNED #4: Do NOT rely on mobile phones for primary communications, especially in the early period after a disaster. The system will quickly become overloaded and useless. This was discovered after Katrina and after 9-11.

What does work (to some degree) is text messaging. Text messages are transmitted in lulls in the mobile system overload. They can often get through when you can’t get voice service. This is how we communicated and determined who was safe and where everyone was in the first week after the storm until we could get access to the internet and email. Mobile phone reliability remained spotty for months after the Katrina with frequent system overload messages and dropped calls. Landlines (outside the stricken area) are a better solution than mobile phones for voice communications. Nextel radios also seemed to be fairly reliable.

LESSON LEARNED #5: You must store important data offsite, preferably in another state, and be able to easily access it even when displaced from the office.

We learned that “servers can’t swim”. While the foot of very funky water we got in our building didn’t drown them, the two weeks of being in an extremely high humidity environment did them no good. Data lost! Fortunately we salvaged most of it.

With employees scattered, server access was impossible even if they had been working. This meant we did not have access to needed work files. Fortunately, the active jobs were resident on various personal computers and older jobs were backed up on DVD and DAT tape. These were distributed to employees that needed them along with the recovered computers.

Our financials were stored on a mainframe system belonging to a sister company, which also went down during Katrina. Fortunately, they had stored the data out of state, so we were able to access our financials and continue vital functions like payroll, AR, and AP.

Since Katrina, we have integrated our project management and our financials into one system at an off-site location. After considerable research we selected what was formerly named Creative Manager Pro and now called Workamajig to be our provider and moved all of our financials and job management into one fully integrated system on their servers in Arizona. Now, if we evacuate, all SPAR employees can access their jobs as soon as they can get internet access.

We tested the system during the evacuation for Hurricane Gustav in 2008, and it worked exactly as planned. SPAR resumed operations less than 48 hours after leaving the city. I had barely unpacked in Florida before I was getting art files to approve. My accounting manager resumed paying bills and collecting AR soon after. This was possible because we had moved everything to Workamajig.

Mail will be disrupted, but you still need to collect AR and pay your bills. Direct deposit or an emergency PO Box out-of-town to receive payments can be useful. We use both. Also consider using a bank with branches in other cities that may not be affected by a disaster on your area.

LESSON LEARNED #6: There can be prosperity even in a disaster.

You need to reassure your customers. They will be concerned about you and, understandably, your ability to continue to provide services for them. Most of ours are outside of New Orleans, which helped because they continued to operate and need our services. Had they all been local it might have been a different story. I would suggest you coordinate with your customers, especially those who might also be affected by an area-wide disaster, and help them develop an emergency business plan, so both of you stay in business.

We publish an emergency message on our Audix system when we evacuate and give information on how we can be reached. We also reassure them we will be open for business as soon as humanly possible.

As soon as we re-establish operations we contact all our clients and brief them on our situation. You must be honest about your capabilities and be prepared to do what you promise to do. After Katrina one SPAR account executive contacted one of her clients who expressed heartfelt concern for us. He then asked a pointed question, “Can you service my business?” Her answer was yes. Then he asked, “Even if I give you more?” Yes again. He then told the AE, “I will throw everything I can to you to help you out. My one request is if you cannot get it done right and on-time you tell me up front.” She of course agreed to his terms. We serviced every piece of business he gave us, and he trebled his business in the last quarter of 2005 and trebled it again on 2006 to become one of our largest clients! Build relationships with your customers based on honesty. It pays off in an emergency.

LESSON LEARNED #7: People need other people.

We learned we can operate as a virtual agency. It is not the preferred way of doing business, at least for us, but it can work. After Katrina we worked that way for over four months. Though our disaster plan was faulty, we cobbled together a plan of operations on an ad hoc basis and it worked. Since then we have tuned the plan based on experience, and with the addition of Workamajig, virtual agency operations are a lot easier.

The one thing we missed most during our displacement was one another and the sense of family we share at SPAR. We briefly considered opening a storefront in another city and operating mainly as a virtual agency when recovery in New Orleans looked so impossible during those early weeks after Katrina. Technology makes that an option today. But the coldness of the computer cannot substitute for face-to-face interactions with real flesh and blood people, especially when as close as we are at SPAR.

The art directors were the first to complain about this. They missed the interplay and easy exchange of ideas made possible by having a counterpart right there. “Hey, take a look at this and tell me what you think.” Some of that is possible via the internet, but it just isn’t the same. In the end we all were anxious to get back into real offices and be a “family” again.

LESSON LEARNED #8: It can happen to your business.

The reality is one day your business may be faced with a disaster that forces you from your office and disburses your employees for some extended period of time. As a business owner or manager you need to have a plan for dealing with that. Consider how you might continue operations if your employees cannot get to the office. Yes, I realize such is easier for service-type businesses like an advertising agency, but you may be surprised what is possible if you apply some thinking to it. Get your employees involved in the process. After all, it is their survival at stake too. Ours proved to be a very ingenious lot that came up with all sorts of tricks and work-arounds to remain operational and continue serving our clients. Their input proved invaluable when we later sorted out what we learned from our Katrina experience and moved forward with a real disaster plan.

SPAR emerged from the waters of Katrina a much stronger organization, one much better prepared to deal with a business disruption. Maybe your business can too.