TOWN HALL JOURNAL - SPRING 2007
Disaster Experts Share
Secrets of Enterprise Resilience
On January 18, 2007, Town Hall Los Angeles and Lockheed Martin presented PREPARE!, A Leader's Guide to Security and Emergency Preparedness. The one-day conference at the Beverly Hills Hotel featured keynote addresses and four panel sessions with experts from corporations, government agencies and non-governmental organizations identifying steps businesses can take to survive a natural disaster or terrorist attack.
The morning keynote speaker, Dr. Yossi Sheffi, is Director of the Center for Transportation and Logistics at the Massachusetts Institute of Technology. Everyone attending PREPARE! received a copy of Sheffi’s book, The Resilient Enterprise.
Sheffi identified characteristics that distinguish a successful “resilience strategy,” including a company’s reliance on multiple sources for supplies and manufacturing, and their swift detection of and reaction to emergencies. He also mentioned the proper allocation of security resources, and adequately planning for “low probability, high consequence” emergencies, which can have destructive repercussions for companies as public fear often prompts government authorities to overreact.
“There are actually only two ways to create resilience,” Sheffi stated. “First is having some redundancy.” He urged corporate leaders to adopt redundant manufacturing lines and information technology systems.
The “just-in-time” movement advocates a decrease of inventory, but Sheffi advised companies to maintain excess inventory to help them respond to disasters, but to do so in ways that don’t incur the problems associated with bloated inventories. One example he gave was the Pentagon’s “pre-buying” of inventory from Johnson & Johnson.
“But by and large redundancy is very expensive, so what do you do?” asked Sheffi. “Well, the answer is, you have to build in flexibility.” He described several principles of flexibility, including interchangeability and standardization.
Sheffi also discussed aspects of corporate culture that contribute to resilience. “Resilient companies communicate obsessively,” he said. “But most importantly is the second point, distributed power.” Sheffi explained that giving even low-level workers the authority to make decisions is one of the most critical traits that defines resilient enterprises.
The first panel session, Regional Homeland Security, focused on local emergency response plans. Panelists included Los Angeles County Sheriff Lee Baca; Warren Bamford, FBI Special Agent in Charge of Counterterrorism, Los Angeles; Commander Michael Grossman, Office of Homeland Security at the LA County Sheriff's Department; and Deputy Chief Mark Leap, Commanding Officer, Counterterrorism and Criminal Intelligence Bureau, LA Police Department. The moderator, Dr. Nadav Morag, is a faculty member at the Center for Homeland Defense and Security, US Naval Postgraduate School, and a former Israel National Security Council Senior Official.
Americans tend to look to the federal government for disaster relief, but Dr. Nadav Morag focussed on responsibilities local businesses and governments have when emergencies occur. “Most of America’s critical infrastructure assets are run by the private sector,” Morag declared. “If we talk about emergency medical services, public health, social workers and so on and so forth, again the vast majority of these personnel are employed at the local level.”
Sheriff Lee Baca claimed California has been well-served by its familiarity with natural disasters, becoming a model for the rest of the nation. “The concept of unified command is something else that the federal government is learning about from here, good old California,” said Baca.
FBI Special Agent Warren Bamford also remarked on the limited role federal agencies play during a natural disaster, though he claimed the federal government has much greater authority in the event of a terrorist or military attack. “In natural disasters, such as an earthquake, or a hurricane as we saw with Katrina, the FBI’s role is really to support local law enforcement,” he said. “The terrorism arena is really a different arena. The national response plan lays out that the attorney general, acting through the FBI, really is the lead law enforcement official in the country when it comes to the investigation of terrorist acts and terrorist threats.”
Planners Stress Employee Training, Transportation and Communication
Bamford named two government programs open to the private sector: InfoGuard, an infrastructure protection program that enables government agencies to share information with private businesses; and Titan, a threat information-sharing system that works through Blackberrys and pagers.
Commander Michael Grossman described how the private sector can work with government “terrorism liaison officers” and “infrastructure liaison officers” in the event of an emergency. “Every law enforcement agency and fire agency and health agency in the county has a liaison officer,” Grossman explained. “We’ve also spread that out to the private sector through infrastructure liaison programs, primarily through security heads, security chiefs through the various corporations and disciplines throughout the county.”
Los Angeles Police Deputy Chief Mark Leap underscored California’s leading role in the nation’s disaster planning, and emphasized collaboration between government agencies and the private sector.
“Because we have had such experience with natural disasters, we have a real collaborative attitude in southern California, not only in the government sector but in the private sector as well,” Leap said. “There are somewhere in the neighborhood of 2 million private security officers out there...That’s an untapped source.”
Leap also discussed the role businesses can play training their employees for disaster response.
In Session 2, Keeping Your Business Running, industry leaders shared what they have learned from recent disasters. Moderated by Gloria Jeff, General Manager for the LA Department of Transportation, the panel included Thomas Beaver, Senior Vice President of the Information Services Group for City National Bank; Tom Watson, Manager of Emergency Services for Lockheed Martin; Skip Skivington, National Director for Health Care Continuity Management at Kaiser Permanente; and Jason Jackson, Wal-Mart’s Director of Business Continuity.
City National Bank’s Thomas Beaver identified three essential elements of emergency planning: people, transportation, and communication. “Evacuation plans for life safety should be your primary goal,” said Beaver, “...making sure your people are safe and know what to do in emergencies.
“Transportation and communication,” Beaver continued. “How do you get people to move from one location to another? In communication, you need to make sure that you have a way of talking to people...”
When designing continuity plans, business leaders must be aware of the impact any down-time will have on their companies, Beaver stated. “How long can your business go without starting to lose money and customers?” he asked.
Beaver also discussed external communications. “Make sure that you ensure that your customers know that you know what you’re doing,” he said.
Business Leaders Told to First Send Cash When Disaster Strikes
Skip Skivington, National Director for Health Care Continuity Management at Kaiser Permanente, took issue with the “all disasters are local” opinion expressed by some of the speakers. “Some of the things they said make sense from a theoretical point of view in some cases, but from the medical perspective, some of it didn’t work for me,” Skivington stated.
As a health provider, Kaiser Permanente takes its role in disaster response very seriously, Skivington asserted, and has, “...been doing this for a long time. It wasn’t a wake up call for us on 9/11...”
Kaiser’s “health care continuity management” system, Skivington suggested, was superior to some business continuity plans that were too locally focused. One example he gave was his company’s response to the 2001 anthrax attacks. “What we were able to do as a national organization was to take critical resources...and move it into where they were needed.”
Wal-Mart’s Jason Jackson also questioned the effectiveness of traditional business emergency plans. “We’ve found that in our company, a lot of what’s out there sometimes just doesn’t work for us,” he admitted.
As an example, Jackson recalled his company’s actions during Hurricane Katrina. Wal-Mart has three priorities during emergencies, according to Jackson, “Take care of your people, number one. Take care of your operations -- reconstitute, restore -- and take care of our communities.”
Like Skivington, Jackson emphasized the importance of his company’s national command structure, describing an, “...upper level emergency operations center, which is at our headquarters.”
Jackson also encouraged companies to prepare for any contingencies affecting their employees, suggesting businesses may need to provide a range of basic services to their personnel. “Are they going to need shelter, are they going to need food, are they going to need financial support?” he asked.
Tom Watson provided insight into his company’s particular successes in the area of disaster preparation, including its response to Hurricane Katrina. “I believe we were successful because of our pre-planning, the way we executed our plan, our leadership, and then something we have at Lockheed Martin we call progressive evolution,” said Watson, “...which is a combination of everything you’ve heard from the panel this morning earlier with the law enforcement folks, and our private sector folks up here today.”
Though Lockheed Martin coordinates disaster recovery from a central command center, Watson claimed that, “...one of the key things that’s important is to give your managers out in the field the authority to act.”
Watson also informed companies that one of the first things they should do in the event of an emergency is to send cash. “There are no ATMs, there’s no electricity, nobody’s taking checks, and you need to get out and get supplies and fuel, food, tarps, sheet metal, whatever you may need for your facility.”
Brigadier General James P. Combs delivered the day’s luncheon keynote address. Combs is the top military official in charge of emergency preparedness and response for the Southern California region.
General Combs sought to allay concerns that the National Guard’s deployment to Iraq and Afghanistan has weakened its disaster response capabilities. On the contrary, Combs insisted the war-fighting mission has enabled the National Guard to modernize its emergency response systems. “Talk about cell phones,” he said, “I can put up an aviation platform that will...take over all cell requirements for an emergency response.”
Partners as Important as Plans When Emergencies Occur
The general explained the civilian-military system that operates in the event of a disaster. “An incident occurs, normally the sheriff is the head of the mutual support region,” he stated. “The sheriff says here are all the problems I got. Boom, he sends the list up to OES [the State’s Office of Emergency Services], they validate the requirement and then they send it on up to the governor, who blesses the requirement to affect the support, and then it goes to our operations in Sacramento, the joint force headquarters...and then we deploy the assets.
“What didn’t happen in Katrina? Those relationships were not well-defined and the individuals were not connected, so decision-making got blurred and foggy. I have full authority to make decisions,” assured Combs, who promised problems that occurred during the Hurricane Katrina response would not be experienced by the California National Guard. “You know the interaction and the interoperability problems you heard about in Katrina? I’ve got vans and systems that would never allow that to happen...”
Ellis Stanley, General Manager for the City of Los Angeles Emergency Preparedness Department, moderated Session 3, Tales from the Trenches. Panelists consisted of leaders in non-governmental organizations sharing their on-the-ground experience and local response plans: Joe Becker, Senior Vice President for Preparedness and Response at the American Red Cross; Daryl Rand, Project Manager of the Emergency Preparedness Initiative for CBS Outdoor; and Stephen Tomlin, Vice President of Program Policy and Planning for the International Medical Corps.
Ellis Stanley set the tone for the discussion by emphasizing relationships rather than plans. “Plans would be great, if the disaster read the plan. We have to be flexible enough, and that flexibility comes not in changing words on paper but being able to interface with our partners in preparedness,” he said.
Stanley listed several organizations businesses can partner with to facilitate disaster preparedness, including the Business and Industry Council of Emergency Planning and Preparedness, the Association of Contingency Planners, and the American Society for Industrial Security.
Stephen Tomlin of the International Medical Corps encouraged companies to provide mental health services for employees affected by a disaster. Tomlin described, “The impact of grief, the impact of dislocation, the impact of anxiety, the impact that has on individuals in our community.” He cited a Centers for Disease Control survey that reported a 300 percent increase in the suicide rate in New Orleans following Hurricane Katrina.
Like Ellis Stanley, Tomlin advised companies to partner with non-governmental agencies. “They are characterized by their ability to respond fast, to provide flexibility, to be maneuverable and with deep reach into the community,” Tomlin said.
The American Red Cross’ Joe Becker echoed other panelists when he told the audience, “Katrina taught us all a lot but I’ll tell you, the most significant lesson that we learned had to do with partnerships and relationships...”
Becker encouraged companies and individuals to learn in advance which non-governmental organizations in their area are prepared to respond to an emergency. Discussing Hurricane Katrina, Becker said, “How much better would it have been if long before the disaster, the community knew who was willing to step forward to respond, what church, what civic group, what business...”
Daryl Rand discussed the difficulty of publicizing disaster response measures. To illustrate, she recounted a conversation she had with the panel moderator. “One night I called Ellis up after a very frustrating day, and I said, ‘Ellis, around the country I hear 10 calls to action generally. The ordering is different but they’re pretty consistent -- get a plan, get water, have food, have a battery operated radio -- so if 50 percent of the citizens in Los Angeles knew five of these calls to action, would you be happy?’ And he said one word: ‘ecstatic.’”
Government Provides Resources for Business Disaster Preparation
Rand made several recommendations to increase public awareness of disaster preparation activities. She advised the Department of Homeland Security, for example, to mandate a percentage of every grant be allocated for public education, and to enlist the outdoor advertising industry to broadcast public announcements in the event of a disaster, perhaps retrofitting billboards with LED message tapes at the bottom.
Rand also urged those responsible for formulating disaster plans to use the Emergency Management Accreditation Program, a voluntary assessment process for state and local government programs responsible for coordinating disaster preparation activities.
The final session of the conference, Tools of the Trade, detailed cutting-edge technologies and disaster planning systems from industry experts. The moderator was Frank Quiambao, Director, State of California’s Office of Homeland Security. Panelists included Robert Cruz, Program Director of Homeland Security Solutions at American International Group, Inc. (AIG); Duane Habeck, President of All Hazards Management, LLC; Shawn James, Vice President of Maritime Systems and Sensors for Lockheed Martin; and Mike McGuire, Roche’s Vice President of Anti-Infectives.
In his opening remarks, moderator Frank Quiambao said California State officials are investigating high-tech tools like remote sensor devices, but are also employing low-tech solutions, such as using bomb-sniffing dogs to help deter suicide bombers.
Robert Cruz focussed on the limitations of the federal government’s Terrorism Risk Insurance Act, which reimburses insurers for terrorist attacks, but only covers incidents certified by the Attorney General and the Secretary of the Treasury as terrorist acts carried out by foreign interests. Said Cruz, “You don’t want a policy or any type of financial backstop where certification is necessary, because if an event happens, do you want somebody waiting to certify the event? No...you want to be able to get the money back into your hands and start your business going right away. You want coverage that covers foreign and domestic acts.”
Cruz also advised businesses to get insurance that provides for chemical and biological incidents, cyber-attacks, accidental death and dismemberment, evacuation coverage, and workplace violence.
Duane Habeck described tools his company has developed to help organizations prepare for emergencies, including data management, risk analysis, task coordination, and program management systems, but he insisted, “Change management is really the most difficult thing to deal with.”
Information is available that can help organizations prepare for and respond to disasters, Habeck suggested, but organizations need help digesting the information and implementing related procedures.
According to Habeck, the federal government has published, “The capabilities task list or the universal task list. These are 4,000 tasks of preparedness...This was enough to choke any city emergency management program. Yet we’ve figured out a way to put this into a systematic, logical process...”
Shawn James detailed efforts companies can take to support the federal government’s National Strategy for Maritime Security, a series of plans to enhance, as James said, “...international cooperation, employing security into commercial practices, deploying layered security -- and not just from a defense department perspective but from a supply chain perspective -- and ensuring continuity of that marine transportation system because of the impact on the world’s economy.”
James stressed that the federal government is working with Lockheed to provide security while not impeding what he called “the velocity of commerce.” One tool his company is advocating is the use of radio frequency identification (RFID) tags to track merchandise on a global scale.
Mike McGuire recommended companies engage in “pandemic planning.” While disaster specialists often focus on terrorist attacks and natural disasters, the threat from a pandemic illness could be much greater, according to McGuire, who recounted the impact of past pandemics and reminded the audience of circumstances today, including the ease of intercontinental travel, that could make a modern pandemic even more devastating.
McGuire also explained why a pandemic could have a much greater impact on a company than other disasters. “Unlike a hurricane where it’s an initial hit and...eventually it’s going to go away, you hope. Here you have about an 18-month time period of various locations having outbreaks of pandemic, and so you’ll have disruption all over the place,” warned McGuire.
