Harvey Threatens Significant Business Disruption

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Hurricane Harvey 5-day forcast cone

As Hurricane Harvey rapidly strengthens before landfall, it is predicted to make landfall as a formidable hurricane on the evening of 8/25/2017 or early Saturday morning along the Texas Gulf Coast.

  • Harvey will then stall or meander for several days, leading to a devastating flood threat in parts of Texas and Louisiana.
  • Extreme rainfall leading to severe flooding, storm surge flooding, and damaging winds are all threats.
  • Hurricane, tropical storm and storm surge warnings have been issued for parts of Texas.

Preparing for Business Interruption

Utilities and governments will attempt to head off long-term power failures Harvey may bring by alerting independent contractors to be ready to help repair storm damaged equipment quickly and asking employees to cancel vacations and work longer hours. Researchers at the NHC official forecast (OFCI), estimate that approximately 1.5 million people (which is roughly equivalent to 500,000 utility customers) will lose power.

While changes in the forecast intensity of Harvey will have an impact of the power outage predictions, there is also substantial uncertainty due to the track of the storm. If we use the COTI model from 18 UTC, this track shifts the landfall location to the east. If the storm makes landfall closer to Houston, the model estimates that the number of people who will lose power will approach 3.4 million (which is roughly equivalent to 500,000 utility customers). This illustrates that there is significant uncertainty in the power outage predictions due to uncertainty in the track and intensity forecasts. (Professor Steven Quiring)

Expect significant travel – airport, seaport and rail – disruptions across the country. Ahead of Hurricane Harvey’s anticipated landfall on the Gulf coast, several airlines are working with customers to re-book travel to and from airports throughout the region:  In addition, Texas Gov. Greg Abbott has activated about 700 members of the state National Guard ahead of Hurricane Harvey making landfall.

State transportation officials were considering when to turn all evacuation routes from coastal areas into one-way traffic arteries headed inland. John Barton, a former deputy executive director of the Texas Department of Transportation, predicted state officials will do this before the storm hits, but said timing and determining where to use it are the key factors. Storms change paths and if contraflow starts too early, supplies such as extra gasoline needed to support impacted areas can’t get in, he noted.

According to weather.com:

With Harvey stalling for a few days, prolific rainfall, capable of devastating flash flooding will result near the middle and upper Texas coast.

To illustrate this, it’s possible Harvey’s heavy rain may not entirely exit the areas of Texas it soaks until sometime next Thursday, and may not exit the Mississippi Valley until next Friday.

For now, areas near the Texas and southwest Louisiana Gulf coasts are in the biggest threat area for torrential rainfall and major flash flooding, potentially including Houston and Corpus Christi.

Here are the latest rainfall forecasts from the National Hurricane Center and NOAA’s Weather Prediction Center. Keep in mind, locally higher amounts are possible where rain-bands stall.

  • Middle/Upper Texas Coast: 15 to 25 inches, with isolated totals up to 35 inches
  • Deep South Texas, Texas Hill Country east to central, southwest Louisiana: 7 to 15 inches
  • Other affected parts of Texas into the Lower Mississippi Valley: 7 inches or less

For Businesses, the following five areas are key to managing the potential impacts of a major storm:

Control Critical Supply Chains:

Almost every transportation avenue will feel the impact of Hurricane Harvey – from over-the-road transport to sea shipping, the supply chain impact will reverberate worldwide.

In anticipation of a disaster such as a major coastal hurricane, it is important to identify the internal and external dependencies of critical services or products.  Firestorm research conducted with more than 200 senior supply chain professionals showed that a company’s supply chain is the source of well over half of all business crises and disruptions and that number was on the increase.  Suppliers are the largest source of these supply chain failures. Yet, many companies do not fully understand, track, or analyze the embedded risks that are inherent within their selection of suppliers.

The survey provided compelling evidence that the ability to view supply network activity is lacking. While 48% of survey respondents indicated that they have visibility into the “critical suppliers”, an additional 36% indicated that they either had no visibility or the tools used were limited to internal operations only. While 16% indicated they have visibility into all suppliers, there was evidence to suggest that these were related to Tier One suppliers and not to ‘full visibility’ throughout the entire supply chain. The fastest growing risk existed within the extended supply network (suppliers’ suppliers) globally. This risk represented then and now, a multi-tier escalating exposure.

It is clear that lack of appropriate visibility is a significant issue. The lack of meaningful visibility is one of the key causes for disruption, second only to natural disasters; the combination of lack of meaningful visibility and a natural disaster such as Harvey can be a business killer.

Train Employees for Work and Home:

“If I had taken the warnings more seriously we could have locked things down earlier — perhaps shipped out a segment of our team to our Minnesota office. Then we would have been covered if things were down for more than a week, and these employees would have had plenty of advance notice to get personal things organized.” David Roth, Forbes, 2012

Firestorm has found that across most companies, 95% of employees do not have a plan at home. If employees do not have a clear strategy for their families, an emergency or disaster can force them to choose between family and work. Family will always trump work.

During a major weather event, actions from the authorities to close down mass transit, highways, bridges and tunnels impact not only the transfer of goods and services, but significantly impede the movement of key staff and support services. Employee loss of power at home impacts remote access / remote working abilities; those companies that have a plan to allow remote work and access through a VPN may be unable to implement the plan, and those that have server storage in the affected areas may be crippled further.

Medical care and contingencies for care become key issues for families and employees as well; in her excellent article for Stanford Medical, “Beyond Hurricane Heroics”, Dr. Sheri Fink well-describes the life and death decisions made by medical care providers in a long-term disaster; in essence, she explains that significant weather events “…demonstratee that America’s medical infrastructure remains extremely vulnerable to natural hazards, and there is an urgent need for preparing for disasters and responding to extreme triage scenarios like the ones faced by those hospitals…”

Training and planning must take place for long-term disaster scenarios, and this starts with essentials: food, water, shelter (consider those out-of-town employees or visitors and guests that are stranded in a disaster area), and access to medical care.

Every crisis is a human crisis. The Firestorm founders published “Disaster Ready People for a Disaster Ready America,” to guide individuals in developing their own preparedness plan at home. The fundamental building block to having employees perform at work is for them to know their families are safe.

Identify and Monitor all Threats and Risks:

In our business, the greatest competitor we face is Denial.

For any business, no matter how large or small, a formal risk assessment is needed to properly understand a company’s very specific risks and how those risks could be better addressed through additional controls. The analysis also results in the identification of specific enhancements for leadership requirements, decision processes, command and control operations, emergency response, employee procedures, streamlined communication techniques and facility and equipment upgrades.

Knowing the threats an organization will face enables it to manage the results and respond to those threats, both natural and man-made.

Conduct Exercises and Update Plans:

After Hurricane Matthew and the subsequent 1000-year flood event, thousands of business found that current continuity plans were not scalable and did not effectively position leaders to communicate their expectations for the maintenance of ongoing operations. They had plans but those plans had not been thoroughly tested for maximum threat.

In every Firestorm Virtual or on-site Tabletop exercise where a simulated natural disaster is explored, the results unanimously that participating companies find either a gap in their existing plans, or contingencies they had overlooked altogether.

Plan must contain options for levels of operations, and a framework for such levels. Disaster plans should establish clear chains of decision-making and empower employees in the field to take action, especially if leadership is unavailable, or worse yet, missing.

Last, continuity plans and disaster response plans should be synchronized to avoid overlap or gaps in capabilities.

Major weather events also bring to light the need for short-, medium- and longer-term business continuity plans. Companies need different disaster recovery strategies for events of different duration, and must train, test and update these plans.

Training converts written plans into actionable ones. By test exercising plans and their procedures, the problems or weaknesses identified will stimulate appropriate changes.

Develop a Crisis Communications Plan:

Providing accurate and timely information to employees and other stakeholders is essential to the crisis communications process. Identifying and prioritizing target audiences and then identifying channels of communications must be established beforehand for effective internal and external communications. Plans must consider alternate communications sources: newsletters, social media, email, text messaging, and 1-800 lines. A plan must include predetermined, stand-by messages and tactics such as prepared templates, ready-to-use news releases, media statements, social media messaging, fact sheets, and backgrounds.

Essentially, the most critical component of any emergency plan is based on the ability of an organization to communicate to their targeted recipients in a timely and effective manner.

Effective communication to employees, families of employees, customers and clients, vendors and suppliers, visitors and the community is a crucial element in emergency/crisis management and should assume a central role in disaster preparedness. Proper communications establish confidence in the ability of an organization to deal with a crisis and to bring about a satisfactory conclusion.

Conclusion

Disasters, risks and threats are increasingly a global concern. Disasters and actions in one region can have an immediate impact on risks in another. Despite growing understanding and acceptance of the importance of risk mitigation and increased disaster response capacities, disasters – and in particular, identification, monitoring, and management – continue to pose challenges to most organizations.

The best time to respond to a disaster is before it happens. Every physical area in the world is or will be subject to some type of disaster or hazard. Even though an area has never been damaged before, there is no guarantee that it will not happen tomorrow. It is a governance responsibility to identify the kinds of hazards – and their impact – that could affect your company both internally and externally, before they occur.

The starting point for reducing disaster risk and for promoting a culture of disaster resilience lies in the assessment of the threats and vulnerabilities that most businesses face.

The time to act is before now; before the crisis or disaster has a lasting impact on your family, your community, your employees and ultimately, your business.

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