Excell Puget Sound CEO Blog

Lesson from Hurricane Sandy

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Today we have a guest blog from Dan Weedin:

“It will never happen to me. And if it does, we have insurance and will just deal with it.

 These are words I have heard often throughout my 25+ years in the insurance and risk management industry. I wonder how many New Yorkers and New Jersey business owners never thought a hurricane the force of Sandy would ever impact them and cause the chaos and crisis that it has.

All you have to do is open a Wall Street Journal, USA Today, or New York Times on a daily basis to read about fellow small business owners being devastated by disaster. Tune into CNN and watch it as it happens. And, I’m not just referring to natural disasters like hurricanes. Here is a short list of crises that have occurred to small businesses and could to yours. In each case, some sort of crisis response and damage control was required…

• A cyber crime compromises your database and threatens the identities of employees and clients.

• A cyber attack cripples your technology with a virus, leaving you unable to operate and out a lot of money to fix.

• One of your employees suffers a heart attack and dies in the office with dozens of employees watching and trying to help.

• You are sued by an employee for age discrimination after you terminated them for cause.

• Your server room suffers a broken water pipe and floods the room damaging your system.

• You suffer a devastating fire that will mean a complete rebuild. What do you do with 50 employees tomorrow? What do you tell them?

• One of your key executives’ poor behavior lands on the front page of the local paper. The reputation of your business is now on the line. What’s your first step?

• A massive windstorm causes a power outage and power may not be restored for 4-5 days.

• One of your drivers causes an accident that kills someone else, and then test positive for drugs. 

I can do this all day. My guess is, that if I put you in a room with your peers, you could do the same. The problem is that a small percentage of business owners actually do anything about it. Their method of managing and responding to risk is to call their insurance agent, hoping that it crisis is insured, and then respond in real time. As the CIA director on the Bourne Ultimatum quipped, “Decisions made in real time are most often very poor.”

The reason most business owners eschew proper planning is because he thought of doing it is daunting. They’ve been led to believe that it’s too time and energy consuming. The reality of it is that it’s not. You just need to know what you’re doing.

Here is my easy to use guide on how to quickly and painlessly develop a plan….

1. Allocate 2 hours of uninterrupted time with you and your key people. Close the doors, turn off the cell phones and require focus.

2. Create a plan for who is in charge in the event of any crisis. This person should have authority to make decisions and also have a backup in case they are unavailable.

3. Create a simple, yet effective communication plan to communicate with employees, clients, supply chain partners, and families. Take into consideration loss of power and connectivity.

4. Find someone who is able to deal with the media. It should be someone different than the person in charge. This person will deal with press releases, interviews, and other media requests.

5. Determine what are your most likely perils, and which ones would cause the most damage. Discuss appropriate responses.

6. Test/practice your plan. This one gets overlooked all the time!

7. Meet as a group at least quarterly to reassess and make changes as necessary.

This may seem oversimplified. If you just do this, you’re ahead of most of your peers. If you go beyond this and make effective crisis response part of your culture, then you dramatically improve your chances of avoiding a crisis to begin with; mitigate the ones you can’t control; and respond in a way that protects your business, employees, and reputation.

© 2012 Dan Weedin. All Rights Reserved

DAN WEEDIN 

Dan Weedin is a Poulsbo-based management consultant, speaker, and mentor. He leads an executive peer-to-peer group here in Kitsap County where he helps executives improve personally, professionally, and organizationally by enhancing leadership skills.  He is a 2012 inductee of the Million Dollar Consultant Hall of Fame. You can reach Dan at 360-697-1058; e-mail at [email protected] or visit his web site at www.DanWeedin.com.