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16 STORM & SECURITY PROTECTION / PEOPLE IN THE KNOW 2014 Just surviving a disaster or rapidly resuming operations is not always sufficient to guarantee the future of a company. Physical damage is often the easiest problem to deal with following a disaster such as a hurricane, severe storm or flooding. But quick repairs alone do not equate to business survival if you cannot produce goods and services or there is no one to buy them. Once the immediate crisis is passed, it is essential to have a business recovery strategy. A prime example of this is the experience of the Sheraton Hotel following the terrorist attacks in New York City on September 11. The hotel had not been damaged in the attack and initially enjoyed several days of sustained bookings from stranded travelers and rooms provided to rescue workers. But it soon became apparent that the attacks had dealt a heavy blow to the tourist industry. Room cancellations soared and the outlook for the future was bleak. The Sheraton needed a new strategy if it was to survive. That strategy took the form of a partnership with Lehman Brothers, the global financial firm. Lehman's offices were located in World Trade Center Three and had been severely damaged in the attack. The firm was desperately seeking an operating location for its 6,500 employees. Owing to a pre-existing relationship and aggressive marketing by the Sheraton staff, within a few days Lehman Brothers contracted to use all 665 rooms of the hotel, its lounges and restaurant as office space. This relationship continued for several months until Lehman Brothers was able to purchase and renovate a new building and insured the survival of the Sheraton Manhattan hotel. Understand the Impacts Developing a recovery strategy requires an understanding of the impact of the crisis. This impact is not limited to physical loss; disasters produce ripple effects that can have a long-range impact on the survivability of a company. There are three basic questions that must be asked when developing a business recovery strategy: 1. What is the impact on your labor pool? For most companies, their ultimate competitive advantage lies in its employees. Employees are the repositories of intellectual capital and represent a significant investment in training. However, disasters can have a disproportionate impact on hourly employees. Damage to housing stock may encourage employees to relocate to other areas or seek higher-paying jobs to meet unanticipated expenses. Disasters also create new opportunities such as high-paying construction jobs. One need look no further than the mass-evacuation of the city of New Orleans following Hurricane Katrina for an example of the effect of disasters on local labor pools. 2. What is the impact on your supply chain? Disasters frequently create spot shortages of goods and services, particularly those related to reconstruction. They also can generate significant transportation infrastructure | by Lucien G. Canton | YOUR RECOVERY STRATEGY Three questions to ask after a disaster to ensure your business survival. Business Savvy } The long-term effects of Hurricane Katrina still are being felt in Biloxi, MS. Businesses need to consider the impacts of disasters on employees, suppliers and customers. FEMA/Mark Wolfe