Katrina shows businesses not prepared for disasters
The tragedy that resulted from Hurricane Katrina has given us an opportunity to look at what went wrong and fix it, but I want to focus very narrowly here on how poorly our businesses (I am referring to primarily corporate America here) were prepared to deal with a natural disaster. What it shows is that some of the largest corporations (particularly in the energey and telecom sectors) had probaly never heard of terms like risk management, disaster management, redundancy, backup systems, etc.
We saw the same lack of preparedness by corporations prior to 9/11 but that was somewhat excusable since the probability of that event was low. On the other hand, the risk experts have been talking about the dangers in the Gulf region for years if not decades. It is simply incomprehensible to me that many Fortune 500 companies had not prepared for power failure in the gulf region.
Three things you can do now
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If you don’t know how to prepare your business to face natural or man-made disasters, start researching or hire an expert.
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Merely having insurance is not enough because that only allows you to recover your losses. What you need is capability to serve your customers when they need you most. Just ask those cell phone customers who could not make phone calls when signal disappered and then could not charge the batteries when the power died. What kind of customer service is that?
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It may seem very tempting not to invest in a disaster management program. It costs a lot, is rarely needed, you can get away with it, etc. but companies that have been there for their customers in their toughest moments are the ones that have created the highest value for themselves.
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