- Crisis Management
As the entire Eastern Seaboard hunkers down for what may be the storm of the century, some perspective of other disasters, both natural and manmade, may be in order. They say past is prologue but as the world of commerce is so intertwined with digital tendons this storm will be a lesson for all of us.
For perspective, although now I am running the DC office of Burson Marsteller, I was the Executive Director of the Business Roundtable during both Katrina and 9/11. Some lessons learned:
Corporations and governments spend time and money exercising for these types of disasters. With this storm – given the lead time – most if not all plans have been put into place. Safety and continuity of operations and leadership decisions are actively being put into place. The unknown is, will the redundancy measures, given widespread power outages, allow the necessary connectivity?
The one thing I learned is that disasters of this magnitude carry a massive price tag but also always boost economic activity in the subsequent two quarters. Clean-up, repair and replacement all cost time and money, much of it very labor-intensive. While insurance companies will provide a gauge of the impact, every state and locality will have its own barometer, neighborhood by neighborhood.
Katrina had a $45 billion dollar price tag. There is no way to know the potential cost of this storm.
The fact that the markets have shut down will have a massive impact. Working with the CEO's of the Business Roundtable during 9/11 it was clear that closure of the markets sends a chill through the world of commerce. While the East Coast is experiencing massive disruption, the rest of the world moves on. Geopolitical events continue to unfold and instead of the markets being able to react, they are frozen in place. This is so unusual and so arresting, it has ripple effects that can only be seen in the rear view mirror.
The one thing I am certain of is the response of corporations and local and national disaster response groups will be unprecedented. Corporations stepped up during Katrina and provided every asset they had to both the federal government and local officials. I can predict that will happen again, reaffirming the nature of corporations as a key partner in communities and cities.
Managing Director, US Market Leader DC Burson Marsteller
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