Katrina analysis


THE RESPONSE of government to Hurricane Katrina is being dissected to
determine why the initial reaction was lackadaisical even though
officials knew the disaster was coming. One reason could be the culture
of the organizations involved. If this root cause is not addressed
systematically then all the special commissions, forecasting tools,
special gear, and training available will not fix the problem. And there
are plenty of examples in the corporate world to serve as a guide.

Over the last three years, a team of MIT researchers has been studying
the resilience of corporations in crisis situations. The team studied
many examples of organizations that ''made it" when disaster struck, as
well as those that faltered. And there are numerous examples of both
kinds. Following a fire in a Philips Chip plant in Albuquerque, N.M., in
March 2000, Ericsson had to exit the cell phone market while Nokia
increased its market share, even though both depended on the chips from
the struck plant. After the 1999 Taiwan earthquake that disrupted the
island's chip manufacturing and 40 percent of the world's chip supplies,
Apple Computers stumbled while Dell kept increasing its market share.
And Chiquita was able to recover much faster than Dole from Mitch, the
hurricane that devastated Latin America in 1998.

The more resilient organizations were better prepared and had designed
their supply chains with greater flexibility in mind. Close examination,
however, also showed that such companies have something in their DNA
that makes them more resilient, a certain corporate culture that helped
them survive and even strive:

Empowerment of front-line employees. While it is well-known that
production line employees in Toyota factories have the authority and
responsibility to stop the line when they see a quality problem, it is
less known that any sailor on the deck of a US carrier has the right and
responsibility to stop flight operations when they detect a developing
problem. Front-line employees are close to the action and can assess
what is needed; as a disruption develops there is usually not enough
time to go through the usual chain of command.

Constant communications. Resilient enterprises communicate obsessively
and ensure that they can communicate in a disaster. Constant
communication allows employees to know the state of the system when
disaster strikes and emergency communications allow for the recovery
efforts. Thus, Intel keeps an emergency center in each region of the
world where it is doing business and each center is equipped with
landline telephones, cell phones, SSB communications, satellite phones,
Internet connections, and even globe-spanning ham radios. But resilient
organizations not only have the gear; they create the environment in
which communications are important and bad news travels fast.

The big picture. Employees in resilient enterprises are passionate about
their mission and care deeply about what they do. Don Schneider,
chairman of the largest truckload company in the US, Schneider National,
explains to his 20,000 associates that they are not really in the
trucking business. As transportation enters the cost of every item sold,
efficient, low-cost trucking reduces the price and increases
availability of products. Thus, Schneider is really in the business of
raising the living standards of US consumers. At UPS, employees are
keenly aware of how dependent their customers are on timely deliveries
and thus ''nobody goes home until all the packages are delivered"
regardless of disruptions.

The response to Katrina demonstrated how woefully unprepared the
government was at all levels. Instead of taking decisive actions, city,
state and federal officials argued with one another; communications
broke down, and too many civil servants, from New Orleans police
officers to Louisiana state officials to FEMA directors, did not have
the urgency or the passion required.

What has to be done is strikingly obvious -- instill a radical change in
organizational culture. Will this largely avoidable tragedy change the
culture of the organizations involved? We can only hope.

Yossi Sheffi is a professor of engineering at the Massachusetts
Institute of Technology, where he heads the Center for Transportation
and Logistics.
© Copyright 2005 Globe Newspaper Company.
This post is worth absolutely nothing and is probably fallacious.

Use oz@xxxxxxxxxxxxxxxxxxxx [ozacoohdb@xxxxxxxxxxxxx functions].
BTOPENWORLD address has ceased. DEMON address has ceased.


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