Houston Executive: Lessons I Learned From Hurricane Harvey

There is one HUGE lesson I learned from being a small business owner operating in Houston during Hurricane Harvey - every business should have an emergency plan. As the CEO of Sterling Staffing Solutions, I am in charge of assuring the provision of quality medical care by 575 clinicians to approximately 800 patients throughout Texas. In preparation for the storm, we ensured our loved ones, our homes, staff and clients were safe. However, as business owners, we did not properly anticipate the disaster to come.

As a native Houstonian, I’ve lived through my share of hurricanes, tropical storms and flash floods. Usually the hype does not meet reality, and we thought this hurricane might be the same.

What would happen in just a few hours would be what seemed to be an instantaneous turn for the worst. Within minutes, the fronts of homes were under water, power outages were widespread and emergency rescue calls were being made. And all I could think was, what happens if we can’t open our business up again on Monday? What if our offices flood? Is my data safe? If critical employees are temporarily disabled or even worse lose life in this storm, how do we rebound? What if I or my business partner lose our lives, how does our business survive? It became evident that we should have devised an appropriate emergency disaster plan.

Here is what I learned during the aftermath:

Identify the Potential Risks: What could happen that might stop your ability to conduct your business in a normal fashion? 

·      Fire, Explosions, Wars

o  What would happen if your office or your supplier’s warehouse went up in flames? Have you been following North Korea and Kim Jong-un lately?

·      Severe weather and regional disasters

o  California = Wild Fires or Earthquakes. Texas = Flooding & Hurricanes. Mid-West = Tornadoes. Washington = Snow Storms. You get the picture.

·      Medical emergencies

o  What if you were incapacitated due to an unforeseen illness. How would your business continue?

·      Equipment failure and power outages

o  If your office, warehouse, etc. is without power for an extended period, how would you continue operations?

·      Malpractice/ Liability Lawsuit

o  Employee or customer is hurt at your facility and files a lawsuit

o  Employee accidentally releases confidential information

·      Acts of violence or terrorism

o  Angry employee goes on a rampage and your key employees are hospitalized or even worse…murdered. How do you move on?

Are You Appropriately Insured? Now that you have identified the potential risks, one must get insured for these potential occurrences. For example, our business is on the first floor of a multi-story building. Like many others, we did not have flood insurance as we were not in the flood plain and not required to have it. Additionally, a client’s high-rise office had its windows blown out by a hurricane, and rain then damaged its interior.

·      Flood Insurance

·      Workers Compensation Insurance

·      Property Insurance

·      Rental Insurance

·      Professional Liability Insurance

Rainy Day Fund. When a disaster happens to your clients, the last thing they are thinking about is how to pay their vendors/subcontractors on time. They are concerned with the immediate safety of themselves, their families and their employees. Because our business niche is home health, we were doubly impacted. Our clinicians and their patients were displaced. So, our revenue generation was cut to 25 percent of typical revenues for at least two weeks. Due to the devastation to our local government services, client’s checks that were mailed to pay for prior invoices were delayed for 1-2 weeks. Our cash flow was severely impacted. Bottom line, you need to be prepared to possibly cover expenses for a while. 

·      As a business owner, you need to have enough savings to operate your company for 3-6 months without any cash flow. Start with one month of savings and then keep increasing your threshold until you reach your goal.

·      How fast is your business growing? 

·      High growth businesses may need more cash on hand this month than last month.

·      Funding type. Investing your savings in the stock market makes your funds inaccessible in an emergency. Good choices are:

o  Interest bearing savings accounts

o  Low-risk municipal bonds

o  Short-term CDs

Emergency Communication Plan. Do you have a way of contacting your employees, clients, sub-contractors in a quick manner? What if cell phone towers are down? Electricity is out? Internet down? How would you communicate? On the Thursday before Hurricane Harvey was scheduled to hit Houston, we knew that we would close our staffing company Friday to allow our employees to ride out the storm. We honestly did not even have an easily accessible call list for all our employees so we created a “GROUPME” chat number to quickly communicate emergency messages. 

·      Establish a single point of communication for all parties - a spokesperson. Let everyone know whom (and how) to make contact for updates on your business.

·      Select a place to be used as a media center.

·      Prepare and issue company statements to the media and other organizations.

·      Internal alerts. Get your message out internally on how to evacuate, reassemble and status updates. Consider the following of modes of communication:

o  Email

o  Voice messages

o  Text messages to cell/smartphones

o  Overhead building paging systems

o  Buddy System. Each employee should be responsible ensuring the wellbeing of another employee and report to the senior manager

·      External emergency communications that should fit into your business continuity plan include: notify family members of an injury or death, discuss the disaster with the media, and provide status information to key clients and stakeholders

Protect Your Business and Your Clients. If your office goes up in flames or all your equipment is under water, how long will it take to be operational? If you sell goods services online, orders may still come in, how do you service those orders? If your staff or clients are evacuated, do you know how to find them?

After the hurricane hit, it was difficult to assess where our clients and patients had been evacuated or moved for safety. For example: FEMA ordered a stroke patient to evacuate her home. At the same time, her assigned physical therapist was also displaced due to flooding. The patient needed aggressive and consistent therapy to increase the likelihood of a fast, permanent recovery. What would you do?

·      Emergency Contacts – identify those who should be contacted during an emergency. Make sure your customers know your business’ emergency contact information for sales and service support, your back-up business location.

·      Client Triage – Prioritize which contracts, projects, activities must be completed in the short-term vs. long-term. Identify projects that may be impacted by untimely delivery of goods and services.

·      Client Records – determine which client records are needed for the delivery of your goods or services.

·      Secondary Staff/ Services – Identify backup personnel to step in when your primary or secondary resources are not available. A greater number of backup personnel may be required to achieve the same results of more tenured and experienced staff.

·      Back up all electronic data on a cloud-based server. Make sure that contact information for employees, key customers, important vendors and suppliers, and insurance companies are accessible.

·      Establish an alternative operational location where employees can work temporarily until your current location is operational.

·      Shipping may be temporarily impacted in the impacted area. Establish an alternative shipping method or distribution center.

·      Customer Care – determine how to deal with the emotional strain of being impacted by a disaster for both your clients and your employees. Asking an employee who is dealing with emotional strife to momentarily ignore their situation to provided needed care to others is difficult.

Lastly, make sure to have high-quality first aid kits, battery operated radios, fire extinguishers, flashlights, and batteries on hand inside of your office. Have emergency signage that gives steps on how to handle strokes, heart attacks and choking.

Going the extra step to be prepared will save you time and money, and your employees and clients will appreciate the level of concern you show for their safety and the continuity of your business.

Stephen L. Carter, MBA, PMP

Serial Entrepreneur

CEO of Sterling Staffing Solutions and White Orchid Hospice