Crisis response plans post 9/11: current status and future directions.
There have been a number of crises that have affected organizations during this decade. The events of September 11th, 2001 and Hurricane Katrina in 2005 demonstrated that a majority of organizations' Crisis Response Plans (CRP) were not adequate to respond to either man made or natural disasters of this magnitude. "On Sept. 11, 2001, terrorists attacked the World Trade Center, killing 2,749 people. The attack resulted in severe economic impact, especially to airlines, and a stock market loss of $1.2 trillion. On Dec. 26, 2004, a tsunami from a 9.1 earthquake overran the shores of many countries along the vast rim of the Indian Ocean. Over 283,000 people died. On Aug. 29, 2005, Katrina, a category-5 hurricane, knocked out electric and communication infrastructure over 90,000 square miles ofLouisiana and Mississippi and displaced 1.5 million people." (Denning, 2006, p. 15). This past decade has been catastrophic, and there are still two more years to go.
September 11, 2001 started off as a normal Tuesday morning at work. That changed at 8:46 a.m., the time at which the first plane crashed into the North Tower of the World Trade Center in New York City. A day that started out normal for thousands of workers turned out to be the day that is now considered to be the worst terrorist attack ever launched on the United States. As a result, the attacks of 9/11 changed America, the work environment, and the workforce.
It is estimated that 2,749 people died on September 11, 2001 in the World Trade Center attack. This includes 343 firefighters, 23 police officers, 658 Cantor Fitzgerald employees, and 78 employees of the Windows of the World restaurant located at the top of the North Tower (Levitas, 2002). The people who were killed that day "were bond traders, chefs, firefighters, computer programmers, administrative assistants, custodians, vice presidents and flight attendants." (Caudon, 2004, p. 35).
The attacks of 9/11 showed that innocent civilians performing their daily work routine can be victims of crises, including terrorism. The attacks were not expected, and they were not planned for. Ian Mitroff (2004) categorizes crises as abnormal accidents or normal accidents. Abnormal accidents include kidnappings, bombings, cyber or internet attacks (e.g. viruses), and any other attack or event that is performed out of betrayal or sabotage. Normal accidents include floods, earthquakes, human errors, and system breakdowns. While these events are not necessarily expected, organizations may better prepare for them than they do abnormal accidents. The events of 9/11 highlighted the need for organizations to prepare for abnormal accidents (Mitroff, 2004).
Unfortunately, much of the knowledge corporations gained from dealing with the aftermath of the terrorist attacks was either forgotten or misused during the crisis following Hurricane Katrina. John Lawson (2005, p. 20), an official from Tulane University, recounts his experiences at Tulane, "... people were too dispersed for post-disaster activity, which was exacerbated by the communications failure. We couldn't get hold of people to find out where they were. I had my director of administrative computing evacuating to one city; my director of networking, who was supposed to go with me, ended up in a different city because of traffic. We had people spread out all over."
The level of security and safety that people felt towards their institutions, first challenged by the events of 9/11, was called into question by the planning incompetence exhibited by the Federal Emergency Relief Agency (FEMA) during Hurricane Katrina. "We still have difficulty grasping the notion that we are not safe from disaster in our own country. We couldn't imagine a foreign terrorist attack on our soil. It happened. We couldn't imagine an entire city disappearing under water, its population evacuated--but too late. It happened. We must begin to imagine future disasters, perhaps multiple catastrophes, for they, too, may well occur." (Nussbaum, 2005, p. 36).
After the events of 9/11 and Hurricane Katrina, there were calls for organizations to improve crisis management. "Crisis management is broadly defined as an organization's pre-established activities and guidelines for preparing and responding to significant catastrophic events or incidents i.e., fires, earthquakes, severe storms, workplace violence, kidnappings, bomb threats, acts of terrorism, etc." (Lockwood, 2005, p. 1). Part of crisis management is having an effective Crisis Response Plan. Organizations need to constantly update their CRPs each time they experience a crisis because there are lessons to be learned each time a CRP is implemented during a crisis.
Lawson (2005) explains how he extrapolated from contingency planning he received from living through the 9/11 crisis to deal with Hurricane Katrina in New Orleans. Lawson suggests the following (2005, p. 20): "You also need a business-continuity plan for your institution. You've got to think about how you are going to function if a disaster happens. How long can you go without printing transcripts, how long without sending paychecks out, how long without paying bills? How long can you tolerate not sending out accounts-receivable statements? You need to make those choices, so you'll know how much money you'll have to spend on disaster recovery."
However, research has found that organizations do not have adequate CRPs in place. A study released in December 2005 by the nonprofit agency, Trust for America's Health (TFAH), noted, "[Hurricane Katrina] provided a sharp indictment of America's emergency-response capabilities as the gaps between plans and reality became strikingly evident. Parts of the public health system did not work, and while many did work as intended, those functions were often too limited and divorced from other response activities to match the real needs in a timely way," (Young, 2006, p.197). The report went on to give specific examples of ways in which some of the most basic infrastructural services are still woefully unprepared, months after Katrina and years after 9/11. "... according to the report, hospitals in 15 states, including California, Florida, New York, Pennsylvania, Texas, and the District of Columbia, have not sufficiently planned to care for a surge of extra patients by using non-health care facilities, such as community centers, sports arenas, or hotels."
The 2004 report "Disaster Planning in the Private Sector: A Post 9/11 Look at the State of Business Continuity in the U.S." found that overall U.S. organizations are still unprepared for disaster. The survey of one thousand executives who were decision makers in their organization's crisis response planning efforts, found that 25% of the respondents did not have a crisis response plan in place in their organization. Respondents from Los Angeles were ranked as the least prepared with 30% of the companies not having a crisis response plan in place (Salierno, 2004). This finding is significant since intelligence reports suggest that Los Angeles, CA is likely to be the site of a future terrorist attack (http://www.cnn.com/2006/ POLITICS/02/09/bush.terror/index.html).
Companies that reported having plans in place acknowledged that the plans had not been updated. Twenty five percent of executives reported that their plans had not been tested within the past year; 40% indicated that the last time their plan was tested was over a year ago; and 11% responded that their plan had never been tested (Salierno, 2004). The report revealed that 200 of the participating companies indicated that they had experienced a disaster which resulted in revenue losses as high as one million dollars a day due to the crisis. Even with such huge financial losses, 75% of the firms reporting that they had suffered a disaster did not improve their crisis response plans or create a plan after the disaster (Salierno, 2004).
These findings were confirmed by another study which found that even those organizations that were directly impacted by a disaster still did not make improvements or changes to their crisis response plans. The study reports that "it was expected that organizations that were directly affected by the attacks of September 11, 2001, because of their location in the World Trade Center in New York, would create plans to be better prepared for emergencies and catastrophic events compared to employers that were not directly affected by the attacks. This was not found in the results of the study" (Hurley-Hanson, 2006, p. 491). Interestingly, while the number of west coast companies that created crisis response plans increased, the number of east coast companies did not (Hurley-Hanson, 2006). However, all of the respondents felt "that their companies had improved their efforts in collecting emergency contacts for employees, in finding a way to communicate with employees after a crisis, in providing drills to help the employees become resilient and the employees had more confidence in the company's crisis planning, " (Hurley-Hanson, 2006, p. 489).
The purpose of this study is to examine how organizations' CRPs have changed in response to the numerous crises that American businesses have encountered. The study also examines the role technology played in these changes. The first section of the paper discusses the importance of Crisis Response Planning, Crisis Communication Planning, Succession Planning, and Technology in Crisis Response Plans. The second section of the paper describes the research methodology of the study and the results. The final section of the paper discusses the implications of the research results and provides suggestions for ways that technology can benefit CRPs.
CRISIS RESPONSE PLANNING
Crisis response planning, often called scenario or crisis planning, is a roadmap for employees when a disaster strikes. A typical crisis response plan outlines how employees should evacuate the work place during a crisis, where employees will work if they cannot return to the workplace, how food and shelter needs will be met in the event that employees cannot leave the work premises, and where back up records and files will be located (Benefits and Compensation Digest, 2006).
Business continuity was a major concern for companies following the events of 9/11, especially for financial organizations on Wall Street (Kennedy, Pettrottet & Thomas, 2006). Business continuity planning is the process of "closing the gaps between current and target states of asset readiness." Organizations with effective Crisis Response Plans are expected to experience better levels of business continuity.
CRISIS COMMUNICATION PLANS
Much of the research on crisis communication plans focuses on the importance of strong communication during a crisis and identifying the most appropriate communication channels during the crisis. Argenti states that during a crisis, "internal communications take precedence. Before any other constructive action can take place whether it's serving customers or reassuring investors--the morale of employees must be rebuilt." (Argenti, 2002). His research found that the companies that managed the crisis communication process most effectively, performed one or more of the following actions after 9/11: Managers were highly visible to employees; managers sent messages to employees who could be reached about updates; executives met with supervisors and managers weekly after 9/11 to discuss how the employees were doing; the meetings were recorded and put on the intranet for all employees to view; executives sent messages during news talk shows to employees who could not be reached by telephone; and/or call centers were set up, so employees could call to let the company know that they were safe (Argenti, 2002).
Many of the problems and difficulties suffered by the people of Louisiana as a result of Hurricane Katrina were due to poor organizational communications. "At each level of government, leaders failed to hash out their differences beforehand. As a result, officials ran into communications roadblocks that should have been uncovered before the disaster struck." (Roberts, 2006, p. 26). Another problem that contributed to the organizational breakdown after Katrina was the result of a decentralized command center that failed to hold civil employees accountable to the fulfillment of their obligations as administrators of public services. "The report noted that in the days after Hurricane Katrina, more than 30% of the New Orleans Police Department did not report for duty, an indication that "planning must not only account for absences, but also seek to address worker concerns." (Young, 2006, p. 197). Also, the problems that subsequently occurred throughout FEMA and the federal response in the wake of Hurricane Katrina were largely due to personnel failing to competently communicate with one another. "The various agencies had major difficulties in coordinating and FEMA did not deliver what people thought it had promised. At all levels there was a lot of finger pointing and wrangling over who would do what and who would pay for what," (Denning, 2006, p.17). "Since the events of 11 September 2001, in New York there is now worldwide awareness of the necessity of having trained and coordinated teams available to respond to such unexpected catastrophes." (Smith, et al, 2003, 517).
Succession planning is the process of identifying leaders who can step up and take a leadership role on short notice. In addition, the identified leaders are given the training, knowledge and tools to be able to take on a leadership role at some point in the future. This becomes critical in the event of a crisis, where several layers of management may be affected (Catrain, 2002). "A total of 343 firefighters, nearly 30 times the number ever lost by the department in a single event were killed in the attack. The dead included five of the department's most senor officials, including the chief who specialized in directing rescues from collapses of this sort." (Levitas, 2002). Along with the many lives that were lost, "the FDNY estimates that it lost 4,440 years of experience the day of the attacks" (Marquez, 2006). The massive losses experienced by the New York Fire Department during 9/11 illustrated to businesses in all industries the important role succession planning plays in a comprehensive crisis response plan. The poor planning that was exhibited by the Federal government in response to Katrina, highlights the need for strong leadership at all levels of an organization during both terrorist attacks and natural disasters. Despite its importance, many companies still do not have succession plans in place. An HR Magazine study reported that 43% of the respondents had no process for the transition of a CEO, and 25% did not know the strengths of the managers two layers below their own job (Pomeroy, 2006). Greengard (2001) reported that 24% of Fortune 500 companies do not consider succession planning a priority and notes that succession planning has changed over the years because of 9/11. In the past, the second highest-ranking person would typically succeed the CEO. Since many senior level managers died on 9/11, the surviving managers of the organizations that suffered the most losses "had to confront the reality that key talent and brain-power were gone forever, but they also had to cope with gaping holes in their management structure. They immediately had to identify positions, competencies, and skills that they needed just to stay afloat." (Greengard, 2001, p. 1).
Information technology can play a major role in crisis response plans, crisis communication plans, and succession planning. Information technology can help organizations to take the correct precautions to ensure that when a crisis or a disaster strikes, an organization is prepared. In part, this is because ... "Computerized information systems have developed from a mere transaction processing function through a data accumulation period to a decision support role." (Beckers & Bsat, 2002, p. 41). There are some good examples of companies employing IT to implement crisis response plans. Directly after the attacks on 9/11, American Airlines took immediate steps to assist its personnel. "After American Airlines Flight 11 crashed into the North Tower of the World Trade Center, American Airlines' most important public was the families of their passengers and crew. A crisis management plan called for the utilization of the Customer Assistance Relief Effort (CARE) program. CARE sent more than 350 specially trained volunteers from American to the departure and destination cities of the hijacked plane. They set up command centers to assist families of victims and helped them deal with such things as flight arrangements, hotel accommodations, and provided food if necessary. CARE volunteers, who speak a cumulative total of 50 languages, also escorted family members attending accident-related events, including memorials and funerals." (Feam-Banks, 2002, p. 30).
Coast Electric Corporation also learned valuable lessons from the events of 9/11 and decided to implement an ad-hoc system of additional, part time employees to deal with the problems created by Hurricane Katrina. "During the storm, Coast Electric saw its 230 full-time employee population swell to 3,000 with contract crews." (Babcock, 2006, p. 37). Ernst and Young created a Catastrophe Communications network to account for its employees affected by disaster. "The [so-called] 'Roll Call' database allows emergency personnel to view which employees have checked in and compare them against the list of workers assigned or "hoteling" at the office facing the emergency." (HR Focus, 2005, p. 6). This roll call can be issued at anytime via an acting manager and it helps track where personnel are during a crisis.
Human Resources professionals located in downtown Los Angeles, who were also members of the Professionals in Human Resources Association (PIHRA) were chosen as the participants for this study. One of the most critical lessons learned from 9/11 was the importance of Human Resources professionals in crisis response plans. "HR is ... the keeper of the keys. They have all the privacy information, they have to deal with the IT people, they know who to contact, and they have to be able to manage communication with employees en masse. It could be a very significant role, depending on the size of the organization" (Cadrain, 2004, p. 27).
A survey was sent out via email to 446 PIHRA members; 42 completed responses were received, yielding a 9.4% response rate. The respondents were primarily Caucasian women in their forties and fifties holding Bachelor's degrees. Most respondents held jobs in middle to upper management (HR managers and directors), and the majority of the respondents had been with their organization for 10 years or less. Respondents worked in a variety of industries, and organizations of all sizes were represented. The downtown Los Angeles geographic location was selected due to the size and importance of the metropolitan area.
The data was collected through a 48 question survey consisting of Likert scale responses measuring individuals' opinions on the topics of crisis response plans, crisis communication plans, succession planning, and the use of technology in these plans. Respondents were asked to rate eight Human Resource aspects from one to eight with one being the most important and eight being the least important. The survey included questions on respondent demographics and company attributes. The survey was administered on-line and the researchers did not have direct contact with the survey participants, as distribution of the survey was facilitated by PIHRA. A representative from PIHRA distributed the survey link including a short cover letter via email to further protect the anonymity of the participants.
Crisis Response Plans
Survey results revealed that 33% of respondents said that their organization did not have a crisis response plan or disaster training prior to 9/11. Fifty-Seven percent of respondents indicated that their organization had a crisis response plan prior to 9/11. Respondents were asked to indicate the importance level of eight Human Resource Management issues in the 3 months following 9/11. Crisis response plans were ranked as the third most important issue, above succession planning and technology. When asked to indicate the importance level of these same issues in the 5 years following 9/11, crisis response plans had fallen in rank to sixth place, below technology, succession planning, and crisis communication planning.
Seventy one percent of respondents reported that crisis response planning was a high priority in the years following 9/11. Fifty five percent of respondents said that the focus on disaster planning has increased in the years following 9/11. Thirty eight percent said that disaster planning budgets has increased and fifty two percent said that there was an increase in in-office disaster supply purchases. Fifty two percent of respondents reported that disaster training programs had increased in the years following 9/11. Thirty eight percent of respondents indicated that their organizations had set up off site work locations in the event of a crisis.
A significant relationship was found (p<.03) when analyzing the relationship between organizational size and an increased focus on crisis response plans. As illustrated in Figure 1, respondents in organizations with 100 employees or less indicated that their organization did not increase their focus on crisis response plans several years after 9/11. Respondents in larger organizations indicated that they either did not change their focus or they increased their focus on crisis response plans several years after 9/11.
[FIGURE 1 OMITTED]
Crisis Communication Plans
Respondents were asked to indicate the importance level of eight Human Resource Management issues in the 3 months following 9/11. Crisis communication plans were ranked as the second most important issue, above succession planning, crisis response planning, and technology. When asked to indicate the importance level of these same issues in the 5 years following 9/11, crisis communication plans had risen in rank to first place, above technology, succession planning, and crisis response planning.
Sixty one percent of respondents reported that crisis communication plans were reevaluated or created in their organizations in the years following 9/11. Sixty two percent of respondents said that their organizations had implemented new methods of communication in the years following 9/11. Sixty two percent of respondents indicated that their companies had developed and regularly audited the emergency contact information for employees in their companies.
As indicated in Figure 2, a significant relationship was found (p<.02) when analyzing the relationship between organizational size and the creation or reevaluation of crisis communication plans. Respondents in organizations with 100 employees or less indicated that their organization did not reevaluate or create crisis communication plans several years after 9/11.
[FIGURE 2 OMITTED]
Survey results revealed that 52% of respondents said that succession plans were not a focus in their organization prior to 9/11. In addition, 37% indicated that their organization did not have a succession plan prior to 9/11. Respondents were asked to indicate the importance level of eight Human Resource Management issues in the 3 months following 9/11. Succession planning was ranked as the sixth most important issue, below crisis response planning, crisis communication planning, and technology. When asked to indicate the importance level of these same issues in the 5 years following 9/11, succession planning had risen in importance to a third place ranking, above crisis response planning and technology. Fifty eight percent of respondents reported that their companies had increased focus on succession planning in the years following 9/11.
A significant relationship was found (p<.03) when analyzing the relationship between organizational size and an increased focus on crisis response plans. As illustrated in Figure 3, respondents in organizations with 100 employees or less indicated that their organization did not increase their focus on crisis response plans several years after 9/11. Respondents in larger organizations indicated that they either did not change their focus or they increased their focus on crisis response plans several years after 9/11.
Respondents were asked to indicate the importance level of eight Human Resource Management issues in the 3 months following 9/11. Technology was ranked as the fourth most important issue, above crisis communication planning and succession planning. When asked to indicate the importance level of these same issues in the 5 years following 9/11, technology had fallen in rank to fifth place, above crisis response planning. Seventy five percent of respondents reported that technology access security was emphasized more within their organizations in the years following 9/11.
A significant relationship was found (p<.02) when analyzing the relationship between organizational size and the importance of technology. As illustrated in Figure 3, respondents in organizations with 100 employees or less indicated that their organization did not increase their focus on technology several years after 9/11.
The results of this research study have shown how the events of 9/11 significantly impacted crisis response planning, crisis communication planning, succession planning, and technology. Although some of these areas were more affected by the impact of 9/11 than others, overall it was found that the events of 9/11 truly changed many aspects of crisis response planning and the workplace as a whole. While past research indicated that little or no action had been taken by organizations to improve their responses to crises post 9/11 (Hurley-Hanson, 2006), this research found that organizations have taken actions to improve their crisis response plans.
Although the importance of crisis response planning was noted immediately after 9/11, there was a significant decrease in the ranking of its importance several years after 9/11. These results are not surprising, given the time and distance from the original crisis. Still, respondents reported that crisis response planning remained a high priority for organizations and that crisis response planning budgets, supply purchases, and training programs continued to increase in the years following 9/11.
Research results suggest that crisis communication planning retained its high importance ranking immediately following 9/11, as well as several years later. It consistently ranked higher in importance than crisis response planning, succession planning, and technology. While some companies created new crisis response plans, others reevaluated their crisis communication plans, implemented new methods of communication, developed, and/or frequently audited the emergency contact information for their employees.
The most dramatic change was in the area of succession planning. In the three months after 9/11, succession planning did not receive a high level of importance ranking. However, several years after 9/11, succession planning was ranked as more important than crisis response planning and technology. This jump in importance may reflect companies' growing awareness of how greatly the attacks had affected their workforce. With regards to technology, security access was identified as an area where information technology was utilized to improve organizations' responses to crises.
[FIGURE 3 OMITTED]
This study emphasized the important influence that organizational size plays in crisis preparedness. There was a significant difference between respondents of different size organizations in several areas. Across the board, smaller organizations, with 100 or less employees, reported that their companies had not increased their focus on crisis preparedness. Larger organizations were more likely to have focused on improving their responses to crises. One reason for this may be that large organizations have both the budget and technological infrastructure to build, maintain, and test crisis response plans. Small organizations may not see the value in crisis response planning because they have a smaller number of employees and do not have a large budget allocated to crisis response plans. Larger companies with more employees, and therefore, more liability, are faced with more stringent government regulations regarding employee safety and health.
Crisis communication plans may not be a vital part of organizations with fewer that 100 employees because most likely all of these employees are in the same location. Crisis communication plans would be more vital to larger companies because they have many more employees to account for during a crisis and it may be more difficult to reach them. In addition, larger companies may have employees in multiple locations around the world.
Employees working for smaller companies may not have rated technology as important as employees of larger companies either because their companies have a minimal crisis response plan or as many companies have rdone, they have their technology systems outsourced. If the technology systems are outsourced, the company itself does not have to focus on the direct cost or planning of the system. However, larger companies would have to put a significant amount of planning and budgeting into their technology system to align the system with their crisis response plan.
Ultimately, organizations cannot predict when a crisis is going to occur. This unpredictability is part of the reason that crises are so devastating. One of the most important things that an organization can do to prepare for a crisis is to test and evaluate the technology in their crisis response and crisis communication plans. "Test your communications plan and have a backup. Make sure you're as prepared as possible for your post-disaster activity. That means you need to know where your people are. You need to know how they can get back, and you need to have a place for them to get back to." (Lawson, 2005, p. 21).
Also, it is important to make sure that your organization is not overly dependent upon technology that could fail in an emergency. Even in this era of cellular phones, the internet and fax machines, the most sophisticated IT systems should be supplemented. "Don't rely upon cellular and push-to-talk networks. Have an old-fashioned radio system for backup communications on campus. Educate your key personnel on text messaging. We couldn't make a voice phone call, but we could use text messaging on our phones, because that used so much less bandwidth." (Lawson, 2006, p. 21).
In discussing the implications of the findings, two limitations of this research study should be noted. First, participants were asked to recall past situations. Although the individuals surveyed may have reacted strongly to the attacks and have vivid recollections of those events, over time, memories of organizational responses from that period may have diminished. Second, participants in this study worked in companies located on the West Coast. These companies may not have implemented significant changes to their crisis response plans given their geographical distance from New York city.
Despite these limitations, the findings from this study are important. Organizations are an important part of our lives. Our jobs help us determine who we are and they give us identity. When a disaster occurs, we want to know that we are safe where we work. This can only occur with proper planning and if early preparations are put into place.
Future research should focus on how the effects of 9/11, along with other recent natural disasters (e.g. Hurricane Katrina) and man made crises have changed the workplace. As this paper is being written several states in the mid West are experiencing unprecedented storms and flooding. It would be beneficial to understand how each of these events individually and collectively has affected organizations. The economic and human implications of these disasters can be expected to be felt for many years. Researchers are encouraged to examine the effects of these events and to use those findings to help better prepare organizations to survive and to care for their employees in times of crisis.
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Amy E. Hurley-Hanson, Chapman University
Cristina M. Giannantonio, Chapman University
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|Author:||Hurley-Hanson, Amy E.; Giannantonio, Cristina M.|
|Publication:||Academy of Strategic Management Journal|
|Date:||Jan 1, 2009|
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