Rising from the Ashes: The Return of Technology

When we were all introduced to the internet in the 1990's, the future seemed limitless. I mean where else could you go to get a seemingly endless fill of e-brochures, and make millions simply by securing a catchy domain name? There was probably a good reason why this first generation of "killer apps" was destined to come tumbling down.

We now find ourselves almost five years removed from the big bubble burst, and not suprisingly, technology seems to be back, but this time, the dynamics of technology and what constitutes e-business has completely changed. We've moved from brochure-ware to business blogs, and from sites where the value is not tied up in a name, but in functionality. As the reach of broadband expands, so too will the dynamics of how work is conducted. Indeed, the e-business economy will take on greater importance. This prediction is supported by the results of the following article summarizing this year’s e-readiness rankings established by the Economist Intelligence Unit (EIU):

According to the EIU, this year’s rankings show that ”the global economy is beginning to feel comfortable in a digital skin”, perhaps for the first time since the technology bubble burst. Spending on information and communications technology (ICT) is growing again with some buoyancy in developed markets. In emerging markets, expansion of connectivity – defined as individuals' and organisations' access to voice and data communications – continues on a rapid ascent. Meanwhile, broadband Internet access is beginning to reach critical mass in several countries and is becoming a catalyst for other improvements in the digital economy. The 2005 edition of the rankings reflect the increasing importance of broadband to countries' digital development. As a result, the world's most developed broadband markets have registered significant score increases over 2004, although only some have moved up in the rankings.

What this says about the future is by no means definitive, but it certainly does point toward a reconfigured workplace that is decentralized and more resistant to the impacts of risk. Technology plays a critical role in maintaining workplace continuity, and it's nice to see the sector has risen from the ashes. All in all, things are looking bright.

The Safety of Chemical Plants

In Washington today Richard Falkenrath will deliver a written statement to Congress discussing the Bush administration's policy on chemical plant security. At issue is the government's policy to count on chemical plants to voluntarily beef up their own security. Given the risks and vulnerability, this policy may have to be rethought:

The government estimates that there are more than 15,000 chemical facilities nationwide, including more than 100 in heavily populated areas. Such plants can store enough deadly chemicals to kill or injure hundreds of thousands of people.

The article cites a recent example of a rail car crash in remote Graniteville, S.C., that killed 10 people after 60 tons of chlorine was released. Of course the scope of the devastation can be much wider - one need not look any further than the Bhopal disaster of 1984 when forty metric tons of methyl isocyanate (MIC) from a Union Carbide pesticide plant were accidently released into the atmoshpere in the middle of a heavily populated Indian city.

As officials in Washington weigh the merits of Falkenrath's statement, emergency managers in Cobourg, Ontario, a small hamlet located one hour east of Toronto, can pat themselves on the back today for executing a well-coordinated emergency response plan, after responding to a massive inferno at a local plastics factory. The fallout from the wake of the fire remains to be seen, yet the way local authorities responded needs to be applauded, as it validates the the need of putting together a multi-tiered response plan that seemlessly coordinates the response across a wide number of responders. Although the Cobourg fire department has only fifteen fire fighters, the plan created seemless communication channels to external first responders who would immediately be mobilized to the scene. In fact, over 100 fire fighters were on the scene within short order to help bring the blaze under control.

Due to the magnitude of the fire at Horizon Plastics, crews from surrounding fire departments were summoned to help, including crews from Peterborough, Smith-Ennismore-Lakefield Township and Otonabee-South Monaghan Township. Chief Gord Jopling of Smith-Ennismore-Lakefield sent a pumper truck with three firefighters. Chief Ted Bryan of Otonabee-South-Monaghan dispatched four firefighters and a pumper truck.

As officials in Washington try and make heads or tails out of how to best respond to a potential crisis, they may be well served taking some small town tips from their neighbor to the north.

Evaluating TOPOFF 3

A few weeks ago, we heard news of a massive simulation of simultaneously occurring terrorist incidents that took place in Connecticut and New Jersey. The U.S. Department of Homeland Security’s Top Officials Three Exercise (TOPOFF 3) is a Congressionally mandated exercise designed to strengthen the nation’s capacity to prevent, prepare for, respond to, and recover from large-scale terrorist attacks involving weapons of mass destruction (WMDs). Essentially, this was an exercise to gauge how well a number of authorities would respond and coordinate activities in a fully cooperative manner. The details of the event are described in this article which refers to the exercise as a "gaming exercise", but stresses:

it is no game to those dedicated first responders and emergency officials from all levels of government, who have taken on the urgent responsibility of terrorism prevention and response

This was in fact a simultation that took place on a grand scale. The program is the latest application of a procedure that has actually been in place since 2000:

TOPOFF was first conducted in May 2000 and involved thousands of federal, state, and local personnel, along with top U.S. officials including the Attorney General, Secretary of Health and Human Services, FBI Director, FEMA Director, and two state governors.

TOPOFF was originally designed to improve the response skills of senior American officials. However, as terrorism has become an increasingly global threat requiring an integrated, global response, the Department of State has taken the lead in involving foreign governments in TOPOFF.

As this last point emphasizes, the scope of TOPOFF has gone beyond testing the capabilities of a large number of domestic organizations involved in emergency management, and included two of its closest allies:

“The threat from international terrorism remains real and serious, and is a worldwide concern. It is vital we make every effort to enhance and develop our resilience to this threat by working closely with our international colleagues. Exercise Atlantic Blue provides an excellent opportunity to do just this, through sharing best practice on emergency planning and response procedures,” said Hazel Blears, U.K. Minister with responsibility for Counter Terrorism and Resilience.

The results of the exercise are being analyzed and evaluated.

Continuity on Selected Campuses

As we study the efforts universities are making to formalize preparedness, we notice that some are doing a better job than others, using the internet to get the word out. Here's a sampling of the different approaches taken by Stanford, the University of Western Ontario, and Cornell, which are all worth a look.

Demand for Steel Affects Construction Costs

It's logical to assume that the economic incentive for a developer to move forward on a real estate project, is that he/she will capture a sufficient return on the investment they inject to get things going. Once in a while, even the most well thought out plans don't materialize due to some factor beyond the control of planners. If things do move ahead, the only way to capture the desired return, is for the project to yield higher economic rents. Either that, or swallow the loss on the real estate play, and move on to other asset categories the next time around.

We mentioned the boom in China and India in our Kunstler post last week, so I thought why not throw one more log on the fire. Seems that even though China's demand for steel has been slowing, it still moving at a torrid pace. This may be good news for some, but may not be for others, including real estate developers in the U.S.:

Since June 2003, the price of steel has doubled. The costs of copper, gypsum, plywood, lumber, cement and petroleum used to fabricate, transport and install many materials have also increased steeply, if less drastically...Such nettlesome price increases have been compounded by the difficulty at times in obtaining steel and other materials as the fast-growing economies in Asia, especially China, soak up supplies.

Beyond these micro-anecdotes that use isolated cases to illuminate how rising costs can adversely affect the economics of a real estate project, it seems as though the scope of this phenomenon is wider, and is in fact affecting the larger economy:

An increased demand and price hike in commodities is likely to push the costs of construction in the buoyant US property construction market higher, according to Rider Hunt Levett & Bailey president Julian Anderson.

At what point do required economic rents become cost prohibitive? Whether this phenomenon represents a blip, or is indicative of what might be defined as "the new normal", it offers one more clue that the long-term nature of workplace will change.

Universities to Obtain Homeland-Security Dollars?

It's been about a month since we launched Campus Continuity, and thus far the response has been enthusiastic. Seems as though the profile of risk management at educational institutions increases on a daily basis. So much so, that it has captured the attention of the U.S. Congress. A client just sent this article from the Chronicle of Higher Education to me last week (if the link doesn't work, or is no longer active, try this link). I am still trying to get some additional information on it, but it seems relevant:

Congress is considering lifting a two-year ban on earmarks in its homeland-security spending bill, higher-education lobbyists confirmed on Thursday. Word of the plan was first reported in Congress Daily.

If the directed, noncompetitive grants are allowed, the bill could become a bonanza for colleges and universities, providing millions more in pork related to homeland security. The measure has been off-limits to earmarking since 2002, when Congress created the Department of Homeland Security and its associated appropriations subcommittees.

"It would be an opportunity for a lot of universities to obtain homeland-security dollars that they otherwise would not be able to," said B. Jeffrey Brooks, a lobbyist with Adams & Reese, a law firm that represents Louisiana State University.

If any of our readers have additional information on this Congressional maneuvering, please drop me an note.

PanEx - Delivering Pandemics to Your Door

When a pandemic flu virus was mistakingly sent to over 4,000 countries in a handful of countries, there was certainly cause for panic.

Samples of the influenza A(H2N2) virus were sent to 3,747 labs, the vast majority of them in the United States, the World Health Organization (WHO) said in a statement last night. The WHO recommended that all the samples, which were sent for use in lab proficiency testing, be destroyed immediately.

The H2N2 virus triggered the "Asian flu" pandemic of 1957-58, which killed an estimated 1 million to 4 million people worldwide, including 70,000 in the United States. The virus continued to circulate and cause annual epidemics until 1968, when the H3N2 virus emerged and sparked a new pandemic, the WHO said. Because the H2N2 virus has not circulated since then and is not used in current vaccines, "persons born after 1968 are expected to have no or only limited immunity to H2N2," the WHO said.

The problem was identified by a Canadian laboratory, which promptly informed the World Health Organization who then took immediate action to inform. The magnitude of the potential fallout of this incident was so significant, that the public announcement was made days after the problem was discovered. Scary stuff indeed.

Postscript: From USA Today Posted 4/17/2005 10:19 PM and Updated 4/18/2005 5:44 AM

Some samples of a potentially deadly flu virus, sent by mistake to thousands of laboratories from October through March, were found last week in FedEx warehouses in Lebanon, Mexico and Chile, a World Health Organization official said Sunday.

Kunstler's View on Oil Prices

When the price of oil hit $58 a barrel a couple of weeks ago, I was all set to put a post up discussing how unlike previous periods where the price of oil spiked, the fundamentals of this episode were different (remember, this blog is all about identifying factors the lend evidence to our contention that the conventional dynamics about workplace will change). I was going to say that unlike other periods, where the price inevitably went down when OPEC nations simply upped the production levels, we were now dealing with the new phenomenon of demand from India and China (over 2 billion people that never really factored into the equation before their combined economic engines started churning) which would create an entirely new dynmanic - if these two ever actually join forces, their combined might will not only tilt the balance of economic power, but will only accelerate the stresses associated with a limited supply of fossil fuel. My intention was to sound very smart, but this wasn't really meant to be, because our old friend James Howard Kunstler beat us to the punch.

In a recent issue of Rolling Stone, Kunstler discusses some of the themes put forth in his new book The Long Emergency: Surviving the End of the Oil Age, Climate Change, and Other Converging Catastrophes of the Twenty-first Century, published by Atlantic Monthly Press. In it, he not only talks about the India/China theme, but puts it into a far more elegant framework than I could have ever come up with (but hey, he's one of the best, so I'm okay). More importantly (to this forum at least), Kunstler talks about the kind of communities that stand the best chance of surviving over the longer term:

The successful regions in the twenty-first century will be the ones surrounded by viable farming hinterlands that can reconstitute locally sustainable economies on an armature of civic cohesion. Small towns and smaller cities have better prospects than the big cities, which will probably have to contract substantially. The process will be painful and tumultuous. In many American cities, such as Cleveland, Detroit and St. Louis, that process is already well advanced. Others have further to fall. New York and Chicago face extraordinary difficulties, being oversupplied with gigantic buildings out of scale with the reality of declining energy supplies. Their former agricultural hinterlands have long been paved over. They will be encysted in a surrounding fabric of necrotic suburbia that will only amplify and reinforce the cities' problems.

If you haven't read one of Kunstler's books, particularly the ones dealing with urbanism, do yourself a favor and read one. Kunstler is extremely thought-provoking, and has a wit that is singularly unique. I can also say that he has inspired much of the work we have done since our inception. Enough talking here, I'm off to buy a copy of the book.

Remembering Terry Fox

Courageous, principled, determined. These are words that describe Terry Fox, the man who lost his leg to cancer and used this experience as an opportunity not to lament his misfortune, but to turn it into something positive. His plan was to run the equivalent of a marathon a day, starting on the east coast of Canada and keep going until he reached the Pacific. His goal was to raise one dollar for every Canadian (when he began the Marathon of Hope, the population of Canada was 22 million). His dream ended midway through the run when doctors discovered the cancer had spread to his lungs; he would lose his battle to cancer ten months later. Terry's improbable feat began 25 years ago today when he dipped his artificial leg in St. John's harbour. To date, the Terry Fox foundation has raised over $300 million for cancer research.

I come from a generation whose parents ingrained the concept of determination and heroism in children by telling stories about the brave soldiers who fought in a war in a place very far away. As my children reach an age when they too will sit down for their stories of courage, I will tell them about Terry Fox.

Linking Outbreaks to Telework

Imagine this scenario. On a typical working day, one of your co-workers, who happens to occupy the cubicle next to you comes in with what appears to be a runny nose and a cough. Although he tries to go about his business, his persistent coughing and annoying nose-blowing start to become a distraction. You peer over the partition and tell your colleague he should take the rest of the day off and go home to rest. "I'll be okay" he tells you, and stubbornly carries on. Another case of the typical modern office hero, who feels that the unless he remains at his desk, the entire operation of the company could come tumbling down. Sure, this could be nothing more than a benign little ailment, but it also could be something that could affect the operations of the entire company. In fact this very scenario played itself out not so long ago.

Two years ago, I was nearing the end of a work assignment with a firm that had me providing the research that drove a fair bit of business development. In the middle of March, I took my daughter to pre-school only to find out that a sign had been posted on the door of the school warning parents that a mysterious ailment had been discovered at the local hospital. Doctors had no clue where this virus had come from, or how to treat it. The only thing they did know was that it was highly contagious and potentially fatal. Given the daycare arrangements for our daughter, my wife and I agreed that the best course of action would be to keep her at home for a week (like most of the other parents) – I would alter my schedule to be with her. As far as my own work was concerned, we were trying to land a fairly big chunk of business, and given that my contribution to the effort would be to provide the research – I decided to give teleworking a try.

Although I told the team leader of the situation and the solution I had proposed (actually, we ended up winning the business), he took it upon himself to casually mention prior to a meeting with another client that he was having ‘behavioral problems’ with one of his team members. At the time, he had no idea how serious North America’s first outbreak of SARS would become. Unfortunately, his views, like so many other managers were grounded in a firm belief that in order for workers to be effective, they need to be within a manager’s line of sight. In fact, this happens to be the dominant factor that limits the spread of teleworking.

Pandemics and infectious disease tend to be topics managers don’t want to acknowledge because if they do, the measures required to protect workers against their outbreaks would require a substantial reconfiguration of a contemporary workplace and ultimately, control over workers. In past posts, we have discussed the implications of pandemics, but a news item we stumbled upon reminds us again of how serious the outbreak of bird flu in the Far East could be.

Vietnam says five members of a family who operate a chicken farm have tested positive for bird flu. A health official says initial tests show the H5N1 virus is present in samples taken from a man, his wife and their three daughters. The doctors say they believe the family contracted the illness through direct contact with the birds. However they can't rule out the possibility of human-to-human transmission.

If bird flu isn’t scary enough, there is fear of a new “superbug” that may signal the start of a deadly epidemic.

MRSA, or methicillin-resistant Staphlycoccus aureus, normally thrives in hospitals, making sick people sicker – and doctors know which antibiotic will beat it. But a more powerful strain of MRSA has been spreading among healthy people who have never been in hospital, first in the United States and now in Canada. Standard antibiotics don't seem to slow its ravages at all.

As organizations hear about more and more instances of the outbreak of epidemics and pandemics, they will have to acknowledge what the impact of these outbreaks will be on the organization. A reasonable starting point would be for managers to reevaluate their misguided perception of what constitutes a ‘behavioral problem.”

Risk Headlines on Opening Day

Now that baseball's back in full swing, we can focus our attention on topics that make for the good water cooler banter. Let's see, we can start by discussing baseball's big steroid bust in the majors as well as the minors, who might win the American League East, whether Mark McGuire should be elected to the Hall of Fame, or Jose Canseco's next career move. Ah, nothing like the great American pastime to create a diversion from the events that can really creep up on us, without our noticing anything.

I mention this only because today, April 5, 2005, after getting my first good baseball fix since last year's fall classic, I happened to stumble upon the following headlines - all in the span of about five minutes:

• Manitoba braces for a new flood season
• US holds massive terror exercise
• 9/11 report calls for new ideas on tower safety
• At least 2,500 were killed in Indonesia quake
• U.S. launches avian flu vaccine trial
• N Korean bird flu 'different'

That's six big risk-related headlines all in one day - when it comes to adjusting corporate strategy to address areas such as business continuity and emergency management, now sounds like as good a time as any to 'play ball'.

The Psychology of Panic

Barely three months after a massive earthquake and tsunami hit southeast Asia, an 8.7 magnitude earthquake hit Indonesia again this past Monday. The hardest hit area was the island of Nias. The reaction to this event was predictable - there were widespread reports of panic all in an effort to get to higher ground. This panic led to accidents, injury and chaos.

This invariably leads us to wonder what the impact of panic must be in disaster zones, and how great a risk panic actually is - a topic that would be of particular interest to emergency responders and business continuity planners. I heard a very thought provoking segment this past Wednesday on CBC Radio's The Current, where this topic was discussed at length. The first guest on the show was Charles Figley from the Traumatology Institute at The Florida State University (my alma mater) who offered some very interesting insight. Some of the key points included:

• the overlapping nature of these massive events increased the degree of reaction; however, panic is an overreaction to irrational beliefs - in this case, running to higher ground was entirely rational
  
• Florida's experience with hurricanes in 2004 provided a very telling example of how the mind becomes more rational with more experience; when the second hurricane struck in Florida, there was the same degree of panic, however, the response became more rational with successive hurricanes (there were four in total)(Figley surmised that this may have largely been influenced by fatigue)
  
• Fright overrides any kind of rational thought or appropriate behavior
  
• The effects of panic can make a crisis substantially worse; in this regard, emergency managers are trained to be directive, competent and compassionate
  
• Panic can be reduced by keeping emergency response policies as simple as possible

A different perspective on this discussion was offered by Henry Fischer, who is the director of the Center for Disaster Research and Education at Millersville University. Some of the key points he discussed included:

• the response of locals in Indonesia to the second earthquake was entirely rational
  
• True panic is associated with a circumstance where a person believes they may have an opportunity to escape, but the window to do so is small - this is the cause of stampede behavior
  
• Panic is an overused term, and its misuse can directly result in creating bad emergency management or business continuity policy
  
• The true first responders in an incident are those who survive the initial impact of an incident and lend their assistance

You can hear the entire segment by clicking on this link.

Business Blog Survives Net Disaster

Gill Advisors Inc. was better prepared than most companies when this disaster struck many business blogs today. Fortunately, our firm has Gills on staff.