STINGY CRISIS PLANNING

Helicopter Flies Over Sendai

Last Thursday I wrote Crisis Response 'On a Dime' about the masterful crisis response executed by Sony CEO Howard Stringer in the recent Japanese disaster.

But I take issue with one thing he was quoted as saying in The New York Times article on March 20: "Dealing with a row of disasters that escalate one by one is not something you can prepare for."

Companies have to prepare for the worst case scenario … and it’s very clear that Sony did a great job of preparing for the earthquake. However, I’m sure no one — outside of the movie industry — could have imagined the overwhelming magnitude of a disaster that combined an earthquake, a tsunami AND the meltdown at the Fukushima nuclear plant. (It’s like imagining that you’re attacked by terrorists and hit by a comet at the same time that the Yellowstone super-volcano erupts!)

That said, I feel that corporate leadership, even among the minority that do crisis planning, are not comprehensive enough in their planning. They often do not consider the most extraordinary thing that might happen and the steps that need to be taken to address them. In contrast to what Stringer says, I do believe you can plan for “a series of disasters that escalate one by one.” Japan proved that it may not be so extraordinary.

Is the extra planning all worth a manager’s time?

Here are some facts and figures that put it into perspective … at least a little. Eleven people died in the Deepwater Horizon explosion. More than 28,000 people have been reported dead or missing as a result of the Japanese earthquake and tsunami, according to the United Nations. Also, property claims from the BP disaster in the Gulf of Mexico are estimated at $1 billion; the earthquake that struck Sendai, Japan, on March 11 is expected to trigger insured losses as high as $30 billion, according to an article this month in Insurance Journal.