South-Western - Management  
The Best-laid Disaster Plans are Merely Works in Progress
Topic Planning
Key Words Disaster Plans, Hurricane Katrina
News Story

Entergy, a 14,400-employee energy company based in New Orleans, had disaster plans in place and were prepared on paper for the devastation a damaging hurricane would bring to their area. However, no one was prepared for the fact that as many as 1,100 of their employees would lose their homes in Hurricane Katrina and be relocated miles away with no working phone service or way to keep in touch. The lessons learned by Entergy, Sodexho, and McDonalds in the tragedy can help managers to plan for future disasters.

Sodexho is a company that provides facilities and food service to hospitals and universities; it employs 1,400 employees at 35 different client sites. Two weeks after Hurricane Katrina, the company still hadn't heard from 430 employees. Peri Bridger, Senior VP of Human Resources for Sodexho North America leased a plane to fly over Houston with an 800 number for employees to call. They also placed human resources managers in the Astrodome working with the Red Cross while trying to find the missing employees.

McDonalds, which had 200 restaurants in the area and about 8,000 workers in the disaster area, set up a command center in Chicago staffed with 40 employees to make and take calls regarding missing employees. They also encouraged employees to go to the nearest McDonalds and post the 800 number to call. The company still has 1,500 employees unaccounted for.

All the companies faced trouble getting money and paychecks to their employees. Many managers at Sodexho personally delivered checks or cash. McDonalds called in a pilot program that used debit cards to pay employees and put it into action. Housing was another problem. Many of the employees who wanted to come back to work had no homes and no place to stay. Entergy put up a tent city, Sodexho put up trailers for temporary housing and McDonalds leased space in condos and hotels. They also set up a website for employees who wanted to open their homes to others who had lost everything.

All three of the companies had plans in place but had to scramble to come up with creative ideas when the storm proved to be more devastating than anyone could have imagined in the planning process. McDonalds still has 70 restaurants closed and doesn't know when they will reopen. Sodexho is facing the challenge of overworked employees and understaffing at hospitals. Entergy has relocated 1,500 employees and is still working at restoring power to New Orleans day by day.

Questions
1.

Define scenario planning How could scenario planning have helped the companies in the situation deal with the aftermath of Katrina? How can other companies use scenario planning going forward to help them to be prepared for a disaster of a similar magnitude?

2.

The pitfalls of not having a well-thought-out plan were demonstrated in FEMA's initial response to the Hurricane Katrina disaster in New Orleans. On the other hand, what are some of the pitfalls of planning that managers should watch out for? Do some reading in your book on this subject to help you formulate your answer.

Source "The Best-laid Disaster Plans are Merely Works in Progress," Workforce Management, Oct. 10, 2005, pp. 23-32.
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