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Disaster readiness lessons from Waffle House

Posted by: Brian O'Connell on July 13, 2011 Source: Kauffman Foundation

Healthcare entrepreneurs often face pressure that other business owners don’t when it comes to disaster management.

Goodness knows, we’ve seen enough of that in 2011, with the Japanese earthquake, the Missouri tornadoes, and assorted other natural disasters that have dotted the geographic and economic landscape this year.

Healthcare companies, especially ones that operate along the supply chains of first-responder medical services entities like hospitals, fire and ambulance stations, and other key providers that are front and center when Mother Nature wreaks her worst havoc, should know that well.

After all, with great responsibility comes great accountability, as medical services providers found out in Japan and Missouri earlier this year, and in New Orleans and Haiti in recent years past.

The message of “preparedness” is certainly getting out. A recent study by AT&T says that businesses of all stripes are amping up their disaster preparation efforts. The surprise, perhaps, is in the way they’re going about it.

This from AT&T:

Evolutions in technology and recovering IT budgets have enabled businesses to investigate new means for maintaining critical operations in the face of natural or manmade disasters.

  • Eight out of ten (80 percent) of executives indicate that their companies will be investing in new technologies in 2011, up from 72 percent in 2010.
  •  A majority (54 percent) of organizations surveyed currently use or are considering using cloud services to augment their business continuity and disaster recovery strategies.
  • Use of  mobile devices plays a role in 78 percent of business continuity plans.
  • Most companies (80 percent) have systems in place that enable employees to work from home or remote locations, representing an increase of 14 percentage points in the past four years.

But healthcare entrepreneurs don’t have to go entirely upscale when prepping their disaster recovery plans. In fact, they can actually learn a lot from Main Street outfits – like Waffle House Inc.

That’s the conclusion of Panos Kouvelis, Ph.D., a business director at the Olin Business School at Washington University in St. Louis, who has studied how the Waffle House excelled in disaster preparedness and risk management in the aftermath of the tornadoes that ravaged the Midwest this spring.

Kouvelis teaches a course on the “Top Four” U.S. firms in dealing with natural disasters, and yes, the Waffle House makes that list, along with Lowe’s, The Home Depot, and WalMart. Calling each a “role model,” Kouvelis says geography and weather have driven each firm to treat disasters not as an afterthought, but as a big priority.

“These companies have many stores in the southern part of the United States that are frequently exposed to hurricanes,” Kouvelis says. “They have good risk management plans in place and are great examples of how their supply chains get affected in two different ways. On the one hand, your own supply chain is exposed. At the same time, your stores are supposed to be the first to react and provide the basic supplies. Your supply goes down, while your demand goes up.”

That’s a great lesson for healthcare companies who, like a Home Depot or, in its own way, a Waffle House, play pivotal roles in the wake of Mother Nature’s fury. One such barometer of preparedness that healthcare startup owners can use to track progress is what Kouvelis calls the “Waffle House Index.”

As he describes it, the index is based on the extent of operations and service at the restaurant following a storm, and shows how prepared a business is in case of a natural disaster.

“If the Waffle House is open and serving food and has a full menu, then the index is green," Kouvelis says. “If it is open but has a limited menu, it’s yellow.

“If it isn’t open, that’s red,” Kouvelis says.

But “red” is a color you almost never see at a Waffle house after a natural disaster. Company executives know how important food and water are to safety workers, and to afflicted citizens. Kouvelis cites the Joplin, Mo. Waffle House as a good example.

“Waffle House managers know immediately which stores are going to be affected and they call their employees to know who can show up and who cannot,” he says. “They have temporary warehouses where they can store food, and most importantly, they know they can operate without a full menu. This is a great example of a company that has learned from the past and developed an excellent emergency plan.”

Instead of eggs, waffles and bottled water, healthcare business owners need to run an inventory checklist of their own and see what they have – and don’t have – in the event of an emergency. If that owner sees a red light, or even a yellow one, he or she can take a moment and ask a question that few business owners would ever consider:

“What would the Waffle House do?”

Increasingly, the answer to that question is the path to improved disaster preparation for healthcare CEOs.

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