Jim Heskett, of the Harvard Business School, authored an interesting piece entitled, "What are the lessons of New Orleans." In his opening, Professor Heskett poses an important question,

There will be an endless number of post-mortems concerning the tragedies that befell the residents of New Orleans last week. More important are the actions, if any, which may result from them. In this regard, can lessons learned in the private sector be brought to bear in minimizing the suffering and damage from inevitable future calamities?

Professor Heskett invited responses and I answered, in part:

...there is a deeper lesson and that is one of investment to prevent disasters in the first place. A large firm is well aware of the human capital and material assets within the perimeters of its fences. It does not take long for the finance committee to run a return-on-investment analysis of operating safely or know that safeguards are part of the cost of doing business, and that industry has a moral responsibility to those who work on-site. There was a saying at [DuPont]: "You are safer inside the plant gates than outside."

Someone forgot to do the return-on-investment, and we as a nation will now pay a pretty price, not only monetarily but also emotionally. This has driven home an important lesson that as a people I pray we don't soon forget.

Thus the basic question: given the likelihood, have we truly weighed the cost of being ill-prepared?

Slightly edited by the publisher, my reply was ePrinted in Harvard Business School's Working Knowledge. I highly recommend "Working Knowledge" as an excellent source of views by business people reflecting many diverse opinions.

I attach the full version of my reply below.

Business tends to maximize its available resources on a minimum set of objects. Government distributes its limited resources over a broad range of objectives.

Prior to HBS, I spent several years in manufacturing at one of the world's largest chemical firms*, and disaster drills and disaster preparedness was part of our responsibility. I chaired the site's Disaster Control Committee, so I empathize with how industry can take a proactive stand. As on-site managers, our main concern was to contain a disaster and prevent the loss of life. This meant localizing damage: shutting down processes, securing tanks that might rupture, moving people to safety if there was a threat of toxic release or accidental detonation, and sending crews in to neutralize potential hazards.

In case of disaster, as Area First Aid Warden, my immediate responsibility was to get a head count and render what aid I could until help arrived. Always, help was on the way. Every equation had that in it. Yet, I still get a queasy feeling, remembering in memory the great steam whistle's mournful dirge tolling out the disaster call.

These drills were on a plant of 500 workers who could call in assistance from the local community. What if it is 500,000 people and is just one city in a large region that is also hit? What happens when the call for help goes unanswered? What if no one comes to do a head count, and there is no Area First Aid Warden to find out if you are alive or dead or MIA?

The tragedy of New Orleans is that no one came. Industry protects its assets and knows where its people are: That's part of staff management, disaster or not. But if someone is unemployed, old, sick, or otherwise disenfranchised, who comes to get them? Do they have visibility? Who has written the evacuation plan to help those most in need? Who can enforce it? Who will enforce a city-wide disaster drill every six months? On site we marched the workers out the front gate, hopefully to safety. How can a city of a half million free citizens be made to do that? And are the city limits the realistic perimeter?

But there is a deeper lesson and that is one of investment to prevent disasters in the first place. A large firm is well aware of the human capital and material assets within the perimeters of its fences. It does not take long for the finance committee to run a return-on-investment analysis of operating safely or know that safeguards are part of the cost of doing business, and that industry has a moral responsibility to those who work on-site. There was a saying at the chemical firm: "You are safer inside the plant gates than outside."

The lesson of the New Orleans disaster is that some people fell off the radar because they weren't part of "the plan."

Someone forgot to do the return-on-investment, and we as a nation will now pay a pretty price, not only monetarily but also emotionally. This has driven home an important lesson that as a people I pray we don't soon forget.

Katherine Lawrence (HBS MBA '76)
COO
Ping Vision

I wrote thus on September 7, 2005. What I did not wish to say so early and while the responders were still the throes of events, is that something truly becomes a "disaster" when people are unable to deal with events.

Surely man is puny in the face of a category four hurricane, but a line is crossed when a system breaks down.

A minimalist strategy, by definition, spends the minimum amount. Surely we cannot defend completely against absolutely anything, anywhere. On the other hand, a disaster of large proportion hits an entire nation, not just a region and as a nation what we might wish to do is to look closer at how many we could have saved and what the cost would have been?

We are paying the price now, even if New Orleans is never rebuilt. The question I feel freer to ask now - was the savings in not being prepared worth it?

I doubt it.

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* I did not mention DuPont by name in the "Working Knowledge" article, but DuPont is probably the safest industrial place to work in the world. I plan a future blog on this topic.

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