EMERGENCY MANAGEMENT DISASTER RISK REDUCTION

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					                                               Institute for Global and Community Resilience
                                                               Western Washington University



    Building a More Resilient Washington Business
                      Community:
Theories of Resilience and Its Applicability to Businesses




                    Partners in Preparedness
                          May 14, 2009




                    Dr. Rebekah Green
           Institute for Global and Community Resilience
                  Western Washington University
II. A Bit of Context             Institute for Global and Community Resilience
                                                 Western Washington University




    I. Theory of Resilience
    II. Does Resilience Make
    Sense for Businesses?
    III. Lewis County Survey –
    Any Sign of Resilience?




                                                                       2 of 32
I.   Theories of Resilience                               Institute for Global and Community Resilience
                                                                          Western Washington University
              a. What is Resilience?


 “The capacity of a system, community or society potentially exposed to hazards to
 adapt, by resisting or changing in order to reach and maintain an acceptable level of
 functioning and structure. This is determined by the degree to which the social
 system is capable of organizing itself to increase its capacity for learning from past
 disasters for better future protection and to improve risk reduction measures.”

                                               United Nations, International Strategy
                                               for Disaster Reduction
ENGINEERING CONCEPT                                      ECOLOGICAL CONCEPT
   • robustness                                             • constant change
   • rapidity                                               • multiple equilibriums
                                                            • disturbance as process
I.    Theories of Resilience                                             Institute for Global and Community Resilience
                                                                                         Western Washington University
               c. Operationalizing Resilience



 •A resilient system should exhibit these characteristics:

                1.Reduced failure probabilities

                2.Reduced consequences from failures

                3.Reduced time to recovery

                4. Increased ability to adapt without service collapse




     These are characteristics of what aspects
                  of a system?

Kay & Schneider (1994); Godschalk et al. (1998); Bruneau et al. (2004)
I.   Theories of Resilience                                             Institute for Global and Community Resilience
                                                                                        Western Washington University
              c. Operationalizing Resilience




 • Natural/Ecological Capital: Air quality, land, water and water
 quality, natural resources, biodiversity, scenery

 • Human /Personal Capital: Population, education, skills, health,
 creativity, youth, diverse groups

 • Social /Cultural Capital: Trust, norms of reciprocity, network
 structure, group membership, cooperation, common vision and
 goals, leadership, depersonalization of politics, acceptance of
 alternative views, diverse representation, values, heritage
 recognition and celebration


 •Political /Organizational Capital: Level of community organization through the use of government; ability of
 government to garner resources for the community

 • Economic/Financial Capital: Tax burden/savings, state and federal tax monies, philanthropic donations,
 grants, contracts, regulatory exemption, investments, reallocation, loans, poverty rates

 • Built/Manmade/Technical Capital: Housing, transportation infrastructure, telecommunications infrastructure
 and hardware, utilities, buildings
I.     Theories of Resilience                              Institute for Global and Community Resilience
                                                                           Western Washington University
           e. Business Resilience in the Face of Disasters


                    Wildavsky’s Principles of Resilient System
         • Homeostasis principle
         – Systems maintained by feedback

         • Omnivory principal
         – Shocks mitigated by diversity / alternatives

         • High flux principle
         – Faster resources move through, more is available

         • Flatness principle
         – “top heavy”, hierarchical systems not flexible

         • Buffering principle
         – Excess equals capacity in times of need

         • Redundancy principle
         – Overlapping functions permit changes/adaptation
Pelling (2003)
II. A Bit of Context             Institute for Global and Community Resilience
                                                 Western Washington University




    I. Theory of Resilience
    II. Does Resilience Make
    Sense for Businesses?
    III. Lewis County Survey –
    Any Sign of Resilience?




                                                                       9 of 32
II. A Bit of Context                                   Institute for Global and Community Resilience
                                                                       Western Washington University
           d. Does Resiliency Make Sense for Businesses?




    Recovery is not certain
    •   At least 25% of all businesses that close for a
        disaster never reopen
        (Institute for Business and Home Safety)



    •   Over 60% of businesses confronted by a major
        disaster close by two years
        (Assoc. of Records Managers and Administrators)




                                                                                             10 of 32
II. A Bit of Context                                   Institute for Global and Community Resilience
                                                                       Western Washington University
           d. Does Resiliency Make Sense for Businesses?


    Who Will Survive?
         • How much are customers affected?
              Advantage for manufacturing, those with diverse
               clientele
              хDisadvantage to locally oriented businesses                  Mobile One standing vacant one year
               serving those most impacted                                  after Hurricane Katrina
                                                                            http://www.12volt.com/archiv
                                                                            es/2006/081606.html


         • Do customers still need product in post-disaster
           environment?

              Advantage for suppliers of building supplies,
               inexpensive food and basic needs

              хDisadvantage to suppliers who depend upon
               discretionary income (typically diverted to remodel
               and basic needs)


                                                                           Cleaning, gutting, and construction
                                                                           service advertisements, New Orleans
                                                                           http://www.12volt.com/archiv
                                                                           es/2006/081606.html
                                                                                                           11 of 32
II. A Bit of Context                                    Institute for Global and Community Resilience
                                                                        Western Washington University
            d. Does Resiliency Make Sense for Businesses?



    Who Will Survive?

         • How will market trends exacerbated by disaster
           affect business?

              хDisadvantage when customers do not depend upon
               a single supplier

              хDisadvantage when product, location or supply
               method or primary customer base becoming
               outmoded

         • How able is the business owner/operator able to
           recognize changes in post-disaster environment
           and adapt?

               Advantage for innovative and adaptive
                owners/operators, especially those who can
                address post-disaster needs                               Reopening after Hurricane Katrina,
                                                                          Intelligent Travel

                                                                                                               12 of 32
II. A Bit of Context                                   Institute for Global and Community Resilience
                                                                       Western Washington University
           d. Does Resiliency Make Sense for Businesses?


    Business Sector Recovery Survival

    •     Realizing return to status quo is often an illusion
    •     Understanding that physical repair is only part of recovery
    •     A struggle to achieve viability in a new and changing environment
    •     A function of ability to adapt to new environment




    San Francisco business district before             Open for business after 1906       California Street, SF Business District after
    earthquake, History Center, SF Public Library      earthquake, www.Outsidelands.org   the 1906 Earthquake

                                                                                                                                 13 of 32
I.   Theories of Resilience                              Institute for Global and Community Resilience
                                                                         Western Washington University
         e. Business Resilience in the Face of Disasters



                                                                         Comprehensive strategy for
                                                                        enhancing the ability to rapidly
                                      Business Resilience                adapt and change and seize
                                                                          opportunities arising from
                                           Strategy                        disturbances (disasters,
                                                                        mergers, market changes, etc.)




     Protect business
                                                                                                     Protect
      operations and                                                                             infrastructure
        processes                                                                                 and services
                                                                                                from disasters



     Business                                                                              Business
     Continuity                                                                            Disaster
     Planning                                                                              Planning
II. A Bit of Context             Institute for Global and Community Resilience
                                                 Western Washington University




    I. Theory of Resilience
    II. Does Resilience Make
    Sense for Businesses?
    III. Lewis County Survey –
    Any Sign of Resilience?




                                                                     15 of 32
I. Background                                                  Institute for Global and Community Resilience
                                                                               Western Washington University
         b. Research Purpose


   Business Recovery Study
   •   Document business recovery from
       frequent flooding


   Research Questions
   •   How are businesses impacted by
       floods?
   •   How do they recover?

   •   What types of businesses engaged in
       flood preparedness activities and was it
       helpful?



                                                  Photo Credit The Oregonian http://pomomusings.com/2007/12/05/chehalis-wa-floods/




                                                                                                                                     16 of 32
II. Research Method                                             Institute for Global and Community Resilience
                                                                                Western Washington University
         a. Focus, Selection and Strategy


   Business Selection
   •   Develop list of 160 businesses
            –   Centralia/Chehalis Offices of Economic Development
            –   Downtown Business Association


   •   63 out of 160 sample surveyed
            - 37 flooded businesses*
            - 26 unflooded businesses


   •   Most had a local customer base**
            - 90% of flooded businesses
            said they had a local customer
            base

            - 70% unflooded businesses
            said they had a local customer
            base



                                                                                                    17 of 32
III. Survey Results                                               Institute for Global and Community Resilience
                                                                                  Western Washington University
          a. Risk Perception and Preparedness


   Preparedness                                                    Flooded,
                                                                   not first      Flooded,
   •   Large differences between                                   time           first time     Unflooded
       previously flooded businesses
       and other businesses               Talked with neighbors           63%            50%            40%
                                          Consulted with a
       - Making business emergency
                                          professional                    44%             9%            28%
         plans
       - Making arrangements to move      Read info on
         stock                            preparedness                    44%             5%            20%

                                          Informed employees              63%            64%            24%
                                          Business emergency
   •   Businesses flooded for the first   plan*                           63%            36%              8%
       time hadn’t done as much as        Make arrangements
       those with previous flood          to move stock                   75%            23%            16%
       experience                         Renovate to make
       (steep learning curve)             flood resistant                 31%             5%              4%
                                          Back up fuel or
   •   Insurance coverage high,           generator                       13%            14%            12%
       flood coverage low for all
                                          Insurance coverage              69%            68%            72%
       surveyed
                                          Flood coverage                  44%            32%              8%
                                                                                                      18 of 32
III. Survey Results                                                                                             Institute for Global and Community Resilience
                                                                                                                                Western Washington University
          a. Risk Perception and Preparedness



    How helpful was                                                                   100%
                                                                                                                6
                                                                                                                                                        11
    preparation?                                                                                  17                         20                                      20                      17
                                                                                                                                                                                  29

    •   Emergency/recovery
                                                                                      80%
                                                                                                  17
                                                                                                                29                        43
                                                                                                                                                        33
        business plan rated as most                                                                                          20
                                                                                                                                                                     27




                                                       Percent Respondents
        helpful                                                                       60%
                                                                                                                                                                                  29         50

    •   Info on preparedness rated
        least helpful                                                                 40%

                                                                                                  67            65
                                                                                                                             60           57            56           53
                                                                                      20%                                                                                         43
                                                                                                                                                                                             33



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                                      No te : Appro xim a te ly 2% o f bus ine s s e s s urve ye d did no t re s po nd pe r pre pa re dne s s o ptio n lis te d.              Very Helpful

                                                                                                       100%
                                                                                                                                                                                       6   19 of 32
                                                                                                                                                       11
III. Survey Results                                                                                         Institute for Global and Community Resilience
                                                                                                                            Western Washington University
          b. Impacts and Disruptions

                                                                                                                                                       Better than typica
                                                                                                100%
   Sales Conditions                                                                                                  17                       23
                                                                                                                                                       Sales about the s
                                                                                                                                                       Worse sales




                                                                       Unflooded Businesses
                                                                                                    80%
   •   Two weeks post flood
                                                                                                    60%
                                                                                                                                              45
        - Flooded and unflooded had worse
                                                                                                                     83
          than normal sales                                                                         40%


        - Significant indirect impacts to                                                           20%
                                                                                                                                              32
          unflooded businesses                                                                      0%
                                                                                                                 2 w eeks                 2 months

   •   Two months post flood                                                             100%
                                                                                                                          Time After Flood
                                                                                                                              Better than typical sales
                                                 Note: Approximately 13%of 26 6
                                                                              unflooded businesses surveyed gave no response to this question.
                                                                                                                              Sales are about the same
                                                                             12                            18
        - Improvement for both groups                                                                                         Worse sales




                                                  Flooded Businesses
                                                         80%                                                                               Better than typical s
                                                                                              100%                 6
                                                                                                                                     33              Sales are about the
                                                                                                                  12                          18
                                                                                              60%
                                                                                                                                                     Worse sales
        - Slightly less flooded businesses
                                                              Flooded Businesses
                                                                                               80%
                                                                                              40%           82
          returning to normal sales level                                                                                                     33
                                                                                               60%
                                                                                                                                     48
                                                                                              20%

                                                                                               40%                82
                                                                                              0%
                                                                                                          2 w eeks                 2 months
                                                                                                                                              48
                                                                                               20%                Time after flood
                                             Note: Approximately 9%of the 37 flooded businesses surveyed gave no response to this question.

                                                                                                0%
                                                                                                              2 w eeks                    2 months
                                                                                                                          Time after flood
                                              Note: Approximately 9%of the 37 flooded businesses surveyed gave no response to this question.
                                                                                                                                                         20 of 32
III. Survey Results                                                                             Institute for Global and Community Resilience
                                                                                                                Western Washington University
          c. Recovery



   Expected Recovery
   •   27% of flooded businesses believe
                                                                                                                                                                 Flooded Businesses
       they have already recovered                                                                                                                               Unflooded Businesses
                                                                              60%

                                                                                                               Update:
   •   38% of flooded businesses expect                                                                        10 % lines disconnected 1 year later
                                                                                                                 - 2 unflooded
       to recover within a year                                                                                  - 3 flooded with no prior experience




                                                    Percenetage Respondents
                                                                              40%                                - 1 flooded with prior flood experience


   •   30% of flooded businesses expect                                                   38        38


       recovery will take two or more years                                          27
                                                                                                         31            30
                                                                              20%



   •   Few flooded businesses deem                                                                                            15
                                                                                                                                                      4
                                                                                                                                                 3                   3
       recovery to be extremely difficult or                                  0%
       impossible                                                                     already
                                                                                    recovered
                                                                                                    expected
                                                                                                recovery <1 year
                                                                                                                       expected
                                                                                                                     recovery 2+
                                                                                                                                            expected difficult
                                                                                                                                             recovery, many
                                                                                                                                                                   impossible to
                                                                                                                                                                     recover
                                                                                                                         years                   years


   •   Many unflooded businesses expect        Note: Approximately 2%of those surveyed gave no response per proposed action listed. Graph
                                                  Note: 8% of initial calls were to disconnected numbers, suggesting immediate
                                               includes responses from 37 flooded and 26 unflooded businesses.

                                                  failure after the flood.
       recovery to also take considerable
       time



                                                                                                                                                                          21 of 32
III. Survey Results                                                                        Institute for Global and Community Resilience
                                                                                                           Western Washington University
          c. Recovery



   Government Action
   •   Over three quarters of all
       businesses thought tax breaks
       would be very helpful                                                                                                                     Very Helpful
                                                                                                                                                 Somew hat helpful
                                                                                                                                                 Not Helpful
                                                                   100%


   •   Three quarters said grants                                  80%




                                             Percent Respondents
       would be very helpful
                                                                   60%



   •   Two thirds said a business                                  40%

       recovery helpline would also be                             20%
       helpful
                                                                    0%




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                                         Not e: Approximat ely 5%of t he 63 businesses surveyed gave no response per proposed act ion list ed.




                                                                                                                                                       22 of 32
III. Survey Results                              Institute for Global and Community Resilience
           a. Risk Perception and Preparedness                   Western Washington University
                     - What’s Important?




                                                                                     23 of 32
I.   Theories of Resilience                              Institute for Global and Community Resilience
                                                                         Western Washington University
         e. Business Resilience in the Face of Disasters



                                                                         Comprehensive strategy for




                                              ?
                                                                        enhancing the ability to rapidly
                                      Business Resilience                adapt and change and seize
                                                                          opportunities arising from
                                           Strategy                        disturbances (disasters,
                                                                        mergers, market changes, etc.)




     Protect business
                                                                                                     Protect
      operations and                                                                             infrastructure
        processes                                                                                 and services
                                                                                                from disasters



     Business                                                                              Business
     Continuity                                                                            Disaster
     Planning                                                                              Planning

				
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