Written by Kathleen Lucey, FBCI   

 

Blackswan

Hunting the Black Swans in Your Continuity Program


This is Vol. II, No. 7 in the DRG ongoing series regarding hunting and mastery of the black swans in your continuity program.

“Black Swans” in your Continuity Program are those events that remain outside the range of normal expectations, and may well produce a significant negative impact when they occur. For reasons of budget, culture, or simple lack of awareness, we just do not see or deal with these potentially devastating exposures in our enterprise continuity capability. This series discusses some of the most common of these “black swans” in business continuity programs, those that are really staring us in the face and screaming for attention.

Already published:

Volume I

Quarry 1: Employee Availability for Response Activities.
Quarry 2: The Level of Individual Employee Commitment to BCM
Quarry 3: Exercising Your Plans
Quarry 4: Exercising Your Plans: Objectives and Annual Programs
Quarry 5: Exercising Your Plans: Business Unit Continuity Plans
Quarry 6: Exercising Your Plans: Technology Recovery Plans
Quarry 7: Exercising Your Plans: Logistics, Communications, and Support Plans
Quarry 8: Lessons Learned
Quarry 9: New Year's Resolutions
Quarry 10: 10 Steps to Building a Black Swan-free Business Continuity Management Program
Quarry 11: New Year's Resolutions
Quarry 12: Developing "Black Swan Sighting" Skills: Warm-up Exercises

Volume II:

Quarry 1: The Centrality of Power: Seeing the Connections
Quarry 2: Power Outages: Isolation Effects
Quarry 3: Power Outages: How Employers Can Get Involved
Quarry 4: Cascading Effects on the Support Fabric
Quarry 5: Deeper Dives to Narrower Terrains: Dive 1
Quarry 6: Deeper Dives in Wider Terrains: Dive 1

Volume II: Quarry 7: Cascading Black Swan Events

As we discovered last month, changes in the background environment can influence and aggravate the impacts of a Black Swan event. The effects of the South Dakota October snowstorm, as tragic as they were, are likely to be vastly worse because of the political shutdown of the Federal government.

This month we continue our discussion with an exploration of the cascading effects of a second disaster event layered on our base scenario, a long-term power outage in the Northeast US: a Category 3 hurricane. It is still the 25th day of a power outage in the US Northeast. West as far as Buffalo; south as far as Washington, D.C., including the states of Maine, Vermont, New Hampshire, Massachusetts, Rhode Island, Connecticut, New York, New Jersey, Pennsylvania, Delaware, Maryland, Virginia, and Washington, D.C. It is a Wednesday in August. The temperature is expected to reach the low 90’s today, with humidity at a relatively moderate 78% - 86%.

August is the heart of hurricane season in the Atlantic. Landfall of several minor hurricanes has already occurred this season in Florida and the Keys, and on several Caribbean islands. Hurricane Leia is now approaching the West Coast of Florida after having devastated several Caribbean islands, and has refueled itself to Category 3 force in the still-warm waters of the Gulf of Mexico. We will look first at a number of areas that may affect many of us individually and personally, as well as at wider effects on key societal aspects. Again, the intent is to get your imaginations oiled and spinning. As a reminder: in order to understand what may happen, we need to:

  • Include rather than exclude.
  • Accept that the improbable will occur, and that the effects may be wide-reaching and not now fully understood.
  • Understand as much as possible about the conditions under which these improbable effects will become visible.
  • Define those conditions where cascading effects will occur – trace these linkages through the social fabric to know where the breaks will occur – especially when the impact seems minor at first, so that we can identify it as early as possible
  • Be alert to gathering evidence that the situation is growing much worse very quickly in multiple areas.

We will also explore here how we can identify and therefore counter these cascading effects, as well as what we can do now to become more resistant to their impacts. Right now we are interested only in identifying them and tracing their immediate and cascading impacts. Please note that the areas chosen are not intended in any way to be complete or to be representative. They are chosen for the ease with which the readers’ imaginations may engage with them.

Today we will be looking at cascading impacts in the areas described below. Please note that the threats discussed here resulting from landfall of a Category 3 hurricane in the Chesapeake Bay area are not intended in any way to be complete or to be representative of how such a situation might play out in a live scenario.

Direct Wind and Water Damage

Roaring in at about midnight in the Chesapeake Bay and advancing up the US coast, with sustained winds in excess of 125 mph (Category 3 on the Saffir-Simpson Scale) , and reported gusts up to 145 mph (Category 4 on the Saffir-Simpson Scale), Hurricane Leia is still moving up the coast at daybreak, pulling strength from the still-warm coastal Atlantic waters. Considerable damage is visible from the air, including piling up of boats in harbors, serious damage to structures, and flooding of rivers and streams. Additional ocean flooding and beach erosion along the coast is expected from Maryland through Maine when high tide arrives at in the early afternoon. Inland river flooding has also been reported by the National Guard units that have been supporting emergency efforts required by the long-term power outage.

Most communications networks are inoperative due to damage to transmission facilities or overload. Military radio frequencies are operating, but work on a frequency different from most of the state and local jurisdictions.

Because military units are already present due to the power outage and are organized under a single responsible military authority, the military immediately begins working with the state or local emergency management groups to provide emergency rescue and shelter to citizens stranded in disaster conditions under pre-existing protocols. Nonetheless, each state is required to submit an additional formal request for disaster assistance.

While the National Guard coordinates its response, the following are occurring:

  1. Food shortages due to road and rail blockages from downed trees as well as vehicles abandoned in place due to the adulterated fuel situation. There is a limited capability to address these shortages quickly because of the inability to make deliveries into and within the affected zone due to the contaminated fuel situation.
  2. Acute drinking water shortages.
  3. Acute medical care shortage: most hospitals have been forced to close when their generators failed as a result of the adulterated fuel. Their staffs have dispersed. It is extremely difficult to contact them with the very fragile nature of telecommunications after the hurricane.
  4. Public toilets are inoperable, and trucks cannot pick up/replace chemical toilets. A sanitation emergency is developing in most densely populated areas. Helicopters are flying in emergency sanitary supplies.
  5. Emergency medical facilities have been set up in athletic fields with tents and local medical personnel. Large numbers of patients are experiencing dehydration, fainting, and increasing numbers of patients with gastro-intestinal infections are appearing. Bodies have been found in buildings and on streets. Who will be responsible for pickup of these bodies and their identification? Where will the temporary morgue be set up? Who will do this?
  6. Representatives from the military, state governments and local governments are meeting with FEMA officials in an attempt to collect as much information as possible and agree on support and evacuation strategies. Tens of millions of people are now at risk.

Responses:

  1. FEMA and as the National Guard are sending as many additional water trucks as possible from outside the affected area. But as they cannot refuel when they run out of gasoline within the affected area, they are accompanied by fuel trucks from OUTSIDE of the affected area. Because of the damage to roadways from the hurricane winds and associated debris as well as the numbers of abandoned vehicles as well as the additional hurricane debris, this effort is progressing very slowly. There is discussion of bringing in both fuel and water to all airports in the affected area.
  2. Highway exit routes from the affected area are becoming difficult to navigate due to the high number of abandoned vehicles, complicated by fallen trees and roadway flooding as well as physical damage to the roadways themselves as a result of the hurricane winds.
  3. Of immediate urgency after water supplies are medical staff and emergency medical supplies. The Navy is sending 10 hospital ships to handle the damaged in selected coastal areas. Most will not arrive for at least 7 days. Helicopters are being provided by the military to bring in staff, shelter, and supplies to begin to address both the medical and mortuary needs.
  4. Air traffic control towers are inoperative as emergency diesel generators are not functioning; no incoming or outgoing flights will be allowed at airports within the affected area until the situation has been resolved. So the military must address the restoration of power to air traffic control before any airborne vehicles may land. Delivery of second-tier supplies may be done via large carriers that will offload in existing port areas. But this cannot be decided until a detailed damage assessment has been performed.

Questions:

  1. As the military is already in place, it is likely that martial law will be declared and the military will be in control. But what are the procedures to justify this extension of military control?
  2. How will the Congress and the Executive Branch be involved? Have the congress and the executive branch been moved to an unaffected area? Have their families accompanied them? Is there any threat to the continuity of government either at the federal, the state, or the local level?
  3. Have there been any looting or shooting incidents?
  4. Will residents be offered evacuation via buses outside of the area? Where will they go? How is this being set up? If evacuation buses are used, how will authorities be certain that the buses are fueled with unadulterated fuel? What do they need to test fuel for adulterants?
  5. How will the private work with the various government groups? How will private resources be made available for public use – voluntarily or involuntarily?
  6. Who will be charged with resolution of the adulterated fuel issue?

After just a very few days, we will have a situation that is extremely serious. Likely there will be waterborne diseases that will begin to affect many after just a short period of time without adequate sanitation and shelter. The effects of this situation will be considerably more dangerous in high population areas, such as Boston, New York City, Philadelphia, Washington, D.C., etc.

Here we have a situation of densely populated areas with serious compromises to their transportation, electrical, telecommunications, sanitation, and water supply systems. The event takes place in August, which is within the highest probability zone for Atlantic hurricanes. There is no reason to assume that the fact that an already desperate situation exists in any way lowers that probability of the occurrence of an additional natural disaster such as a hurricane. And it is normal to expect that such a Category 3 hurricane would cause significant damages and destruction. It is also normal that some elements of society would seek to profit from the disorder of the situation by adulterating fuel in order to increase profits.

This is a just a very small example of the cascading effects that can be found in such situations. Certainly there would be more; engage your imagination to predict what could happen and what would be needed to resolve it.

When you review the above issues even superficially, five areas emerge as critical:

  1. Early Identification of the impacts of each of the events – power outage, fuel adulteration, and hurricane - is critical. Many lives could be spared and much energy saved.
  2. Priority-setting. Get organized quickly! Perhaps exercises involving multiple levels of government utilizing scenarios like this one may help to identify and address critical priorities like sanitation and drinking water and medical supplies/staff.
  3. Inter-sector cooperation. All sectors – government – private sector – emergency services - need to be leveraged in order to save the most lives and avoid as much human suffering as possible.
  4. Effective communications and quick reactions are necessary to minimize negative outcomes to individual emergency situations. Flexibility and individual initiative must be encouraged while simultaneously maintaining the benefits of formal authority structures.
  5. New solutions to emergent challenges must be encouraged and adopted where appropriate by workers within those environments. Responders “in the trenches” must be allowed to implement ideas that work for the individual cases with minimum bureaucratic oversight. Private sector models may be useful here.

If you have not before understood, you should now be better able to comprehend the value of this type of reasoning to the building and implementation of an effective response. You will need to imagine the event before you can train for it, design a response, and rehearse / refine that response.

 

About the Author:

Kathleen Lucey, FBCI, is President of Montague Risk Management, a business continuity consulting firm founded in 1996. She is a member of the BCI Global Membership Council, past member of the Board of the BCI, and the founding President of the BCI USA Chapter. IBM chose her as the first winner of its Business Continuity Practitioner of the Year Award in 1998. She speaks and publishes widely in both North America and Europe. Kathleen may be reached via email at kathleenalucey@gmail.com