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BlackswanHunting the Black Swans in Your Continuity Program

This is Vol. II, No. 1 in the DRG ongoing series regarding hunting and mastery of the black swans in your continuity program. Look for it on the first Wednesday of each month!

"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:
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

We warmed up last month by looking at water and air, and began to scratch the surface of the many ways that we benefit and thrive because of them. And how we suffer in their absence. Today, we will talk about power.

Power is at the epicenter of modern life in developed countries. Even in many urban slums, there is power for a single light bulb, if for nothing else. In fact, the lack of adequate power and water defines the grinding poverty that characterizes much of the undeveloped third world.

But it was not always the case that our daily lives were so interconnected to electrical power. 150 years ago there were no:

  • Vast, interlocking electrical networks called grids
  • Computers (not even big ones), personal computers, the Internet and the worldwide web
  • Telephones or mobile phones, copper wire networks or cable networks or cellular networks
  • T
  • elevisions and their networks
  • Video games
  • Credit cards or ATM cards or ATMs. Card readers and authorizers.
  • Refrigerators, furnaces, water heaters, and a whole host of electrical; appliances: blenders, food processors, juicers, coffee machines, microwave ovens, electric ignition gas stoves, completely electric stoves, electric irons, washing machines, clothes dryers
  • Home heating, cooling and security systems
  • Power tools
  • Electrically amplified musical instruments
  • Records or record players or tape or tape player or CD or CD Players, and certainly not an iPod
  • Point-of-Sale computer systems and electronic cash registers – handling not just sales but also managing just-in-time product inventory
  • Snow-making machines
  • Electrically powered water pumps (of course windmills and watermills did exist)
  • Undersea telephone cables
  • Mass transit systems were generally very localized
  • Airplanes
  • Digital watches
  • Radios or radio networks
  • Card-keys to secure hotel rooms
  • Hair dryers, hair irons

It should not come as a surprise that one of the earliest US Industrial conglomerates was called "General Electric". By 1890, Edison had formed the Edison General Electric Company in New Jersey by bringing his various businesses together. But there was already competition in the form of the Thomson-Houston Company, owned by Charles Coffin, who used to own a shoe factory in Massachusetts. Each needed the other's patents and technologies to produce complete electrical generation and distribution networks, and so they merged to form the General Electric Company in 1892.

Nearly every aspect of our lives is touched by electricity: our health and comfort, what we eat and how it is prepared, how we learn, how we shop and what we can buy, how we work and what work we do. Most of what we now eat, drink, and wear on our bodies needs electricity to make it, package it, and move it. What we do in our leisure pursuits (we do not have to work all the time, as did most of our forebears in the 19th century) depends largely on elements beyond our control such as roads to get there, vehicles to drive on those roads, and power to light our way and control the movement of all vehicles. We live much longer because of vastly improved medical care, including sophisticated electrical monitoring and support systems, as well as state-of-the art treatment and surgical solutions, all requiring electrical power .

Our cultural values are shaped by the global village that comes into our living rooms and workplaces (which may also be our living rooms) via communications networks enabled by electricity. We live in high-rise towers because electric elevators can carry us to our homes in the sky and electric pumps can bring water to us on the 4th floor or the 44th floor.

Our wired world's dependence on reliable, uninterrupted electrical power is nearly absolute. Furthermore, our thirst for electrical power has enabled many other industries, but especially the oil, gas, and coal firms that feed our seemingly never-ending thirst for more and more electrical power generation. That thirst has changed the political and cultural face of the planet through the enrichment of places where oil, gas, and coal are plentiful, and the impoverishment of those areas not so endowed. It has created enormous wealth for those who had the foresight to recognize its importance.

Yet in the US we remain plagued by power issues from brown-outs to grid breakdowns to breaking of electrical infrastructure as a result of both natural and man-made disasters. Just last year, the power supplier to New York City deliberately shut down much of the electrical grid in downtown Manhattan to avoid catastrophic damages to electrical infrastructure equipment from the incursion of salt water. Even now, six months after Superstorm Sandy's passage, electrical repairs are not yet complete in lower Manhattan.. And there is no reason to assume that the increasing severity of weather will diminish.

A power outage of 96 hours makes our dependence on electricity frighteningly clear:

  • We cannot communicate because land, cell, and internet communications are disrupted.
  • Even if telecomm networks are available, our computer and telecommunications devices work only until their batteries die.
  • The food in our freezers thaws. Milk and other perishables become dangerous to consume. We resort to backyard barbecues to heat and cook our food.
  • Grocery store shelves become empty because delivery trucks (to warehouses and to stores) cannot get gasoline – pumps need electricity to function even before gasoline supplies become exhausted.
  • Most water distribution systems shut down without electricity to run their pumps.
  • If it is summer, we sweat. If it is winter we are cold. Our climate control systems do not work.
  • There is no light in homes or on streets. Civil disorders may break out; looting can and has happened.
  • Mass transit systems managers work furiously trying to get fuel and mass transit stops when fuel becomes unavailable and co-generation facilities stop. Electrical generation slows as fuel is rationed or eventually becomes unavailable.
  • Because nuclear families are now widely dispersed, our support networks may be physically weak. The most fragile among us will become critically ill sooner – the youngest and the oldest, as well as those already in need of support, such as diabetics.
  • Sanitation becomes primitive very quickly because water is not being distributed by electric pumps. The prospect of epidemics from water-borne pathogens increases sharply.

Without electricity, how long would it take for our modern societies to crumble? How would we go about rationing such critical resources as fuel and power, since they are so intimately linked? Who would be doing this? At what point would it be likely that curfews and martial law would occur? What would be the means of enforcing these? How long could it take until electricity could be restored?

Of course the answers to these questions all depend on the specifics of the initiating event. Recently there has been much talk about the possible presence of so-called cyber logic bombs within our critical systems, including infrastructure for electrical generation and distribution. And yet very few are even talking about this, much less doing something to keep our systems in a safe state. How many of us have seriously considered what it would take to survive the launch of such an attack? Serious impacts to physical power generation and distributions systems are entirely possible. Perhaps our imaginations have become lazy? Or is it that we do not dare to imagine such a scenario?

And so to complete the circle back to last month's discussion of water and air, what would happen to our clean water supplies, on which we so heavily depend, without electricity and power infrastructure to sanitize and distribute water? What we can say is that there is a critical dependency in the fabric of our support structure between water and power.

We are extraordinarily dependent on electricity in almost all aspects of our lives. The Federal Emergency Management Agency says that during a crisis such as a prolonged regional power outage, we should be prepared to take care of ourselves for the first 72 hours following such an event. How many of us are prepared to do this? How many of our businesses are prepared to do this? How many organizations have thought clearly about the impact on their operations of a regional 2-week power outage? What are they doing to support employee families so that those employees can be available to execute critical organization support and maintenance activities?

Thinking this way helps us to see otherwise unnoticed flaws in our continuity programs, both organizational and personal. Recognizing these specific risks and countering them in our strategies and plans helps our organizations and families to survive such catastrophic events as long-term power outages. We can counter the threats posed by long-term power outages only by recognizing their detailed effects, and then addressing them one by one. It is irrational to continue to pretend that the effects of such an event are not dire, or that such events will not happen. If we as continuity professionals cannot be rational about this, then who can?

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.