Prepare for disaster

The ripple effect of the March 11 Japan earthquake was felt across both large and small businesses in the region; from Asian stock exchanges to neighbourhood sushi restaurants.

While the devastation and loss of life was shocking and unsettling to observe, it was an eye-opening and timely reminder for HR leaders that beyond building corporate recruitment and retention strategies is the constant need to identify and build leaders who are able to cope with any eventuality. Even while some Asian countries such as Singapore or Brunei may feel relatively safe from natural disasters, businesses here can still feel the impact if they have operations or suppliers that are based in Asia Pacific countries that are disaster prone.

It is helpful to note that people living in Asia Pacific are 25 times more likely to be affected by natural catastrophe than Europeans or North Americans and four times more vulnerable than those living in Africa, according to the Asia-Pacific Disaster Report 2010 by the United Nations. Natural hazards of almost every kind can be found in Asia Pacific – from earthquakes to droughts, from floods to tsunamis. Experts argue that the situation will get even worse with the impact of climate change.

Asian countries by number of disasters, 1980-2009

Source: UN Asia-Pacific Disaster Report 2010

Disasters include drought, earthquakes, extreme temperatures, floods, landslides, storms, volcano eruptions and wildfires

HR management teams in Asia Pacific need to have airtight and tailored strategies to disaster recovery and for continuing operations. A natural disaster in any of these locations could have immediate impact on a company’s stock price, not to mention employees, morale, facilities, day-to-day operations and the company’s ability to perform.

Businesses with operations in Asia must ensure that they have integrated emergency management systems and appointed senior executives in place before disaster strikes, so they will know how to mobilize resources quickly. Systematic analysis of vulnerabilities, crisis response strategies and crisis implementation preparedness for the company should be conducted periodically. Disaster management is a true test of corporate planning and leadership.

While many companies have in-house risk management teams and disaster recovery strategies in place, HR managers must ensure that senior management and their board members in Asia are amply prepared too. Leadership qualities can make all the difference between a company that barely survives through challenging and difficult times and a company that leaves a lasting positive legacy on affected communities, its reputation and value. A case in point is the response by leaders at Exxon to the (man-made) Exxon Valdez oil spill disaster.

During natural disaster management, businesses and their leadership teams face extraordinary demands as they have responsibility and accountability for the company and the actions of their staff. Decisions made in the first few hours of a company emergency especially, can have far reaching and lasting consequences. Yet it is during the first few hours that businesses have the least amount of resources to assist them in the decision-making.

Such conditions place companies and their senior management at considerable risk on many fronts: professionally, legally, and financially. To mitigate against such risks, HR managers must be prepared for emergency situational awareness.

Having situational awareness means having the ability to effectively coordinate all functions of the crisis response through frequent communications, to correct mistakes early and to monitor what stakeholders and the media are expecting. Effective leaders will focus their attentions on mobilizing appropriate responses to protect corporate value and demonstrate the credibility to manage emergencies brought on by natural disasters.

Effective leaders also demonstrate self-awareness and their position as role models. Keeping commitments, honesty and trustworthiness are paramount personal leadership traits. In “The Art of War” by Sun Tzu, the Chinese philosopher said, “If you know others and know yourself, you will not be imperiled in a hundred battles; if you do not know others but know yourself, you win one and you lose one; if you do not know others and do not know yourself, you will be imperiled in every single battle.” This is where disaster management and public speaking training can be very helpful for C-suite leaders.

As news of natural disasters become more frequent, HR managers with regional responsibilities need to ensure that both they and their leaders are well prepared to respond to any crisis and to protect shareholder value.

Dr. Paul Aldrich is Managing Partner at CTPartners, a premier executive search firm, in Hong Kong. He has a Doctorate in Business from Durham University.

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