Platt Perspective on Business and Technology

Predicting the unpredictable – and understanding when you are trying to

Posted in strategy and planning by Timothy Platt on November 18, 2012

I find myself starting to write this during a hurricane (late evening, October 29, 2012), taking a break from going outside to clear leaf and small branch debris from the drains out back to help prevent water coming into the lower level of my wife’s and my home. Hurricane Sandy has been predicted and tracked for a number of days now and I add that the forecasts for this storm have proven remarkably accurate and both for the precise track of the storm and for its intensity, coastal flooding and storm surge definitely included. So for the unexpected of the Northeast of the United States getting hit with a major storm around now, this one has been remarkably predictable.

I begin this posting by discussing what that means, and with consideration of time frames and both to plan and respond and to even know that a potentially significant event is coming. In 2012, with weather satellites it is possible to see a storm like this coming from well over a thousand miles away. That means lead time and preparation, and as a consequence, property damage can be significant, but with loss of life held way down.

The Great New England Hurricane of 1938 was the first major hurricane to hit Long Island, New York, and New England since 1869. And with the lesser warning available then and with lesser preparation for that event as many as 800 people are believed to have died as a result of the storm. That was a category 3 hurricane for wind intensity when it first reached land, while Hurricane Sandy was only a strong category 1, but the 2012 storm came in during a full moon high tide and with upwards of 90 mile per hour onshore winds to create maximal storm surge along the coast and into any low-lying areas, and this hurricane combined with a powerful northeaster: a second storm front. So the combined power of these two storm systems: 1938 and 2012 were comparable.

Property damage in 1938 came to some $306 million dollars then, which with cumulative inflation would come to some $4.7 billion in 2012 US dollars. It is still too early to have any property damage totals from the 2012 storm but predictive estimates are up to twice that and even up to some $12 billion and more. But coastal areas are much more built up now than they were then so direct comparison of dollar per dollar loss are not necessarily all that meaningful and even when totals are scaled to the same 2012 dollar valuation. So I turn to consider loss of life figures. A difference in lead time for warning and preparation made all of the difference. In 1938 few people knew well enough in advance if they needed to evacuate what turned out to be high risk areas while in 2012 everyone did – and even the people who decided to ignore the warnings and even mandatory evacuation orders from government officials.

I finish writing this posting the next morning and after the worst of the 2012 storm has passed, and about two very powerful and dangerous storms. I have heard on the news about some six fatalities in the New York City tri-state area plus Connecticut, and with a total known storm-wide loss of as many as 50 lives. Some of them and perhaps many were people who were warned they were in danger but who refused to take action, for whatever reason. Fifty – and that number might very well go up, is still a high number and if my understanding as to how these deaths occurred is correct many were avoidable so it is very unacceptably high. But this is still less than 6.5% of the fatalities total that came out of the 1938 storm and when there were many, many fewer people living and working in the impacted areas.

I also write this posting about businesses. Major storms like the two I write of here cause massive disruptions to business and to local and regional economies. But even a few days of difference in lead time and in preparations taken can make all the difference between recovery and even relatively fast and smooth recovery, and going out of business. A retail business that can move inventory to higher ground and prepare to limit building damage can reopen faster. Even just moving receipts and records, to the extent they are still on paper to safer ground can facilitate business continuity. And here is the real point of this posting – it is not about storms at all. I just began with two storms by way of dramatic and definitive example. A building fire or other much less predictable disaster can happen. Businesses can face disaster level challenge from any of a tremendous range or sources and directions. So this posting is about having a set of Plan B options in place and it is about always being prepared to turn to them. In that it is about maintaining an aware flexibility.

And I end this thinking back to the people who have been lost in this 2012 storm and particularly to the ones who perished from being in and staying in high-risk flood and wind damage areas and despite warning, despite explicit evacuation orders from city and state agencies, and warnings that emergency personnel would not be able to reach them during the height of the storm. No amount of warning or preparation can help if the underlying threat and its potential are simply dismissed and ignored. Just buying insurance then ignoring the message of developing events will not help you in and of itself. Listening and acting, and yes being overly cautious and assuming the worst can help and certainly when that is matched with prudent preparation and planning, and follow-through on them in actions taken.

Some 14 months ago a weaker hurricane went through the New York and surrounding areas and it turned out to be much less of a storm than predicted. People, and way too many of them simply assumed this storm system would be a repeat of that. But certainly for storm surge and flooding this was every bit as bad as any anticipatory predictions. Never simply assume for the best. Hope for the best but prepare for much more – and be ready for a more rapid recovery if less happens or even if the worst happens.

You can find this and related postings at Business Strategy and Operations – 2 (and also see Business Strategy and Operations.)

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