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See how Companies are Rebounding from San Diego’s Fires

24 January 2008 No Comment

By Helen Kaiao Chang

This article originally appeared in bizSanDiego.

It was just another business day for retailers Ed and Adam and Muscat, when they took up hoses, chainsaws and shovels to combat wild fires that raged outside their office building and house in Poway on October 25 last year. The fires had already ravaged the storage shed, destroying two computers, a fax machine and the phone system. Ed and his son Adam, along with three other relatives and friends, fought the fires from 9 a.m. to 9:30 p.m., pumping water from the pool, pushing back the flames and saving the buildings on their property.

The next day, the Muscats were back in business. They had previously evacuated their 1,200-square-foot office building, loaded laptops, equipment and inventory into their trucks and rented temporary offices in Mission Valley. The toll-free 800 customer service line was redirected to Adam’s cell phone, and they processed orders by phone and internet.

The office may have moved, but the business kept running.

For many San Diego business owners, whether they directly battled fires or not, the Muscats exemplify how businesses were able to rebound from last October’s destruction.

While many businesses will still be recovering from losses well into this year, even the hardest hit companies say they have been able to recover quickly through technology, communication and community.

“We were able to get right back online, contact all our customers, continue sending out orders, process refunds and answer questions from customers,” says Adam, 30. “Technology was incredible for what we were able to accomplish in such a short period of time.”

The Long Recovery
The fires may be over, but San Diego businesses will continue to feel the impact through 2008. The region lost an estimated $893 million in economic transactions and productivity, says Kelly Cunningham, economist at the San Diego Institute for Policy Research. This is based on the county’s gross regional product in 2006 and calculated for two days. Although some companies will make up for lost productivity, others will have permanent opportunity and revenue losses, he says.

Many companies—ranging from large corporations to small home-based businesses—are still reeling from losses. These include physical infrastructure damage, lost business and employee compensation. Los Willows Inc., a wedding resort in Fallbrook, saw its pavilion go up in flames, forcing owners to cancel 11 events, with losses estimated at $250,000, says manager Christine La Grua.

Scripps Health, which closed four clinics in fire zones and postponed all non-emergency procedures to make way for potential burn victims, is still tallying financial losses, which may be in the “hundreds of thousands,” says CEO Chris Van Gorder.

Away with Clutter, Inc., an organizing business that is normally booked solid in the fourth quarter, saw a 20% cancellation of business worth $200,000 immediately after the fires, says owner Dana Korey. “People have stepped back either in terms of budgets or priorities,” she adds.

Even businesses that were not severely impacted by fires have had to direct more dollars toward employee programs, particularly for workers who lost their homes. Sony Electronics, based in Rancho Bernardo, contributed “tens of thousands of dollars” in support and financial assistance to its 2,000 employees, including eight who lost their homes, says Rick Clancy, corporate communications senior vice president.

Tech Impact
Yet, many San Diego businesses have rebounded due to technology, communication and community. From email and Blackberries, to voice-over internet protocol (VoiP) and backup data centers, to air filters and scrubbers, technology helped San Diego companies recover quickly, take care of employees and get back to business.

Technology helped companies remain productive despite office evacuations. Sony Electronics was shut down for one week as fires raged within just a few hundred yards of its facilities. Although assembly lines were down, many company executives and engineers remained productive by working at home offices equipped with laptops, the internet and phone lines, says Clancy.

With air quality affected by smoke, the company also used special air filters, flown in from out of state, to clean the air, so that the buildings would be safe enough for employees to go back. Because of this productivity, says Clancy, “In terms of actual sales, there was no noticeable impact.”

Several companies used other communication technology to keep businesses humming. ProTravel International in Rancho Bernardo rerouted customer calls to its Palm Desert office, using VoIP-based phone systems. Other businesses used servers in other states to back up data and internet-based videoconferencing services to maintain communication with associates.

Technology also helped businesses maintain vital communication among staff during the fires.

Scripps Health, a $1.7 billion company, was able to relay key information to its employees during the chaos of the fires, using a cascading chain of communication. Its five hospitals converted their boardrooms into centralized command posts, which had Web access to the county’s updates on the fires.

Van Gorder, who is also a commander in the county’s volunteer search-and-rescue task force, exchanged information with the county sheriff through his Blackberry device, “because they didn’t have the information I had available through our emergency operation center.”

All these updates were then disseminated to employees via emails and old-fashioned flyers on bulletin boards. Management teams also walked the halls, making sure employees were cared for.

According to Van Gorder, “They may be working and taking care of patients, but they’ve got family members they’re worried about as well. If we’ve got information in relation to where the fire is, that eases their anxiety and makes it easier for them to take care of our patients.”

Sony also used technology to keep its employees informed. Managers created a dedicated website for its employees, where people updated each other on how they were faring, who had lost a home or what they were doing. Later, this helped form the basis of Sony’s employee assistance, particularly for those who lost homes.

Businesses have also used communication to stay in touch with customers. Away with Clutter made courtesy calls to their clients to make sure they were okay after the fires. Many thanked Korey for one of their products, the Vital Document Organizer, which help clients prepare for disasters such as the fires.

Yet Korey stopped short of asking for more business. “There’s a sensitivity factor,” she says. “Normally you might take a more aggressive stance, [but after the fires] you might be more sensitive, if you don’t know if the person on the other side has lost their home.”

Pulling Together
Community has also played an important role in helping San Diego businesses recover. In the weeks following the fires, regional businesses committed millions of dollars to community nonprofit groups help¬ing those who lost homes in the disaster.

Businesses also turned to the community to help its customers and employees.

When Los Willows lost its key wedding facilities, it referred its bride-and-groom customers to other businesses in the area or postponed some events till this year. “Our industry is based on dreams and fantasies, and when you have to facilitate canceling that, it’s a difficult thing,” says La Grua. “You can’t not help them.”

After the fires, Sony turned its cafeteria into a resource center, and leaders from various industries arrived to help its employees. Community leaders included government agency officers, financial aid consultants, legal advisors, real estate brokers, insurance agents and counselors.

For the Muscats, who own All-ett wallets, community also played a big part in saving the business. The Muscats were celebrating with 17 family members in Ed and wife Michelle’s home when they smelled smoke the first night of the fires. Family and neighbors helped pack valuables from the house, such as photos, Michelle’s wedding dress and inventory from the office building, into trucks that drove them all to safety.

And when all was said and done, as Adam Muscat puts it, “The community pulled together wonderfully and helped each other as much as they could.”

Wildfire Stats:
• Fires started Sunday, October 21
• $2.09 billion countywide economic impact
• 879 outbuildings gone
• 1,686 residential homes destroyed
• 250 to 500 high-value farms burned
• $30 million of agricultural crops destroyed

The Winners and Losers
Industries that stand to benefit or suffer from the fires, according to Kelly Cunningham, economist at the San Diego Institute of Policy Research.

Winners
• Construction
• Real estate resale market
• Rental housing
• Furniture
• Retail
• Technologies related to crisis prevention
• Insurance companies (in the long term)
• The regional economy (when FEMA and state funds kick in)

Losers
• Agriculture
• Tourism
• Restaurants
• Service
• Retail
• Insurance companies (in the short term)
• The regional economy (prior to FEMA and state funds)

Helen Kaiao Chang is a ghostwriter, editor and journalist. She can be reached at www.ghostwriter-needed.com.

Follow Helen on Twitter @HelenChang

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