developing world-class emergency contingency … world-class emergency contingency capabilities ......

J.D. MessingerChairman, Essence Group

Developing world-classEmergency Contingency

Capabilities

Implementing proven leadership and

management strategies

Jonathan D. MessingerCEO, Essence Enterprises LTD

Copyright © 2006 Essence Enterprises Ltd. All rights reserved. www.Essence.com.sg

Program Agenda

• The Situation: Introduction & Overview

• Case Studies: Valdez Oil Spill, China National Petr oleum Company Benzene Spill, Hurricane Katrina, SARs in A sia

• Management System Solutions

• Developing Adaptive Response Capabilities – Lessons From Evolutionary Biology (Nature)


Appreciation

• The information in this course has been graciously provided by some or all of the following organizations– Exxon Mobil– United States Coast Guard (USCG)– U.S. Federal Emergency Management Agency (FEMA)– APCO World Wide– Emergency Management Institute (EMI)– Singapore Armed Forces – Singapore Ministry of Civil Defence

• It is by no means complete or intended to be a repl acement for thorough training. It is our intent to familiarize the deleg ates to be aware of the management systems and tools and to provide resourc es for further development or networking.


Situation and Introduction


Contextual Framework

• The role of financial continuity is more than simply the controlling of funds or financial information

• The role of information technology is more than the establishment of information systems

Developing a response capability is what matters. N ot functional excellence. A capability cuts across

functions and all processes.


Major Systems Project Example

• $4 billion power company• Implementing SAP due to regulatory changes• Strategic organizational imperative

– Open market driving the need to track, manage and service customers accounts

– Deregulation separating the transmission, distribution and billing functions

– Greater demand for power, enhancing the grid, securing versus terrorist threats

• $100 million system project, dedicated team, great vision, right solution, 2 year project

What could possibly go wrong?


Building Houses Metaphor

• Architect - chief designer; style, location, number of floors, foundation, structurally and geographically correct

• Bought a prefabricated house (SAP)• Owner (family) was each allowed to redesign their own room• Interior Designer

– Lighting, colors, finishing touches• General Contractor

– No master craftsman, hired apprentices for plumbing, electrical, mechanical, ventilation

• No Independent third party inspectors


What Happened?

• Prefab house was redesigned• Lighting, colors, finishing touches all designed their own way

(processes, functions)• Plumbing, electrical, mechanical, ventilation • Foundation cracked (network)• Presented two options

– Jack up the house & replace the foundation (network) for $50M– Or, knock down the house and start over for $100M. In other

words, the system had to be thrown away• $800 million in cash flow losses, would have bankrupted the

company without infusion from the parent


Continuity is More Than Financials or Systems –

It’s “Capability” that counts

Non-financials

NonNon --financialsfinancials FinancialsFinancialsFinancials

Customer, Stakeholder, Investor or Public Concern

InformationInformationInformation SystemsSystemsSystems

Functional ConcernFunctional ConcernFunctional Concern

In this case, we’re talking about a capability of providing reliable sources of power.


From USS Baton Rouge, SSN 689

A LOBA occurs over a long period of time, 2 - 10 years, where we are blinded by slow incremental changes that one day add up and cause a major disruption.

On boats (that’s a submarine) we had a name for this kind of failure…it was called a LOBA.

1,000 feet underwater chasing snapping shrimp, singing whales and Russians for a living.


Financial Assurance: Reality versus Appearance

• The reality of control is different than even the a ppearance of control– No one truly expects complete control in a major incident, but they

do expect the assurance of control

• The appearance of control is confident communications, executing plans, showing action and courage

• Credible experts, demonstrating compassion, understanding, patience– For appearance and confidence– For the actual control of significant financial and human assets

across numerous entities for a prolonged period of time


Poor Incident Response

Lacking those key mental qualities will always exacerbate the situation and impact:

• Ability to execute

• Management credibility

• Quality of operational planning• Ability to adapt and respond to changing circumstances

• Ability to communicate and lead

Perception is reality. The situation triggers emoti onal responses which by definition, are not rational.


Effects of Devastation

• Chernobyl Nuclear Melt Down• Valdez Oil Spill• Indian Ocean Tsunami• Earthquakes• Hurricane Katrina• Jilin Chemical Spill in Songhua River• Avian Bird Flu• SARS

A Generation of Value Wiped Out in Days or Hours


Overview Lessons Learned Always the Same

• For a major incident to occur, many things always h ave gone wrong at the same time– Unclear lines of accountability and authority– Accountability and responsibility separated– Inoperable lines of communication– Insufficient capacity for

• Storage of basic life support stock piles• Transportation, especially air• Information or financial management (assets or resources)

– Insufficient or non existent monitoring and sensing equipment– Lack of critical intelligence/information sharing

• Different radio channels and frequencies is still a major concern 5 years after 911

– Multiple command and control centers or none• 80% of the causes are human issues and 100 % of the 80% is

failure to communicate and understand


Overview

• By prevention and preparedness we mean having– Service providers selected and contracted in advance

– Phone lists, emails, mobile phone contact lists – A command center wired with PCs, mobile phones, contact lists– Storage supplies of commodities capable of being air lifted

– Military protocols worked out– Plans in place for human and social needs– Mass media draft releases, website templates

– Legal advisors

• How does your boss or stakeholder define this? Do y ou agree?

Neither the Nation or the World speak the same language. Even if it is called English.


Overview (Continued)

• By response & recovery we mean– Response is to incident, the public, shareholders, the world, the

politicians

– Recovery is to the operations, the product, the clean up, disposal. – Response can last for years (or is it days and weeks)

• By mitigation & coordination– Contain the product, media, minimize expansion, minimize

misinformation on BLOGS, emails,

– Coordinate the truth, assets, resources, communication, accountabilities, responsibilities, When you need authority to act and from whom

– Sometimes asking for forgiveness instead of permission may save you a billion dollars

• How does your boss or stakeholder define this? Do y ou agree?


TRAVEL & LOGISTICS

Manage Relations

PERFORM

ACTIVITIES

SOLVE CRISIS

PURCHASE SERVICES

GATHER

INFORMATIONOBTAIN

FUNDING

Crisis Response LogicIt’s a Very Complicated Scenario

Collect Information

Accelerated Movement

Obtain

Phones, Computers, Faxes

Resources

EMOTIONAL THOUGHT PROCESS

EMOTIONAL &

IRRATIONAL

RESPONSES

LOGICAL THOUGHT PROCESS

Need $$$

EatSleep

ENVIRONMENT

Save Entity & Operations

Field Intelligence

ADAPTIVE LEARNING PROCESS

Communicate

Survival Instincts

Environmental Intelligence


Case Studies


Environmental Case Study

• Environmental Case Study: Valdez Oil Spill– Exxon Valdez ULCC– 11 Million Gallons of Crude– 500,000 Dead Birds on the News

• March 24 th, 1989 … still impacts image of company• Ship went aground on Bligh Reef• 1,400 miles of shoreline contaminated• World has never heard the truth

– Largest peace time mobilization of resources since World War II at the time


Clean Up Prince William Sound, Alaska

(US $ 26 Million OMNI Barge)


Alaska Shoreline FRT Shocker


Why Review Exxon Valdez?

• The largest US Oil Spill. The clean up operations l asted over three years and cost over $3 billion in direct clean up c osts– The environmental damages and lawsuits totaled over $6 billion

• The operations response methodology is recognized a s the case study examples and has become the industry and nati onal standardfor spill and incident response– Basis for Alaska Incident management system– National Incident Management System– US Coast Guard Field Operations Guide (partially)

– First successful application of fertilizer (Bio remediation product) to naturally clean up the spill

• The public relations response is also a case study for the worstmanaged disaster in history.

• Not one person died from the accident. Reality is p erception .


Chemical Spill Case Study

• China National Petroleum Company Fire and Chemical Spill– Explosions on November 13, 2005 in No. 101 petrochemical plant– Explosions killed five, 70 wounded, caused evacuation of 10,000’s

residents

– One of the tanks leaked 100 tons of toxic chemicals into the water way

– 80 km long toxic chemical spill in national and international water supply, Songhua River

– 3.5 million people without water


Songhua RiverRemote and Isolated Area


Valdez Case Study

• Similarities and Comparisons– Task force coordination and bioremediation was massive effort.

10,000 personnel– Multi-agency support – outside experts brought in from EPA, NOAA,

industry, US Navy, US Coast Guard, scientists and researchers– Massive media and political coverage

– Industry support (meaning all other major oil company’s) brought in to mobilize, help, train and prepare themselves and their equipment

– International experts brought in for credibility– Military coordination used for food, water, waste disposal

– Environmental conditions similar to Jilin, remote areas, cold, ice


Valdez Case Study

• The truth of what was never told or shared by the p ress– Immediate establishment of claims– Hiring and or compensation of 1,000’s of local fisherman– Millions of dollars paid for renting of their homes and boats

– The true picture of the status of the cleanup – at that time it was the largest mobilization of resources since Normandy

– The success of the bio remediation programs– The misinformation and delays and antics of those that wanted to

stop the clean up or punish Exxon• Pirates, raids, planting dead animals

– No expense was spared, global sourcing– The role of the U.S. Coast guard as mediator


What Went Wrong Public Relation Management

• Valdez Financial Impact of Not Managing Public Rela tions– PR was not managed as well as it could have been

• All the good work and efforts was distorted and never been communicated to the public and national and international agencies.

– Perception is reality, not the reality• Media presented the same ‘bad news’ damaging reports for over 12

months • Clean up status and progress never been reported. “no news”

– Stock remained depressed and undervalued for years• Jilin, CNPC

– In USA, adversaries used this as a case for action against China not supporting human rights, protecting of the environment

– Russian lawsuits, California Teachers Pension fund threatened orsold millions of shares


What Went WrongFinancial & Administrative Management

• Financial controls– Once spending begins, it is difficult to stop. In an incident, Billions of

dollars can be spent inefficiently.– Communication and data exchange infrastructure are not available

for real time monitoring– IT system are not available for integrated management of Human

Resources, Supply Chain and Financials

• Administrative management– With such a vast number of organizations and institutions involved, It

is always difficult or impossible to establish • Clear lines of accountability and authority• Clear lines of communication• Separation of factual information from misinformation


What Went Well in Valdez Incident Command Center

• Incident Command Center with Unified Command– Field response teams with direct line of communications– Industry support and coordination

• Good training for international oil companies, good support to Exxon

– Inter – agency support and coordination • Support from NOAA and EPA (expertise, state of the art technology, lab

and testing equipment) – provided credibility and scientific documentation for health purposes

– Excellent military support – provided sea, air and land logistics. • Utilized troop vehicles, C141 aircraft and ships for movement of food,

water, health supplies, waste disposal• Utilized dedicated aircraft for command and surveillance• Unit commanders (civilians) had own private aircraft for immediate

transportation to locations


• There was and is a great story to be told• The best business practices, three Layers of functi onal teams

established collectively to restore the environment .– Crisis Management Team (CMT)

• Consists of Exxon corporate officers, State commissioners, USCG regional incident command (US Coast Guard)

• Assign broad policy issues to appropriate staff for action

– Incident Management Team (IMT)• Incident commander with federal and state on scene coordinators• Make decisions on how best to control the source, contain and clean up the

spill, and manage the public expectation

– Field Response Teams (FRT) • Field operation commander with federal and state representatives• Day to day operation in the field.

What Went Well in Valdez Incident Command System


Challenges CNPC Faced Internet and News Media

• Good News– Latest technology was deployed for monitoring by Heilongjiang EPA.– US environment experts indicated that “Bottom line is – “monitor it and

let it go.” Nature will take care of it. • Bad News

– By Reuters, California's state treasurer said on 12/2 he urged the board of the third largest U.S. pension fund to sell the fund's shares in CNPC to protest against its conduct following a major toxic spill and its links to the government of Sudan.

• Internet and Blogs– There were more than 600 Blogs actively engaged in discussion of

CNPC Jilin Spill. – There are too many agencies, entities which are dealing with public,

national and international agencies. • CNPC did not put in place controls with a “transpar ent” plan.• Strategic approach must be to feed the markets and public the right

information


• Comparisons and Lessons Learned– Valdez, CNPC Jilin– Hurricane Katrina– Establishing Control, Stabilizing the Scene– Managing the Media and Communications


Hurricane Katrina

• Most devastating natural disaster in history of USA

• 27 foot (10 meter storm surge)

• 98,000 square miles, 138 counties and parishes

• Evacuation of 75 % of Gulf of Mexico 819 manned platforms (25 % US Daily demand)– 50- 70 % still not fully operational

• Destroyed nations 35th largest city, and an additional 80 miles of Mississippi Coast, plus parts of Alabama

• Over 10,000 deaths, US 100 billion


Report to President George BushLessons Learned

1. Establish a centralized response center to provide situational awareness and a common operating picture

2. Improve capability to quickly assess and gather the full environmental impact to provide the public and first responders the most accurate information. When Is it safe to operate or return to the scene?

3. Integrated approach to debris removal

4. Need to incorporate volunteers



5. A single governmental agency should provide the integrated policies and procedures for search and rescue

6. National department of transportation must be prepared to conduct mass evacuations when a disaster overwhelms local or state capabilities

7. Policies or procedures need to be in place to ensure an adequatelaw enforcement capability

8. Need to have clear functional structure and clear lines of accountability



9. Military and defense must be prepared to be called upon to support logistics, law, evacuation, search and rescue, life support, food, water, shelter …

10. There needs to be a national communications strategy to ensure vital communications are secure and reliable. Interoperability (e.g. same frequencies, compatible equipment)

11. Needs to be a modern, flexible and transparent logistics system.Capable of stock piling basic living commodities and distributing the goods and services



12. Government and military must work cooperatively with the privatesector

13. Develop policies and plans for foreign assistance and support14. Rapid means for sharing of vital information, status, both internally

and to the public15. Control misinformation16. Public health and medical support provisions must be designed

and prepared for17. Integrated public communications plan is necessary to better

guide, inform, prepare and reassure the people18. Need a simple and integrated information system for providing

human services


Overview Lessons Learned Always the Same

• For a major incident to occur, many things always h ave gone wrong at the same time– Unclear lines of accountability and authority– Accountability and responsibility separated– Inoperable lines of communication– Insufficient capacity for

• Storage of basic life support stock piles• Transportation, especially air• Information or financial management (assets or resources)

– Insufficient or non existent monitoring and sensing equipment– Lack of critical intelligence/information sharing

• Different radio channels and frequencies is still a major concern 5 years after 911

– Multiple command and control centers or none• 80% of the causes are human issues and 100 % of the 80% is

failure to communicate and understand


TRAVEL & LOGISTICS

Manage Relations

PERFORM

ACTIVITIES

SOLVE CRISIS

PURCHASE SERVICES

GATHER

INFORMATIONOBTAIN

FUNDING

Crisis Response LogicIt’s a Very Complicated Scenario

Collect Information

Accelerated Movement

Obtain

Phones, Computers, Faxes

Resources

EMOTIONAL THOUGHT PROCESS

EMOTIONAL &

IRRATIONAL

RESPONSES

LOGICAL THOUGHT PROCESS

Need $$$

EatSleep

ENVIRONMENT

Save Entity & Operations

Field Intelligence

ADAPTIVE LEARNING PROCESS

Communicate

Survival Instincts

Environmental Intelligence


Process and Management System Solutions


Management System Framework

Feedback

& Improvement

Verification & Measures

Scope & Objectives

Accountability & Responsibility

Process & Procedures


ESH / Operations Integrity Management System Modules

• Leadership and Accountability• Design and Construction• Information Documentation and Management• Operations and Maintenance• Loss Prevention• Assessment and Measurement• Personnel Qualifications and Training• Incident Investigation and Analysis• Contractor Services and Qualification• Emergency Preparedness• Emergency Response• Reporting (internal, external)• Public Relations

Some of this information has been graciously provided by Exxon Mobil Corporation


Loss Prevention Management System

• Defines the overall operations integrity management system approach– Key elements (e.g. objectives, roles and responsibi lities,

procedures, measurement system, feedback loops)• Defines the critical success factors

– For example: vision, communications, rewards, conse quences, targets, front line involvement, etc.

• Focuses on cutting off the incidents before they oc cur. The lossprevention pyramid model.– Change the bad behaviors that lead to incidents– Reward good behaviors– Massive communication approach (as opposed to hidin g

information)


Loss Prevention Pyramid

Statistical Data 15

50300

The Solution

“ Elements of Loss”“ Elements of P

revention”


Developing Adaptive Response CapabilitiesThe 80% Solution �� People, Their Minds, Thoughts, Actions


Cambridge10 Years of Research

This research has been presented in leading forums around the world.

This research was used to develop the national innovation and value creation programs in Italy, Singapore and France.

10 Years of Extensive Published Research on Uncerta inty & Change10 Years of Extensive Published Research on Uncerta inty & Change


Lessons from evolutionary biology, science, physicsLessons from evolutionary biology, science, physics

• Adaptive eco-systems exhibit critical qualities– Guiding principles not rigid rules– Organise around capabilities– Survival of the fittest– They experiment and fail– They share the lessons learned from the “flock”

• Species, companies or societies that become extinct• Erect artificial barriers• Isolate themselves from their environment• Lose focus on their purpose and reason for existenc e• Debate, fight, or squawk • Lose their moral and noble cause

Scientific Research


Universal Situation

• Social, military or governmental agency challenge:– How do institutions that have a fixed or constraine d budget

with limited or fixed resources and assets, adapt i n the face of rapidly changing situations or unpredictabl e events?

• Research demonstrates that successfully responding is based upon– Entities that exhibit “adaptive” leadership & manage ment

traits– Can harness a team that has a unique combination of

qualities and attributes– Know when to throw the book out the window and use

simple guiding principles


Developing Adaptive Leaders To Answer Questions

• What is your target?• Who is the leader?• What are your simple rules?• How are you aligned?

• What resources do you have?• What are your assets?• What do you fear?• Why do you care?• What don’t you know?• Why don’t you speak?• How do you share intelligence?


Universal Qualities

• The qualities and traits of successful “adaptive” te ams

– Singularly mission focused and balance the big and small picture

– Optimal unit or team size of 6-8 people on a task– Communicate vital information in a timely manner– Assign roles and responsibilities but are flexible to change– They are ingenious and resourceful when the unexpec ted

occurs– They are risk takers. – They are confident in themselves and demonstrate mo ral

courage – They don’t lose their composure– Can be creative and or inspirational

• They serve a noble purpose that is greater than the mselves


Thank You!

Questions and Answers

Contact [email protected]

281-465-4107 office281-825-1068 cell

developing world-class emergency contingency … world-class emergency contingency capabilities ......

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