The sudden destruction of the nation’s financial center will wreak havoc on the nation’s design firms in a number of ways, many yet to be discovered.
In Mel Gibson’s 1998 release Lethal Weapon 4, moviegoers watched breathlessly as his car exploded through the glass curtainwall of a downtown skyscraper and landed in the middle of a busy architectural firm, sending workstations and plan files flying through the air. The wildest imaginations of screenwriters could not have envisioned the scenario that would unfold a couple of years later. It was, as a broadcaster said nearly fifty years ago, “a day that will live in infamy.” As all work ceased in firms across the country, Americans watched footage replayed as the twin towers of New York’s World Trade Center, Emory Roth & Sons’ most well known and visible commission, were sequentially struck by hijacked jetliners. Within minutes of each other, 200,000 tons of steel, 425,000 cubic yards of concrete and 43,600 windows rained down on rescue workers and fleeing tenants as the towers collapsed into a heap of rubble.
In addition to the loss of lives that will probably exceed tens of thousands and property losses in the billions of dollars, the consequences were immediate and global in scope. Major Internet servers and routers were housed in the buildings which served much of the Northeast. Major data centers which served ATM networks and electronic funds transfer mechanisms, as well as one of Verizon’s switching centers were destroyed — a disruptive inconvenience to be sure, but ones that could be remedied with time.
What time cannot remedy is the disastrous damage inflicted on Mancini Duffy, the architectural firm whose offices were on the 21st floor of 2 World Trade Center (WTC). At press time, it was not known how many, if any, of the firm’s 200 employees had been able to survive the plane’s impact into the building and the explosion and subsequent building collapse. DI did learn that Gensler, a firm with an office in very close proximity, had within hours, accounted for every employee and that there had been no fatalities. The fate of S.O.M.’s employees, which also had an office near the WTC, could not be determined since its offices in Chicago, Washington, and San Francisco had been closed for security reasons.
The effects of this day on the design community will be extensive. With all of the financial services companies based in the World Trade Center complex, it is highly likely that design professionals were on-site, discussing work in process as well as pending commissions. Contracts, payments, plans and specs under review and renovations in process by the hundreds of tenants housed in the five buildings which comprised the World Trade Center were suspended indefinitely, if not, as it will be in some cases, forever. Manhattan-based interior and architectural firms which had been awarded long-term contracts by the Port Authority of New York and New Jersey for on-going tenant planning had extensive portions of their backlog for the next few months simply disappear. For firms already hovering on the brink of financial insolvency, this could drive them into bankruptcy.
A couple of years ago, in an article entitled “Flirting with Disaster,” DI identified critical weaknesses design firms faced in conjunction with an interruptive disaster of this type and offered some fundamental advice on how to prepare for long term business disruption. How are firms in the vicinity of the World Trade Center likely to be affected in the coming weeks?
Insufficient data backup. While most firms have some sort of regular backup system in place (and a few are better than others, backing up as often as hourly) most, however, back up on only a monthly basis and have no provisions for off-site storage of backed-up media. How many firms can afford to lose a week’s or a month’s worth of work and not feel the pinch?
Inaccurate understanding of the building backup systems. Technology representatives from firms located in high rise office towers said, without reservation, that their building had emergency power backup and generating capabilities. Yet, when building owner or management representatives were contacted, they confirmed that only life-safety exit signs, egress lighting, elevators, fire suppression systems, etc. were included—power to tenant outlets was not.
Inaccurate expectation of battery back-up systems. San Francisco-based Backen, Arrigoni & Ross was described by A/E technology wizards as having one of the most sophisticated emergency preparedness system in the country. While the firm had the best backup system and did, in fact, have emergency battery power available, firm representatives stated that it was only useful up to a maximum of eight hours—anything longer than a day put them in the same boat with everyone else.
Perhaps the most dangerous misconception was an inaccurate understanding of insurance coverage. A few of the more savvy respondents replied that they had “business interruption insurance” as part of their property and casualty insurance policy which would cover any loss of equipment or income due to natural disaster. Further discussions with many of the nation’s largest underwriters revealed a confusing array of coverage availability and exclusions which was best summarized by a 43-page handout from one of the leading underwriters.
What can computer-dependent design firms do? How can they better prepare themselves in the event of a natural disaster or terrorist attack such as this one?
Keep duplicate records and backup valuable electronic files. Under federal laws, if companies fail to maintain accurate business records and to safeguard those records, the company canbe held liable. Back up computerized data files at least weekly and store them off premises. Keep copies of magnetic media in a bank safe deposit box and make sure they’re kept up-to-date. Compile lists of equipment you own or lease by type, model and serial number. Some firms have lost their entire system as a result of a nearby lightning strike.
Identify critical business activities. Which activities must be continued and what equipment do the employees need to carry on? Find alternative facilities and equipment. Computer-dependent companies should contact their computer hardware vendor—they may know of a service that provides equipment in the event of a disaster. Some will allow companies to test out their emergency plan. Companies that need specialized equipment or a special environment should consider a reciprocity agreement—making arrangements to share facilities and equipment with another company (or branch office) in the same business in a different community.
Ensure availability of funds. In the case of most wide-spread power outages, electronic commerce grinds to a halt, particularly those firms whose international work relies on electronic funds transfers and direct deposit to employees’ accounts. Access to adequate cash and manually-produced checks should be available.
Develop a disaster communications plan. For companies that relocate temporarily after a disaster, it is imperative that they let their clients and customers know how to contact the company at the new location. Among possibilities to explore, depending on the circumstances, are posting notices, contacting clients by phone, placing a notice in the local newspaper and asking acquaintances in the local business community to help disseminate the information.
Examine your insurance policy and obtain appropriate coverage. Most firm representatives don’t understand the extent and complexity of the various types of insurance needed to keep them up and operating in the case of a unexpected disaster. Many firms mistakenly think that their liability insurer (e.g. D.P.I.C, C.N.A) is the person to call. According to Charles Vonderheid of The Ebersberger Companies, firms should have the following types of coverage put in place before disaster stikes: Building Coverage and Business Personal Property Insurance; Business Interruption Insurance; Extra Expense Insurance; Systems/Equipment Breakdown Insurance; Off Premises Power Failure; Computers/Media Insurance; Earthquake Insurance and Flood Insurance. Each of these have unique coverage aspects, exclusions and limitations and should be combined to create the most appropriate coverage for your firm’s situation.
Get your firm’s people together to discuss the various possible scenarios and develop contingency plans for each of them. Accounting for human life safety should be paramount. In the aftermath of situations such as what happened at the World Trade Center, some firms may need to offer access to professional counseling services to help employees deal with the accompanying trauma and grief.
Business continuation should be next in line. Intra-firm communication, along with crisis leaders assigned to teams, studios or office floors should be quickly established to provide order and instruction. In moments like these, the true heroes emerge. Putting those most capable of “grace under pressure” will help minimize panic and could actually save lives.
Our previous article stated, “Even though Mel Gibson might never drive through your firm, it pays to be ready.” After the events in New York and Washington this month, it’s obvious that the only thing that can be expected in the future is the unexpected. No amount of preparation can anticipate and prepare for terrorist destruction of this magnitude. However, for anything short of that, we must be ready. Our livelihood, and possibly our employees’ lives, depend on it.