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Interview with Ted Sheppard

Leo Wrobel: Briefly, what does the PDC do?

Ted Sheppard: By providing applied information research and analysis support to a broad customer base (including policy makers, planners, and executive-level disaster managers), the PDC serves as a bridge between the scientific and decision-maker communities. The latter certainly includes commercial business, and representatives of major industries are always included in stakeholder workshops when the PDC works with government clients.

Sharon Wrobel: How are current and emerging technologies relevant to disaster management, specifically for businesses?

Ted: Disaster management is a constant consumer of the newest technologies, but it’s also an area where a lot of innovation takes place. The PDC has developed mature systems for acquiring hazard and risk data—from historical information to space-based imagery—and partnerships around the world to support continuity of data availability. The center also has developed novel processes for the visualization, automated processing, and point-to-point redistribution of the data as needed. The distributive networks range from absolutely secure servers to systems devised for broad dissemination of hazard warnings.

Businesses today are often large economies—frequently, international economies. Among the most devastating effects of any natural disaster is damage to that economy: economic loss and reversal of development in the fiscal strength of the entity, whether it’s a nation, a metropolis, or a business enterprise. A primary task of executives at the highest level in any organization is to create and maintain sustainable economic growth for the communities it serves. In the case of a business, that could include a board of directors; a corporation-wide community of employees; and, of course, the stockholders—as well as the cities, towns, and nations in which business is done.

Not doing a thorough Risk and Vulnerability Analysis and not having sound, well-reasoned priorities for disaster preparation, risk mitigation, emergency response, and post-disaster recovery is tantamount to crossing your fingers as a way of warding off a tsunami, or closing your eyes to avoid having to deal with an approaching storm.

Leo: In lay terms, what is a Risk and Vulnerability Analysis?

Ted: In terms of systems and processes, software and hardware, and the application of subject matter expertise and experience, the Risk and Vulnerability Analysis might seem arcane or even nearly incomprehensible, but it’s actually something that people do all the time. When you buy a home, for instance, you look around to see what’s on the property that could be a risk to the safety of the home and its occupants. You see trees that may need trimming or removal, find a water supply pipe that may need replacement, notice boulders on the hillside above the property, and so on. You look at the financing in the same way, to ensure that there are as few potential impediments to full ownership as possible.

Naturally, if you’re smart, you also look beyond the property. Is the area on a flood plain? If so, what’s the risk of a damaging flood reaching the home? Do wildfire fuels surround the property, and to what extent can that risk be mitigated? What you choose to do about the dangers discovered in your informal Risk and Vulnerability Analysis of your new home will be based on your best estimate of the risks, the degree to which you’re willing to commit resources to offsetting those risks, and other factors. However, if the property really matters—your family will be living there, for instance—you’ll get expert help with the assessment of the property (commonly called inspection), you’ll get expert help in learning how to prioritize and react (a decision support system in PDC terms), and you’ll put systems in place so that you can be informed of changes in the risk picture and respond appropriately. Maybe that’s something like asking the gardener, the pool boy, and the housekeeper to be vigilant and report regularly.

Sharon: Don’t insurance companies offer largely the same service?

Ted: Not at all. Insurance companies assess risk, but remember that insurance companies are businesses, so their top priority is to manage risk for the sake of their own corporate owners and stockholders. If everything works as it should, you get cash after the event when disaster strikes; in advance of that, you may get some advice about reducing risk in the form of a notice that your rates will be higher if you don’t fix x hazard, or that such-and-such part of your business cannot be insured because of y risk. But, even with the profit motive to impel action, an insurance company’s interests, resources, expertise, and responsibility are all focused differently than those of the most effective top-level manager who is planning for corporate sustainability and business continuity.

For insurers, business is business. Given two entities, one a casino and one a hospital or power plant, if the two have equally valued assets, they’re identical to an insurance company. For the PDC, those two entities are not equivalent. Our Risk and Vulnerability Analysis takes into account the communities served and the value of the entity to the communities. It also can consider impacts in the other direction; that is, how the communities should or might affect the business or other entity.

Another aspect of the difference is the value of having truly done due diligence, having done all that is possible to mitigate risks. Of course, a business has insurance, but on a day-to-day basis, insurance guarantees payouts in case of disaster. On the other hand, a thorough Risk and Vulnerability Analysis, with an appropriate suite of other services, can provide continuous decision-support for planners and managers. For example, think how the community will look at a resort where a devastating tsunami hits. If the company is well-insured, that’s one thing; if it has the data and other resources to prepare for the tsunami, to know exactly what the hazard is, and to respond so that no one is killed or injured, that’s an entirely different thing. For that kind of preparedness and responsiveness, the PR value alone is incalculable. Being insured is something else.

Leo: How does the PDC work with a business or a business association?

Ted: That varies tremendously depending on the company, industry, or association. However, a large company with distributed assets and a significant population of employees or locations is not significantly different from the corporation of a local or even a national government. So the interests of the corporate entity are not generally different from those of a county—or a country. We start with an overall assessment of risks and then develop a clear picture of the need for data streams, information and communications technology, and human resources to meet those needs. Then we compare existing resources with those needs, providing an actual needs-inventory detailing the gaps between what’s available and what’s essential or ideal. If the corporation is large enough to support it and has assets distributed in such a way that it would be necessary or even useful, we would then develop a complete decision-support system to empower the managers with ongoing data and communications resources; real-time or near-real-time collaborative communication tools, and whatever else the managers may need to confidently and consistently select and execute appropriate responses to risks and disaster events.

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