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Volume 27, Issue 3

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Earthquakes

Earthquakes (30)

Nature unleashes its most destructive wrath in the form of a powerful earthquake, emergency planners warn.
Should such a serious quake occur within Missouri or within the Central United States in the near future, scores of businesses may find themselves thrust into a struggle for survival amid the mass of ruin and destruction.

This is because thousands of individual companies and key industries such as banking, finance and insurance, rely heavily on modern technology which includes computers and automatic data processing systems. Unfortunately, without proper precautions, these sophisticated systems are all too vulnerable to heavy damage in the event of a severe earthquake, officials for the State Emergency Management Agency (SEMA), in Jefferson City, Missouri advise.

“As we have reaped the benefits of technology, we have become a nation at risk,” SEMA’s Director, R.D. Ross says. “We are dependent upon computers and ADP systems in almost all phases of our lives.”

“And because of the earthquake threat to Missouri and the Central U.S., we are virtually prisoners of a fragile society,” Ross says.

Risk management officials caution that while some businesses at least recognize the earthquake threat, too many companies have considered only the potential for loss of life and property destruction. What many businesses tend to overlook is the threat to the viability of the business itself.

Disaster recovery consultants fear that some companies may be so severely devastated by a major earthquake that they may be unable to resume full operations soon enough to maintain market share, or even stay in business at all. They cite the need for comprehensive disaster recovery plans, which include backup sites for computers, as the key to saving their business in any type of major catastrophe, including earthquakes.

Minor earthquakes occur frequently in the New Madrid Zone, and it is only a matter of time before a damaging earthquake occurs. Interest and awareness has increased in St. Louis and the Southeastern Missouri area since Iben Browning announced the possible occurrence of a damaging earthquake in the New Madrid Zone during the early part of December, 1990. Mr. Browning’s theory was based on the gravitational pull generated by the alignment of the earth, sun, and moon on December 3, 1990.

Experience has shown that even moderate earthquakes can have a major impact on a business’ operations and cause severe hardship. Stricken areas in the midwest can expect interruption of water, electricity, gas and telephone services and a shortage of supplies when a damaging earthquake strikes.

In California it is recommended that individuals and businesses plan to be self-sufficient for up to 72 hours after a major earthquake. In the midwest that period may be even longer due to the lack of preparedness in both the public and private sectors, and the lack of seismic resistant design for buildings, highways, bridges, and utilities.

Over a year has passed since the Loma Prieta earthquake struck, and repercussions can still be felt and observed in northern California. In the Midwest, Iben Browning, who predicted a quake of 7.0 or greater on the Richter scale to strike along the New Madrid fault in December, is practically a household name. The reports of death and destruction resulting from the Armenia and Philippine earthquakes were overwhelming. Finally, management is becoming persuaded that the “it will never happen to us” mentality could be the equivalent of corporate suicide. Although Browning’s credentials are questionable (he also claimed that the weather conditions caused the downfall of communism in Eastern Europe), his prediction at least proved to be the overdue catalyst for several businesses to take the earthquake threat seriously and, if they hadn’t already, initiate a plan.

With the threat of an earthquake becoming more of a tangible prospect, companies must research the probable risks for their particular regional location, and then learn to manage those risks. In the investigative process, it is necessary to both assess existing structures and retrofit them accordingly, and also to design all new structures to be able to survive the maximum potential earthquake for the location.

DETERMINE YOUR RISK

Obviously, geographical location is a large determinant of your earthquake risk. While the extreme west and Midwest are the most hazardous zones in the U.S. with the ever-present threats of the San Andreas and New Madrid faults, the rest of the country is not immune from danger; quakes causing major damage have occurred throughout the western third of the country, and smaller quakes have affected, to some degree, virtually every state in the continental U.S.

Another crucial risk factor is the vulnerability of the land at your particular location. Your hazard assessment can hardly be considered complete before you review the geography of the land on which your business is located and conduct a site survey. The geological makeup of the ground will result in different levels of potential damage during a quake. Take two phenomena that are standard in any earthquake:

Groundshaking

This essentially defines an earthquake, and the Richter scale is used as a measurement of magnitude. So a 6.0 earthquake in California is the same as a 6.0 earthquake in Missouri, right? Not quite--that same magnitude could shake up to 10 times a greater area in the Midwest due to a different composition of the ground.

Groundmotion

Groundmotion is a function of exposure time. The longer the duration of the quake, the better your chances for soil failure and greater structural damage. Liquefaction, an earthquake phenomenon that tends to densify soils, can cause the ground to take on qualities of quicksand if the shaking is strong enough and of sufficient duration. Prime conditions for liquefaction are flood plain soils, sandy or silty soils, shallow groundwater surfaces, and loose density of soil.

Remember, the magnitude of the earthquake alone is only one factor in the overall outcome. If the weatherman tells you it’s 35 degrees with a gusty arctic wind chill of two above, do you only account for the outside temperature before you step outside?

A final risk factor to consider is the frequency of past events at your location. In general, the trend is that events of a higher magnitude are less frequent over time.

After you have determined the earthquake risk to the best of your ability, the next step is to review design drawings of your facility (or facilities) and estimate the probable maximum loss to buildings, equipment and inventory.

When surveying your buildings and/or considering new construction, keep in mind that steel construction has proven to be the best performer in other quakes. The worst is unreinforced masonry--in this design, the walls are not well attached to the interior, causing the exterior to peel away when shaken. This invariably leads to cracking and failure of the walls and the eventual collapse of the entire building. Older non-ductile structures and concrete frame structures also tend to perform badly during earthquakes.

Your final step in the risk assessment procedure is to estimate your insurance requirements. All that this process really entails is a comparison of retrofitting/rebuilding costs to insurance costs. Depending on the outcome of your research, you may choose to go wholly with one or the other, or else try some combination of the two.

MITIGATION TECHNIQUES

Now that you know your risks, you have to decide what to do about them. The consequences of the once-solid ground suddenly metamorphosing into quicksand can be quite dire. Expected outcomes can include landslides or lateral movements, settlement, reduction or loss of bearing capacity, increased pressure on retaining structures, and uplift of buried structures. Unfortunately, being a risk bestowed by nature, liquefaction-prone areas are not easily stabilized. However, means have been developed to increase soil density and/or strength, lower groundwater levels, and reduce buildup of pore pressure.

Mitigation techniques can be performed more easily on the actual structures that are vital to your organization. In addition to retrofitting facilities, it is also crucial to anchor equipment and brace suspended utilities.

Your underground pipe system, though unseen, is another critical component of your entire facility. During an earthquake, pipes can rupture, become misaligned, or become elevated due to ground and/or soil failure. Not only would any of these events inevitably result in grave long-term economic repercussions for your organization, but you would also find yourself without the water system needed immediately to combat fires, for sanitation, for drinking, etc.

To increase the probability of survival during a quake, design all new pipes with flexible joints and avoid sites with bad soil conditions. When retrofitting old pipe systems, you can take any or all of the following steps:

  • construct protective walls around portals
  • construct engineered sea walls
  • check pipes for and protect from corrosion, especially at joints
  • strengthen or replace the most vulnerable portions

If you will be undertaking the design of a new pipe system for your organization, take note that in the Loma Prieta quake, ductile iron pipes and asbestos cement pipes with rubber gasket joints brought in the best performance.

INDIRECT LOSSES--TRANSPORTATION SYSTEMS

Be wary of the losses that don’t immediately affect your business, for it may well transpire that destruction occurring miles from your facility may result in a devastating outcome for your organization. Highways, bridges, and airports are all susceptible to liquefaction, landslides, rupture and cracking; with bridges is the added possibility of connection failure (which occurred on the San Francisco Bay Bridge) and other structural damage; airports have the additional potential for collapse and damage of unsecured equipment as well as a loss of power and communications. As a consequence of these damages, you may find that emergency supplies are inaccessible by road or air, and you may also have no means to transport employees to and from work.

It is time that businesses come to realize that earthquakes are an omnipresent threat. The extent of your recovery from one will depend on how prepared you are, and your preparedness can only be as adequate as the time you invest in researching the geographical location of the facility as well as the ground on which it is located. If you do conduct a thorough risk assessment and retrofit program, you will find that this relatively simple process very well may be the saving grace for your business when an earthquake strikes.


Margo Young is a staff writer for the Disaster Recovery Journal.

This article adapted from Vol. 4, No. 1, p. 12.

On July 16, 1990 at 4:26 p.m. local time, a severe earthquake registering 7.7 on the Richter scale struck the northern Philippines. The earthquake caused damage over a region of about 7700 square miles, extending northwest from Manila through the densely populated Central Plains of Luzon and into the mountains of the Cordillera Central.

Over 5,000 people were reported dead or injured, and in excess of 2300 infrastructures were either destroyed or seriously damaged. While the quake was devastating, it was not an unusual occurrence in the Philippines; since 1950 alone there have been six major earthquakes at various locations in the archipelago, having magnitudes ranging from 7.3 to 8.3.

A successful disaster plan is not merely a three-ring binder with lists of phone numbers and resources. Rather, it is a result of the combined planning efforts of many departments and people. Persons involved in the planning need to look at what should be done in the areas of staff training, determining “vital records,” and evaluating structural and non-structural seismic hazard reduction. Planners need to verify what systems can be in place to collect disaster information and display it for the decision- makers. Authority should be clearly delegated, allowing those involved to make decisions and take action on the available information, and functional communications need to be established for the dissemination of decisions.

Corporations with stocked disaster supplies found that even though this was not “The Big One,” their employees used the lightsticks, flashlights, portable radios, prybars, and emergency rations and were pleased that their offices were ready. Knowledgable floor wardens prevented panic and appropriately responded to reports of persons trapped in elevators, smoke in the stairwell, jammed doors, power failures, and gas and water leaks. Key executives knew where to report to obtain information on the status of the company’s situation. Emergency Operations Centers provided corporations with the ability to collect information and take appropriate action to assure continuity of business.

In this 15 second, 7.1 quake, we were relatively lucky; for example, in 1964, Alaska suffered a four minute 8.3 quake. But it did alert previously apathetic corporations of the need to get a realistic disaster plan for their organization. Now that corporate executives see that they may indeed be without water, electricity, sewage systems, transportation, communications, and even access to their offices for a time, perhaps they realize the importance to plan for alternatives to assure themselves the ability to function under disaster situations.
Organizations that took action to mitigate non-structural hazards by bracing shelves and file cabinets, putting Velcro under computer, communications, and laboratory equipment, and bracing florescent fixtures and water heaters found that they had minimized business disruption following the quake.

Seismic upgrading of elevators seemed to be very valuable, as there were no deaths or injuries reported as a result of elevator failure. However, there were many reports of minor problems with auxiliary power generators. Some were depending on natural gas as a fuel source, and in many cases electricity and gas were both out. Some had failed to properly anchor generator and batteries and found their systems didn’t automatically come on line. Some didn’t know how much or how little was on auxiliary power in their facility. It was embarrassing when security gates, telephone systems, disaster radios, and radio battery chargers were found not to be on the auxiliary power system! Future disaster plans will certainly inventory what the auxiliary power system provides.

Some communications systems worked well. The telephone industry loaned emergency service agencies thousands of cellular telephones with one month of free air time. Serendiptity! You had new portable telephones with unlisted phone numbers so your key players could control who had their phone number. Unlisted or at least restricted phone access phones in emergency operations centers proved very valuable. Many disaster coordinators reported on the advantages of fax machines. Those lines weren’t as busy as the main switchboard, so there were fewer reports of overloading, and printed copy minimized misunderstandings. List your fax reources in your communications section of your disaster plans. Also list the numbers of pay phones in your buildings--this is an extra communications resource.

We take water and sanitation for granted, but in the Marina District of San Francisco they were knocked out and both families and businesses had to rely on bottled water and port-a-potties. What have you provided in your disaster plan for water and sanitation?

In San Francisco we found that certain truisms (duck and cover, get under a strong table or desk, get away from windows, brace yourself in a doorway, and do not use the elevators) were correct. The sidewalk in front of buildings is very dangerous. Stay inside buildings or get into open space. Five died when bricks fell off of a building on 6th Street.

While in this earthquake all hospitals were not damaged or overloaded, the on-site first aid action of trained floor wardens was very valuable. Are your key personnel trained in first aid? Some in every facility and on every shift?

Pre-disaster training minimizes emotional aftershock. Companies that had provided earthquake preparedness training for both their employees at work and their families at home found their staff could continue to function in their disaster operations because they knew their families were secure.

The term “vital records” held a new meaning for corporate executives who could not get into their offices. It no longer meant just computer tapes and disks, it also meant their phone lists and rolodoxes on their desks. Blueprints easily duplicated now are very hard to come by or get copied the day after an earthquake. After-hours contacts for your key vendors and special customers should be considered vital records and provided for in your disaster plan.

Perhaps now is the time to take an inventory/survey of your employees. Who is interested in helping in time of disaster? Who are amateur radio operators? First Aiders or experienced military medics? Who is trained in building or carpentry that would be valuable in search and rescue tool, public information and public relations functions and corporate decision-making were all in place.

In these examples, we learn the valuable lesson that although we can in no way prevent a disaster from occurring, we can at least recover from one by providing adequate planning. These experiences teach us the necessity of taking disaster recovery planning past the three-ring binder stage and into the form of a workable tool that propels corporations into tomorrow’s business day.


Pete Ashen is Administrator of Emergency Services with the Golden Gate Chapter of American Red Cross.

This article adapted from Vol. 3, No. 2, p. 28.

At Bank of America, we believe that disaster planning is crucial to our success, and we have designated a full-time staff to contingency operations since 1983. We are committed to quality service and plan to be available to our customers in emergency situations. Our dedication paid off on October 17, 1989, when the Loma Prieta quake (7.1) struck Northern California.

We have a multifaceted plan that focuses heavily on maintaining operations and systems so service to customers will have minimal disruption. One measure of the breadth of our business is that Bank of America processes five percent of all the checks written in the U.S., so maintaining operations is extremely critical.

The plan also calls for maintaining normal branch operations, providing assistance to our employees, and offering economic aid to the general community in its recovery.

On October 17, dedicated personnel carrying out a fully developed plan helped us to get through the Loma Prieta earthquake with virtually no disruptions to customers, no significant systems damage or loss of data, and a quick response to the needs of employees and the community.

WHAT HAPPENED

Our critical point during the quake was the San Francisco Data Center (SFDC), which runs ATMs and supports branch operations for Northern California, including check clearing and credit card transactions. It is a high-volume transaction processing site and uninterrupted operations are critical.

When the quake hit at 5:04 p.m., power to vast areas of Northern California, including all of downtown San Francisco, was lost. The SFDC immediately switched to a backup uninterrupted power supply which is supplied by four diesel-fuel turbines in the building.

Our Contingency Operations Planning (COP) calls for operations to be rolled over to the Concord Technology Center, about 30 miles east of San Francisco, should the SFDC become inoperable. Large-scale systems and money transfer backup implementation began immediately in Concord.

We also immediately established a communications link between the SFDC and the Federal Reserve to carry on normal transactions. At that point, we began to evaluate the damage at the SFDC. We discovered that several tape racks had been overturned, the emergency turbines were not receiving fuel, and we were running on batteries.

We immediately decided to bring all systems down (large-scale and minis) and shut them off until we could correct the fuel problems to turbines. At 5:50 p.m. an orderly shutdown of systems began.

We evacuated all personnel not involved in power restoration to the lobby area of the building and helped each other take a minute to calm down and check on the status of family and friends.

Emergency power was restored at 7:47 p.m., and systems began to be brought back up. Restoration of all large-scale and mini systems was complete by 2:27 a.m.

Meanwhile, key personnel, including the head of operations for the California Banking Group and the head of BankAmerica Systems Engineering, had arrived at the emergency command center at the SFDC.

Courier routes for incoming branch deliveries had been altered because of disruption to transportation. Since the Bay Bridge was closed, we used a helicopter to collect deliveries at the Oakland Airport and fly them into San Francisco.

Phone service through the local utility, Pacific Bell, was severely hampered because of damage to some lines and the tremendous volume of calls in the area. However, we were able to communicate effectively in the bank through our internal network, BankAmerinet.

The day after the quake, customers saw no disruption in banking services except for ATMs that were out of service due to a lack of power from the local utility in San Francisco and in branches where physical damage was sustained. To combat the latter problem, a trailer was brought in to provide services in Santa Clara when the main branch there could open.

Internally, it wasn’t exactly “business as usual” but we carried out critical functions. Check capture, money transfer and all posting systems operated in a normal manner from a customer viewpoint; a press release announcing third-quarter earnings went out (they were record earnings), which helped to reassure the investment community that operations were normal and all regulatory reporting was done on time.

In the days following the quake, we offered a variety of aid to employees, including emergency cash grants and time off, flex-time schedules, car-pooling programs to help the commute; and post-traumatic stress counseling.
We also launched a program that disbursed $1.2 million in direct aid to community recovery efforts and over $8 million in emergency loans to individuals and small businesses.

WHAT WE LEARNED

Our planning paid off! Our people reacted superbly. They followed the plan, were innovative where necessary and, above all, worked together to restore our services.

Our most serious problem was communication of accurate information in a timely manner. Even though we have four sources of voice communication, this area still remains critical and will require further attention. We also found that television news provided important information necessary to our decision-making.

The earthquake also prompted us to review the need for more emergency supplies, including flashlights, two-way radios and sleeping arrangements.

Most importantly, the earthquake made us aware that it is crucial to develop, test and maintain contingency plans.


T. R. Longworth is Vice President and Managing Director at Concord Technology Center, Bank of America. Ray Vander Vliet is Vice President and Managing Director at San Francisco Data Center, Bank of America.

This article adapted from Vol. 3, No. 2, p. 24.

At 5:04 p.m. on October 17, 1989, a large-magnitude earthquake rocked the San Francisco Bay Area. Initial reports indicated that fires were burning in several areas of San Francisco, many people were trapped under collapsed freeway spans, and one of the spans of the Bay Bridge had fallen. It appeared that the “Big One” had just hit.

As of January, 1990, the following statistics had been compiled by the California Office of Emergency Services:

  • Total earthquake damage to public and private facilities, excluding California Department of Transportation facilities and business interruption losses: $5.6 billion
  • Damage to public buildings: $2.3 billion
  • Damage to private buildings: $3.3 billion
  • Total number of buildings damaged: Over 25,000
  • Total number of buildings destroyed: Over 1,500
  • Total number of deaths: 62
  • Total number of shelter nights: 40,000

Last January, DRJ published a product profile on VELCRO (R)’s new specialty fastener, tagged Quake/Grip TM, which was rapidly becoming visible in corporate and government offices. Developed in prototype by Pacific Bell, Quake/Grip is a high-strength, flexible restraint system for securing office, hospital, and lab equipment.

On October 17, 1989, Pacific Bell had an unwelcome, but valuable, opportunity to assess the fruits of its R&D efforts when the 7.1 Loma Prieta earthquake shook Northern California. “Equipment secured with Quake/Grip held as firm as if it were nailed down,” said Bill Sambito, San Francisco Bay Area Emergency Preparedness Manager for Pacific Bell, “but we lost a few computers where we didn’t install it.”

Now, a full two months after the so-called “World Series” quake struck San Francisco, not a single Quake/Grip-related loss was recorded from any Bay Area installation. Reports indicate that the fasteners were 100% effective at securing a diverse machine population throughout the affected area.

“San Francisco was a heck of a good test for Quake/Grip,” said Dick Gilman, Supervisor, Instrument Installation and Repair Department at Kaiser Foundation Hospitals in Los Angeles, “everything fastened down with it came through totally unscathed.”

Gilman said Kaiser’s Santa Clara facility, which is near the quake’s epicenter, “lost no equipment” although “they did lose minor unsecured things, like test tube racks that fell to the floor.”

Two weeks after the Bay Area earthquake, employees who work at Hewlett Packard’s Corporate Headquarters building still had plenty of reminders of what happened at 5:04 on Tuesday, October 17. They could stare at the ceiling and see that at least half of the acoustical tiles were missing. While climbing the stairs in their building, they pass by walls with cracks and peeled paint and a series of reassuring notes that explain that this damage is not structural. Damage to paint and sheetrock was caused by leakage from snapped water pipes above almost all the water heaters in the restrooms. From now on, water heaters everywhere in the building will be braced.

Most of the damage to Corporate Headquarters was cosmetic. There were no injuries, and the critical business functions housed in this building were saved from more serious consequences by careful disaster planning and earthquake preparedness measures and nearly a million dollars worth of special seismic protection. The telecommunications systems never failed, and all of the HP 3000s in the Corporate Data Center are back in operation after an Emergency Power Off (EPO). The Worldwide Order Processing center operated with a skeleton crew on Tuesday night, and by 4 a.m. Wednesday morning they had completed processing Tuesday’s orders only one hour behind schedule.

Just about the time the day’s orders were completed, Wall Street began calling next morning, and members of HP’s public relations were on hand to report that the core of HP’s business had not been impacted.

Ray Schwartz, Section Manager in Corporate Computing & Services at HP, has a cubicle a few yards away from the computing center. He was familiar with HP’s prioritized list of what to do in an emergency because he was on the disaster planning committe that formulated it: first make sure the people are safe, then tend to the gas and water, protect the telecommunications equipment, and last of all, see to the computers.

When the quake hit, he went to the computer room to make sure that everyone was evacuated and that no one was injured. Schwartz ordered the EPO twenty minutes after the quake. A controlled power down would have saved wear and tear on computers, but it would have taken longer and therefore put people at risk during aftershocks. Once the power was off in the computer room, it was time to contain the leaks. Then large fans were brought in to keep the telecommunications wires cooled until power to the air-conditioning equipment could be restored.

Only two months before the quake, HP had installed a threaded rod suspension system for reel-to-reel tape racks. The system was designed to swing when the building swayed. Tapes in the 50,000 reel collection swung back and forth during the quake but stayed on the racks. Although the force of the trembler bent almost every rod suspended from the tape vault’s ceiling, none broke.

Two employees were working in the tape vault and neither of them wAS injured. Without the suspension system they would have been hit by a barrage of tapes. Many of the cartridge tapes for HP’s IBM and Amdahl mainframes fell out of their slots. Although these tapes were not heavy enough to cause serious injury when they fall out, HP will replace its cartridge tape racks with new ones that have a small protective lip.

Just outside the computer room, two tape racks fell over and the force of the flying tapes damaged a nearby disc drive. Several other Bay Area divisions had fallen tape racks. Bob Lanning, earthquake preparedness program manager, had just received quotes for more new supported tape racks just before the quake hit. According to Schwarz, these threaded rod tape racks will become a standard earthquake safety precaution. The rod suspension system proved to be superior to the bracing method which HP had been considering. When a braced rack was tested on a shake table at Stanford University, the rack stayed in place but the tapes flew out.

HP had spent $750,000 to replace the raised floor in its main computer room at Corporate Headquarters in Palo Alto with the special seismic flooring. This building, opened in 1981, had state-of-the-art raised flooring reinforced by structured steel. Nevertheless, Schwarz and other members of the disaster preparedness team noted that a floor similar to this one had collapsed during the Mexico City earthquake in 1985. Top management had approved this expenditure to protect the company’s critical business functions.

By March, 1988, the new floor was in in place. This floor had a heavy cast aluminum underside, and the pillars that supported the raised floor were almost twice as thick as the ones on the floor that was replaced. The previous floor was secured with epoxy, but this floor was held by both bolts and epoxy.

Much of the earthquake damage done to equipment in computer rooms with the conventional raised floors comes when equipment on casters or pads bounces around on the floor and fall into the holes for cabling. The seismic floor has protection around each of the holes so that casters can’t fall into them. As a result of the new floor, no equipment tipped over in the Corporate Computing Center although each piece moved and some of the pieces turned as much as 45 degrees.

The computer room contained 60 HP 3000s, several mainframes and many peripherals. All but three of the minicomputers were ready to run when they were powered up again, and a day later all of them were working. None of the floors in HP’s other computer rooms collapsed in the earthquake. Nevertheless, many machines moved around and at least one HP division has reported that a computer was knocked over into the holes for cabling. It is possible to retrofit a conventional raised floor by adding a metal lip around the holes, and this work is already under way for computer rooms at other Bay Area sites.

The corporate Headquarters reopened on Thursday when power was restored, but four HP sites, including two leased sites, needed structural repairs before they could reopen.

HP’s Earthquake Preparedness group had done seismic evaluations on all of its Bay Area sites. One of the buildings that got a poor seismic rating was the leased site in San Jose that housed the Personal Computer Distribution Operation (PCDO).

Another earthquake preparedness measure HP had taken was to pay a retainer to a team of structural engineers so that HP would be first in line for structural repairs after the quake. The following day, the engineers were on site at PCDO to evaluate the damage and present a plan for bracing the building’s pillars with big belts. The city building inspectors approved the plan, engineers and contractors worked all weekend, and the building reopened the following Monday.

Other HP buildings damaged by the quake included a leased building that housed the company’s television studios and, ironically, its Health and Environmental Safety office in Palo Alto. The studio and offices will locate in temporary quarters. An employee cafeteria in Santa Clara was closed because damage to the ceiling tiles expoused asbestos. The structure will be completely remodeled before it opens.

The worst structural damage was suffered to Building 26, a building which had been constructed around a previously existing building on a hillside outside Palo Alto. The ten-year-old building which houses Corporate Engineering and a prototype semi-conductor fabrication facility was built with braced frame construction that was designed to be seismically sound. Nevertheless, the inner frame of the building bent. The structure shook violently, especially on the upper floor, causing much damage to computers, monitors, semiconductor processing equipment, accoustical ceilings and partitions. Because of HP’s stringent safety precautions, none of the chemicals used in semiconductor processing spilled during the quake.

Unlike some other electronics companies that suffered damages from the earthquake, Hewlett-Packard intends to let the public know how it was affected by the quake so that other institutions and households can learn how to prepare for earthquakes yet to come. HP and fourteen other large companies in Santa Clara County had formed the Peninsula Roundtable for Earthquake Preparedness (PREP) to pool their resources and share with one another the most effective ways to protect workplaces from earthquake damage. HP was among the fortunate few who had begun to implement their preparedness plans.


Written by Peggy King, Hewlett-Packard

This article adapted from Vol. 3, No. 1, p. 31.

October 29, 2007

Schwabs Success Story

Written by

SAN FRANCISCO—Still basking in the success of his firm’s complete recovery from the 1989 San Francisco earthquake, Jeffery Lyons, Disaster Recovery Planner for Charles Schwab & Co., Inc., recently agreed to an interview with DISASTER RECOVERY JOURNAL. The following pages reveal some important aspects of the contingency plan they developed, some examples of how that plan held up during the actual emergency, and also some considerations for the plan’s continued development in the future.

“We were fortunate,” said Lyons. “We’d been running quarterly tests with our systems people and about a hundred users and had just finished a systems test at our outside vendor’s site about a week and a half before the [Tuesday] quake.” Indeed, the firm was so thoroughly prepared that, despite power outages, limited or no access to several buildings, and sporadic communications lines, Charles Schwab & Co., Inc. opened for market Wednesday morning “almost as if nothing had happened,” Lyons said.

Lyons and his colleagues certainly deserved the success they brought to the company. Five people had worked full-time for a little over a year during the planning phase, preparing for just such an emergency. The staff was also backed by a substantial budget and an extremely supportive senior management.

Lyons outlined some of the crucial aspects of the contingency plan. “The backup generators,” he said, “had full power in five to seven seconds, with no noticeable interruption.” After a building inspection and safety checks within the first hour, all non-essential systems were powered down so as not to overload the generators. It also proved necessary to rotate outages of certain equipment in order to maintain essential functions without causing an overload.

Since no one, including PG&E, knew when power would be restored, arrangements were then made to relocate employees to a nearby cold-site. The vendors at this site were capable of providing ample space, and the necessary supplies could be taken from a warehouse where they were stored nearby.

Employees were prepared for this relocation since ten days earlier they had successfully connected this site to the East Coast hot-site. At the vendor’s site they had also tested scripts for over 200 business functions.
Although linking the two backup sites alone was feasible, Schwab decided during the emergency to run the systems parallel and link the nearby cold-site to their headquarters production system. This extra precaution proved costly, but, as Lyons affirmed, “It was worth it.”

The Business Resumption Plan provided names and numbers of key personnel and detailed department lists of job functions and their criticality. From these extensive spreadsheets Schwab decided which non-essential operations to redirect and which employees to relocate to the time-critical operations which were to take place at the cold-site. The plan also contains information on how to notify branches of the emergency and provides a list of key personnel during an emergency.

Several employees were also needed to deliver the backup transaction tapes to the East Coast hot-site. Since all the airports in the area were out, a jeep was arranged to deliver them to Hayward, where they then chartered an aircraft for the first part of their journey. Lyons and his colleagues compiled telephone numbers of all surrounding airports, their charter information, runway restrictions, and the names and numbers of the airport managers. This important section of the plan also listed hotels and car rental information.

The Emergency Control Center contains an extensive employee locator file. These numbers are sorted by department as well as by area code, which proved useful since the sporadic phone lines often prevented calls within the area of the branch office, only permitting those outside the area. Frequently, personnel were forced to call outside the area in order to relay information to those within it.

The Emergency Control Center also provides extensive information on operational requirements and strategies, resources, telecommunications, and emergency financial arrangements. In addition, organizational charts provide information on management and staff backups and reports.

This seemingly excessive organization carried its privileges, for Schwab was frequently the only firm allowed access to certain closed buildings. As the security guards reportedly explained to another firm, “They have a plan. They know what they’re doing, they know exactly what they need, and they’re organized. If you want access, get a plan.”

Lyons praised the amount of assistance that the firm was able to provide for its employees. By Wednesday evening the Human Resources Department was working closely with employees who lost their homes. The department organized assistance programs, found lodging in apartments and hotels, and worked to get grants for furniture and clothing.

The firm also provided for employees who were stranded in the building Tuesday night either because they did not want to drive home in the dark or because they could not cross the bay. Two floors at the headquarters office were cleared and prepared for as much comfort and space as possible.

Growing hungry towards seven or eight that evening, the firm’s security personnel raided the cafeteria to help feed stranded employees. Schwab opted to hold off on the emergency food supplies, however, not only for rationing purposes, but also because “the food tastes awful and you don’t want to eat it unless you have to,” Lyons said.

Later that night, a senior executive offered to bring more supplies. Although the firm had radios, he brought battery-operated televisions (which have subsequently been stocked), flashlights, more food, and also personal hygiene supplies—toothbrushes, mouthwash, combs, etc.

The firm purchased similar personal hygiene supplies for the employees relocated to the nearby backup cold-site. Clothing, however, was more difficult to manage, but the firm did manage to provide Schwab T-shirts for the entire group. Rooms and meals were provided by the firm at a nearby hotel.

By making these extensive efforts, “the company gets a payback in the strength of its employees,” said Lyons. This comes in the form of loyal employees and a low turnover rate for Charles Schwab & Co., Inc.
The overwhelming success of the contingency plan speaks for itself, from the concerns of the employees to the overall recovery of the firm. Senior management, however, also benefited, especially from the plan’s conciseness and simplicity.

“We decided it would be too difficult to plan for every possible disaster: fire, flood, earthquake, etc.,” Lyons said. “So what we wanted to do was put together an informational tool, a checklist designed to help the executives THROUGH the disaster.” Senior management at Schwab reportedly found this approach extremely useful.

Lyons and his colleagues developed a basic checklist which, although it did not make decisions for them, helped executives assess and control damage. One strength of this approach was the elimination of unnecessary information. It contained plan reference numbers which, when accessed, provided specific details of the plan as needed. Executives felt comfortable with this approach.

Some of the items on this checklist provided information on customer service issues, such as how to pay customers and how to keep records during an emergency. These issues are of special concern since Schwab places such great emphasis on customer service.

A section of the plan also contained information on media and public relations issues, and, after examining executives’ needs, Schwab developed a daily briefing format.

In summary, Schwab designed a plan which recognized both employee needs and customer service as top priorities and allowed a freedom to improvise in meeting those priorities. Equally important, the plan proved extremely usable, containing a maximum of organization and a minimum of superfluous information.

Schwab has also considered canceling the next unannounced test. After all, since the plan proved successful during the actual emergency and also in the test ten days earlier, it seems unnecessary. Charles Schwab & Co., Inc. was, in fact the only brokerage firm in operation the day after the quake.

“Some of the branches down the peninsula were closed for a day,” said Lyons in closing, “but all of our bay area branches were open by 6:30 in the morning...you couldn’t even tell we had an emergency.”


Richard Newman is a staff writer for the Disaster Recovery Journal.

This article adapted from Vol. 3, No. 1, p. 16.

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