First-hand lessons from Christchurch (Pharmacy Today – June 2011)

In February, Markhams charted accountancy firm’s Christchurch office was displaced from its CBD building. Within two weeks, the office was back on deck helping clients from a new location in Christchurch. This month, the human resources manager from that office, Pauline Loach-Ponga, talks about how Markhams handled the crisis and shares some of the wisdom gained with the pharmacy sector.

Markhams Christchurch Ltd is a long-established chartered accounting firm, with five directors and a team of 35 accountants and administrators. Before 22 February, the Christchurch team worked from offices on the top floor of a six-storey building in the CBD.

On Tuesday 22 February Christchurch was hit with a 6.3 magnitude earthquake. We immediately evacuated our building. All team members were accounted for. Vital business assets – client records, data, paper files and our computer server – were trapped in the office.

Within two weeks of the quake we were back in operation helping our clients. Now, months after the event, we have completely re-established our business at a new site. We have achieved this in spite of having no access to our old building, no paper records, no reference material and no computer hardware.

The recovery process – what we did

The day after the earthquake the directors met to come up with a plan of attack. Areas of responsibilities were allocated based on upon previously established management groups.

The first step was finding new premises. Approximately 6,000 businesses had been based in the CBD. Nearly all were looking for new premises outside the city centre. We located a building in the north-east suburb of Shirley. The office fit-out happened over a two week period.

Next was getting our computer network operational. We have had to reconstruct much of our IT from scratch – new computers, fibre-optics, etc. Competition was fierce – for IT support, telecommunications, computer hardware etc.

It was important to keep the team fully informed of our progress and their options. Three team members left Markhams as a direct result of the earthquake.

Keeping in contact with our insurance agent and broker was important, including determining what costs would be covered, whose policy covered what damage and answering the question of “when is an inaccessible asset written off?”

Clients were hearing rumours circulating that our company was closing! This was immediately addressed by emailing our clients and placing an advertisement in the Christchurch Press. Directors have made personal contact with almost all of our clients.

It’s important to have a disaster recovery plan

Define who and what is vital to the success of your business. What is the absolute core information, team and assets you need to set up your business from scratch over a two week period? A disaster recovery plan should be reviewed and updated on a regular basis – perhaps annually at the time of your insurance review.

Premises

Have you considered the structural integrity of your building – would it stand up to an earthquake, cyclone or flood? What is your emergency evacuation plan? What would you do if you couldn’t secure your premises? How would you secure medicines, drugs and cash? What would you do if you couldn’t access your building for several months?

People

If you lost key people (particularly pharmacists) – how would you continue to serve your customers? Do you have contact details for all your people? Do you have a disaster recovery or redundancy clause in your employment agreements?

Customers

Your customers rely on you for medication and advice. How would you keep confidential information secure while continuing to provide a vital service for your customers?

Information systems

Define what your computer system actually contains, eg, client database, client records, financial information, stock records, payroll, website and firewall. Identify your IT assets, eg, your phone system, printers, copiers, scanners, eftpos machines. Understand what your emergency backup does, will it allow a controlled shutdown, remote access, online storage? Ensure a backup of your information, either by keeping it online, or on a mirror server in another city.

Stock

Keep stock records accurate, current, accessible and backed-up. This will assist if you have to make an insurance claim. Keep all broken stock items for inspection by your insurers. You may be able to dispose of some damaged items, if they are perishable or dangerous, but inform your insurer first. What might a disaster mean for your sales mix?

Suppliers and advisors

Identify key suppliers and advisors – insurance, building, accountant, lawyer, bank, medical/pharmaceutical supplies, cosmetic and other stock supplies, computers/servers, electrical faults/cabling, phone system, general IT, leases, telecommunications etc. Have their contact information recorded; keep a good working relationship with them. Their assistance could be invaluable.

Insurance

At least annually, consider whether your insurance cover is adequate for business interruption, stock and other assets, buildings and vehicles, public liability, and loss of a key person.

Understand what your insurance policies will cover, for example, what if your building and stock is fine but the roads or shops around you are so damaged that you have no customers for several months?

Succession plan

What happens if either you, or your business partner, die? Does your agreement include a valuation process for your business, in case a deceased shareholder’s estate has to be paid out? Do you and your business partners have current wills and powers of attorney? Where are paper and electronic copies of key documents held?

Things to remember

No news is bad news

In a disaster, no news means people will assume the worst. Keep contacting clients, team, and suppliers. You will learn what your customers need and what your competitors and suppliers are doing.

People want to help

An enormous amount of assistance was offered within hours of the quake. Don’t be afraid to ask for help

Be proactive

Push for information, assistance and access. If you are too passive, you may be excluded from decision-making processes that impact on your business.

Look for a silver lining

You might enjoy an enormous increase in turnover. What will your customers need that you can supply?

Think about these issues now

There are plenty of models for disaster recovery plans; do some brainstorming with your key people now. Markhams’ key lesson is it is a lot easier to think objectively when you’re not under the pressure of an emergency.

Published in Pharmacy Today by Pauline Loach-Ponga, June 2011

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