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TechWatch: Corporate Technology Response to Disasters

Natural disasters recently proved they are much more powerful than our modern technology when the tsunami struck Indonesia and Malaysia, the hurricanes hit the Gulf Coast of the United States, and the earthquakes devastated parts of Pakistan and India. But these same events demonstrated clearly that technology can play a significant role in providing warnings as disasters develop, as well as dealing with the cleanup on the other end.

Large corporations may be the best vehicles to deliver this technology, particularly in the cleanup phase. Can large corporations, so focused on returning shareholder value, play such a role with their technology? That’s the question I explored with two of the largest technology-based corporations in the world: Microsoft and Wal-Mart.

Technology at Wal-Mart

Most people understand the role of Microsoft as a large technology-based company. But Wal-Mart? How does this giant retailer fit in?

In April, I had the opportunity to make a visit to Wal-Mart world headquarters in Bentonville, Arkansas. I was able to visit their “Saturday morning meeting” where the key executives of the company review the weekly performance of their numbers across regions and products. While some companies struggle with quarterly results, or monthly results, Wal-Mart, exploiting very sophisticated IT systems, reviews its data weekly. Further, when CEO Lee Scott had a question about any result and wanted to probe further, presenters usually had the information. When they didn’t, within a few minutes the presenter came back with the data requested. There was a powerful IT system supporting these leaders.

Later, we visited a distribution center where another form of very sophisticated technology was demonstrated. The warehouse contained almost 300 bays, where trucks from vendors backed into one end, and goods for particular stores were sent out from the other end. As pallets were unloaded from the vendors, they were split up and loaded onto conveyor belts. Each package contained a barcode. Ultimately, these packages came to a giant merge at the center of the warehouse, and then were automatically shunted onto belts bound for the other end. As the conveyors moved at the speed of a very fast walk, the parcels were sent down one conveyor or another to a waiting truck, pushed off the main track by an automated arm. Our guide said it took about 25 minutes for a package to travel from the vendor truck to one of the trucks being loaded for a particular store. This logistics capability, to deliver the right goods to the right store at the right time at low cost, is part of the Wal-Mart distinction.

The headquarters building is a very modest one floor brick building with a wooden sign indicating the worldwide headquarters of Wal-Mart. The CEO’s office is in the corner, with no sign of barriers or other security measures, though there was plenty of security inside. The computer center is another matter, with concrete barriers surrounding the entire building There is a clear message that technology is the life blood of the company and worthy of extraordinary protection.

Technology for Natural Disasters

In Indonesia, technology was not in place to provide warning for the tsunami, and the tidal wave struck with no warning at all. Yet the technology exists to provide that advanced warning. This disaster was the catalyst for testing such systems in other parts of the world, demonstrating that not all were ready. The painful aftermath from the tsunami should inspire implementing or fixing systems around the world. No such technology has yet been developed to forecast earthquakes.

This was not the problem with the hurricanes. The nightly news carried ominous satellite pictures for the days before Katrina and Rita touched shore. That preparation was lacking, particularly in the case of hurricane Katrina, was not due to technology but people systems.

It’s the cleanup side of these disasters that provides opportunities for technological innovation. There are several levels of response that corporations can provide at the time of natural disasters:

  1. Encouraging their employees to contribute money.
  2. Contributing cash from the company.
  3. Contributing company products.
  4. Offering the services of people in the organization, or modifying production to particularly needed products.
  5. Tapping into the creative skills of the corporation to provide relief solutions.

The first three areas are the easiest. An individual’s easiest response to a disaster is to write a check or give away excess blankets or clothes. For either an individual or a corporation, these are very good things to do. Ask any relief agency. Both Microsoft and Wal-Mart, and many other corporations, did very well in these categories.

Moving to item 4, it is more difficult, because it may interfere with the production of the company. But as important as this is, it could be argued that this is just good marketing responding to changing needs. Microsoft and Wal-Mart also did well in this category.

Microsoft and Wal-Mart Responses

Microsoft worked with Intel, Dell, and Innovia to provide computing capability to people who lost contact with loved ones. This included the donation of computer hardware and software. In addition, “Microsoft Across America” buses with communications technology went into the hardest hit regions to provide communications. Many of the people had never used a computer before, so the Microsoft employees did the data entry to allow people to communicate with others and get access to information, according to Senior Vice President and CIO Ron Markezich.

Wal-Mart also contributed in this area, according to spokesperson Christi Davis Gallagher. “Where disasters can be anticipated, Wal-Mart prepares in advance to be of immediate assistance,” she said, adding these examples: Truckloads of critical merchandise are shipped to the area in advance of a predicable weather incident — things such as water, ice, and many items families and businesses need in an emergency situation. Depending on the situation, these items are sometimes made available to storm victims free of charge.

In addition, Wal-Mart also tracks the merchandise that customers buy more of before and immediately following a disaster. Additional supplies are routed to the area to try to meet demand.

I asked both companies how they explain these acts to their shareholders. “It was the right thing to do,” said Pamela Passman, vice president and deputy general counsel for Microsoft. “Companies are made up of human beings. The technology is critical to disaster relief, and we wanted to step up and help. Of course, our relationships with other companies and agencies is always multidimensional. Red Cross is a customer, as are many other agencies. We learn a lot in these situations as well.”

Spokesperson Gallagher said for Wal-Mart, “Our shareholders expect us to do the right thing. In the event of the hurricanes, that was Wal-Mart’s guiding principle. We have been a part of these communities for decades (our first store in Louisiana opened in 1970), so it is important that we are there now for these communities that have supported us for so long.”

And, of course, they are not alone. In the October 4, 2005, issue of USA Today, an article by Del Jones reported, “Corporations have surfaced from the Katrina disaster looking noble in the eyes of the public and with a swagger that says the next time a city is devastated, the private sector will be there to save lives.”

The article went on to cite Cardinal Health and McKesson for stockpiling medical drugs and supplies near the perimeter of the disaster area, Budweiser for switching beer production to canned water production to be prepared for the water needs of the region, and several other actions. In general, corporations scored higher than governments in their responses.

Creating New Technology Solutions

But the fifth category is where my interest started: Are any of the companies breaking into their key technologies to provide new solutions for disaster support? Is Wal-Mart developing logistics support for disaster relief? Is Microsoft developing software tools to aid the relief efforts? Should they? Here the answer is more mixed.

After asking the question several times of Wal-Mart, the answer finally came back from spokesperson Gallagher, “We have allowed organizations such as the Red Cross to use our empty properties, which are for sale/lease as shelters, staging areas, etc.” Apparently, the answer is no. They generously offered resources, but in the vital area of logistics, they gave no evidence of using their technology to create new solutions.

“Some people had the idea to build a family locator when the need became apparent,” said Microsoft CIO Ron Markezich. “They began working on it before any management approval. When the Red Cross called a number of companies to Washington, D.C., for assistance in the relief response, I represented Microsoft and showed the Red Cross the application our people had already built. The Red Cross immediately responded that this is what they wanted, and adopted the application. (Editor’s note: see Katrinasafe.org.)

“The Groove team that develops our collaboration technology, worked with the Army Corps of Engineers to set up the ability to collaborate over distance,” continues Markezich. “The Corps already had a limited contract for licensing the Groove collaboration software, but with no new contract, we provided software and people to create a new communications capability.”

When asked why they did this, Markezich responded, “The company has a responsibility to humanity. At no point throughout the entire process was this question asked how this related to profit. No one said, ‘Get back to your assigned task.’ All this fits directly with our mission ‘To enable people and businesses throughout the world to realize their full potential.’ People need to know they are in this for something more than making money. The big purpose is the key.”

Conclusions

It’s easy to be critical of companies such as Microsoft and Wal-Mart. They are the companies many Americans love to hate. They are more powerful and control more resources than many nations of the world. Simply being big is enough to draw criticism. Some well-documented failures don’t help either! But as usual, assessing companies is not so easy. It is important to call companies to account when they fail, but equally important to celebrate successes when they occur. In the wake of response to Hurricane Katrina, I believe there are some things to celebrate.

I would rate the Wal-Mart response as a strong B because of their response in the first four categories. I would give Microsoft an A for going to the next level.

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Al Erisman is executive editor of Ethix, which he co-founded in 1998.
He spent 32 years at The Boeing Company, the last 11 as director of technology.
He was selected as a senior technical fellow of The Boeing Company in 1990,
and received his Ph.D. in applied mathematics from Iowa State University.

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