David Giraitis, CBCP, SAIC for the
Office of the Secretary of Defense Y2K Contingency Planning Office

Oil Industry & Y2K Contingency Planning Challenges

• Similar attitudes exist:
• Major accidents might happen, but not to us.
• With all the risk reduction efforts made, contingency planning is not that important.
• The problem could occur anywhere - it is impossible to plan a detailed response.
• Can similar results can be expected?
• Poor execution of response (real or perceived) multiplies the cost several times.
• Proper planning & training is the best way to ensure effective response

Y2K Crisis Management - Purpose of Presentation

• Explore Y2K Organizational Management Concepts by reviewing a typical Corporate Crisis Management System
• Distinguish between Impact Management and Consequence Management
• Review the basics of the Incident Command System as it applies to Impact Management
• Illustrate these concepts with a basic Y2K Scenario

Corporate Crisis Defined

• CRISIS: An event that fundamentally changes the way the corporation conducts its business, due to situations which must be resolved in order to return the organization to "normal" business operations.
• May result from natural causes or be man-made, such as:
• operational "accidents or system failures
• business situation or political changes.
• Note the parallels to many projected Y2K worst case situations.

Impacts & Consequences

• IMPACTS are the immediate, localized effects resulting from the events which caused the crisis.
• CONSEQUENCES are the broader, far ranging effects which result from the original events. They may occur immediately, or some time later.
• Impacts and Consequences may be best managed by different groups. The petro-chemical industry provides a good example.

Examples

• Likely IMPACTS of a Petrochemical Industry Crisis
• Large quantity of oil or a hazardous material released to the environment
• Resulting contamination; injuries to persons, property and wildlife; shutdown of associated plant operations, evacuations, area closures, etc.
• Likely CONSEQUENCES
• Lawsuits; Losses of Market Share, Customer Confidence, Shareholder Confidence, Employee Morale; Competitive Advantage.

Typical Corporate Structure

• Typical Organization of a Large Petro-Chemical Company
• Single Corporate Headquarters - Includes Services shared by the business units.
• Business Units with Headquarters
• Exploration; Production; Refining; Chemicals; Transportation; Marketing
• Field Units
• Production Platforms; Storage Facilities; Refineries; Chemical Plants; Pipelines; Tank Vessels; Retail Outlets

Corporate Crisis Management Organization

• Crisis Management Team (CMT)
• Senior managers at Corporate Headquarters
  • assess the consequences
  • Provide strategy and direction
• Incident Support Team (IST)
• Managers at the Business Unit Level
  • Supporting impact management activities occurring at/near the site of the disturbance
• Incident Response Team (IRT)
  • The organization at the scene of the triggering events, directly responding to the impacts

Interactions within Typical CM System

• CMT maintains "big picture" and does not micromanage IRT actions.
• CMT provides high level strategy
• CMT changes out IC if not satisfied
• IST operates proactively, seeking to anticipate IRT needs without bombarding IRT for information requests
• IST acts as liaison between IRT & CMT, prepares briefings for CMT meetings
• IST seeks to perform remotely as much as possible to allow IC to focus on incident

Incident Response Team Management

• The Incident Command System (ICS)
• A management technique used for on-scene impact response management
• Developed from a functional analysis of tasks that are performed in all response situations
• Command; Operations, Planning; Logistics and Finance/Administration

Basic ICS Functions

• COMMAND - the "Incident Commander" provides overall direction & guidance.
• OPERATIONS - employs on hand resources, executes response tactics
• PLANNING - Assesses scope, researches solutions, proposes strategy, develops tactics
• LOGISTICS - Tracks and supports all resources used in incident response
• FINANCE/ADMINISTRATION - performs all cost & personnel administration duties

Benefits of ICS

• Uses a single "Incident Commander" but adopts to Unified Command
• Easy assimilates personnel from multiple assisting organizations
• Based on "military" principals
• Uses standardized terminology, position descriptions
• Interfaces with most civilian response management systems
• Organization easily ramps up/down to meet situational needs

Y2K Scenario

• Due to power & infrastructure failures, a data center supporting a mission-critical system for a DoD agency loses connectivity with most remote sites
• Contingency Plan calls for manual processing of input data using local terminals.
• Several hundred temporary workers require support, but local community is beset with its own problems due to loss of power.

Y2K Scenario Requirements

• A mechanism to organize and support several hundred temporary workers.
• A mechanism to effect restoration of outside connectivity.
• A mechanism to inform all affected system customers.
• A mechanism to analyze & strategize how mission will continue at acceptable levels during period of disruption.

Possible Solution to Y2K Scenario

• Agency Crisis Management System Activated
• HQ Crisis Management Team deals with Consequences
• Agency Business Resumption Team fills role of Incident Support Team
• AIS Facility Director uses ICS based structure to manage local operations.
• Assisting organizations assigned supporting roles within the site ICS Organization.

Self Assessment Questions

• Does your organization have a viable crisis management system?
• Does it distinguish between impacts & consequences?
• Will it interact with other organizations?
• Are positions & terminology standardized?
• Are roles & responsibilities understood?
• Do field units & HQs understand each other’s roles?
• Has this been validated against Y2K scenarios?

Copyright 1988-2012  Richard Collins, All Rights Reserved