USGlass -2009 September

Volume 44, Issue 9 - September 2009

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What Would You Do
WHEN DISASTER STRIKES?

by Edward Z. Zaucha

What would you do if you lost a key partner and close friend, along with a $90 million contract already in progress, all within 36 hours?

As glazing contractors, we live with risks every day. In business we try to incorporate as many of these factors as possible into our job schedules and into our bids. But these risks can and do affect our abilities to continue working.

We tend to think that disasters such as floods, hurricanes or fires don’t touch us very often. According to recent statistics from the Federal Emergency Management Agency, there have been 45 declared disasters in 27 states so far this year. 2008 saw 75 disasters in 34 states. As distant as those weather crises seem, however, they are among the many types of disasters that can come crashing into our world at any moment. As one might expect, some of these crises can be business-related, some are personal. However, some are both.

Most of us likely don’t give much thought to taking the time to plan and prepare for disasters in our own businesses. APG International was like many other glazing contractors that didn’t give potential disasters any thought and, certainly, we did not have any crisis management plans in place.

I gave Brad the username and password for the webcam and told him to click
on the applicable date on the calendar and then using the drop-down time log to select 7:30 a.m.—there was a beautiful clear picture of the nearly completed curtainwall. Next I had him select 8:00 a.m.—the curtainwall was gone.””

Crisis #1
On the morning of September 23, 2007, I was enjoying a lovely fall weekend at the New Jersey shore when I received a telephone call from my partner, Marc Rosenberg, telling me there was a major fire at one of our projects, the Borgata Casino Water Club Tower in Atlantic City, N.J., which was almost 85 percent complete. Within a matter of minutes the entire south wall of the structure was incinerated in a wind-driven fire. The new structure was within a few hundred feet of a very active operating casino.

There are hundreds of thoughts that run through your mind immediately upon receiving news such as this—first among them being life safety. Fortunately, there were no casualties, mainly because it was a weekend, but also because it was still early in the morning.

But the damage was extensive—36 floors of unitized curtainwall were simply gone. Within an hour our management team was assembled onsite to assess the damage, to evaluate our resources and to strategize and plan for repairs.

Defining Your Strength
How a company responds to a crisis can often define its strength, resources and capabilities. We knew that it was critical to the owner, Boyd Gaming, that The Water Club open on time. Summer months at the New Jersey shore are prime time and we were determined to make sure our work was not going to be an impediment to the opening.

Within a few days, the owner, insurance companies and the project team convened a meeting to discuss the repair of the damage. Having already made some preliminary calls, we were confident that we could secure the necessary materials and expedite fabrication so that we could still get the building envelope completed in time for the scheduled opening.

Our company has a different business model than many glazing contractors in that we partner with key suppliers and vendors for the majority of our materials—we don’t chase the last penny of savings in the purchase of materials. We have a strong belief that a supplier’s technical abilities, strengths, resources and teamwork will yield a lower “in-place cost” than the temporary savings a company might reflect in the up-front purchase from inferior suppliers. When faced with a crisis, the true benefits of having an “A-Team” of critical suppliers are apparent.

Securing the necessary materials to replace 30,000 square feet of wall was going to be no small undertaking; at the time, the industry was inundated with work, materials were in short supply and lead times were long.

My first call was to Gary McKissick, president of MK Architectural Metal in North Canton, Ohio, our curtainwall designer and fabricator for the project. Gary quickly contacted his team and assessed their supply chain for the necessary parts and pieces required for the curtainwall replacement. MK was able to shift some production previously scheduled with their aluminum extruder, Bonnell Aluminum in Newnan, Ga., to secure the replacement aluminum materials within three weeks of the fire.

My second telephone call was to Brad Austin, executive vice president of Viracon in Owatonna, Minn. I asked Brad if he was near a computer and, fortunately, he was at his desk. Throughout construction the project had had a 24-hour webcam pointed at it. I gave Brad the username and password for the webcam and told him to click on the applicable date on the calendar and then using the drop-down time log to select 7:30 a.m.—there was a beautiful clear picture of the nearly completed curtainwall. Next I had him select 8:00 a.m.—the curtainwall was gone.

Modern technology is wonderful when it works. “Brad, obviously, we need glass and we need it in a hurry,” I said. Brad said that was the most compelling display of a need that had ever been presented to him. Being the true partner that Viracon has always been for us, they said they would come through with all of the necessary replacement glass within four weeks.

With a timeline for the replacement materials now coming under control, we were able to turn our attention on the clean-up and re-installation. As one might imagine, there needed to be a complete analysis of the structural integrity of the support structure, embeds and remaining materials required to determine the extent of the tear-down and replacement. So as to not impede the schedule, we worked on a parallel track of proceeding with the fabrication and assembly of replacement unitized curtainwall sections while resolving the analysis and engineering.

Fortunately, with a lot of hard work and a lot of overtime, the curtainwall was reinstalled and the project opened very close to the originally scheduled date.

Crisis Management
The adage that hindsight is 20/20 truly applies to this case. In May 2008, the Finishing Contractors Association (of which I was then chairman of the board) conducted a brief workshop on how to develop and manage a crisis communications plan. I had not been the strongest advocate for the program, called How to Stay Cool on the Hot Seat. Many of us attend training sessions and/or industry conferences, and we’ve all likely skipped some of the sessions that just don’t seem interesting or that we perceive as not being worthwhile to us as individuals. I generally always attend the sessions because you never know what you’ll learn. In this case, I’m especially thankful that I did so.

Every company needs to believe that disasters can strike. You need to learn how to assess your risk levels, identify stakeholders and plan how you will communicate immediately. Then you need to run this plan frequently, updating everyone in your company. While these measures will not halt the disaster, they will support your efforts to deal with the crisis and make it easier for you to cope.

Crisis #2
The summer of 2008 was going along smoothly—APG International was well along in implementing its strategic plans domestically and continued expansion into international markets. In addition to our 160,000 square feet of offices and fabrication space in Glassboro, N.J., and 115,000 square feet in Las Vegas, the APG International Group also has overseas operations and offices in England, Germany, Thailand and the United Arab Emirates.

In mid July 2008, APG had well over $200 million of contracts in process in the United States, our backlog was growing and our overseas work also was solid. Although the domestic markets continued to be strong for the first half of 2008, we continued to invest in new markets. Marc Rosenberg (my friend, my business partner and our chief operating officer) and I completed a very successful trip to China establishing our first office in Beijing and returned to the U.S. on July 21. Life was good. Business was good. We were all healthy and looking forward to many successful years.

“Every company needs to believe that disasters can strike. You need to learn how to assess your risk levels, identify stakeholders and plan how you will communicate immediately.”

The Call
On the morning of July 31, Marc, together with one of our young project managers, Alan Barnett, and a team of executives from Revel Entertainment and Tishman Construction Corp., were traveling to Viracon to inspect glass for a major casino project we were working on in Atlantic City. They were then scheduled to fly to Carthage, Tenn., to visit Bonnell Aluminum Co. to inspect the curtainwall metal being extruded.

They never made it.

At 11:00 a.m., I was busy in my office fielding various telephone calls, responding to e-mails and reviewing project reports, when I received a telephone call from Jerry Drake of Viracon. He asked if anyone had spoken with me about the flight. He then informed me that the private jet crashed while attempting to land at a small airport near Owatonna in inclement weather.

The Aftermath
The story was on every major news outlet in the United States and Canada. All eight people aboard the corporate jet died. Those killed were the two young pilots, along with three executives from Revel Entertainment, two executives from Tishman Construction together with Marc Rosenberg and Alan Barnett from APG.

For me, the next 12 hours were the most tortuous I’ve ever experienced. First, there was the uncertainty of possible survivors—then shock and grief—and then the telephone calls from police, detectives, the National Transportation Safety Board, coroners, reporters, news media, etc. At the same time, I needed to contact wives, parents, family members and employees. The search through the wreckage was slow and arduous and further complicated by the fact that there was a great deal of confusion as to who was actually on the plane. (Some people had last minute conflicts and decided to skip the trip.)

Before I could begin to process the news about the crash, the phones at our offices started ringing. Reporters from trade, local and national news organizations wanted statements.

Friends, work colleagues and people who knew Marc and Alan wanted more information. TV camera crews and vans were parked outside of our office for many hours. We were unprepared to respond. Because of that, I spent hours on the phone, many times answering the same questions over and over. I know I was rather abrupt with some people that day, for which I’m sorry; however, the grief and stress was unbelievable.

Fortunately, I had attended the crisis management session mentioned earlier and I immediately called our FCA offices to request the help of our communications director, Amelia Townsend. Her help in handling all of the media and press was invaluable.

Still, as I have since told many people, nothing in our education and training prepares you for the day you need to let loved ones know their family member will not be coming home.

At 11:00 p.m. that night, I left the office to drive home after having completed my last conversation with some of the family members. I was totally drained. When I got home, I poured myself a good stiff drink, fired up a Cuban cigar and went outside to reflect and pray for guidance.

“As I have since told many people, nothing in our education and training prepares you for the day you need to let loved ones know their family member will not be coming home.”

Crisis #3
The very next day, on the morning of August 1, 2008, I arrived at the office and was greeted with a fax letting us know that the $4.5 billion Echelon Resort Project in Las Vegas was being shutdown and all subcontractors were to suspend onsite or offsite activities as of 3 p.m. that day. Our curtainwall contract for the project was in excess of $90 million, and more than $15 million of materials were already on-hand or in production. This was not the kind of news I was hoping for.

The week after the crash, Eric Rosenberg (Marc’s brother and our vice president of construction) and I attended a total of six viewings and funerals in as many days. We also laid to rest our brother, partner and project manager. Eric and I committed ourselves to continue Marc’s vision for the APG Group. There are no words to convey the depth of the loss this tragedy has had for me personally, for our very tight-knit community in Philadelphia/Atlantic City and for the entire APG family.

Crisis Communication Essentials
No one wants to think that the worst can happen to them, but preparing for disaster can be the most important planning work your company does. The Finishing Contractors Association has ten tips for managing a crisis communications plan, or “How to Stay Cool on the Hot Seat”:

1. Believe a crisis can and will happen.
2. Define your stakeholders and build those relationships.
3. Define your brand.
4. Have an agenda.
5. Develop your message.
6. Create a crisis response team.
7. Assign responsibilities.
8. Determine risk levels.
9. Make and run a plan.
10. Evaluate and fine-tune.

Stakeholder Specifics
Before a crisis occurs, you must determine who will be affected by your crisis. Will it be your employees, your clients, your members, the community? Because each crisis is unique, you will have a different primary group in each event, so you may think it’s pointless to identify stakeholders. However, you will want to communicate your event rather than have outsiders do it for you.

The A List
Your crisis response team should have all the qualities of this “A list”:
• Authority: the organization gives team members the authority to make (sometimes) instantaneous decisions.
• Authenticity: the ability to speak and act with genuine believability and sincerity.
• Advocacy: the ability to see and support both the corporate agenda and those affected by the crisis.

Trying to recover from such a dramatic loss is no small undertaking. We lost a key component of our management team; we had a major project that needed to be shutdown; and we were shaken and sometimes overwhelmed. Yet, we still had other projects in development that needed attention. We couldn’t just stop those and put that work and all those people involved in limbo.

Suddenly, I was cast into the role of company spokesperson while attempting to accomplish the work that Marc Rosenberg deftly handled every day. His steady hand had allowed me to focus on the administrative tasks of running the company while donating many hours of time serving the finishing trades as chair of the FCA and as co-chair of the Labor Management Cooperation Initiative.

“Trying to recover from such a dramatic loss is no small undertaking
… Yet, we still had other projects in development that needed attention.”

Seeking Guidance
As I struggled with our tragic loss, I found some guidance in an article published in a local business journal titled How to Weather the Loss of a Leader and Keep up the Mission, by Priscilla Rosenwald, founder and principal of Leadership Recruiters. Her words helped frame my thoughts and helped energize me to strategically focus on the tasks ahead and the need for crisis management.

Some of her points are summarized as follows:

• Recovering after an unexpected loss can be a major challenge for companies and it can happen to any of us. The loss of a leader can strike the very heart of an organization’s motivation and mission.

• Many organizations are tempted to act quickly. However, hasty decisions made immediately after the departure of a trusted leader can have long-term consequences that might not be foreseen in the stress of the moment. Take time to find the right people to bring into the company.

• Take time to chart a course for new leadership. Organizations, like the individuals that make them up, need time to grieve for their loss.

• Stability can be a precious commodity in a tumultuous time; changing too much too quickly can create even more uncertainty.

• Companies should consider unexpected departures as part of leadership succession planning process. Leaders need to plan for their departure. If leaders execute their final leadership responsibility with the same care and attention that they gave while here, their departure can be an inspiring gift to the enterprise and the people in it.

• The final key in a time of change is clear and consistent communication. Creating open and positive dialog with employees, partners and stakeholders allows everyone involved to grieve and then to feel invested in the future of the enterprise.

Edward Z. Zaucha is chief executive officer of APG International Inc. in Glassboro, N.J.