When The Big One Hits

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Your store will be hit by a .u pandemic that sidelines a third of your workforce for three weeks. Your revenues will drop by 10 percent and the gross domestic product by five, as the American economy gets a $200 billion haircut.

Or, none of that will happen. Confused? Welcome to the club.

Health professionals are having a tough time forecasting the next move of an especially dangerous avian .u strain known as H5N1. This virus has distinguished itself from the run-of-the-mill seasonal .u we get every winter for two reasons: First, it has killed a large number of domestic fowl in Asia and Europe. Second, over 60 people who have contracted the virus — many of them young and vigorous —have died.

While it may seem like a "that will never happen here" scenario, it can't hurt to have a plan that will guide your response to a full-scale disaster, and will also help with a bad case of seasonal .u or other disruption.

So far, humans have only gotten sick through contact with domestic birds such as chickens. That's good, but things may change. "We are looking closely at H5N1 because there is a potential for it to become a pandemic strain if it starts to move between humans," says Dan Rutz, a spokesperson at the Washington, D.C.,-based Centers for Disease Control and Prevention (CDC). "The biggest problem is that we just don't know if or when that will happen."

A possible bird flu pandemic, then, is one more item to add to the unhappy list of disasters that can lay waste to the best of operations. The sobering numbers in the opening paragraph of this article were taken from a report issued in December of 2005 by the Congressional Budget Office. (See sidebar, "Keep Informed.") Given the possibility of a severe disruption to your own business, now is a good time to formulate plans that will help you recover following a devastating event, whether it's the bird flu or some other disaster.


Buildings and data assets protected by conventional disaster recovery plans will be little affected in the event of a flu pandemic. The vulnerable targets this time will be people, and steps must be taken to protect them.

Your disaster recovery plan must be practical and detailed enough to be ready to go without delay should a pandemic strike. "With global airline travel as prevalent as it is today, it may be virtually impossible to keep the .u pandemic from spreading quickly," points out John B. Copenhaver, president and chief executive officer of Washington, D.C.,based DRI International, an organization which certifies contingency planning professionals. "So you may not have a lot of time to execute your plans." (To assess the viability of your own program, see the sidebar, "Will Your Plan Work.")

When designing your plan, refer to the excellent starting template developed by the CDC. Visit the federal government's official flu information site at pandemicflu.gov. Click on the "Business" tab and then on the link for the "Business Pandemic Influenza Planning Checklist." The checklist is extensive, but here are some key elements:

  • Identify employees essential to the maintenance of operations.
  • Train and prepare ancillary workers.
  • Establish an emergency communications plan to include key contacts and processes for tracking business and employee status.
  • Determine the potential impact of a pandemic on company financials.
  • Implement guidelines to modify the frequency and type of face-to-face contact (e.g. hand shaking, seating in meetings, office layout, shared workstations) among employees and between employees and customers.
  • Establish policies for telecommuting and staggered shifts.
  • Establish policies for employees who have been exposed to pandemic in.uenza, are suspected to be ill, or become ill at work.


When a significant part of your workforce is home with the flu, crosstrained employees can go a long way toward keeping you in business. If employee A is absent, employee B should be able to substitute. Of course, saying's easier than doing. While many retailers have some level of cross-training in place, developing a formal program can be difficult. Many times employers face resistance from workers looking to protect their personal turf. People want to retain their unique skills that help guarantee their jobs.

Promoting employee self-interest can help overcome such resistance. Cross-training is an easier sell if you can say, "This will help the store survive and preserve your job if and when disaster strikes."


In the event of a flu pandemic, lack of preparation can result in costly panic. "Picture yourself in a situation in which someone walks into your store, pulls a handgun and demands money," suggests Jeffrey Williams, president of Binomial International, a disaster planning consultancy in Ogdensburg, N.Y. "At such times you are not thinking about the state of your 401(k); you are thinking about what steps you will take to survive the next couple of seconds." The same mental attitude, suggests Williams, will result with the arrival of a pandemic. Rather than looking around for your disaster recovery folder, you will need to take appropriate steps automatically.

Prompt response requires prior planning. To bring home the severity of the challenge, Williams suggests trying this disaster drill: One morning have each employee draw a card from a deck and send home everyone who draws a club. Then, with 25 percent of your work force gone, announce "now we will exercise our disaster plan." What will the reaction be? "People freak out if they do not have a workable plan ready to go," says Williams, who has run the drill many times. "They find they cannot operate their business. Well, the same thing will happen if their work force is hit with a flu pandemic."


Your plan should also contain procedures to obviate liability for negligence if customers and visitors contract the flu from employees. Given the idiosyncratic nature of a pandemic, though, it is unclear at what point a retailer is in danger of being sued.

"We have not had enough recent experience to make it readily apparent how a jury would impose a civil or criminal penalty," points out Copenhaver, who is a licensed attorney in Georgia. "The big question is, how do you come up with an articulation of duty of care. The courts will ask what a reasonable person would have done in the case of a pandemic, and the answer to that question really takes us into uncharted territory."

At the very least, your disaster plan should include policies designed to minimize the risk of transfer of the virus from employees to customers. Local health officials may recommend steps such as sending ill workers home immediately, reducing hand shaking and the donning of face masks.


Because the H5N1 virus is undergoing mutations, and virus behavior varies by form, developing a prudent response to a pandemic is more of a work in progress than a cut-and-dried affair. The best you can do is monitor announcements about the virus's advance and respond appropriately to recommendations.

Stay in touch with your state and county health authorities who will update you on government policies and suggested responses in the event of a .u pandemic. "Your local health officials will discuss 'what if' scenarios," says Copenhaver. "If there is an outbreak of bird .u, what does the public sector plan to do in terms of vaccine distribution and quarantine, for example?" That last matter is an important issue. "A quarantine will obviously keep some employees from getting to work," warns Copenhaver.

While no one can specify with any accuracy the social and financial impact of a .u pandemic, prudent retailers will keep an eye on the news and develop appropriate recovery procedures. "For every dollar you spend trying to prevent a disaster you save $4 later when an event occurs," says Donald L. Griffin, vice president of personal lines at the Property Casualty Insurers Association of America, Des Plaines, Ill. "So it's wise to be proactive now and put policies in place that will insure your employees maintain good health practices in the event of a .u pandemic."

Keep Informed

A bird flu pandemic, if it occurs, could have a devastating impact on any retailer. To be informed is to be prepared. Stay up to date with these Web sites:


This is the official federal government Web site devoted to avian influenza and flu pandemic. Click on the "Business" tab for information.


The Congressional Budget Office Web site offers a report on a flu pandemic's anticipated effect on American business. See "A Potential Influenza Pandemic: Possible Macroeconomic Effects and Policy Issues." (December 2005)


The Centers for Disease Control and Prevention (CDC), part of the federal government's Department of Health and Human Services (HHS), maintains this site devoted to health issues for business owners.


The World Health Organization's site is your first stop for the latest information from scientists tracking the virus strain that may cause a pandemic.

Will Insurance Help?

Will "business-interruption insurance" cover your losses when a large number of your workers are out sick. Probably not, says Donald L. Griffin, vice president of personal lines at the Property Casualty Insurers Association of America, Des Plaines, Ill. "Typically, business-interruption insurance requires that your business has been shut down because of some sort of property damage caused by disasters such as wind storm or fire. The losses incurred from a bird flu pandemic would not likely be covered since the sickness does not involve property."

Consider an alternative scenario. Suppose one of your key suppliers has to shut down because its workforce has contracted the bird flu. Will you be covered by any "contingent business-interruption insurance" that you might hold. Again, Griffin says the answer is likely no. Such insurance, while designed to reimburse you for losses incurred when your supply chain dries up, is subject to the same condition as business-interruption insurance: The losses must be due to property-related damage.

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