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The Workday After Tomorrow
What happens when business as usual is impossible? When millions in the Northeast lost power, cell service, Internet access, and running water due to Superstorm Sandy, companies scrambled to find the answer. Some improvised on the spot: Keith McNally’s New York City bistro Balthazar grilled steaks and served lobster on Prince Street, while Katz’s Delicatessen sliced up sandwiches by candlelight. Manhattan’s Equinox fitness clubs started a second business, selling showers for $35 a pop. Large financial firms such as Goldman Sachs (GS) began relocating staff and workloads from New York to offices overseas, and tens of thousands of workers turned to the cloud, working from home—or Starbucks (SBUX). Meanwhile, Tim Webster, a customer enablement manager at EMaint Enterprises, an info-tech company in Mount Laurel, N.J., found himself in a Florida Wal-Mart (WMT), picking out a Captain America costume for the company’s impromptu Halloween party. “It’s hard to complain,” he says. “I mean, it’s a bit cold this morning. Maybe you need a light jacket?”

Webster was one of five employees flown down to EMaint’s satellite office in Estero, Fla., on the Saturday before Sandy hit, as part of the company’s business continuity plan. “It looked like we were going to get battered here in South Jersey, with mass power outages and trees down, and we have customers worldwide,” says Jon Hollander, executive vice president of operations. “So we decided to send five of our core-function employees for an expense-paid vacation in sunny Florida.”

Thanks to data stored in the cloud, the company was able to provide service to its clients without interruption. But Webster (who insists “it’s not a vacation—I’m still working”) is still playing it safe. “I’m staying out of the sun,” he says, noting how weird it’s been to see his colleagues wearing shorts.

Illustration by Marcos Chin

World economic losses to disasters totaled an estimated $380 billion in 2011, and nearly every major company now sets up detailed continuity and mitigation plans for everything from terrorist incidents and nuclear attacks to pandemics like bird flu. A cottage industry of in-house sky-is-falling professionals and glass-half-empty consulting firms has sprung up to deal with this need. And as companies become more reliant on digital data and geographically diverse locations, their strategies must evolve, too. “For instance, people don’t warehouse parts anymore,” says Ken Burris, chief executive officer of Witt Associates, a crisis management consultancy. “They rely on just-in-time delivery. But when there’s that hiccup in the supply chain, they’d better have multiple contingencies in place, or work stops.” And Burris points out that the implications are often dire: “Statistics show that, of small businesses impacted by disaster, about a third don’t recover.”

The biggest difference between recent disruptions and those only a decade ago shows up in businesses’ increasing faith in cloud computing, which was sorely tested by Sandy. As Lower Manhattan was swamped, major media companies such as Huffington Post, MarketWatch, and Gawker saw their sites go offline as water flooded the basement floors of the Datagram server building. Gawker Media eventually improvised by redirecting Gawker, Gizmodo, and Deadspin to temporary Tumblr blog pages. “If we’re the indestructible cockroaches of the media world,” Gawker founder Nick Denton e-mailed his staff, “now’s the time to show it.” Still, the network lost nearly all its advertising opportunities, save a cheeky “Back Up Site Covered by State Farm” plug at the top of each site’s Tumblr home page.

Peer1 Hosting, a Net outfit based in Lower Manhattan, thought it was in the clear—it had generators on the 17th floor ready to keep the data servers humming. But when the fuel pump in the basement was flooded, Peer1 was unable to get the necessary diesel fuel upstairs. So it improvised, too. “We had a team of 30 people getting buckets of diesel fuel going up 17 floors to keep the generator working and our customers online,” says Rajan Sodhi, Peer1’s vice president of marketing. Employees hoofed it up darkened stairwells for more than 48 hours, replenishing the tanks.

Shawn White, vice president of operations for Keynote Systems, which monitors online access, says many companies have turned to the cloud primarily for cost savings, not safety. “If you’re going to be in the cloud, you have to make sure they have options for multiple data centers in a geographically distributed base. It’s extra money, but that’s the cost of a robust continuity plan,” he says.