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Christchurch earthquake business recovery – the months ahead

Obviously the next week’s priorities for the authorities are to rescue as many survivors as possible, to restore power, water and waste water to as many households as possible, and to put in place public health measures to avoid disease: I gather that the hospitals are gearing up for an epidemic of dysentry and other illnesses caused by insanitary conditions. Personally I’ve been really impressed by how rapidly the Civil Defence organisation has mobilised and begun working through their disaster management plans. And I’m really impressed by the guys from Orion (local power lines company) who were still working in our neighbourhood until 9:30pm last night to get the power on before the end of the day: Roger Sutton doing an excellent communications job in the media as the figurehead for what is obviously a world class organisation with many high quality people.

However, given that what I do for a living is help businesses (especially technology businesses) think about their long term strategy – where they want to be in a few years time, and the roadmap from here to there – suddenly I’ve  found myself with more spare time on my hands than usual now that everyone’s immediate focus is action and disaster recovery management. So, in an attempt to make myself feel useful,  I have gathered my thoughts in the next few posts on how Christchurch’s businesses can plan their recovery over the next months given the unique circumstances. Given that we’ve already had a pretty serious “dress rehearsal” in the September 4th quake, I think Christchurch businesses can actually go into the next few months relatively prepared for the challenges ahead.

Key operational challenges:

Commercial Premises:

The CBD has been flattened, and many offices have sunk into the ground due to liquefaction. Similarly some suburbs. There is going to be next to no available office space available for months at least, probably years. It’s going to take at least a year for resource consents to filter through – and another year to start rebuilding properly: IMO *every* new building needs to be up to the structural standards of the Art Gallery (all glass and not one broken pane)!

In addition, it’s probably going to take weeks to clear up the CBD enough to remove the cordon and curfew: any businesses with premises in the CBD (including my own business Memia) is going to have to do without office access for almost all of that time.

Initially some businesses will be able to operate with staff working from home – however, most Christchurch businesses need a rapid solution from this month onwards – what are our options?

Staff welfare and availability:

Staff will be stretched to the limit: as the news filters out over the next week, almost all of us will know someone who has not survived the quake. So many people have lost their homes, their livelihoods and their possessions, and insurance payouts will take months. People will be staying and living on top of family and friends, children are going to be off school for weeks and needing childcare. We’re all going to be using portaloos and standpipes for months.

Once the initial emergency has subsided, staff are going to need flexibility of hours, part time work options, and more intense welfare provisions. And despite the blitz spirit, we should expect  productivity will fall well below normal.

Travel and transport:

Throughout the whole city, the roads are, in NZ parlance, “munted”. The threat of remaining buildings falling down will mean that one-way systems are put in place, shipping containers stacked on the roads and it’s going to take much longer to get from one part of the city to another: again, this will impact on productivity.

The state of the Port of Lyttelton and the tunnel are unknown currently – it may be that the region must operate at reduced shipping capacity for a number of months which could drive up delays for replacement plant arriving from overseas.

Are there any solutions we can take to minimize the effect that transport disruption is going to have on the city’s economy?

IT Systems:

Anyone who is still running on-premise IT systems (whether it’s an email server stuffed under a desk or in a secure airconditioned data centre facility) will have been challenged by this recent quake. Business continuity and disaster recovery plans will have been tested to the limit and IT systems may now be offline for many businesses.

Expensive new servers can take days or weeks to arrive from suppliers, and then need to be installed and configured. Alternatively the option is now there to move systems completely offshore and into the “cloud”, and take advantage of modern internet-based applications which work well either on a PC or a smartphone for a fraction of the cost of traditional solutions. How do businesses decide which systems to replace and manage to get new IT systems up and running rapidly?

Financial:

Finally, businesses are going to be holding on to their cash to see them through the crisis. From experience, we know from back in September that Government noises about stepping in to support local businesses are unlikely to yield substantial cash relief for any period of time. Businesses are going to put long term plans on hold, which means no planned spending. As a result Christchurch businesses are going to need to watch cashflow like hawks and try to secure debt facilities to tide them over until the insurance cash starts to really flow in 3 months’ time. It will be survival of the leanest and we should fully expect that lots of businesses will go under.

Optimism?

Despite all of the above, I still see major potential for Christchurch to rise up from this disaster and invest in an innovative and prosperous future. This is my adopted city, where my children are happily growing up, and I for one am here to stay.

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