Katrina, the costliest and one of the deadliest hurricanes in U.S. history, roared through southeast Louisiana on Monday, August 29, 2005. That same day, nearly 1,000 miles away in Virginia, Katrina also barreled into the life of Miles Reidy (HNZ'86), a senior vice president of Capital One Financial Corporation. When Katrina hit, Capital One was just days away from finalizing its acquisition of Hibernia Bank in Louisiana.
Instead of Miles' usual responsibilities of managing integration of bank acquisitions, he was thrust into disaster management. "When someone's safety is really dependent upon your actions, you learn the weight of responsibility," Miles says. "It's not numbers, earnings or Wall Street. You realize, as a manager, what responsibility really is."
The Rescue
With levees and communication lines failing in New Orleans, more than 40 people were trapped in a Hibernia Bank data center in the middle of the flood waters. Miles helped develop an evacuation plan using local oil rig helicopters that would drop inflatable rafts and supplies on the roof of the data center. The stranded people would then be able to paddle across the street to a hospital equipped with a helipad. Once at the helipad, the stranded people would be picked up and flown to safety.
The first stage went well, but unfortunately, suspected gun fire caused the helicopters to abort the rescue attempt. Miles and his colleagues persisted however, and eventually obtained special clearance for the helicopters to go back. In the end, every one of the stranded people made it safely to their families.
All Hands on Deck
To locate and assist the 3,100 displaced bank associates who were attempting to evacuate the region, Miles and his colleagues utilized existing call centers and toll-free phone numbers, launched an all-out communications blitz and made on-the-ground searches. The effort resulted in the vast majority of employees being located within a few days.
Many of the displaced employees needed cash and housing immediately, so the company offered financial assistance, housing, furnishings and relocation packages to all of the impacted employees. In a disaster, Miles explains, "you've got to take care of the personal side of your employee's life before you can ask the employee to take care of your customers."
Reflecting on the need for collaboration by many public and private entities during a disaster, Miles emphasizes the importance of "focused leadership." His definition: focusing on the problems and putting all the resources you have on them, without wasting energy and resources on non-mission-critical issues. "It is a huge test of leadership."
Moving Forward
Inevitably, explains Miles, "there's going to be another hurricane, another disaster. There's got to be a way that you take very senior executives—people who have the authority to make decisions quickly—and teach them how to work with their counterparts on the other side of the public/private fence."
For Miles, much of this learning occurred after the hurricane while working with the Small Business Administration (SBA) and legislative aides in the U.S. House and Senate. "When I would go to Washington, I spoke a foreign language, and they spoke a foreign language to me." Miles realized that the private sector and the government can drift apart. "One thing that is critical is finding ways to forge partnerships where you can align public and private organizations to a shared vision."
In Katrina's aftermath, the SBA attempted to hire thousands of people to process the huge demand for relief funds from both small businesses and individuals. The delay caused by this personnel shortage, along with other bureaucratic inefficiencies, was one of the primary drivers of the slow response time that the agency faced. Paradoxically, there was an existing workforce of experienced, trained people already on the ground, the workforces of the local banks. Unfortunately, neither the SBA nor the banking industry had the capability or legislative authority to work together, and the result was an extremely slow response to a national disaster.
As a result of this crisis, Miles has been very active in creating a proposal for legislation that would enable the SBA to utilize local banks to process SBA-guaranteed loans for small business disaster victims. The legislation, currently pending in the Senate, would help the SBA move more quickly to provide a boost of capital to get small businesses – which provide so many of the jobs in an area – back on their feet after a disaster.
Miles also believes that one of the most important things people have to realize in a disaster is that it is impossible to put everything back the way it was. "Disasters pierce the belief that we control our surroundings, and that piercing is very disconcerting, paralyzing people at a time when decisive action is critical." He is concerned that "the more one sits and laments, not accomplishing anything, the more inertia slips in and then it becomes even harder to start up. You can make things better. And, as a leader, you've got to start by making something better, and you build momentum with that," he says.
Crisis Planning
Before disaster strikes, Miles urges business leaders to develop top-notch disaster evacuation and recovery plans for their businesses, and to demand the same for their communities. He recommends working with public officials to develop plans that take into account all factors involved for community members.
"My company had a very good disaster recovery plan, and the systems part worked well," Miles notes. "What we did not anticipate was being out of New Orleans for six months instead of a couple days. And what we really had to scramble with was meeting the personal needs of our employees."
"We spent millions of dollars. But I think it's the best money my corporation has ever invested," Miles believes. "We did it because these people work for us and they needed help in an extraordinary situation and we were in a position to do it."
Miles Reidy is a graduate of the H. John Heinz III School of Public Policy and Management (HNZ'86) and a member of the Dean's Advisory Council.
