For more from our May issue on natural disaster planning in 2021, check out:
Armed with lessons learned from the 2020 hurricane season and pandemic response, risk professionals are preparing differently for natural disasters in 2021. Risk and insurance professionals discuss unique considerations, disaster planning for remote workforces, and first-hand perspectives of natural catastrophe response amid the pandemic.
Heading into the 2021 hurricane and natural disaster seasons, organizations must reassess their risk profile with regard to remote or hybrid workforces to ensure the safety of both operations and employees.
With approximately 600 locations spanning 49 U.S. states, restaurant chain Texas Roadhouse has weathered a lot of storms in the past year, from pandemic-related shutdowns to a wide range of natural disasters including hurricanes, wildfires and the severe cold and snow that crippled Texas in February. Patrick Sterling, senior director of legendary people and risk management, and Matt McMahan, senior manager of business continuity and records, sat down with Risk Management to share some of the lessons they have learned over the past year, preparations for natural disasters in 2021, and insight into building a people-first playbook for times of crisis.
Many types of disasters have increased in recent years, from hurricanes to wildfires to severe storms, and you have to account for a broad range of incidents given the size of your company’s footprint. Did anything take you by surprise when responding to natural catastrophes last year?
Sterling: We certainly had a pretty robust plan on hurricanes, but what really caught us a little off-guard was the winter storm that hit. With a lot of your responses, whether they’re generators or water purification systems, it’s a different experience in a winter storm in areas that don’t have the experience or the resources or the infrastructure to deal with extreme freezing temperatures.
In response, one thing we have done is assemble a cross-functional team to incorporate the winter storms into our severe weather response plan. There were some lessons learned in there that those areas have a whole unique situation for response due to the lack of experience and resources and infrastructure that are at play.
What were some lessons learned as a result of the Texas winter weather crisis?
McMahan: A lot of the other types of disasters—wildfires, wind, hail, rain—don’t have as widespread of an effect, so we deal with those on a one-off basis as they come up. You often have a power issue, you often have a “boil water”-type issue, if there are pipes breaking or things like that—those all come down to the same type of things we have to deal with in a hurricane.
What really made some of the winter storm issues a little different is that, for example, with water purification, if you’re bringing in machines but you have sub-freezing temperatures, then the water is potentially expanding in the water purification machine, which could break those pipes. There are just some nuances there that we don’t typically see in other types of severe weather situations.
With so many stores across very different regions, how do you manage monitoring and communication of the risks to your locations?
McMahan: We use a threat monitoring system. We’ve geolocated all of our stores with a system and we get notifications when certain types of threats hit. During the wildfire season, we would often get these updates that were geolocated based on our stores, so we knew approximately where the fires were in proximity. They never got that close to us, but they did have impacts on our employees, which would generate some response to make sure that our employees are taken care of.
Did any risk management measures prove especially critical in your disaster response and crisis management efforts last year?
Sterling: This past year really emphasized the importance of effective communication, and communicating not only in spurts, but really having a regular cadence of communication and check-ins over a much longer period of time than we’ve ever had to do in the past. Typically, crises are fairly short-lived—maybe a week or so—but a whole year? Getting that right amount of check-ins and communication was really important.
I think it also emphasized the importance of cross-functional teams and having everybody in the room. This allowed decisions to be made faster and projects to be completed quickly—you can move really, really fast when you have everybody in the room.
This also applies to every call. In a crisis, we have standing calls and everybody knows that, at 10:00 A.M. the next day or whatever timeframe we have those scheduled, we’re going to have a call again, and we make sure to have everybody that is on our emergency response checklists. Whether it’s IT, purchasing, human resources, accounting, payroll—they’re all on that call to be able to answer questions and to support our operators. Then, if there is a question that somebody has or a special need, they have that resource right there for them immediately.
Your restaurants are run by different managing partners across the country. Is there anything that stands out in differentiating between operators who best handled disasters last year and those who may have struggled more?
Sterling: I think everybody did a great job this past year.
McMahan: Yeah, they did. I think they are all successful, but the people who may have it a little easier, as Patrick has said, are the people who really have the communication piece down. Making sure everyone is on the same page prevents misunderstandings from happening and it makes things easier when everyone is working in the same direction to reach the goal.
Sterling: Communication is the differentiator—whether it’s at the store level or at the support center level, effective communication is the game-changer. At the store level, it is critical to have a really good communication plan on how to connect with the employees and stay in contact with them, especially if they have to evacuate.
As a brand, Texas Roadhouse talks a lot about care for employees as a central value. When disaster strikes, are there any things you recommend to better care for employees, and to balance ensuring everyone’s safety with resuming operations quickly?
McMahan: Employee safety is our number-one priority when these disasters hit, and every employee has a different internal risk tolerance. Certainly there’s a time when everyone needs to leave town if there’s anything dangerous, but before a storm hits, we also allow people to leave earlier if they have concerns—not only from a life safety perspective, but also from a mental safety perspective. We want them to feel comfortable and to know that we care about them and we care about their concerns. Some other people may want to stay a little longer, and that’s great too, but it is really about listening to the employees and making sure that we’re all one team and that they feel listened to and cared for.
You have mentioned emergency resources like generators and water purification systems. How involved do you get in coordinating those resources for different restaurant locations?
McMahan: We get very involved in it. For water purification, we’ve worked for several years to try to get some machines together that can help with water purification, so we store and send those out to areas as needed. The generators are slightly different in that a lot of that is done through relationships with third-party companies. Sometimes there are local relationships where they source the generators themselves, but other times we help out sourcing the generators from other locations. It really depends upon the situation.
Particularly on top of COVID-related shortages in supplies and disaster recovery services, it has been very challenging for some businesses to get emergency resources in recent widespread disasters. How are you managing that supply chain and business continuity issue?
McMahan: This goes back to being a good community and also being involved in the local community—if you have those local relationships, that opens up a lot of doors. We can and do have relationships with companies to provide these resources, but where somebody has a close relationship with other resources in the area, you can more easily get those resources because those third parties are thinking about you—they’re wondering, what can I do for Texas Roadhouse? Because we take care of them and they take care of us. You don’t want to enter into a disaster and, when you’re calling somebody, that’s the first time that they’ve seen your business card.
Sterling: I think this past year showed how fragile the supply chain is. With the real-time inventory processes and manufacturing processes that so many companies have right now, there’s just not a lot of inventory out there, so when you have a significant break, it can have a big impact on the supply chain. It’s something that we’re continuing to monitor and it can go to everything from having a couple of major protein plants that have to shut down or a shortage of truck drivers—there are a lot of things that play into this.
Last year was undoubtedly rough for you in terms of business continuity. What are the biggest risks on your radar this year?
Sterling: One key goal is that we still want to get better and more efficient at power restoration and water purification. Those are two things we’re continuing to develop, and [we want to] improve our capacity to get quicker and more efficient in those processes.
McMahan: We continue to be concerned about natural disasters and hurricanes. We’re hopeful that there won’t be as many hurricanes this year, but nature is going to do what it’s going to do. Of all the risks that I’m concerned about, it’s not the storms themselves—it’s the continued stress on the supply chain and infrastructure, and what these natural disasters mean to that in a world that’s still recovering from the pandemic.