Ten years ago, Hurricane Andrew assaulted South Florida. I lived and owned a business in the city of Homestead, which was hardest hit by the storm. Over the past ten years I have had considerable time to ponder the lessons I learned before, during, and after the Hurricane. From the perspective of a small business owner, I have identified five lessons that will stay with me for a lifetime.
Hurricane Andrew was a Category 5 monster with winds exceeding 145 mph. It was the most costly weather disaster in U.S. history. It inflicted over $25 billion in damages in South Florida. It killed 15 people in Miami-Dade County and was indirectly responsible for at least 25 other deaths. The storm destroyed over 25,000 homes (mine included) and damaged over 100,000 additional houses. At least 180,000 people were temporarily left homeless.
After the Hurricane we had 23,000 soldiers and 6000 members of the National Guard move into our “neighborhood”. Helicopters flew in formation. Convoys thundered through residential streets and over massive amounts of debris. There were military checkpoints at what used to be busy traffic intersections. Schools were destroyed. Common landmarks such as trees, buildings, and signs were gone. I got lost in my own sub-division. It was a scene that I can’t even begin to make comparisons to.
Within days of the storm, we decided to rebuild our home and our business in their original locations. We knew both efforts were going to be huge challenges. We had no idea just how challenging they would be.
For six months we operated our travel agency out of a trailer in a gravel parking lot behind the previous site of our building. The Hurricane relocated most of our files, airline tickets, and small office equipment somewhere west of us in the Everglades National Park. We worked with temporary phones, makeshift desks, and a port-a-let. Getting to work each day was a minor miracle. Making it through each day required extraordinary patience and resilience.
By the time we were able to move back into our new office and resume some level of normalcy a number of rather simple business lessons were learned.
Lesson #1. Carefully pick your business partners. When I speak to individuals starting new businesses I talk about the importance of selecting the right external professionals for their respective business start-ups. We discuss the importance of finding professionals such as an attorney, the accountant, and a banker who understand your business and you are able to establish some level of chemistry with.
In our case were very fortunate after the hurricane particularly in terms of our bank and our insurance company. Both “partners” worked very hard to help us through the painful recovery stage of the storm and than the rebuilding efforts. Their interests were in us not only as business clients but as people and neighbors as well.
Our landlord was a different story. Our landlord decided to capitalize on this disaster as a business opportunity. While other business vendors and suppliers went to great lengths to work with us as “partners” in rebuilding, this individual was difficult to work with and took advantage of us and his own insurance company at the same time. Lesson learned…
Lesson #2. The importance of customer loyalty. Previous to the hurricane I had attended numerous customer service seminars and had been told how important customer satisfaction was to our business. It made sense but the theory had never really been tested like it was after the storm. We found out that many of our clients were not just satisfied. They were extremely loyal to our business. How did we know this? Due to the circumstances at this time, our customers had to go to great lengths to use our service. For a while we did not have dependable phone service (or power). Instead our customer had to come find our office trailer. There was no parking per se. No comfortable chairs or waiting area. Minimal air conditioning. It was literally an ordeal to come to our office for any of our customers.
And yet they came. Day after day we saw more and more old customers show up. Some just came by to see if we were okay. Some were planning their exodus from South Florida. Others had insurance checks and were planning getaway vacations. Our business clients slowly began to travel again as well.
I am convinced that we did not see too many of our previously satisfied customers. I have come to understand that satisfied customer will switch brands very easily if the price is right or the switching costs are minimal. No, these were loyal customers that came back to us after the storm. They felt an emotional connection to our agency and our employees that made switching agencies almost impossible. That is a lesson I won’t forget…
Lesson #3. The importance of employee loyalty. This lesson is similar to the previous one. I had studied employee motivation and leadership for many years previous to Hurricane Andrew. I prided myself on being an effective leader. Many of our employees had been with us for a considerable amount of time. They seemed to be satisfied with their employment. They seemed to be loyal to their employers. But that loyalty had never really been tested until now.
After the hurricane, our immediate concerns were with the safety and well being of our employees. Many of them experienced the same level of damage to their homes as we had. A number of them had to relocate to hotels, rental homes, or other family residences for months to come. Some had better insurance than others. Some faced significant financial hardship as a result of the storm. Like ourselves, each of them were trying to figure out how such a bad thing could happen to such good people.
The miracle was that within almost a week of the disaster, each of our employees were prepared to return to work. Not because they had to. But because they wanted to. At this point in time, our office was as close to a home as they had and we were all family. This was not easy work. For a time every booking was done manually without computers. There was a very high level of stress to deal with due to the situation and the clients we were dealing with.
Had it not been for these loyal employees we would have never been able to rebuild the business as we did. Many of the items we lost during and after the hurricane were replaceable. These individuals were not replaceable. There were one of a kind.
Loyalty is like beauty; it’s very hard to describe, but you know it when you see it.
Lesson #4. Don’t ever under-insure your business (or home). The aftermath of Hurricane Andrew was a classic learning experience in the field of Insurance.. For years I had taken our business insurance coverage for granted. Every year our agent would pay us a visit and would present us with our insurance coverage (bill). I can’t say that I truly understood what was covered and what wasn’t. Over the years I had processed a handful of claims and had never had reason to question what we had or didn’t have in our coverage.
This particular year prior to the hurricane we met with our agent as usual. We were looking for ways to cut costs and asked that he take a little known coverage called Business Interruption insurance, off of our bill. That $150 savings could be applied somewhere else in the business we thought. Our agent politely replied that if we did not want that coverage than we would have to find another insurance agent. He stated that he could not sell us that policy without that coverage in good conscience. Rather than switch insurance agents, we buckled and took the policy as presented. Thank goodness.
We later came to find out that Business Interruption insurance protects the owner’s earnings from the business in case the operation of the business is interrupted due to storm, disaster, war, etc. This coverage provided my family with income for one year as we rebuilt our business back to where it was the business day prior to the storm. In addition, we were fortunate that we had provided ourselves with excellent contents insurance allowing us to replace all of the equipment, furnishings, etc. in our office. Needless to say that I am now a proponent of Business Interruption insurance.
Lesson #5. “At the end of the game all the pieces go back in the box.” If there is one lesson that has had the greatest impact on me since Hurricane Andrew it is this one. Leading up to the day of impact, I had worked very hard for ten years to build a portfolio of personal and business assets. In less than twenty-four hours, the majority of those tangible assets had been lost. Sure, we were able to recover certain items that had not been destroyed by the storm or ruined by the days of rain that followed. Yes, insurance allowed us to rebuild and start over. But the thought stayed with me that the tokens we work so hard to earn could be lost just as abruptly and in our case due to no fault of our own. Even if we make it a ripe old age much of what we have collected gets redistributed anyway. What the storm couldn’t take away are those things that I value most today: family, friends, and a lifetime of great memories.
Tim Fulton is a nationally recognized small business consultant and management trainer. He is also a very popular public speaker. Tim can be reached at timfulton at hotmail dot com