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Leadership + local initiative + volunteers = recovery in New Orleans

Yossi Sheffi
Yossi Sheffi
Photo courtesy / Yossi Sheffi

The headlines on the anniversary of Hurricane Katrina are dwindling -- only to be replaced with updates on the next hurricane bearing down on the American coast. Katrina's devastation should have been a wake-up call for local and federal agencies, but, says Yossi Sheffi, director of the MIT Center for Transportation and Logistics, many political leaders still aren't getting the message.

"The fact that there is no agency at this point to rebuild New Orleans with all this money in a more coordinated fashion -- that's deplorable," said Sheffi, an expert in systems optimization, risk analysis and supply chain management.

It's not a question of more funding. Indeed, Sheffi said, the federal government is virtually throwing money at New Orleans, only to see much of it dissipated in waste.

Congress has allocated more than $100 billion in disaster relief to New Orleans -- a city with a pre-storm population of less than 500,000, Sheffi noted. "The government is doing its part. The government is pouring money in. It's nonsense to say the government doesn't care.

"But the instruments of government are broken at this point. The instruments work if the recipients are using the money to help themselves -- to actually rebuild homes and businesses. But they're not. They're trying to take as much as they can, whether by shady contractors coming to homeowners or local business owners."

The lessons of how better to deal with disasters like Katrina lie within private industry and within the federal government itself -- even in the much-maligned Department of Homeland Security -- according to Sheffi.

While, Sheffi contends, the Federal Emergency Management Agency and city and state agencies failed miserably handling the initial impact of Katrina, the U.S. Coast Guard operated "gloriously." The Coast Guard -- which is within the homeland security department -- rescued 35,000 of the 64,000 plucked from the storm. "They operated effectively, they operated efficiently,'' Sheffi said. "As they saw the storm coming, the local commanders started calling everyone in, canceling all vacations, moving ships behind the storm."

Why did the Coast Guard operate so impressively? For starters, commanders were used to a culture of "local initiative." "They didn't wait for orders -- they never got an order to do anything," Sheffi said.

Likewise, local employees of companies such Wal-Mart and Folgers were able to respond quickly to Hurricane Katrina because of corporate policies forged well in advance of the storm.

Folgers' sole U.S. coffee processing plant is in New Orleans, and while the company was reasonably well prepared for power loss and flooding, "they were not ready for the workers not having a home," Sheffi said. Yet, by focusing the company's resources on the goal of resuming production, the plant resumed operation within 2 1/2 weeks.

Wal-Mart was able to mobilize aid and send desperately needed water, putting plans for rebuilding its stores temporarily on hold, due to a corporate culture that emphasized worker safety and community relations, Sheffi said. These efforts were not attempts to curry public favor, he insisted. "Absolutely not. That's a cynical view, totally incorrect."

In his book "The Resilient Enterprise: Overcoming Vulnerability for Competitive Advantage" (MIT Press, October 2005), Sheffi targets those qualities that can help a company overcome disaster; many of the points also apply to local government.

One key issue is that of leadership. For example, CEO Gordon Bethune, in about a year, transformed Continental Airlines from one of the worst aviation companies to one of the best. He did this, in part, by fostering a sense of teamwork. Former New York Mayor Rudolf Giuliani -- whatever his faults as a politician -- showed leadership in the wake of Sept. 11, 2001, Sheffi said. "He brought to New York a sense of community and we're all in it together and we're going to overcome it. There was a very different sense than the hopelessness of New Orleans."

Unfortunately, Sheffi concedes, New Orleans is a "basket case," ridden with a culture of victimhood, dependence on government handouts and greed. One only needs to look, he noted, at the videos of the police brazenly looting stores, even in front of cameras, to see the extent of this "where's mine" culture. Change, he said, must come from within the New Orleans community, at the local level, particularly in religious institutions, parishes and churches.

"A culture change cannot be imposed from the outside. The FAA could not impose a culture change on Continental. Even the market could not impose a change. It was the company itself that decided to change," he said.

It is still timely, Sheffi said, to establish a task force, perhaps run by an experienced military commander, to coordinate resources and programs to rebuild New Orleans and, mostly importantly, take advantage of the volunteers who want to do their part to help the city recover.

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