Guest Author Jeff Ingber is a 30-year-plus veteran of Wall Street, having held senior positions with several leading financial institutions. He is the author of numerous articles on the financial markets and, most recently, of a book about the impact of the events of 9/11 on the financial markets.
Earlier this year, I published the second edition of my book, Resurrecting the Street: Overcoming the Greatest Operational Crisis in History, about the devastating impact of 9/11 on the U.S. financial markets, a largely unknown story. While the Wall Street of the early morning of 9/11 is long gone, a number of fundamental lessons from the massive operational crisis of that time remain applicable to all companies. Here are five:
- The importance of contingency planning: After 9/11, contingency planning went from being a technology management and back-office concern to a key responsibility for a company’s CEO. A redefinition of the concept of “disaster” raised issues that had never before been sufficiently considered. After 9/11, everyone’s imagination improved, revolutionizing contingency preparedness.
- Disaster planning must consider the possibility of devastation of an entire geographic area: The most visible impact of 9/11 was the acceleration of firms’ efforts to move staff and resources out of lower Manhattan to areas with different telecommunications and power infrastructures. For the first time, many firms set up operating sites with separate staffs, applications, and hardware in locations hundreds or even thousands of miles from their headquarters. Aside from geographic dispersion, there was a renewed focus on the adequacy of backup sites, which by their very nature tend to be less robust than primary locations.
- The need for redundant communications capabilities: This operational crisis was, in many respects, based on lack of telecommunications capability and of redundancy. Most financial firms had a carefully constructed communications plan in place, including multiple connections to their banks and numerous lines and facilities. But those plans often were rendered useless by the scale of the devastation and that these multiple line fed into one common hub.
- Protection of data in real-time: A massive loss of data and attendant books and records occurred. Firms came to understand that housing and protecting data is even more vital than maintaining functioning operational sites. Important data must be preserved on an up-to-the-minute basis at a remote “hot” backup site.
- Protection and management of staff in a crisis requires thorough planning: The “human capital” plans of firms understandably failed on 9/11. Companies had difficulty reaching staff, relocating them to alternate sites, accommodating displaced employees, and putting them to work productively. Most essentially, companies recognized the need for better planning to ensure the protection of life. One significant aspect of this was that businesses of any size no longer placed all their staff members work in the same location.
Jeff Ingber is a 30-year-plus veteran of Wall Street, having held senior positions with several leading financial institutions. He is the author of numerous articles on the financial markets and, most recently, of a book about the impact of the events of 9/11 on the financial markets entitled Resurrecting the Street: Overcoming the Greatest Operational Crisis in History.