Does Your Business Pass the Waffle House Test: Hurricane Florence Edition

With Hurricane Florence all but certain to carve a path of destruction through part of the US southeast, the media -- from CNN to Fortune Magazine and everything in between -- is taking note that Georgia-based Waffle House has activated its Storm Center. That may seem like an odd bit of trivia to focus on, but in fact Waffle House's emergency preparedness strategy has enabled it to bounce back from disasters that could cripple many other businesses.

TriplePundit took a look at the Waffle House disaster management strategy back in 2011 and pulled out some lessons learned, so let's revisit the topic for an update.

The "Hidden" Part of the Waffle House Index

The reason for all the media attention is something called the "Waffle House Index."

That term was coined by former FEMA director W. Craig Fugate in 2011 as an indicator of how badly a storm had an impact on local communities.

The system is simple: green means a Waffle House location is open, which indicates the community is faring well. Yellow means the store is open but with a limited menu, indicating there are some serious issues in the aftermath of the disaster. Red means something unusually serious is going on.

As for how the Waffle House earned this distinction, the company is fiercely dedicated to its 24/7 business model, so closing a location in advance of a storm -- or failing to open it quickly afterwards -- indicates a community in a dire situation.

That rapid response takes a sophisticated level of advance planning, and the payoff is clear in terms of bottom line benefits. According to information compiled by the data recovery company Invenio, 33 percent of businesses fail to plan adequately for a disaster, and 90 percent of businesses without a recovery plan will fail after a disaster. Overall, FEMA estimates that up to 60 percent of businesses fail to recover after a disaster.

Efficient planning can also yield more intangible benefits, in terms of a company's reputation in its community.

In particular, restaurants and other retail food stores can have a significant impact on community resilience in the aftermath of a disaster.

Emergency responders need food -- and hot coffee -- on the go, and for various reasons people may be unable to cook at home.

Restaurants and food stores can also pick up the slack when additional emergency responders and volunteers are called in from outside of the community.

The Waffle House Secret

FEMA actually still refers to the Waffle House Index as a model for risk management. In a 2012 article the agency summarized the importance of the Waffle House approach for community resilience:

...the Waffle House test doesn’t just tell us how quickly a business might rebound – it also tells us how the larger community is faring. The sooner restaurants, grocery and corner stores, or banks can re-open, the sooner local economies will start generating revenue again – signaling a stronger recovery for that community. The success of the private sector in preparing for and weathering disasters is essential to a community’s ability to recover in the long run.

Credit for "discovering" the Waffle House secret is due to the emergency management publication EHS Today, which noted two key aspects of the company's emergency strategy.

One is a strong focus on employees -- both those who are able to put in extra hours during emergencies, and those who are needed at home:

...Waffle House has been known to reach out to employees with four-wheel drive vehicles to help ferry supplies, and it brings in employees from outside the disaster area so local employees can take care of their families and property. The lesson here is to make sure you know what your employees can do in an emergency – and make sure they are motivated to do it.

[snip]

...Waffle House waitresses have been known to show up for work even when local public safety officials can’t make it, so if your local Waffle House can’t open then you know things are pretty bad out there.

The other factor is a laser-like focus on supply chain management. That includes being prepared to open at less than full capacity:

Waffle House will open with a limited menu when necessary, and that actually forms the basis of the “Waffle House Index.” If a community hit by disaster has a Waffle House open with a full menu, the index is green. Open with a limited menu means yellow, and closure means red, indicating that the community is in serious trouble.

Planning Ahead Is Not A Secret

None of this is actually "secret." FEMA maintains a robust preparedness website specifically for business, ready.gov/business, including toolkits for hurricanes, earthquakes, flooding, widespread power outages and other disasters.

Businesses that plan ahead have more to gain than bottom line benefits. They can also earn priceless good will in their communities as they become a vital part of local emergency response planning.

As the impacts of climate change come into sharper focus, the bottom line benefits of disaster planning are also becoming more clear -- and so are the reputational benefits that resilient businesses can earn.

Image: FEMA.