by Sara Jones
Any newcomer to San Diego soon learns that it is a small-business and startup town. About 94 percent of the 97,000 businesses in San Diego are small businesses.1 On average, these small businesses have between three and 10 employees. They span industries as diverse as retail, finance, and manufacturing. As different as they are, all of them face a common threat that manifests swiftly and unexpectedly: a natural or manmade disaster. According to the Insurance Information Institute, 15 to 40 percent of businesses fail following a natural or manmade disaster.2 And the cost to the surrounding community is dear.
On Sept. 8, 2011, a power blackout affected an estimated 2 million people in Arizona and Southern California and cost the impacted area (Southern California, Arizona, and Mexico) about $20 million in government overtime.3 At least one business had a disaster-preparedness plan in place, though. When the power failed, Giuseppe Gutierrez and his team at Albertsons Del Mar implemented standard company-wide protocol for power outages. Their backup generator kicked on in seconds, doors stayed open, pallets of ice and water were moved to the front of the store for easy access, and staff members were posted at the doors to direct people where they needed to go to get what they needed. While the gas stations, convenience stores, drug stores and other grocery stores in the immediate area had quiet cash registers, Albertsons Del Mar was open for business during its normal hours for the duration of the blackout. The supermarket had what Gutierrez considered “a 366th day of sales” and saw a 30 percent spike in customer count that day – clearly the result of effective preparation by a large business.
But small businesses are not without their own creative solutions. Just as they are forced to be nimble and imaginative in the areas of finance and marketing, small businesses can also exercise those qualities in the area of disaster planning. In particular, they can model their disaster-planning process after a broader planning technique called micro-gaming. Micro-games are mini hypothetical crisis-management sessions intended to boost team dynamics and communications. Phillip Van Saun, the director of UC San Diego’s Continuity and Emergency Services, is an evangelist for this technique and believes decision-making in a crisis must be fast and frugal. “You can’t always predict or prevent disasters, but you own the space of preparedness,” he said.
Van Saun, a former member of the Marine Corps Presidential Helicopter Squadron, also believes that the choice not to prepare is a choice of willful blindness. Indeed, he titled his primer on crisis management “Failure Is an Option.” In this book and in his presentations, Van Saun outlines six steps for a micro-game: 1) Present the basic details of the risk to be addressed; 2) brainstorm possible solutions; 3) discuss challenges to a resolution; 4) determine possible moves given the realities of your culture; 5) select moves to respond to the problem; and 6) implement steps to mitigate the identified risks. In order to carry out the micro-game, Van Saun recommends that managers gather their staff on a regular basis for small increments of time to work through the six steps. At first, a facilitator guides the group to identify and adjust for bias in the decision cycle, demonstrates how to ask good questions, engages the team in fast and frugal decision-making, and closes with an analysis of what went well and what needs to improve. Once the group gets regular practice and builds these habits of mind, the role of the facilitator diminishes, empowering employees and team members to take the initiative themselves.
For startups and small businesses whose coffers are already tight, micro-gaming can be cost-effective when compared with the cost of formal training workshops. For example, if a startup with seven employees, each with an hourly rate of $30, met for 30 minutes over a company-hosted lunch (est. $30) twice a month to micro-game any number of possible topics, the cost of micro-gaming would be only $3,240 per year. Of course, these meetings could induce follow-on policy development or action items that might incur incremental improvement costs, but the intention is to save time, effort and money when what Van Saun calls “predictable surprises” such as fires and earthquakes actually do occur.
Partnering with two professors, Van Saun is bringing microgaming into the curriculum in two academic departments at UC San Diego, where it is seen as a way to develop the psychological capacity to respond to chaos and uncertainty. In her urban studies and planning course, Mirle Bussell, Ph.D. uses the technique to encourage students to anticipate where things might go wrong and respond to those challenges in a group setting. In the planning industry, there is a rational, linear planning model; micro-gaming introduces a non-linear, more realistic decisionmaking model. Bussel believes these skills are critical not just for urban planners, but for all planners. She also sees these skills as valuable for everyday decision-making, not just crisis or eventbased decision-making.
Michael Kalichman, the director of UC San Diego’s Research Ethics Program, also uses micro-gaming as the backbone of his class called Ethics and Survival Skills in Academia. He aims to teach students to work with each other to anticipate trouble spots in research and lab testing before they happen and gain an advantage against the unexpected. Kalichman believes that proactive conversation about what can go wrong helps the individuals and the group to see the complexity of risk. It allows them to be better prepared to minimize the occurrence of academic misconduct and therefore failure. Through these micro-games, his students come to learn that there are many right answers.
According to Van Saun, this heightened state of preparedness and risk management can be incrementally developed when microgames are implemented over time and as the challenges presented become more complex. Kalichman said, “So many benefits come from talking with each other about these things. [Students] see that micro-gaming is a small investment for a great return.” The planning technique can be coupled with existing tools that prepare small businesses for disasters, such as the American Red Cross Readiness Rating and the PSPrepTM program, sponsored by FEMA. Additionally, the Small Business Administration and the American Institute of Certified Public Accountants offer general guidelines for small business emergency preparedness.
As the victims of San Diego’s recent disasters know, wildfires, earthquakes, water main breaks, and even power outages have a way of revealing the value of preparedness. Many victims fall into the trap of denial, convincing themselves that disasters will never happen to them or that it won’t be that bad. Those who champion micro-gaming know that change cannot be forced; individuals and teams have to want it for themselves. Peter Danielson, an assistant professor in UC San Diego’s Global Public Health department, and Daniel Jacobsen, a Ph.D. candidate in UC San Diego’s Bioengineering department, are both students in Kalichman’s course. They say that the use of past experience as topics for micro-gaming is valuable to develop that respect for the power of disasters to change lives. Van Saun cautions, however, that the skills developed in micro-gaming are perishable. Jacobsen concurs that “they must be worked frequently and on a continual basis; otherwise they atrophy.”
Van Saun believes that through the regular practice of microgaming, small businesses can find better ways to manage risk and be prepared for natural and even man-made disasters. As more San Diego small businesses engage in this practice, the whole community builds resilience across the entire spectrum of risk.
Sara Jones (Rady MBA, 2013) is an active volunteer with the U.S.C.G. Auxiliary. Her interest in business continuity and preparedness comes from her volunteer and paid experiences with the American Red Cross, including the 2003 and 2007 San Diego wildfires and the 2004 and 2005 hurricane seasons, as well as her role as an analyst in support of the Department of Homeland Security.
- Kyle, Keegan. “Fact Check: A City of Small Businesses.” Voice of San Diego, May 25, 2012. Accessed March 28, 2013. http://www.voiceofsandiego.org/fact/article_cb5f0dcc- 3597-11e1-bfeb-001871e3ce6c.html
- The American National Red Cross. How the Ready Rating Program Works. 2013. Accessed March 25, 2013. http://www.readyrating.org/HowItWorks.aspx.
- National Universtity System Institute for Policy Research. Economic Impact of September 9th Power Outage: Conservatively Estimated at $97 to $118 Million. National Universtity System Institute for Policy Research, 2011.