The worst disaster in Jack Smith's career came in December 2004, when the 45-story Chicago headquarters building for the financial services firm ABN AMRO erupted into flames in the early evening. It was the largest skyscraper fire in the history of the city.
"We had 3,000 people displaced as of 6:30 at night. Many critical banking functions were impacted. However, we worked throughout the night and by 6:30 the next morning all of our critical processes were up and running," said Smith. "Despite the fact there was $55 million worth of damage to the building, the business interruption insurance claim was zero ... Business was not impacted."
In Smith's profession, that's the way it's supposed to be. Hired as director of business continuity by Synovus Financial Corp. in April, the Chicago native has the job of planning for the worst and taking out as much uncertainty out of the equation as possible for management.
The Ledger-Enquirer talked recently with Smith, 54, whose resume also includes a stint with the one-time retail giant Sears Holdings in his hometown. He discussed his job, the profession's skills and his concerns about the future of Synovus, parent company of Columbus Bank and Trust.
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What exactly is business continuity?
Business continuity -- also as I like to call it, revenue resiliency -- is all about helping corporations prepare for the unexpected, and to keep the product flowing, revenues flowing, whatever you do flowing.
What's happened in business is ever since the invention of the Internet and just-in-time processing, any disruption has an immediate ripple effect. Back in the old days, if you didn't get your shipment this week, it would be, 'Well, we'll double you up next week.'
That's no longer how we process. If you look at not only banks who do real-time trading, but all of the way down to car manufacturers, there are factories where the shipment comes in the 'day of' that they're due, and the seats are being delivered in the order that the factory needs them. So there's not a lot of room for error. It costs money.
What you need are contingency plans -- what are you going to do if? Management is pretty good at (deciding) what to do if it's a sunny day or a rainy day, or what to do if this is late or that's late, or Mary calls in sick or Tom is not around today.
But then when you start saying: What will you do if the building is not available that you currently work out of? Or what are you going to do if the vendor you've been relying on goes belly up with no notice? Or what are you going to do if an executive has sort of an Enron moment, shall we say? These are the kinds of things when it gets a little trickier, as far as how do you continue to make money.
There are several events you help companies plan for and manage, with natural disasters coming to mind?
Yeah, but I'm talking about if you cannot do work out of your building. I don't care if it's a natural disaster or a shooter in the lobby ... The primary focus of what business continuity is all about is making sure that the processes are in place in the organization so that we can continue to function.
What did you take away from your time at Sears?
In Sears' case, as you probably know, they've had a lot of financial issues over the years of trying to make money compared to their competitors. And I have found that not just Sears, but any company, when you are in crisis mode and trying to make this quarter's numbers, it's very difficult for you to spend a lot of time preparing for a crisis that might occur. But when you're in the middle of one, that's not the time to plan.
What skills are needed for your type of job?
Certainly, you need to have good managerial, coordinating skills. Project management is one way a lot of people find themselves coming in to this. I came into it as an (information technology) manager. So I would find myself constantly being the liaison between the business and IT ... (It takes) someone with good business sense, someone who can take a look at the forests through the trees kind of thing and help coordinate across areas.
Is there a growing need for people like you?
There's more and more need, and there's a couple of reasons why. The first reason is just-in-time processing. Being down for a day is becoming more and more costly for organizations as everybody is working off the Internet and everything is just more dynamic ... Secondly, as people expand their business to all corners of the world and they outsource and do some of these other things to be lean, mean businesses and try to do more with less and in an automated way, it shrinks, if you will, some of the buffers that we've otherwise enjoyed as businesses in general.
The last one, as you look at the weather, many more natural disasters are coming. Every year it seems like a record year, whether that's due to global warming or a natural cyclical event.
What's your primary concern for a banking operation like Synovus, other than a fire?
My biggest concern right now is that our headquarters is right along a river and they're blowing up a dam. They keep blowing up that dam. (laughs) That's got my attention. Actually, if you look at Synovus, the thing that worries me the most is this is a company, like many, that are undergoing a lot of change. And one thing that we've done is centralized a lot of our back-office operations. As things change like that, we need to make sure we have the right levels of resiliency there in case something does happen to the river or a tornado comes through that impacts a lot of our folks.
A big takeaway from this is it's more about planning for events than reacting to them?
Most definitely. From what I've found, we have a management staff here, like many management staffs, who are extremely good at making decisions once they have all of the facts. It's about the planning of knowing what we have and what we don't have, so if an event occurs, we know which directions to go and which directions not to go.