More than a Fire Drill Planning for the worst may be the best thing a co-op can do By Donna Abernathy

Editor’s note: Abernathy is a Tennessee-based freelance journalist and communications consultant with decades of experience working for, and with, cooperatives.

It’s like getting punched in the gut.” Though it’s been more than four years since it happened, Mark Pfeiffer can’t forget how it felt to look at the pile of burned rubble that had been Organic Valley Cooperative’s headquarters. “Watching the life’s work of our founding farmers burn” elicited powerful emotions, says Pfeiffer, who was facilities manager for the La Farge, Wis.-based Organic Valley’s distinctive headquarters building seen shortly organic cooperative when the intense after a fire in 2013 and following repairs. The disaster fire destroyed two-thirds of the main motivated management to fast track development of a business office and displaced nearly 250 continuity and risk management plan. Photos by Clovis Siemon, employees in May 2013 courtesy Organic Valley Thanks to a well-rehearsed evacuation plan, all employees and visitors safely exited Organic Valley’s building that day. But, as Pfeiffer and his co-workers would soon realize, effectively handling a crisis requires far more than fire drills. “You just never think it’s going to happen to you,” says Pfeiffer, admitting that the cooperative was not adequately prepared to handle the crisis. “Sometimes hubris can be your worst enemy.” Disasters happen, and cooperatives are not immune, says veteran cooperative communications consultant Lani Jordan. More than a quarter of all U.S. small businesses experience a significant crisis in any given year, she says, citing a 2014 Risk Advisory Services survey conducted by KPMG, an international accounting and business services firm. Crises come in all sizes and descriptions. Though a fire or natural disaster is most often the first thing that comes to mind, a crisis is any out of-the- ordinary event that has the potential of damaging your organization, says Jordan. “It’s not if a crisis will occur at your

Rural Cooperatives / September/October 2017 13 cooperative, but rather when it will situations. It also included adding a work together to handle the situation,” occur and how you will respond when it fulltime business resiliency manager to says Pfeiffer. does,” she says. the management team. Whether as a result of a gut- The emergency plan “was the one Crisis planning ‘not an option’ wrenching experience or following a good thing that came out of the fire,” Sheryl Meshke is aware that some “be prepared” philosophy, many says Pfeiffer, who is now the director of cooperative leaders question whether cooperative leaders and managers agree employee services for the 2,000- resources should be allocated to develop with Jordan. They’re placing a higher member cooperative that employs more a crisis plan. She’s heard the grumbling priority on crisis preparedness. In the than 900 people. “Our board and of those who regard the plan as “an event of an emergency, they aim to be executive team have 100-percent expensive dust collector.” The co- ready — and they’re advising other confidence in our risk awareness and president and CEO of Associated Milk member-owned businesses to do preparedness now.” Producers Inc. (AMPI), New Ulm, the same. The new plan was put to the test Minn., has a different viewpoint. when Organic Valley employees found “It’s really not an option; it’s our Rethinking priorities themselves in the midst of another crisis responsibility,” Meshke says about why As he watched his workplace burn, Pfeiffer couldn’t help but think about the notes in a folder still on his desk. Organic Valley’s board had asked the executive team to begin developing a business continuity and risk- management plan only six months earlier, and Pfeiffer had just begun the research. In early 2013, Organic Valley employees had been in no particular hurry to put a plan in place. Indeed, they expected to spend five years developing a plan while tending to other, higher-priority tasks for the fast- growing cooperative. Then the fire erupted. “It was an eye-opening experience,” says Pfeiffer, whose work priorities were quickly reordered as the business resiliency project was fast-tracked. Organic Valley employees began Dixie Electric Membership Corporation’s crisis she and Donn DeVelder, AMPI’s other developing a comprehensive plan while plan was put to the test when the Louisiana co-president and CEO, are committed the cooperative’s headquarters was co-op’s service territory received 30 inches of to maintaining a well-crafted crisis plan. being rebuilt. rain in three days, resulting in catastrophic “We have too much at stake, and so do “As a food business, it was a given flooding in August 2016. Photo by Billy Gibson, our partners.” that we had a plan for issues like courtesy Association of Louisiana Electric You can never be too prepared for a Cooperatives [product] recalls,” Pfeiffer says. “But crisis, Meshke has learned during her the fire forced us to look through our nearly 30-year career at AMPI. Having business and become aware of all our in July. Severe flooding in the Midwest a workable, updated crisis plan is as potential risks and to identify how to threatened one of the cooperative’s much a part of risk management as is mitigate them.” facilities, forcing an emergency investing in good insurance or In only two years, an aggressive evacuation of personnel, equipment and conducting safety training for strategic plan for risk management was inventory. Pfeiffer and his co-workers employees, she reasons. completed and implemented. The plan were ready. “Being prepared illustrates immense identifies the top three risks for every “This time we were organized. We respect for your partners in the business department in the cooperative and the had a plan, everybody had a — employees, owners, the community,” processes for addressing potential crisis responsibility, and we were able to Meshke says.

14 September/October / Rural Cooperatives Co-ops aiding hurricane victims

Hurricanes Harvey and Irma have caused historic “It is difficult to grasp the full scope of damage caused levels of damage in southeast Texas, Florida, other states by these two devastating hurricanes,” Tom Halverson, and U.S. territories, and across a large swathe of the CoBank president and CEO, said in announcing the effort. Caribbean. When this magazine was heading to press in “The impact of these disasters will be felt for a long time, early September, estimates of damage and death tolls but CoBank is committed to supporting our customers, were climbing daily. It will not be a matter of weeks or our colleagues and our Farm Credit partners as they even months, but rather of years for all the damage to be begin the process of recovery.” repaired. The Cooperative Development Foundation (CDF) is As always in such disasters, the nation’s cooperatives raising funds to assist cooperative businesses damaged have been deeply involved in the relief efforts, including by the hurricanes, including damaged buildings, lost help from many electric cooperatives that have sent staff business and wages, and loss of inventory. and equipment to help restore power to hard-hit areas. “CDF has a long history of providing needed and timely USDA has also been directing staff and resources to assistance to cooperatives impacted by natural offer aid (visit www.usda.gov to learn more about these disasters,” says Rich Larochelle, board chair of CDF. efforts). “Helping cooperatives recover from damage inflicted by CoBank has announced that it is committing more Hurricane Harvey demonstrates the 6th and 7th than $350,000 to support efforts for hurricane recovery. Cooperative Principles — cooperation among Its contributions are being made in partnership with its cooperatives and concern for community.” For more customers, employees and other Farm Credit institutions information about CDF’s Disaster Recovery fund, visit: that will support a number of organizations involved in cdf.coop/hurricane-harvey. the humanitarian response to the hurricanes. These CDF has also partnered with the National Rural include the American Red Cross, Texas Farm Bureau Electric Cooperative Association (NRECA) to raise funds Foundation, Texas Electric Cooperatives Harvey Disaster specifically for rural electric cooperatives and workers Relief Fund and the Farm Credit System Employee Relief impacted by Hurricane Harvey. For more information on Fund. that fund, visit: cdf.coop/nreca.

AMPI employs 1,250 people who crisis situations, including when fires serves more than 100,000 members in work at 10 Upper Midwest dairy shut down AMPI plants during the peak seven parishes in southern Louisiana, so manufacturing plants and the corporate dairy product sales season in 2004 and he’s no stranger to storms and the havoc office. The cooperative routinely tests again in 2014. On each occasion, AMPI they can wreak on an electrical- its crisis management plan to ensure all employees — from plant workers to the distribution system and the lives of employees know their role in an communications team — demonstrated those who depend on it. emergency situation. their readiness in the face of disaster. Though it may seem counter- Having a workable crisis plan is Their quick, professional response productive, conducting frequent important for employee morale, adds garnered the appreciation of members meetings with co-workers is essential to Sarah Schmidt, AMPI’s as well as the respect of customers, successfully executing a crisis plan, communications director. “Just knowing emergency responders, industry peers, Latona emphasizes. there’s a plan in place that you can the media and others. “Set aside time before [when execute is so helpful,” she says. possible], during and after an “Assurance is what preparedness Stay in touch emergency to digest what is going to provides for everyone involved in a David Latona, manager of member happen, what is happening and what crisis situation.” and public relations for Dixie Electric just happened,” he says. “We found that The time and resources AMPI Membership Corporation (DEMCO), a time set aside for our group to discuss invests in crisis planning have been knows firsthand the importance of both what we are each doing gives us an worth it, both Meshke and Schmidt say. internal and external communications opportunity to understand the big The plan has been used for a variety of during times of crisis. The cooperative picture, and each member can feel

Rural Cooperatives / September/October 2017 15 Co-ops of all sizes need a crisis plan

Spending years in the cooperative communications “At least annually, you need to walk through a trenches has taught Lani Jordan this important lesson: hypothetical crisis scenario to make sure everything in “You can’t ignore the need for a crisis plan.” your plan still works. Find the holes in it and revise,” she Before opening her own communications business, says, adding that a crisis plan must address both physical Jordan spent three decades as the corporate concerns — employee safety and the protection of communications director for CHS Inc., the nation’s largest assets — and how you will communicate with cooperative. Her responsibilities included leading crisis stakeholders. response for the $45-billion business as well as for many “A good crisis plan absolutely must include a solid of its 1,100 farmer-owned member cooperatives. communications plan,” agrees Sheryl Meshke, co-CEO of Whether it’s the nation’s biggest cooperative or the the AMPI dairy co-op. The AMPI plan puts a high priority smallest, all co-ops need to be prepared to address a on communications. Meshke views communications as crisis event, she says. Jordan believes concerns about vital for protecting the cooperative’s reputation during a the potential cost of developing a crisis plan may deter crisis. some cooperatives from developing one. Even if your cooperative is physically managing a “You can’t afford not to have at least a basic plan,” the crisis well, failing to communicate what you are doing respected crisis advisor says. Jordan describes a basic with members, employees and other stakeholders is risky plan as one that outlines the processes a cooperative will business, Jordan cautions. “You’ve left a big hole [in use in a crisis situation and identifies the employees managing your crisis], and created the potential for responsible for executing them. It also includes a making things worse.” provision for regular practice.

confident they have the support of messaging option as a means to ask at Cullman Electric Cooperative to take the team.” questions or express concerns. a closer look at its emergency response Latona and the DEMCO team Once an hour, the communicator plan, revealing gaps in the co-op’s activated their crisis plan when the co- also made it a priority to personally ability to protect employees and op’s service area was hit with the worst answer emails and social media information in the South’s infamous flood ever recorded there. Over 30 messages. It was time well spent, Tornado Alley. inches of rain — nearly 7 million Latona says. Four tornadoes hit the co-op’s gallons of water — fell during a three- “We don’t have empirical data, but service area on April 27, 2011, wrecking day period in August 2016. the anecdotal [evidence] is almost its electricity transmission and A reported 160,000 structures in the overwhelmingly positive,” he says, distribution system. The most powerful co-op’s service territory were damaged explaining how direct communication twister, rated an EF4, passed within two by floodwaters. Among them was a helped to protect DEMCO’s good miles of the headquarters in Cullman, Ala. DEMCO district office. To make reputation among members. “It was In the storm’s aftermath, the co-op’s matters worse, 50 employees, about certainly worth our time to respond to management team evaluated its one-quarter of the co-op’s workforce, those that reached out to us. We even response to the natural disaster. The were among the thousands forced from replied to members who were team also pondered what would have their homes by high water. messaging us to say ‘good job.’” happened if the tornado had hit the Latona’s external crisis An added benefit of Latona’s efforts main office. There was no doubt that communications plan called for was fewer calls to the DEMCO office. the co-op’s information technology primarily using social media to keep “We love personal contact, but our call infrastructure was vulnerable. members informed during the center can better serve members when “We realized that our IT emergency. At least once an hour, he they are not flooded with calls.” [information technology] infrastructure shared power restoration information would likely have been destroyed,” says with the 10,000 members who follow Minding the gaps Brian Lacy, the co-op’s manager of the co-op on Facebook. Members were in Tornado Alley communications and external affairs. encouraged to use the platform’s direct A near miss prompted management “We would have been dead in the

16 September/October / Rural Cooperatives water if our computer infrastructure drill. The date of the exercise is employees that you wouldn’t normally had been destroyed,” adds Cullman announced at the beginning of the year interact with on a day-to-day basis,” CEO Grady Smith. and all employees are expected to be in says Kelly Hester, the co-op’s The introspection also revealed that attendance. communications and corporate events the office’s only “safe space” was the “It’s important to incorporate all coordinator. vault. The space was insufficient to employees in the day … because The training also focused on accommodate all employees or visitors everyone plays a role during a disaster,” employee wellness, teaching strategies who might be inside the building says Tim Martin, CEO of Carroll for mental and physical endurance during an emergency. EMC. during a crisis period. This is a In response to both concerns, the During the drill, employees put their frequently overlooked element of crisis cooperative invested in constructing an normal jobs on hold and instead focus preparation, Hester says. above-ground, reinforced concrete on their assigned crisis roles. “When you’re in the midst of a bunker. It houses the co-op’s Accountants set aside number crisis, managing your stress is vital to information technology infrastructure crunching to make plans for feeding staying calm and focused on the tasks at and provides an adequate-sized storm and housing mutual aid crews. hand,” she notes. shelter. The structure can Managing crises may never be withstand a direct hit from an completely stress free, but EF5 tornado. Organic Valley’s Pfeiffer is confident that his cooperative is ‘Road test’ the plan now well prepared to handle a Tornadoes, cyber terrorism, ice disaster. Looking back, he realizes storms and a host of other there was a lot of luck involved in potential disasters are often on recovering from the headquarters Jay Gill’s mind. Each year, he fire quickly. spends time plotting how to use “We were 10 feet from this such disasters to give the going a whole other way,” he says, employees of Carroll EMC a hard explaining that the co-op’s data time — at least for a few hours. system — the nerve center of its Gill, vice president of operation — was in a small communications for the section of the building that Carrollton, Ga., electric co-op, received only smoke and water creates havoc — of the mock kind damage. Saving that section — to help his co-workers prepare allowed the cooperative to for crisis situations. Whether a reestablish communications with cooperative distributes electricity, customers and never miss a sells farm supplies, markets grain, product shipment. or processes milk, there are Pfeiffer is no longer relying on benefits to “road testing” a crisis luck for business survival. While it plan, he believes. Carroll EMC’s was once just another item on a annual Disaster Day allows long “to-do” list, crisis planning is employees to do just that. now something he’s passionate Leaders of Cullman Electric Cooperative (CEC) The day provides an immersive, about. He has this message for those began rethinking their emergency readiness hands-on experience that exceeds the after a near miss by this deadly, EF-4 tornado who are procrastinating over the industry’s minimum emergency in April 2011. Photo by Brian Lacy, courtesy CEC development of a plan to protect their preparedness requirements. The cooperative business. cooperative’s management supports the “Don’t ever think that some risk will exercise, believing it helps ensure Engineers become “bird dogs” who not impact you. If you’re not planning exceptional employee performance in guide crews to areas requiring repairs. for those risks, then you’re accepting crisis situations. During its 2017 drill, Carroll EMC them. If you accept them, then you are The electric cooperative closes its incorporated several team-building opening up your cooperative to a offices for an entire day each May so activities to further enhance employees’ disaster that could end your business.” that most of its 140 employees can crisis response capabilities. “You have Is that a risk you’re willing to take? n participate in the emergency response an opportunity to get to know

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