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Risk Management Tips from Waffle House

Monday March 19, 2018


Both companies and customers rely on a business’s regular hours of operation. Companies use this time to make and sell their products or services, and customers rely on these opportunities to acquire the goods or services they need. This balance falls apart when a natural disaster disrupts operations. Goods and services can’t be produced and sold, employees relying on their hourly salaries aren’t paid, and customer needs go unmet.

The impact can be even worse if your company provides food to a community 24 hours a day, 365 days a year. Restaurant chain Waffle House, which operates more than 1,900 establishments across the United States, is known for serving comfort food around the clock. “Our customers and [employees] are used to us always being there,” says Pat Warner, Waffle House director of public relations and external affairs. As such, the restaurant chain is known for being one of the few places open during and after inclement weather.

For nearly 15 years, Waffle House operations have served as a paragon for risk management and an unofficial measure of how badly a community is affected by a natural disaster. Back in 2004, Craig Fugate, then director of the Florida Division of Emergency Management, coined the “Waffle House Index.” He instructed his disaster response teams to keep driving until they found a closed Waffle House because that was a sure sign of a severely affected community. Further illustrating the uncommon degree of devastation caused by last year’s storms, the company closed 11 restaurants for Hurricane Harvey and 88 for Hurricane Irma.

Although Waffle House is proud to be part of an unofficial index, this role comes with responsibility, Warner says. “We now have to make sure we are responding quickly because people are looking,” he explains.

Of course, after several years as a leader in disaster response, the company has learned a few lessons about risk management. Here are some tips Warner shared:

Put your leadership out in front. Waffle House senior leadership, including the CEO, visit affected markets right after a natural disaster. This helps leaders survey the extent of the damage and make quicker, better-informed decisions about recovery efforts. This, in turn, speeds response times.

Prepare for the potential disaster ahead. Warner advises that business leaders must plan before the storm, consider all the possible scenarios, and figure out how to maintain or curtail operations in each of those scenarios. Before a storm hits, Waffle House restaurants stock up on necessities and check in with suppliers to ensure they are prepared to make deliveries as quickly as possible.

In addition, during a storm, managers can shift their Waffle House operations to one of four shortened menus: no power, no water, emergency and limited. Each of these contains items that can be served in the given scenario, such as items that can be cooked on a gas grill or without water. In the other situations, the menus offer items that can be prepared quickly and do not take up a lot of grill space. “Right after the storm, our restaurants are usually packed, so speed and efficiency are keys to operating,” Warner says.

Invest in risk management assets. A solid recovery plan requires an investment in assets that restore operations and keep the business afloat. “It’s not cheap to stage resources and respond quickly,” Warner says. “Companies have to be willing to do that.”

Waffle House keeps both equipment and relief employees at the ready to help during and after a storm. Local operations teams have small generators, and company leaders can bring large generators to affected restaurants after a storm to help power the facilities. In addition, the company sends in operations personnel from other markets to supplement staff as local employees are recovering and returning home from evacuations.

Train your employees to respond. Waffle House trains all of its managers in risk management. Initially they are educated about specific safety and security procedures, but they keep their knowledge up-to-date through ongoing training modules. In addition, all employees in hurricane strike zones participate in a pre-hurricane-season meeting to review procedures.

Keep employee safety first. During snow and ice storms, Waffle House books local hotel rooms so employees do not have to commute to and from work. In addition, extra rooms are kept on standby for employees who are unable to travel home after work because of wintery conditions.

During hurricanes, if conditions are unsafe and local officials encourage evacuation, an area, senior or executive vice president will make the decision to close at-risk restaurants so Waffle House employees can seek safety. Company leaders encourage employees to retreat to the nearest safe place and check in with evacuating employees to ensure they and their families are sheltered. Afterward, these leaders communicate with employees to report which restaurants are reopening and when it is safe to return. This enables a quick transition back to normal operations.

Warner adds that Waffle House feels it has a responsibility to respond quickly to natural disasters to support its customers and employees. “By opening quickly, our customers get a sense of normalcy, and that really helps a community rebound quickly from a natural disaster,” Warner says. “Secondly, if we are not open, then our employees are not making money. We owe it to them to get open quickly so they can also get back to some sense of normalcy.”

 

Jennifer Storelli is a freelance writer. She may be contacted at jastorelli@gmail.com.