Executive Briefings

Disaster, Humanitarian Relief Is Good, And It's Good for Business, Too

A conversation with Dan Ludwig, senior vice president of DHL and head of the company's new office of Humanitarian Affairs and Emergency Management for the Americas. DHL, a leading global express and logistics company and a subsidiary of Deutsche Post World Net, recently created a new humanitarian and emergency management office to formalize procedures and provide oversight for all the company's regional disaster preparedness and response efforts. This includes management of DHL Disaster Response Team Americas, which is part of a worldwide network of disaster response teams developed in partnership with the United Nations to support humanitarian relief efforts in the international community. Dan Ludwig was tapped to head this effort.

Q: How did this position come to you and what attracted you to it?
Ludwig: I have been in the logistics business for more than 18 years. Most of that was with Exel Logistics, which last year was acquired by DHL's parent company. My time there was largely in financial roles, though I later moved into operations and held the position of vice president of operations for the chemical and industrial sector. I think that's where my affinity for safety, health and environmental causes really began. I spearheaded Exel's program to become a Responsible Care logistics provider, which is very important in the chemical industry. From there, I took on global roles in finance and I also got involved in major strategic change projects at Exel, which involved developing standard and consistent processes across the business, taking strategic initiatives and actually bringing them into reality. All of that background led me into this role. In the wake of last year's disasters and all of the challenges that came out of them, DHL wanted to establish a functional office that would provide leadership and strategy for our emergency management and humanitarian affairs efforts. When I heard about the opportunity, I just thought, 'Wow, it would be great to have an opportunity to affect changes that would impact not only DHL's major business units but also our employees and the public at large. So I am very pleased to be in this role and to be working toward the objectives that we have set.

Q: What are your objectives, your mission?
Ludwig: We do have a written mission statement and I will read it to you: "to provide a safe work environment for our employees in all parts of DHL's businesses; to properly train our employees for their safety while at work and for their families while at home; to plan, prepare, respond and recover from emergencies in a consistent and effective way in order to ensure the continuity of our business and enhance our role as a strong community supporter, before, during and after an event."

I believe our objectives have two aspects with both internal and external dimensions. Internally, we are focused on business continuity during any disaster, because we see the continuance of our logistics and express and global mail businesses as one of the foremost services we can provide. Maintaining the continuity of those businesses is critical not only for our corporation and our employees but also for the customers that we serve. That is the emergency management side.

Now, being successful at that enables us to be a much stronger corporate citizen on the humanitarian side. It enables us to bring logistical expertise to the communities that we serve and to play that role of good corporate citizen, which we believe is our social responsibility.

Q: What role did the disasters of 2005 play in your decision to form this office?
Ludwig: Well, the events of 2005 certainly contributed to our strategic thinking on this, but we also were looking at the opportunities for us to take a more active humanitarian role in providing disaster relief. Just last year we established a strategic partnership with the UN and what we have promised to do as part of that is to establish disaster response teams that will be able to respond in the event of a natural disaster anywhere in the world. We typically would send logistics professionals into a nearby airport to provide support activities and to help maintain airport operations so that humanitarian relief coming from all over the world doesn't get bottlenecked and can be transported on through local carriers to the actual site where the relief is needed.

As a global organization, DHL has a lot of resources and expertise from which we can draw to form virtual teams that will bring the right capabilities to bear on a given situation. These teams will span multiple business units and take into account multiple functions. The thing that will make these teams effective, though, is how well we can consistently develop and implement our processes.

Q: What did DHL learn from past disasters that has informed your strategy in this area?
Ludwig: Most of our learning centers around critical assets and functionality. Identifying business-critical assets and functions and people is probably the most important thing that needs to be done. For example, being able to deploy generators and fuel into an affected zone in order to be able to continue our services is crucial-so it's all about securing the assets and controlling the assets as we deploy them into the zone.

There are a whole host of anecdotes around how a company's assets were commandeered by the public sector during Hurricane Katrina and we have a few of those stories ourselves. What needs to happen is collaboration between the private sector and the governments in order to make that process more effective, so that resources getting into the zones will be those that can help the local economy, help the local business owners and the public at large in their recovery. That includes identifying critical service providers and helping them get access to their own assets and their people.

Generally, we have found that companies often have difficulty matching resources against the severity of the event. That is a critical success factor because you don't want to get it wrong in either direction. If you provide too much, you are being inefficient. But if you are wrong on the short side, you run the risk of failure and of not being able to continue providing services. So that's one element at which everyone, frankly, could do a much better job. Of course, that's easier said than done and a lot depends on a company's maturity level. Relying on manual processes or ill-defined processes, or relying on individuals to be heroic might get you through one disaster. But you need to learn from that event and to formalize the process and standardize it as much as possible so people understand what their roles and responsibilities are. Then you stand a much better chance of being able to handle future events, People will default to processes that they know and if something is ingrained in the fabric of your business you stand a much better chance of being able to respond.

And that brings me to the second thing we have learned, which is the importance of training your employees and getting them ready, both on a personal level and also in terms of their functional role within the business. We have initiated several internal communications campaigns and employee training programs that are designed to prepare our employees and give them the resources that will enable them to be more effective before, during and after an event.

Q: Can you tell us a little more about how you formalize these processes?
Ludwig: We are structuring our implementation around a four-part architecture: plan, prepare, respond and recover. We use a road map methodology that moves us from very general statements and ambitions down into action plans that can be enacted through practical tools, such as checklists, process flow diagrams, and contact lists for crisis management teams and functional teams. We have produced all of that as a formalized plan that is documented and provided to the leaders of our businesses. The idea is to ensure that there are linkages between activities taking place at the site, that individuals know what their responsibilities are and that execution is aligned to the overriding plan.

Q: What do you see as the key challenges for this office in the coming year?
Ludwig: It would have to be the adaptability of our plans to virtually any disaster that may occur. At the moment, quite a bit of focus has been on hurricanes, and we also have been doing quite a bit of effort on pandemic preparations as well. Building in that adaptability so we can respond to any disaster, whether it's hurricanes or earthquakes or pandemics or even terrorism, is the challenge. Another challenge is scalability-making sure that adequate resources are available to handle large, widespread disasters if they occur.

We have both short-term and long-term goals. Short-term, we want to develop consistency in DHL's emergency management processes across the business units, as well as alignment across countries and regions of the globe. Our second short-term goal is to improve DHL's readiness to deal with all types of disasters; third, we want to enhance our position in the community by taking a more direct approach to providing humanitarian aid in conjunction with our strategic partnership with the UN and our disaster response teams.

Long-term, our goal is to develop an emergency management capability within DHL that is recognized as industry leading and then maturing that into a marketable service that will enable a logistical link between government and private industry partners for efficient disaster response. Additionally, we want to proliferate our humanitarian activities for the benefit of our strategic partners and the communities that we serve.

Q: How did this position come to you and what attracted you to it?
Ludwig: I have been in the logistics business for more than 18 years. Most of that was with Exel Logistics, which last year was acquired by DHL's parent company. My time there was largely in financial roles, though I later moved into operations and held the position of vice president of operations for the chemical and industrial sector. I think that's where my affinity for safety, health and environmental causes really began. I spearheaded Exel's program to become a Responsible Care logistics provider, which is very important in the chemical industry. From there, I took on global roles in finance and I also got involved in major strategic change projects at Exel, which involved developing standard and consistent processes across the business, taking strategic initiatives and actually bringing them into reality. All of that background led me into this role. In the wake of last year's disasters and all of the challenges that came out of them, DHL wanted to establish a functional office that would provide leadership and strategy for our emergency management and humanitarian affairs efforts. When I heard about the opportunity, I just thought, 'Wow, it would be great to have an opportunity to affect changes that would impact not only DHL's major business units but also our employees and the public at large. So I am very pleased to be in this role and to be working toward the objectives that we have set.

Q: What are your objectives, your mission?
Ludwig: We do have a written mission statement and I will read it to you: "to provide a safe work environment for our employees in all parts of DHL's businesses; to properly train our employees for their safety while at work and for their families while at home; to plan, prepare, respond and recover from emergencies in a consistent and effective way in order to ensure the continuity of our business and enhance our role as a strong community supporter, before, during and after an event."

I believe our objectives have two aspects with both internal and external dimensions. Internally, we are focused on business continuity during any disaster, because we see the continuance of our logistics and express and global mail businesses as one of the foremost services we can provide. Maintaining the continuity of those businesses is critical not only for our corporation and our employees but also for the customers that we serve. That is the emergency management side.

Now, being successful at that enables us to be a much stronger corporate citizen on the humanitarian side. It enables us to bring logistical expertise to the communities that we serve and to play that role of good corporate citizen, which we believe is our social responsibility.

Q: What role did the disasters of 2005 play in your decision to form this office?
Ludwig: Well, the events of 2005 certainly contributed to our strategic thinking on this, but we also were looking at the opportunities for us to take a more active humanitarian role in providing disaster relief. Just last year we established a strategic partnership with the UN and what we have promised to do as part of that is to establish disaster response teams that will be able to respond in the event of a natural disaster anywhere in the world. We typically would send logistics professionals into a nearby airport to provide support activities and to help maintain airport operations so that humanitarian relief coming from all over the world doesn't get bottlenecked and can be transported on through local carriers to the actual site where the relief is needed.

As a global organization, DHL has a lot of resources and expertise from which we can draw to form virtual teams that will bring the right capabilities to bear on a given situation. These teams will span multiple business units and take into account multiple functions. The thing that will make these teams effective, though, is how well we can consistently develop and implement our processes.

Q: What did DHL learn from past disasters that has informed your strategy in this area?
Ludwig: Most of our learning centers around critical assets and functionality. Identifying business-critical assets and functions and people is probably the most important thing that needs to be done. For example, being able to deploy generators and fuel into an affected zone in order to be able to continue our services is crucial-so it's all about securing the assets and controlling the assets as we deploy them into the zone.

There are a whole host of anecdotes around how a company's assets were commandeered by the public sector during Hurricane Katrina and we have a few of those stories ourselves. What needs to happen is collaboration between the private sector and the governments in order to make that process more effective, so that resources getting into the zones will be those that can help the local economy, help the local business owners and the public at large in their recovery. That includes identifying critical service providers and helping them get access to their own assets and their people.

Generally, we have found that companies often have difficulty matching resources against the severity of the event. That is a critical success factor because you don't want to get it wrong in either direction. If you provide too much, you are being inefficient. But if you are wrong on the short side, you run the risk of failure and of not being able to continue providing services. So that's one element at which everyone, frankly, could do a much better job. Of course, that's easier said than done and a lot depends on a company's maturity level. Relying on manual processes or ill-defined processes, or relying on individuals to be heroic might get you through one disaster. But you need to learn from that event and to formalize the process and standardize it as much as possible so people understand what their roles and responsibilities are. Then you stand a much better chance of being able to handle future events, People will default to processes that they know and if something is ingrained in the fabric of your business you stand a much better chance of being able to respond.

And that brings me to the second thing we have learned, which is the importance of training your employees and getting them ready, both on a personal level and also in terms of their functional role within the business. We have initiated several internal communications campaigns and employee training programs that are designed to prepare our employees and give them the resources that will enable them to be more effective before, during and after an event.

Q: Can you tell us a little more about how you formalize these processes?
Ludwig: We are structuring our implementation around a four-part architecture: plan, prepare, respond and recover. We use a road map methodology that moves us from very general statements and ambitions down into action plans that can be enacted through practical tools, such as checklists, process flow diagrams, and contact lists for crisis management teams and functional teams. We have produced all of that as a formalized plan that is documented and provided to the leaders of our businesses. The idea is to ensure that there are linkages between activities taking place at the site, that individuals know what their responsibilities are and that execution is aligned to the overriding plan.

Q: What do you see as the key challenges for this office in the coming year?
Ludwig: It would have to be the adaptability of our plans to virtually any disaster that may occur. At the moment, quite a bit of focus has been on hurricanes, and we also have been doing quite a bit of effort on pandemic preparations as well. Building in that adaptability so we can respond to any disaster, whether it's hurricanes or earthquakes or pandemics or even terrorism, is the challenge. Another challenge is scalability-making sure that adequate resources are available to handle large, widespread disasters if they occur.

We have both short-term and long-term goals. Short-term, we want to develop consistency in DHL's emergency management processes across the business units, as well as alignment across countries and regions of the globe. Our second short-term goal is to improve DHL's readiness to deal with all types of disasters; third, we want to enhance our position in the community by taking a more direct approach to providing humanitarian aid in conjunction with our strategic partnership with the UN and our disaster response teams.

Long-term, our goal is to develop an emergency management capability within DHL that is recognized as industry leading and then maturing that into a marketable service that will enable a logistical link between government and private industry partners for efficient disaster response. Additionally, we want to proliferate our humanitarian activities for the benefit of our strategic partners and the communities that we serve.