The MBA for Executives program at the Yale School of Management was an incredible opportunity; many of my colleagues shared the sentiment this past May that, in a way, we were sad to see it end after graduation. The lessons learned in the core and in the subfocus of sustainability are so important and relevant to the management of my South Florida real estate management company. After each class weekend I truly felt there was something I could apply to one aspect or another of my company.
Of course, I could never have imagined that this summer would bring one of the worst hurricane seasons in recent history, and that I would rely upon my learnings at Yale so much during this time of crisis as our Florida community faced the threat and impact of Hurricane Irma this past September.
Prior to the storm, the South Florida economic environment could be said to be near full employment. Many of the companies that I deal with were and continue to have tremendous difficulty finding and retaining skilled labor. Most companies were operating at full capacity, with a 100% utilization rate. There was no slack in the system.
As the hurricane approached, I remembered my learnings from Professor Art Swersey’s Operations class and our Littlefield simulation. I realized that our labor utilization rate, as a company and as a community, could not withstand a shock to the system, or extreme variability in demand. Any large departure would create a huge bottleneck in supply, jolting the economy of South Florida. I knew this would happen, and it would take a long time to correct itself and bring the system back into equilibrium (à la Professors Schott and Caliendo).
Approximate five days before the storm, a supply-side shock is exactly what ensued. As South Florida was almost certainly within the path of the storm, a large-scale evacuation began—and so did gas lines, gas shortages, and supply outages. The interstate was completely clogged, and many families took two days to flee to Georgia, which is normally a six-hour trip.
Locally, as we prepared for the storm, we had to manage our human capital, reallocating resources from other tasks as everyone was focused on storm prep, sandbagging and boarding up doors and windows. Throughout these long days, the effects of climate change were a constant reminder as the Atlantic Ocean off the coast was at 88 degrees—unbelievably warm and very favorable to hurricane development and strengthening.
As Irma passed we realized we were fortunate that the storm weakened slightly and we were largely spared from the eye of the storm, which caused severe damage to the Florida Keys. Yet there was still a lot of damage, down trees, and power lines. Just after the storm there were reports of millions without power. Locally, 75% of our company’s employees were without power. Yet almost all showed up to work on time the day after the storm to begin the cleanup process, clearing the bottlenecks, normalizing transportation, restoring power, and maintaining standards of life safety. Together we spent the next week removing down trees and cleaning up debris, trying to get operations back to ‘normal’. Many of us were without power for over a week, yet we moved clients to other locations that did not loser power so that they could contact their customers and get back to work. We worked together as a community. We were resilient. We adapted.
As a manager I realized we are in a new “normal.” The effects of climate change will undoubtedly lead to more volatility in weather and storms and more volatility in how we are required to manage our companies, our human capital, all of our resources. Just a few short weeks thereafter the unthinkable happened as Hurricane Maria made a direct impact upon Puerto Rico and caused unimaginable devastation. Unfortunately, our learnings have also taught us that a shock this large to the Puerto Rican people and economy will require significant assistance from the federal government for a long time. Locally, we are continuously collecting and donating to their recovery efforts as well, which is estimated to now take years.
Several months have passed since Hurricane Irma hit South Florida, and our company still has a severe backlog of work. Work that was slated to occur before the storm or on a regular maintenance schedule was postponed given the reallocation or resources to the need. As we get back to normal, I see again the role of economics take effect, as I see pent up customer demand. Customers trying to acquire our services before the hurricane had to wait weeks to restart their own operations. We are of course grateful for the pent-up demand. Yet it leads to more work, and even more backlogs.
Nature has a way of cleaning itself; it is part of sustainability. In order to sustain our cities, our communities, our companies, we must prepare for and adapt to these changes, no matter how they result and despite many politicians’ claims to the contrary. When events, human or natural, test the limits of our capacity, of our capabilities, it is by the grace of our training and learning that we can think about the economic impacts of the event, and deploy managerial strategies to deal with them.
Not that any of this makes going through a hurricane so much less nerve-racking. It is a traumatic experience; not nearly as fun as a Yale blizzard during a class weekend. Yet there is a sense of newfound confidence that we have been given the tools to deal with the challenges ahead. It just so happens this management and sustainability challenge happened just a few short months after graduation. The ultimate capstone course goes far beyond the Executive course; it is life.