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Report on how organisations coped with the earthquakes

Wednesday, January 7, 2015   Posted in: Earthquake By: Administrator With tags: earthquake recovery, research, business, emergencies

University of Canterbury media release: 22 December 2014

Dr John Vargo.A major University of Canterbury report has found a high level of innovation and adaptability shown by hundreds of organisations in Canterbury following the earthquakes. 

National resilience experts and university researchers Dr Erica Seville and Dr John Vargo say many businesses had to relocate multiple times, had to deal with on-going disruption to infrastructure services and have had to cope with disrupted supply chains and changing customer demand. 

The report, "Disruption and Resilience: How Organisations coped with the Canterbury Earthquakes", is part of research being done within the Economics of Resilient Infrastructure project. The report authors, Dr Seville and Dr Vargo, are co-directors of the University of Canterbury’s Resilient Organisations Group.

"In spite of all this disruption, two thirds of organisations participating see themselves as being in a position that is about the same or better off, since the earthquakes," Dr Seville says.

The University of Canterbury report that captures the experiences of 541 organisations affected by the 2010 and 2011 earthquakes is unparalleled in the world of disaster research.

Dr Seville says further in-depth analysis will produce many more insights into how infrastructure outages affect organisations and what enables some organisations to recover effectively.

"But Canterbury organisations can feel justifiably proud of their achievements over the last four years. We have been hugely impressed by organisations in Canterbury. Looking forward, it is important for organisations to keep fostering their resilience. 

"An organisation’s resilience relies on having great leadership and culture within the organisation, building strong and diverse networks that can be drawn on for support when needed, and strategically positioning the organisation to be agile and change ready.  

"With these qualities, an organisation will not only survive a crisis, but can find ways to thrive in a world of ever increasing change and uncertainty.

"We found that overall organisations are recovering well from the Canterbury earthquakes. However, organisations have different capacities to respond and adapt to the challenges they face. Our report paints a high-level overview of some of the key findings from our preliminary analysis of the survey data."

Dr Seville says that despite all of the physical damage, it was the people-organisational issues that were most disruptive for organisations. Organisations were particularly disrupted by customer-related issues and faced challenges managing staff wellbeing.

Of all the infrastructure disruption organisations experienced, it was disruption on the roads they felt most keenly. Roads had both the longest duration of reported outages or reduced service and the greatest degree of disruption.

Organisations experiencing infrastructure disruptions suffered reduced productivity and tended to close for longer.   

Closure is associated with reduced productivity in the post-disaster period, but interestingly, length of closure does not predict which organisations recover well and which do not.

Organisations whose suppliers were disrupted were significantly more likely to experience reduced productivity than organisations that did not face supplier issues.

Organisations with a more resilient leadership and culture, that have strong networks, and that are change ready (as measured by the University’s Resilient Organisation’s 13 resilience indicators) were better prepared, could function for longer with disrupted services and were more likely to be able to meet customer demand a year after the earthquakes.

Organisations that had engaged in some kind of relocation planning were more likely to move after the earthquakes. More than 70 percent of organisations made more intensive use of their staffing resources to recapture lost production following the earthquakes.

Other key report findings: 

  • Organisations that experienced the greatest impact were also the ones most likely to take the opportunity to invest in new technologies.
  • Out of necessity, organisations adapted significantly. Nearly 30 percent entered new market sectors.
  • Once an organisation started adapting, it tended to keep adapting – like an adaptive snowball.
  • The earthquakes caused a dramatic, yet temporary, reduction in resilience for many organisations in greater Christchurch.
  • Maori-focused organisations were more resilient and tended to recover better.
  • Organisations with above average resilience were significantly more likely to be able to maintain or improve productivity following the earthquakes. This has important implications for the ability of an economy to rebound in the aftermath of a disruptive event.

Organisations in their survey had an average of 83 full-time equivalent employees. The 541 participant organisations were from agriculture, forestry and fishing, manufacturing, electricity, gas, water and waste services, construction, wholesale trade, retail trade, accommodation and food services, transport, postal and warehousing, information, media and telecommunications, financial and insurance services, rental, hiring and real estate services, professional, scientific and technical services, administrative and support services, public administration and safety, education and training, health care and social assistance and arts and recreation services.

Contact Dr Erica Seville (021 456 706) or Dr John Vargo at Department of Accounting and information Systems (021 442 091) or UC Media Consultant Kip Brook (0275 030 168) for further information.