Leadership Dispatches: Chile's Extraordinary Comeback from Disaster (High Reliability and Crisis Management) - Hardcover

Useem, Michael; Kunreuther, Howard; Michel-Kerjan, Erwann

Hardcover

ISBN 10: 0804793875 ISBN 13: 9780804793872

Verlag: Stanford Business Books, 2015

Inhaltsangabe

Through an account of Chile's remarkable recovery after a catastrophic earthquake in 2010, this book unearths a set of leadership principles that are relevant to anyone at the helm of public or private organizations facing risk. Leadership Dispatches is at once the story of nation that shifted into high gear after a major disaster, and an instructive guide for leaders coping with increasingly widespread and menacing crises.

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Über die Autorin bzw. den Autor

Michael Useem is William and Jaclyn Egan Professor of Management at The Wharton School, where he is also Director of the Center for Leadership and Change Management. His previous books include The India Way, The Go Point, Leading Up, The Leadership Moment, and Boards that Lead.

Howard Kunreuther is James G. Dinan Professor of Decision Sciences and Public Policy at The Wharton School. He is Co-Director of the Wharton Risk Management and Decision Processes Center, a Fellow of the American Association for the Advancement of Science, and Distinguished Fellow of the Society for Risk Analysis.

Erwann Michel-Kerjan is Executive Director of the Wharton Risk Management and Decision Processes Center and Chair of the OECD Secretary-General Board on Financial Management of Catastrophes.

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Leadership Dispatches

Chile's Extraordinary Comeback from Disaster

By Michael Useem, Howard Kunreuther, Erwann Michel-Kerjan

STANFORD UNIVERSITY PRESS

Copyright © 2015 Board of Trustees of the Leland Stanford Junior University
All rights reserved.

ISBN: 978-0-8047-9387-2

Contents

Prologue: A Quiet Summer Evening, 
PART I: Taking Charge to Lead a Comeback, 
1. Twelve Days before Entering the Presidential Office, 
2. One of the Most Intense Events Ever Recorded, 
3. First Order of Business, 
PART II: How They Did It, 
4. Frameworks for Action, 
5. Presidential Leadership, 
6. Tiered Leadership, 
7. Financing Recovery, 
8. Insurance Payouts for Recovery, 
9. Private Giving for Recovery, 
10. Execution and Expectations, 
11. Vulnerability and Readiness, 
12. Civil Action, 
PART III: What They—and We—Learned, 
13. Long-term Disaster Recovery, 
14. Rescuing Thirty-three Miners, 
15. Leadership Dispatches, 
Epilogue: A Quiet Summer Afternoon, 
List of Tables, Figures, and Photographs, 
Notes, 
References, 
Individuals Interviewed, 
Acknowledgments, 
About the Authors, 
Index, 

CHAPTER 1

TWELVE DAYS BEFORE ENTERING THE PRESIDENTIAL OFFICE

The reality of my life has changed. —Interior Minister-Designate Rodrigo Hinzpeter

"Oh my God, it's not stopping," recalled a Time magazine reporter in Santiago who had been in a bar when the earth started moving. Glass shards everywhere, patrons were clambering out the shattered windows, others rushed for the door.

Visiting Santiago from Oregon, Sylvia Dostal had booked a room on the twenty-third floor of the capital's Marriott Hotel. "I had been in earthquakes before," including the deadly 6.9-magnitude event in 1989 near San Francisco, "but this was different," she said. "The building was swaying AND moving up and down!"

Near the epicenter, 210 miles south, Osvaldo González was on a river island with dozens of relatives when the earthquake happened. He began shuttling family members off the island in a boat, as did his cousin, Osvaldo Gomez, with another boat. But then, after several successful crossings, recalled González, "I never imagined what was about to happen." A thirty-foot wave surged up the river just as he was momentarily at the shore, but his cousin was still midstream when it hit. González saw his cousin's boat wafted high on the crest of the enormous swell.

Karina Murga had been partying in a nightclub in the nearby city of Constitución: "It was about 3:20 in the morning. We were close to the beach, celebrating a cousin's birthday," she said, "when the ground started to shake. At first it was soft, but then it got strong, so strong we couldn't hold ourselves up." Some yelled, "Tremor, tremor!" Others, "Earthquake, tsunami!" When Murga emerged outside, she recalled, "You couldn't see anything. There was a cloud of earth—horrible—you had to yell people's names to know where they were, because you couldn't see them."

Katrina Murga's six-year-old daughter, Carla, had been left for the night with friends. "I yelled, 'My daughter! My daughter! I need my daughter! I have to go get my daughter!' Like a crazy woman, 'My daughter!'" Murga would soon reunite with her unscathed six-year-old. Osvaldo González would never find his cousin.

THE PRESIDENT AND INTERIOR-MINISTER-TO-BE

Although more than two hundred miles from the epicenter, the capital city's shaking also aroused the president-elect's interior minister-designate, Rodrigo Hinzpeter. He and the new president would be taking power in less than two weeks. But as the first signs of the calamity's enormity became shockingly evident, the future minister quickly appreciated that the new administration's leadership of the country was about to be profoundly tested and redefined. It would have to address a whole new order of very unexpected business.

The designated minister of the interior and public safety (as Rodrigo Hinzpeter would be formally entitled)—the premier member of the presidential cabinet who would become vice president if the president were abroad or incapacitated—talked with his wife, checked on his three children, and attempted to call his mother. Telephone lines were dead or jammed, but after many redials, he found that his family was well and safe. Yet he also soon realized that tens of thousands of other families were suffering, and that any return to the anticipated governing path was not in the cards: "The reality of my life has changed." Hinzpeter's portfolio included public order and internal security, direction of all domestic policies, and oversight of regional authorities throughout the country. Every element would be affected.

Hinzpeter raced across the near-empty streets of Santiago at 4:30 a.m. to the party's campaign headquarters, where the future government had been readying itself ever since its victory at the polls on January 17. Plans for stimulating growth and creating jobs had been on the table yesterday, but today they would be swept aside for the urgency at hand. "We were waiting to start the government," recalled the future minister. "In a few days the government team would have to start working, so from the very beginning we had no time to lose" and "we had to understand what happened to the country."

The interior-minister-to-be had managed to learn a little about the country's condition before exiting his home, before all power had been severed. But now in the car, with a working radio, as he sped across the darkened capital he was hearing spot reports indicating that the destruction was severe and extensive. "I began to understand that it was a really big mess," he recalled, "more than I imagined when I was at home." Panicked citizens were already in long queues at gasoline stations, he saw, though to no avail, since the station pumps themselves were powerless.

Hinzpeter called the president-elect to compare what little data they had gleaned so far; they agreed to meet later that morning at an agency of the Ministry of Interior, the National Emergency Office, abbreviated as ONEMI (La Oficina Nacional de Emergencia del Ministerio del Interior—National Office of Emergency of the Interior Ministry). Similar in charter to the U.S. Federal Emergency Management Agency (FEMA), ONEMI was responsible for responding to large-scale national crises.

The soon-to-be-inaugurated president and interior minister entered the National Emergency Center at 11 a.m. The enormity of the moment was becoming all too evident. "The earthquake had been huge," recalled the president. "It had affected six regions where more than 70 percent of the Chilean population lived, and the consequences in terms of life had been very huge." He added, "We already knew that more than 500 people had been killed and that the economic damage had also been massive."

Sebastián Piñera and Rodrigo Hinzpeter returned to their campaign headquarters both to consult and to instruct the incoming cabinet, even though technically none of them had official responsibility yet. The president asked the minister-of-finance-designate, Felipe Larraín, to forecast the total costs of reconstructing the country; the future housing minister, Magdalena Matte, to estimate the number of homes destroyed; the future minister-of-public-works-elect, Hernán de Solminihac, to assess the damage to public infrastructure; and the future minister of the presidency, Cristián Larroulet, to look at the legal tools used with prior earthquakes to finance the reconstruction.

Rodrigo Hinzpeter decided that they would have to see the impact of the quake for themselves. "The country was in a very bad situation and many people were suffering," he recalled, but driving to the most affected region, several hundred miles to the south, would be impossible. The country's only north-south artery, the legendary Pan-American Highway, had been completely severed. Invoking for the first time the fact that they were the incoming administration, slated for investiture on March 11, Hinzpeter called one governmental office after another to borrow a helicopter—only to learn that all had been committed. He finally obtained a small helicopter from the Policia de Investigaciones (the FBI equivalent).

Landing at 3 p.m. in the devastated town of Talcahuano—where 80 percent of the residents had been left homeless—the president-elect and minister-designate drove along the waterfront and then down a main avenue. They were stunned by what they found—but also deeply moved by what they learned. "We were completely in shock, but our shock was smaller than the shock of the persons in the street," recalled Hinzpeter. Even then, the residents' concerns for the plight of others, not just themselves, were remarkably in evidence. "People believe other people suffer much more than they do," Hinzpeter found. Although traumatized, inhabitants were asking about the event's impact elsewhere, pressing to know how others had fared, dwelling less on their own plight. The cause of the disaster itself was not yet clear to many. "What happened?" some implored the president. "Was it a bomb or an earthquake?"

It soon became plain to the incoming officials what residents needed most at the moment: "Clear leadership that explained to the people, short and easy, what happened to the country," the minister-designate concluded, "not just what is happening to them but also what is happening to the other people. People want to know what happened to the rest of the country." So the president-elect and the nation's current and future leaders would have to focus, Hinzpeter resolved, on providing "immediate, simple, short information" about both the local area and the entire country.

The incoming officials also began to anticipate what else might follow—in the eyes of those most affected. "People need to know if they are likely to face new dangers in the immediate future," recalled Hinzpeter, "and how they will receive emergency aid." Residents sought face-to- face guidance and reassurance. And as the scale of the disaster unfolded, the minister-designate recalled, "People need to see their leaders hands-on."

Sebastián Piñera and Rodrigo Hinzpeter then traveled to the regional capital city of Concepción, one of the hardest hit of all, where they stumbled on one of the most astonishing products of the calamity. The Alto Río building on Avenida Los Carrera, a main thoroughfare, had completely toppled. The earthquake had turned this fifteen-story condominium—just a year after its opening—from vertical to horizontal. It now lay along a roadway over which it had towered the day before. Most distressing of all to the visitors, appeals for rescue could still be heard from residents trapped in the debris. "When we tried to approach the building and penetrate it," recalled the president-elect, "we heard the cries of the people that were caught there asking for help."

A passing fireman recognized the two horrified observers and urged them to call in a canine search-and-rescue team from Santiago. Hinzpeter contacted the national agency he was soon to oversee but was informed by the incumbent interior minister himself that no canine teams could be made available. Piñera and Hinzpeter would later learn that some of the residents whose cries they had heard that afternoon were among those who did not survive. Eight people perished inside the ruins, the last body not finally extricated for nearly two weeks.

The impact of the personal stocktaking was one of both anguish and action, and as the president-elect and the future minister flew back to Santiago that evening, they concluded that the first order of business was to mobilize governmental assets not only for rescuing trapped survivors but also for restoring basic necessities. Supermarkets had been destroyed, water conduits were severed, and hospitals had collapsed. A rising desperation was already evident in the streets, and some would turn to looting in the hours ahead.

"The most important dialogue that we had" on the helicopter flight home, Hinzpeter recalled, "was our conviction that the city was out of control, so there was a need to call the army to get control of the city that night." Darkness was approaching on the first day of the disaster, and yet there seemed to be no public authority in the streets. The future minister concluded, "You have to make an immediate assessment of what is the reality on site, because otherwise you make bad decisions since you don't have the information. You have to guarantee the basic needs of the people immediately, which are security, food, health, and housing."

Meeting with his incoming cabinet that same evening in Santiago, Sebastián Piñera plunged into national recovery. Yet he would do so, he pledged, without relaxing any of his campaign pledges to jump-start the economy. He concurred with his incoming interior minister's appraisal of the herculean task ahead but quickly added that he was not going to set aside any of his platform promises to spur growth and generate jobs. Still suffering from the 2008–9 world economic crisis, the country required a public stimulus. "The Chilean economy was in very bad shape," recalled the president. "The rate of growth was very low. The job creation capacity was very low. The unemployment rate was very high. The investment rate as a percent of GDP was falling down. Productivity was negative. Poverty was increasing."

The minister-designate countered that at least they ought to consider scaling back some of their campaign promises, but the president-elect declared that he would accept no compromises. Hinzpeter pushed back again: "I was thinking that we would have to rebalance our program." But the president replied, "Minister, you are wrong, we have more work, we will not change our program, and I will tell that to the nation in the next few days." The new administration would stand by its campaign commitments to restore the country to a 6 percent annual growth, create a million jobs, increase an investment rate of 20 percent of GNP to 28 percent, and reduce poverty.

The president-elect decided to embrace two orders of business, one well established in the campaign, the other forced by the natural calamity. He would pursue what had been promised before the earthquake—but now also what had been required by the earthquake. "We knew that we would have to face very difficult situations," said the president, citing three simultaneous winds all blowing in the wrong direction: an international financial crisis stemming from the collapse of Lehman and AIG, the stagnant economy, and now the February 27 catastrophe.

The president-elect decided and declared that evening that the country would fully "recover our growth capacity," and then he and his lieutenants set about analyzing how they could achieve both goals at the same time. For the immediate recovery, they would mandate themselves to restore essential services—civil order, water, and electricity—within a week; social services—including public schools—by winter's start on June 21; and all else by their four-year regime's end. One week, four months, and four years: "By March 11, 2014," the president contended, "the reconstruction process will be over."

To jump-start the recovery, Piñera raised a host of questions for himself and the cabinet members. "What do I have to accomplish? How can I get there? What are the phases? What are the resources that we need?" Most important, "How can I fund it, and who would be responsible for what?" Creating a strategy for addressing these challenges that very evening, he assigned responsibilities to specific cabinet members, and then made clear to all that each would have to deliver. "Look, we have to do it," declared the president. "We cannot fail!"

THE RECIPE FOR RECOVERY

In formulating both a near-term plan and long-term strategy for overcoming and then transcending the calamity, the new administration's actions offer an instructive look at how those with greatest responsibility for a country, company, or community can best attack the extraordinary challenges of coming fully back from calamity and instituting more safeguards against future disasters. Chapters 1 to 3 constitute the first part of our account, "Taking Charge to Lead a Comeback." Chapter 2, "One of the Most Intense Events Ever Recorded," characterizes the scale and magnitude of the earthquake. To appreciate the recovery process,Chapter 3, "First Order of Business," offers a portrait of the comeback.

In Part 2, "How They Did It," we frame the key concepts, leadership characteristics, and actions taken to accelerate Chile's recovery from the earthquake. "Frameworks for Action" (Chapter 4) focuses on the defining capacities of leadership and national institutions. We give special consideration to the importance of thinking deliberatively and acting strategically, and formulate operating principles that tie several tiers of leadership together and are of special concern during a crisis.

In "Presidential Leadership" (Chapter 5), we characterize those personal capacities that the newly installed president brought to the reconstruction process. Here we focus on Sebastián Piñera's decision to take charge, to build a team with a host of management skills but comparatively little political experience, and to set forward unequivocal directives—his mission intent—for his top lieutenants.

(Continues...)

Excerpted from Leadership Dispatches by Michael Useem, Howard Kunreuther, Erwann Michel-Kerjan. Copyright © 2015 Board of Trustees of the Leland Stanford Junior University. Excerpted by permission of STANFORD UNIVERSITY PRESS.
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Details zur Ausgabe

• Verlag: Stanford Business Books
• Erscheinungsdatum: 2015
• ISBN 10: 0804793875
• ISBN 13: 9780804793872
• Einband: Tapa dura
• Sprache: Englisch
• Anzahl der Seiten: 292
• Kontakt zum Hersteller: Nicht verfügbar