Tuesday, April 15, 2008

Of pope, corn, and light rail

Who would think a papal visit or corn crops as business risks?

Yet both are very real risks,

The pontiff's visit to the U.S., as do most head-of-state visits, disrupts life across the board.

Traffic which cannot (or will not) be rerouted will snarl as the "pope-mobile" travels from Andrews Air Force Base to the Vatican's embassy suites. (Why couldn't he, like the U.S. president, simply fly there by 'copter? Even blocking one street for 30 minutes to allow the visitor to land and travel to the compound seems a lot less disruption than the promised "rolling" blockages.)

Many Federal employees in D.C. proper and in surrounding communities will be either furloughed for the day or "allowed" to work from their residences. My work is in Reston near the (Dulles) airport tollway and while I am able to work via VPN, no one is suggesting that I stay home.

How many businesses will be financially hurt by the Vatican visitor's stay? How many businesses plan for such events. (Dust off the snow plan; the impact should be similar: people not coming to work, customers unable to shop; deliveries delayed.) What about ambulance and other emergency vehicles that might encounter a "rolling blockage" on the visitor's unannounced route?

I wonder if the pope-mobile, a Benz, can run on a 10% ethanol mix. Which brings us to the second problem.

Some months ago I suggested that our growing dependence on corn squeezin's for the flivver's fuel tank would have a negative ripple effect on the economy.

If farmers are paid more to grow corn than other plants, corn (and other products which can be turned into ethanol) would be the product of choice. That's reasonable: if a farmer can make $1 from Crop A and $2 from Crop B, simple economics tells us the farmer will plant Crop B.

For the moment, thanks to the oil "shortage" and the continuing dependence on the fuel, ethanol source material (corn, sugar beets, etc.) is in greater demand than supply - and the old rule of "supply and demand" is in effect with a vengeance. Eventually it will lessen, but in the meantime, gas prices soar and with them, prices for everything that is touched by a gas-powered anything - farm implements, trucks, refrigeration units at the store - and home.

On the flip side, we have in the U.S. senate at least one gentleman who - although his state is not known for its oil reserves - insists on withholding subsidies for public transportation. (The local light rail system is seeking funds for maintenance; the senator believes that the riders must pay the full cost.)

Normally the "American way" is to agree with the senator - let the user pay his or her own way. And, frankly, normally I would agree.

But the user is subsidized on the road.

The user is subsidized in the air.

The user is subsidized on the rails.

I'm not sure if the user is subsidized at the ports, but given the other subsidies, I suspect that this is the case.

So why not subsidize local mass transit?

Does anyone think the super-trains of Europe and Japan run strictly on user fees? They are subsidized.

Does anyone believe the airlines pay for the guys in the control towers? How about the TSA folks? Your Federal taxes at work.

And this, too, is a risk. If personnel can't afford to come to work, if customers can't afford to shop . . . Customers will go elsewhere (to the Internet, in many cases).

None of the risks cited here are found within the confines of the business, certainly not within the InfoTech department, yet all can, and increasing do, take their toll on the business' bottom line; as such they are risks which properly need to be considered. Perhaps they can't be avoided, but there may be means to mitigate them.

It's not always the risk within the walls that does the most damage. Smart planners look beyond the walls to protect the organization.

John Glenn, MBCI, SRP
Enterprise Risk Management/Business Continuity
Planner @ JohnGlennMBCI.com

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