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Operating at the edge: firefighters, networks and lessons for minimal disruption during crisis

Olivier Berthod

1. Introduction

Any distant crisis or catastrophe can have ripple effects thousands of miles away and wreak

havoc on whole industries. The tsunami of 2011 in Japan disrupted the world supply of flash

memory, increasing the price of this component by 20 per cent. In the same year, an E. coli

outbreak in northern Germany provoked similar problems in the European food business

until the German administrations identified the product that was transmitting the disease. In

2013, economists of the World Economic Forum (2013) announced that supply chain

disruptions reduce firms’ share price by an average 7 per cent. Such disruptions are typical

for the prevalence of network relationships in industries, markets and society. In this case

study, I propose to reflect on ways to turn this connectedness into a resource and mitigate

disruptions.

Companies, unmistakably, operate amid complex webs of relations. Customers, suppliers,

transportation firms, service providers: some are distant contacts and others very close

partners. Whether they want it or not, all companies are embedded in networks. Some

harness these relations for the better; others fail to do so and ride along. What would

happen to a firm’s operations, however, if one of those partners failed to deliver the right

number of components or even collapsed altogether? or If retail partners collapsed

altogether? and What can firms do about that?

For the better part of the past three years, colleagues and I have been involved with the

work of the firefighters of the city of Düsseldorf, Germany, asking ourselves this very

question. We studied this organization the old-fashioned way: by observing its members

while they work (over 100 interviews and 560 h of observations constitute the background of

the project presented in this article). Observing the work of firefighters in this country is an

once-in-a-lifetime opportunity, especially for scholars interested in management. German

firefighters are not only in charge of fighting fires. They must cope with pretty much

everything: car accidents, technical relief, pumping oil out of a tanker, bomb disposal,

safety planning for large-scale events (including soccer games, which, in Europe, amount

to something) and sometimes fires. The scope of their responsibilities makes it an incredible

organization to look at. They operate in constant turbulences and must deal with

unexpected accidents and problems that they have not caused in the first place. In other

words, they live the nightmare of most firms: at any point in time, they can be dragged into a

crisis and will be held accountable for its resolution.

There are plenty of approaches, theories and advices on how to deal with such

disruptions – crisis management, business continuity, risk mitigation, supply chain

Olivier Berthod is based at

Jacobs University Bremen,

Bremen, Germany.

The author owes gratitude to Michael Grothe-Hammer for his comments on an earlier draft of this paper and for sharing his numerous insights and observations from the field. He acknowledges generous fund- ing from the German Research Foundation (DFG, Grant SY 32/ 6-1).

PAGE34j JOURNALOFBUSINESSSTRATEGYjVOL.39NO.32018,pp.34-39, ©EmeraldPublishingLimited, ISSN0275-6668 DOI10.1108/JBS-04-2017-0038

resilience. What these approaches share, however, is a focus on a company’s

responsiveness and on how to protect it from the outside. Instead, the firefighters we

observed cope with their challenging mandate by building proactively tighter relations with

the management of the most critical infrastructures and partners in the city. They do that via

the designing of binding, collective structures for crisis management. In this article, I report

on the main insights from these observations and attempt at translating these networking

practices into heuristics for business settings. These lessons from the field turn common

wisdom about strategic planning on its head.

2. Networks: what are they?

The management of relations between firms (but also organizations from other sectors, for

that matter) is a central topic in contemporary management discussions. All disciplines

seem to be concerned with networks. General management, strategy, nonprofit

organizations, public administration, value and supply chains, finance – scholars from all

fields point to the same direction: the more complex the problem, the more likely it is that

networks are involved instead of single organizations operating on their own.

Car producers do R&D and produce in networks; air carriers share capacity via networks;

governments deliver public services in networks; policy-making takes place in networks;

criminal groups run on networks. And so, the interested reader will find a wealth of

definitions and theories about networks. My interest in this article is with the constitution of

what other authors have called goal-directed networks. A goal-directed network (henceforth

“network”) is “a group of three or more organizations connected in ways that facilitate

achievement of a common goal” (Provan et al., 2007, p. 482). This definition excludes the

more general notion that firms have various ties to various other firms and that opportunities

arise amid this web of acquaintances. By contrast, goal-directed networks are prepared for,

assembled and nurtured over time to coordinate multiple contributions to a collective goal

that cannot be attained by one firm alone. In other words, firms evolve amid a field of

dormant relations. These dormant relations, however, can be awakened and harnessed

strategically into purposefully designed networks, not only to create value but also to

respond better to disruptions in firms’ operations.

3. Harnessing networks as continuous design: the Düsseldorf case

Business and management scholars do not write much about the design of organizational

structures anymore (Greenwood and Miller, 2010). The main reason for this lack of interest

is that research on organizational design had traditionally been more interested in

predictions about the contingencies and outcomes of specific structures instead of

illuminating the process of designing as such (Romme, 2003). The design of organizational

structures refers to the process of developing a plan for whatever problem the organization

is facing. Design, in organizations, is therefore always incomplete, as long as managers

keep on looking for possibilities for improvement. For example, in a case study of a

pediatric intensive-care unit, Madsen et al. (2006) reported on design as the means to

maintain a protective buffer between the unit and others to safeguard the unit’s

performances. Similarly, Yoo, Boland and Lyytinen (2006) showed how the shape of project

teams is constantly changing, depending on the evolution of the project’s vision, visual

representations of the results and collaborative work in-between. This line of thinking, as we

will see, applies also to the structures that bind networks together.

Düsseldorf is the capital of the state of North Rhine-Westphalia, on the border to Belgium

and The Netherlands, and part of one of the most important economic regions in Germany.

The Düsseldorf Fire and Emergency Department (henceforth FED) is unique in Germany for

two main reasons. First, the city’s infrastructure is concentrated within the city’s boundaries

and not, as it is often the case in large cities, scattered regionally. This situation increases

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the scope of responsibilities of the FED tremendously. The infrastructure and critical areas

include an international airport; the production facilities of many international firms (e.g.

Henkel and Daimler); a major railway hub; two inland harbors on the River Rhine and an old

town famous for its high density of restaurants, bars and venues; and crowded, narrow

streets along the river, which renders emergency and rescue operations very difficult.

Hence, with a staff of about 1,000 employees, mostly technicians and officers in firefighting

and emergency management, and 300 volunteers, the Düsseldorf FED conducts about

140,000 operations each year, of which only 2 per cent relate to fire.

The second reason is the FED’s tendency to nurture interorganizational relations to

anticipate and mitigate potential incidents, from minor emergencies to major crises. This

strategy, however, emerged organically. Hence, legislators regularly point at the Düsseldorf

case as a promising practice for FEDs generally. The FED relies on three major networks to

mitigate crises, using a variety of structures (Berthod et al., 2017). The first network is

concerned with daily emergencies and incidents. Participants in this network are listed by

the FED on an incident-per-incident basis, incorporated in the FED’s alert system and kept

on standby between actual incidents. Depending on the nature of the emergency, they are

activated by the FED officer in charge. The second network is a restricted group of partners

who are activated in case of larger crises. Participants in this network are public

administrations and municipal companies (utility providers, transportation, harbor, etc.) that

gather during large incidents to address problems in public service delivery that might

ensue from ongoing operations. The third network is dedicated to the planning and

monitoring of large-scale events in the city. Participants in this network gather routinely to

discuss the safety of future events that are still in planning. According to a set of procedures

and rules, smaller teams manned with officers and managers from the organizations directly

involved (including, at the very least, the firm organizing the event, the venue management,

police, safety firms and FED) work in shared situation rooms and exchange information

directly as events unfold.

What these large, established networks share are rudimentary structures that help the

coming together of their participants when deemed necessary. They qualify as networks

because they include more than two companies or administrations; their participants gather

and exchange information and resources toward a common goal (in general, mitigating

crises or anticipating potential ones); and because they have become relations that reach

beyond mere business transactions. Our observations at the FED show that the prevalence

of such network structures in the city’s emergency management is due to three processes

that are at the core of the work of the FED’s top management: courtship, attention to

systemic vulnerability and collective prototyping. I will now introduce these processes with a

concrete example: preparing for crisis mitigation at the airport.

3.1 Courtship

At the outset, any relation to potential partners must be triggered and nurtured or it will

remain dormant. We were amazed by the amount of time the FED officers spend out of the

office visiting other managers and getting to know others’ ways of working and thinking. In

the process of preparing for the handling of emergencies at the airport, courtship included

countless bilateral visits to participants in the planning work (federal and state police, the

logistics firms operating onsite, the airport management, etc.). I call this “courtship”

because these meetings often constituted first attempts at getting to know each other

before planning and without a clear goal in mind. Courtship, however, never stopped

altogether. Between crises, FED officers often pay courtesy visits to partners to maintain

mutual awareness and be prepared in case a crisis occurs. Similarly, during planning at the

airport, courtship increased as soon as the partners were hitting topics of disagreement,

thereby maintaining the discussion active while giving it time to evolve.

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3.2 Attention to systemic vulnerability

Moving on toward the defining of a common goal, one of the chief agenda of the FED during

the planning work was to create a sense of vulnerability. Much literature on change

management highlights the importance of urgency to precipitate change. But, how does

one create urgency without a threat? With their focus on vulnerability, the FED asked, with

deceptive naivety, what would happen if a plane crashed over the airport while landing?

Obviously, all participants knew what they would do. However, discussing this problem

collectively pushed an unsuspected problem to the fore: what they had planned to do

would have disturbed the others and their work, and vice versa. Silence set in. The more

general question, for the infrastructure, quite naturally became: “Wouldn’t it be nice, if they

could keep on operating the airport, no matter what?” And, each partner, from this

perspective, asked itself the same question about its own operations.

3.3 Collective prototyping

As the amount of interactions increase, the participants to such a design process need to

solidify whatever agreement they are working on. Sustaining the rules and resources on

which the network relies is a chief mission for a network structure to survive planning. The

FED led a process of prototyping together with the other participants to proceed. They took

a map of the infrastructure and asked the participants: for the case, they would need to

reallocate and deploy at the airport all the resources they can possibly think of, how would

they reach the area, where would they dispatch them, and what for? This level of simplicity

celebrates the very idea of networks: what one does and how one does it is one’s expertise.

How can organizations connect, then, and make the combination of their efforts a

meaningful, coordinated ensemble? Over numerous meetings, the participants discussed

preferred routes and deployment strategies and looked for alternatives to avoid frictions.

The result is a simple map filled with colored routes and symbol for each organization that

highlight clear responsibilities and mutual agreements. The network, since then, is back to a

state of courtship – until the next crisis, that is. People meet and greet. And, the map is in all

emergency vehicles.

4. Lessons learned: three guiding questions to harness networks before crises occur

This article reports on the way firefighters harness networks to mitigate potential crises.

Against this background, this article raises particularly relevant questions (and related

suggestions) for firms interested in harnessing better, and ultimately, control better, the web

of relations in which they operate and create value, both up- and downstream.

4.1 Getting rid of scenarios?

Ever since Arie de Geus (1988) reported on how scenarios had helped Shell to navigate a

sudden drop in the price of oil (going from US$27 per barrel in January of 1986 down to US

$10 in April of the same year), scenario-based planning has been everywhere. And, while

de Geus had made clear that scenarios were about changing minds and not plans, what

stuck was that scenarios help anchor creative thinking about plans. The first lesson from the

Düsseldorf-way of planning for crisis mitigation is: we could as well forget scenarios. They

are useless when it comes to networks. Scenarios that make sense to a firm might well be

incomprehensible to others. Culture kicks in, regulations, different priorities, etc. This is

the reason why the FED never used concrete problems while prototyping their map in the

example above. Instead, they asked the others what would they do, if they had to operate

there. Or, there. Their focus was on geography and spatial redistribution of operations, not

on concrete problems (Grothe-Hammer and Berthod, 2018). So, a first question is to ask:

what would the company do if partners in its value chain collapsed in those geographical

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areas that are particularly important for its operations, customers and ultimately, to the

economic value its management is adding. What are these areas and what partners are

critical and difficult to replace?

4.2 ‘‘All in’’ or why companies need to embrace the unknown

A second interesting question for managers of all sectors is the FED’s focus on “all in” in

terms of planning and resources. Their rationale was: if they know how to handle an

operation with maximal dimensions, then they will be ready to handle lesser problems. As a

corollary, the FED accepted the fact that even that approach had limits. And, this humility

had a positive force. If a situation comes when “all in” is not enough, well, what can they

possibly do about it, anyway? So, they concentrate on a more important question: how do

they make sure that they can give their very best. The point being: strategy is no ultimate

shelter. So, once the company has an answer to the first question above and knows what

the most sensitive areas for its operations and value creation are, it should ask: how much

resources can it afford to put into a recovery operation and where from. Depending on the

role of the partners identified in question #1, strategies could be multiple sourcing from

other parts in the world, absorption of additional costs of transportation, etc. And, finally,

against the backdrop of this second question, how, and how far, are these responses

scalable?

4.3 Lead: the case for a trouble-shooting unit

Developing scalable responses to disruptions in a network will necessarily include an

important work on the company’s relations to its partners. Similar to the FED and its

relations at the airport, a firm needs to understand how its partners operate, especially

in case it counts on them for its own recovery plans. How well can partners scale their

operation if a firm suddenly needs to buy more and dispatch to new geographic areas?

Could quality become an issue in case of sudden variations in the orders? There is a

running debate in the field of crisis management about how response networks fail to

be sustained between crises and how this leads to weaker responses. The strength of

the FED, we found out, was their constant work on what they called “interplays”. In their

case, this was a tacit job requirement among top management. This works out just fine

because their job fluctuation is low. By contrast, Shell had a team working on scenario

planning. Hence, my last point is less a question and more an organizational

suggestion: firms, too, should have a team working on network disruptions and

recovery, full time. A team that does courtship, and that is skilled at highlighting

systemic vulnerability when visiting and brainstorming with partners. A team ready to

engage in prototyping plans collectively. A reflexive, critical, trouble-shooting unit that

will act as a catalyst for ideas and solutions when the next crisis kicks in.

5. Conclusion

This case study reports on promising practices from an organization that is used to cope

with the most extreme of crises and disruptions. It uses data from a longitudinal fieldwork to

expose how this organization strategically manages the network of public organizations,

nonprofits and firms in which it operates. Three practices are put to the fore: courtship,

attention to systemic vulnerability and collective prototyping. In a last section, the case

study proposes three questions for firms interested in harnessing their own network: get rid

of scenarios, plan for all-in and make a case for a troubleshooting unit.

Keywords:

Network, Scenario planning, Crisis management, Business continuity, Society of networks, Value chain disruption

PAGE 38 j JOURNAL OF BUSINESS STRATEGY j VOL. 39 NO. 3 2018

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Corresponding author

Olivier Berthod can be contacted at: [email protected]

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