Carlos Riesco - Head of Finance, Ecuador
No one is ever truly ready for the consequences of nature’s severity. The devastation a disaster brings reverberates across countries, homes, businesses, communities and the individuals responsible for holding them together. The residual effects can last a matter of days, months, even years.
On 16 April 2016, I experienced firsthand the ramifications of nature’s destructive force when a devastating 7.8 magnitude earthquake struck the coast of Ecuador, killing hundreds of people and leaving tens of thousands in need of urgent help. Thankfully, my family and I suffered no harm in the earthquake. Though our house sustained some damage and we experienced some logistical issues, our thoughts were more focused on the people who had lost a great deal more than us, and what we could do to help.
As the Head of Finance for Unilever Ecuador, I am fortunate to be part of a company that leads the way in creating a positive impact around the world through its brands and the Unilever Sustainable Living Plan. I knew that Unilever would be able to play a part in helping to bring some normality back into the lives of those who had been affected by the catastrophic force that had hit Ecuador.
In this blog, I discuss the actions we took to help others, what we did to mitigate the impact of the earthquake across Unilever and the things that you can do to help your business prepare for, and recover from, natural disasters.
Taking stock after shock - The road to recovery
The earthquake itself happened on a Saturday evening when people were enjoying their free time with friends and family. As with most earthquakes, there was no pre-warning.
Right after the earthquake, I became part of a crisis committee at Unilever’s Ecuador headquarters in Guayaquil. I had previous experience of managing crises, however, I had no experience dealing with a natural disaster. There were a few doubting thoughts in my head that made me wonder whether I was out of my depth. Fortunately for myself and the other board members, our country manager had experience being on a committee just like this one. His knowledge provided lots of practical guidance; he had faced an earthquake while living in Chile, so knew just what to do.
At Unilever, your colleagues are considered family, so naturally I wanted to ensure they and their loves ones were OK and had their needs covered. Water, food, first aid kits, and a safe place to stay were key priorities. Our next focus was on the business. Repairs were carried out on Unilever sites to keep business running as usual and ensure that the area was safe for our colleagues to return back to work.
We used our brands to rebuild and restore our communities
Once we had addressed our own most pressing issues, we turned attention to relief work. We decided that the best thing we could do to support people was to act through our traditional Ecuadorian brands. We felt it was important that people knew that the brands they had grown up with were now helping them in their communities.
Here in Ecuador our laundry brand, Deja is a well-known household name. Through the brand and associated teams we built more than 100 houses to support victims of the disaster. Through our ice cream master brand, Pingüino, we delivered ice creams to children and in the process created a theatre to help take their minds off the catastrophic event.
It was crucial that we worked collaboratively
Another way we helped society included assisting our own clients, for example with our ice-cream sellers. Their stock was ruined as a result of the power going off for extended lengths of time. Unilever helped these companies with working capital to keep their businesses afloat and provided replacement products. These actions were replicated across the whole of our portfolio bringing a real sense of partnership and togetherness during a testing time.
As Head of Finance it was my job to not only adjust the company’s financial plan, but to also deal with offsetting costs. As part of this I needed to find out how our insurance would cover the losses, of which there were two: material damage and business continuity. The importance of insurance is highlighted most when you suffer from crises like this.
How you can help your business when disaster strikes
When it comes to preparing your business for the worst, I think this Spanish expression sums it up best: “Es mejor prevenir que lamentar” or, “better to be safe, than sorry,” in English. Having an action plan ready before disaster strikes is probably the best way to hedge against damage to your business. Here are some tips to help your company mitigate losses:
- Understand how a crisis committee works in your organisation: who is part of it, who leads and how it operates.
- Address people’s safety and immediate needs. Find out how you can have the most impact in society - where help is most needed. This will support things getting back to normal and in turn, help business to pick up again.
- Pay attention to any communication the company releases in regards to relief your company provides. You do not want it to appear more ‘opportunistic’ than charitable.
- Make sure your company’s insurance coverage is up-to-date and policies are clear.
- Adjust financial forecasts. Consider the funds required to rebuild the business as opposed to simply accounting for the losses. This will have a huge financial impact on business in the short term, but will help the business reap the benefits in the years to come.
- Invest in the local community. There is no better way to help your company than by helping the community it operates in. Invest by offering working capital to business partners. Help build local stores and amenities. Normality within the community will help your business run normally again.