View from the Top: Cleaning Up After Katrina
The CEO of Oreck Corp. credits quick thinking by employees (including his VP of IT) for a speedy recovery from the hurricane. After all, the systems don't run themselves.
CIO —
Just before Hurricane Katrina madelandfall last Aug. 29, Tom Oreck, president and CEO of cleaning products manufacturer and retailer Oreck Corp., took off from New Orleans on a plane bound for Houston. With him were his wife, his three kids (all under age 5), his dog and his company’s backup tapes. When he touched down, he FedExed the tapes to the company’s backup data center in Boulder, Colo., and began piecing his company back together.
Oreck’s headquarters are in New Orleans, and the company also has a 375,000-square-foot manufacturing plant and call center based in Long Beach on the Mississippi Gulf Coast. Though the company was back in operation 10 days after the hurricane (and now, more than six months later, has resumed normal operations), its disaster recovery plan was severely tested by the storm. The experience taught Tom Oreck some critical lessons about the role of IT in business continuity. First of all, in today’s networked environment, when one IT system breaks down, they’re all down, for all intents and purposes. Second, the public telecommunications system cannot be counted on. And lastly, although a good business continuity plan is essential, recovery from a disaster depends on what Oreck calls "aggressive improvisation" by employees.
The company owes its existence to improvisation. When Oreck’s father David first tried to sell his lightweight, heavy-duty vacuum cleaner in the 1960s, he had trouble marketing the product through department stores, which were the traditional channel of distribution. So the elder Oreck went straight to the consumer, turning the fledgling Oreck Corp. into a direct marketing company. Back then, Oreck’s systems consisted of a few telephones, typewriters and invoices to be filled out in triplicate.
Four decades later, with estimated annual revenue of $190 million (Oreck doesn’t publish its revenue), the mid-market company has 450 retail stores and an expanded product line (it now sells cleaning and air-purification products too). And its IT needs are complex. The direct marketing side of the business lives or dies by its data. Manufacturing depends on supply chain and logistics systems. Customer service needs its call centers.
Tom Oreck and his CFO approve all major IT investments. Nevertheless, Oreck is hard-pressed to name the applications that keep the company running smoothly (aside from that expensive ERP system he recently approved). He is less interested in the systems themselves than in the business results they deliver—or don’t. "Our business is about three things. It is about marketing. It is about controlled, aligned distribution. And it is about quality, both in the product and in customer service," says Oreck.
