#9: The Waffle House Index

1. Now, I’ve got so many questions I want to ask you, but I’m going to limit to to a few. So can you explain to me what the Waffle House index is, and how did you come up with it?

W. Craig Fugate
Well, to understand the Waffle House index, you got to know what a waffle house is, it’s a chain of restaurants are basically fast food doctors best known for their breakfast waffles and hashbrowns, across much of the southeast of the United States, and the waffle house as a diner. They’re open 24 hours a day, seven days a week. They don’t close they don’t close for holidays.

And the index actually came about in 2004 when responding to the hurricanes that hit state that year. And after the first hurricane hit and hurt on August 13, Friday the 13th in 2004 was hurricane Charley struck the Florida Peninsula in the southwest. I had gone down with other members of my team, and we were in the area, the day after the storm and we stay down there for several weeks. The days were long. If you’ve been a disaster, you know, it’s kind of like whatever you can get, and you’re not sure you’re going to get a meal. And the days are long we were we were doing about 18 hour days. So we have found the place to stay just outside of the disaster area. But they had been in fact a lot of power outage stuff. When we got up in the morning. We get up in the US East Coast time, about 4:35am in the morning. We knew if we didn’t get something eat for breakfast, we weren’t sure we’re gonna eat all day. So we would just get on the interstate system or highway system and the Thursday, we actually drive away from the disaster and we’re actually driving south the storm impacts from north of us.

And we finally saw the lights off of the interstate of a Waffle House. It was open. So we pulled in, we’re going to get breakfast. But normally they have these very bright colored plastic laminated menus with all of the great food they serve. And instead, we got this mimeograph sheet of lip paper. And the waiter said, we’re sorry, but you know, the power went out. We lost everything in the freezer. The only thing that’s available is what’s on this on this printed menu. So we said fine, coffee, got eggs. You got hashbrowns, we’re good. We had breakfast. Next morning. After a full day we started this whole cycle again, but instead of having to drive further south, there was actually a Waffle House where we were getting on the interstate. So we went in there, same deal. Here’s a mimeograph menu. They don’t have a full menu, but they had gotten the store reopened. And the thing was, if you looked around, they were the only thing open on it.

What we kept seeing was if there was anything going to open, it was going to be a Waffle House and they were going to open first. So that observation got put into practice because we were also looking at a lot of the state had been impacted by Charlie and we had different degrees of damages. The area where it made landfall was catastrophic. They hit as a category four hurricane. But if you’re familiar with Florida, if you’re familiar with Disney World, which is in, Orlando, the Orlando International Airport had hundreds of millions of dollars of damage inland from the storm as it went across the state. So we were doing a lot of counties and we were color coding, their response status are red, yellow, and green. Red, bad yellow, kind of bad green, they’re okay or they’re going to do it themselves.

And my team at that time were putting a slide deck together – called the Waffle House index. And the index was if the Waffle House is open has a full menu. It’s green. If Waffle Houses are open and has a limited menu. It’s yellow. If the Waffle House is closed, it’s red.

And it would have probably a stop there except for the fact we got hit by another hurricane. And we got hit by another hurricane. And we got hit by another hurricane. And what we started doing in Florida differently in 2004, as part of the lessons we learned from Hurricane Andrew, was this idea that when disasters happen, we’re going to go in and do an assessment, determine what is needed, and then we send the resources. We have put so much effort in getting the assessment teams in there quickly to do these assessments. It was still taking us two to three days to generate the response. And I thought we could get faster so I said what if we just eliminate the whole assessment process and respond like it’s bad? You know, we have enough hurricane history in Florida are pretty good. Good idea. If you tell me the population and the storm where it hit, and how strong it was, I can, I can at least generate the initial response. And so we began this process of not waiting till after the hurricane had passed and descend an assessment teams. As soon as the winds got down to where it was safe enough to get on the road, we’d start driving into the areas of impact.

The challenge was if you’re driving into an area of impact, particularly with hurricanes, and you see this with cyclones down there, the area of impact can be very large. And you’ll start seeing damages as you’re moving into the area. And so the question was, well, what is it bad enough to stop and go to work? And that’s where the Waffle House came in. Because of our interstate or highway system in the United States across the south, there is a Waffle House. I won’t say every intersection, but almost every intersection the point where they became almost like you know, road post – if the Waffle House is open witha fill menu it’s not that bad. Keep going.

If you get there in a Waffle House is got a limited menu, we got power outages, you know, we may have water issues, we may have a lot of mascara issues, but we’re probably not in the area where we need to search and rescue teams. But if you drive and you get to the Waffle House that has closed because of the of the storm, that’s pretty bad. And that’s an area where we should go to work.

And so that rule of thumb became useful to us. But then people started finding out about at Wall Street Journal and others. And as you started thinking about it, Waffle House is actually a pretty good indicator of the community’s infrastructure in the aftermath of a disaster. Because we know they’re going to get open if they’re camped, the building is safe, and they can get the grill going. They’re going back to work even without power. And they have a lot of steps and things They do they actually send folks down to the corporate office. But that because they’re so set on getting open. If they can get open, it tells you a lot about the community just by that status. So that was the genesis of the Waffle House index. And it was never intended to grow to what it has, but it is served, at least in my career.

Renae Hanvin
Well, I have to say, apart from the fact that I absolutely want the Waffle House to come here because I can’t think of anything better than driving along Australian roads and stopping off for some waffles. The Waffle House Index, and just the concept of it is has been a real fundamental part of me and creating corporate community and driving in Australia, more private sector contribution. So that’s, I mean, what a fantastic outcome to discover from the situations that you were in.

2. Did the Waffle House know that you are making them famous and that you were basically positioning them in terms of, you know, being this kind of index with a part of those conversations.

W. Craig Fugate
Not until I got the FEMA. So we were using the Waffle House index starting back in 2004. And I never had permission. I never met with Waffle House. This was just observations of a restaurant. That just in they own most all of their restaurants, they have a few franchises, but as a chain of restaurants, they’re kind of different is that they’re privately held. They don’t report to investors, and they don’t advertise their signs themselves or the advertising. So I didn’t realize I was giving them some of the best publicity they’ve ever had with the index. And by the time I got the theme up, and that was in 2009.

We got a call that Waffle House wanted to come meet with us. And I thought I was in trouble. I thought they were mad that we were using trademark or something. And they actually came in and they were actually thrilled. And they started telling us your story because I said well, you guys must have all these procedures and a elaborate stuff and they go Well, not really. Because they have so many restaurants in the south. They’ve been dealing with hurricanes, most of that their history. And they had actually kind of built a an ad hoc system where their corporate leadership, their president, vice president, you know, all these guys and women that work in their headquarters, they would literally take on and they had to figure this out that they’re going to need cash. So the the chief financial officer goes down to the local bank and gets, you know, a lot of cash, it puts it in a lockbox. They go to their warehouses and they load up all the stuff that they know they’re going to need to reopen a store food cleaning supplies extra, you know, plastic silverware, plates and stuff then on water, and they literally load up their trucks and they drive to the disaster area. And they go to their stores and start working to get them open.

I mean, it’s kind of kind of interesting how many CEOs, you know is proud to say I can’t run the cash register but I can mop. And I’ll mop to get that store up. Yeah, that whole philosophy of just and kind of their I said well how do you guys do all this and sometimes what you know we operate on they’re very simple you know operation philosophy just get open and they have all kinds of work arounds if this is you know, obviously our first concern making sure our employees are safe that we’re providing safe food that our customers are safe. We don’t want to make anybody sick or in danger, anybody. But they’ll do everything from if they got, you know, a store that standing they’ll get. A lot of them are on portable gas. They’ll get the grill going and if they can get the grill going, they’ll start cooking. If the water is not safe, they’ll actually pour bottled water in the coffee makers and start making coffee and they’ll serve ice cold canned drinks, but you won’t have ice you know, things like that, that they have learned over time. You know, they bring in the extra dumpster. They’ll bring in portal it They need to the portable bathrooms, they’ll do a lot of this stuff to get that store open. And they do it within usually the first day or so of particularly hurricanes. As soon as they can get in there, they’re reopened.

Renae Hanvin
I just think it’s so fantastic how I guess it’s an organic growth. And it’s an organization, a private sector organization that has decided the role that it wants to play before, during and after disasters for its employees and for its customers and for the community in which it operates in and serves. And to then seed that into the culture and the strategic leadership and culture of that organization. It’s, it’s so simple, but it’s so smart because you’re building the trust and you’re building the connections with your community in the good times for the bad, which is obviously going to help them in the good times as well. And yeah, I don’t know many CEOs who would literally, you know, pack up and go and mop some floors.

So I’ve heard a lot about how The Waffle House, literally if all they can do is serve water, then they do it because that’s what the community needs. And that’s the role that they feel like they can play. And I’ve heard that it’s also a great place for a lot of the emergency services workers going into, you know, the hurricane or disaster areas. So they have a place to go to as well. It’s not just for the communities, but it’s for the heroes that help the communities as well.

W. Craig Fugate
Yeah, they told me what I thought was a pretty amusing story. They were after one of the Hurricanes going down to Galveston Island in Texas. And when they got started heading that way, there were all these checkpoints and they weren’t letting anybody back on the island. You had to be, you know, a credential responder to get in there. And every time they got the checkpoint, there’d be like local law enforcement, there would be the military National Guard there. And every time they pulled in, of course, our trucks have logos of Waffle House on it. They would just wait from three they weren’t even stopping them and they were kind of laughing that, you know, they got the final checkpoint.

And having been out long enough these disasters that the thing that I’ve always marveled at is for a lot of people, both the responders but also the people live in the area, be able to go in and sit down and just for that 30 minutes to eat food, have coffee, have a cold drink is about the most normal thing that you may be doing and the most bizarre situation you find yourself in. And it’s it’s really interesting to hear people’s that’s when they start telling their stories, which I think is also a very important part of people managing and coping with stress is storytelling and being able to think out and talk about what they went through with other people. And so these waffle houses, again, as you point out it, and I asked them, what’s what’s the business reason you get up and they said, Well, we don’t make a lot of money doing this. But we figure we owe it to our employees, they call their associates and we owe it to our customers and they kind of they kind of chuckle and said, you know, we got some customers if we’re not open, we’re not sure they know where to go.

Renae Hanvin
Yeah, and I think I I love the work that Daniel Aldrich does. So he’s from Boston in America, and he’s a global expert in social capital. And he says a lot about the fact that, you know, people build resilience, and people are the foundations of resilience. And, you know, in fact, connections with people is more important than batteries or water in many instances, and I, you know, if the Waffle House just identified the fact that if they can just bring people together and give people that place to connect and to, you know, just take a breath and leave the immediate, you know, situation that they’re in, I mean, you know, that you can’t build more trust or, you know, brand equity than, you know, being there in those sorts of times at all.

W. Craig Fugate
Turns out social capital is a, I think, an under underrated and not well understood requirement for building community resiliency, particularly among government organizations. But that social capital is key and that’s why we find things like getting getting businesses better. Getting schools open after disaster. All these things are lending themselves to reestablishing that social connectedness. And Waffle House is it I’m pretty sure they never set out to do this. But that becomes one of the first places that many people can start sharing experience and other people and start and I think one of the things that’s really interesting is they find out I’m not the only one going through this. I’m not the only one feeling like I am. And I’m not the only one that’s looking at what you had the day after, almost looks hopeless, because everybody here is facing the same challenges and guess what we’re going to get through this.

3. Now, can I ask you, you’ve obviously got so much experience from working at FEMA, you led responses to so many hurricanes and disaster situations and changing and driving, you know, leadership. What value from your experience in terms of capabilities does the private sector in America offer to government and also to communities in the before, during and after stages of disasters?

W. Craig Fugate
Well, I started out initially in the fire service, I was a paramedic. I became a local county emergency manager, I served the state of Florida State Emergency Management with the FEMA and the thing that I learned throughout my career was it’s very easy to fall in the trap of doing what are called government centric planning. And I came out of the fire service where this is really evident is that we always look to government. As the solutions of problems, you dial 911 or your emergency number and help arrives and those systems are built and reinforced. And are used daily. And too often these government organizations will then try to apply that to a disaster. And I don’t think we actually do a good job of teaching folks that disasters are not big emergencies. As I like to point out, if the org chart of government is taking care of things that you don’t need emergency management, but when that system starts to break, it doesn’t meet the needs. It’s increasingly something that government can’t solve by itself. We began planning after the aftermath of Hurricane Katrina, looking at what a catastrophic hurricane would do to Florida and we actually had one we had it back in the 20s to great Miami hurricane, which struck South Florida across the state as a hurricane and hit Pensacola and other other end of our panhandle as a hurricane. And when we modeled that today, the numbers were staggering. It was about 100 billion dollar store. Up to 12,000, folks would be without power for potentially weeks. And as we began our plans for that we kept running out of things.

There wasn’t enough government and including our federal partners, including the Department of Defense, we still ran out of stuff. We just couldn’t get to everybody fast enough. And we began asking the question of what’s left. And we had done a good job, I think after Hurricane Andrew in 1992, of incorporating our volunteer organizations into our response, we worked as one team, but we were leaving the private sector out, and we were leaving the public out. And I found that with the private sector, increasingly, they were seeing the need to engage. But there wasn’t a good relationship with government too often the relationship between government and business is more regulatory. It’s rules based, it’s not really a collaborative environment. And so we had to create that space in emergency manager. State of Florida we, we built a part of our emergency operation center around the business community well couldn’t have all in the EEOC, but we set up what we call the virtual emergency operation center. So we could do conference calls with all the major retailers and give them the information that we had what we were doing so we could coordinate what they were going to do a lot of hurdles there on both sides to get through. But we found that by incorporating the private sector, we actually sped up response in the United States, almost all of our telecommunications is privately owned cell companies to your landlines, your internet, Wi Fi cable. Most of our power electrical generation is in the private sector. Increasingly, we’re seeing other utilities move to the private sector and then almost all the goods and services are in the private sector. So not incorporating them into your plans. created this dynamic that we would respond with Government to the point where the system fail, and then there was nothing else. And by incorporating the private sector, we raised that threshold that we weren’t hitting that point where everything just collapsed at once when we ran out of stuff, but was more resilient to the impacts of these big disasters.

4. Can I ask you in the States, obviously, we’ve talked a lot about the Waffle House, which again, I’m such a fan of. So who are the other leading private sector organizations in America who are driving either disaster resilience or preparedness or recovery solutions that support communities?

W. Craig Fugate
What turns out is a lot of our major retailer which are located in the southeast United States or have a lot of stores in southeast that have been dealing with hurricanes. So everything from Walmart, which runs an emergency operations center, and their headquarters, where they do everything from tracking their employees and making sure their employees are safe to getting stores up and getting supplies I move they actually have a system that when they know a storm or whether it’s a blizzard or hurricane or wildfires, that there will be certain things their stores will need to stock up on. So rather than running out of stuff, they’ll start moving inventory from across the country to areas they know are going to need stuff in the aftermath disaster.

Two of our major what we call big box hardware stores, Lowe’s and Home Depot are also located in the south. And they they will go in and an example when Joplin Missouri was struck with a tornado on the Fujita scale of IA five. Basically winds close to 200 miles an hour just torn about a mile wide just devastated. The town and the local Home Depot was flattened. Home Depot brought in literally big circus tents and supplies they knew people would need to start rebuilding and repairing Eric, and we’re up and running two days after that tornado. They, again, they didn’t have everything they normally stocked in store, but they had the things that people needed to start rebuilding and repairing their homes. And so what we’ve seen is on the retail side that’s improved. We’re also watching in the electrical systems, particularly in the south where they’ve had a lot of Hurricane experience.

They do a lot of what we call mutual aid of moving crews across these companies across the United States. So when Superstorm Sandy hit New York and New Jersey in the region up there had not had big power outages due to wind storms at some time. But crews from across the country that had joined up and help them get their power back up. So we have seen that, but COVID has opened up a whole new area of the private sector. And now we’re starting to see more tech companies. We’re starting See banking and financial institutions that are really now looking for how do they participate? How do they leverage what they do best with what government does. And, you know, again, every disaster is an opportunity to grow and build our teams as we learn more about the capabilities that private sector can bring in, if we allow them to, and we treat them as part of the team.

With my final question always…