Grace under pressure: one CEO’s efforts to manage wildfire crisis

Keysight Technologies CEO Ron Nersesian had just finished a presentation at a conference in Stuttgart, Germany, Monday morning when he received an alarming text message.

“There’s a large wildfire dangerously close” to the company’s headquarters in Santa Rosa, the text said. “Neighbors are in evacuation mode. We’re shutting down the site immediately.”

Nersesian immediately flew back to San Francisco and drove to the North Bay. As the leader of a publicly traded high-tech firm worth $7.9 billion, Nersesian is accustomed to managing through tough problems. But nothing in his experience remotely came close to the destruction he saw: dozens of fast-moving wildfires had consumed hundreds of thousands of acres and destroyed 3,000 homes and businesses, most of them on the northern edge of Santa Rosa.

“It’s just devastating,” Nersesian said by phone Wednesday on his way to visit the damaged headquarters. “You hear about these things, but they happen to other parts of the world.”

In many ways, Nersesian, a former Eagle Scout, and Keysight were well prepared for the crisis. For example, in case of a natural disaster like an earthquake, the company had stashed an emergency stockpile of supplies and parts needed to make its electronic measurement technology in a bunker in Colorado Springs.

Keysight was the original business founded by Bill Hewlett and Dave Packard in 1939. Hewlett-Packard spun it off into Agilent Technologies in 1999, which, in turn, spun out Keysight in 2013. The company generated nearly $3 billion in revenue last year.

On the plane ride home, Nersesian immediately set up a crisis management leadership team, including an incident commander, who would be responsible for making all decisions until Nersesian returned, and a lead communicator, who would manage all communications with employees, the board of directors, the media and investors.

Since the headquarters were in a no-go zone, Nersesian immediately went to the command center the company had temporarily set up at the home of an executive in Santa Rosa. The company later moved the command center to a business park in San Rafael.

The first order of business was to account for the 1,500 employees who work at the headquarters. As of Wednesday morning, Keysight had reached all but 200. Nersesian learned that one employee was in critical condition with severe burns at UC Davis Medical Center. Fires destroyed 33 employees’ homes and forced hundreds of people to evacuate.

Keysight then set up telephone hotlines for employees who needed water, medicine and temporary housing. The company will pay out $10,000 to employees who lost homes and provide $1,000 to each worker forced to evacuate. Those employees do not have to repay the company. Keysight also established a location in Santa Rosa where employees could meet, exchange information, and drop off goods.

But as in any crisis, leaders must confront unforeseen problems on the fly.

On Monday night, a television station aired a report that suggested that fires had completely destroyed Keysight’s corporate headquarters. In reality, the fires destroyed three smaller, outlying buildings and cars in the parking lots, but the company’s four main buildings suffered only minor damage.

But the report “caused panic,” said Nersesian, who was flooded with calls from employees, investors and customers. “It created a lot of emotional shock to employees. It really complicated things.”

Luckily for Keysight, the station aired the report after the stock markets closed Monday evening, which allowed the company to send out a press release with the correct information before Wall Street trading opened the next day. (Keysight’s stock price rose Tuesday and Wednesday.)

Keysight was extremely fortunate. Photos from the Associated Press at the site appeared to show fires burning and extensive damage to structures.

As it turns out, Keysight owns about 200 mostly wooded acres. The buildings sit on just 95 of those acres. The four main buildings are surrounded on all sides by large surface parking lots, which absorbed the brunt of the fires.

“We are unbelievably blessed,” Nersesian said.

Hazardous materials teams are still combing through the property, but Nersesian said that the teams finished inspecting one building, which was still in good condition. He hoped to visit the site Wednesday, though police have been blocking people from the area.

The company does not plan to issue any new financial forecasts to Wall Street, Nersesian said. He did say that he doesn’t expect much impact to operations, but that depends on the condition of the three other main headquarters buildings.

In any case, the wildfires offer some important lessons to corporate leaders.

“Safety is first, second and third,” Nersesian said. “You don’t care about short-term financial impact. That doesn’t mean anything compared to the employees.”

Make sure to take care of the employees and their families, he said.

“People need you to keep a positive attitude.”