Daily Fix: Reasonable New Year planning

A few days ago, I received an email from a reader who asked if there was any rational reason for his employer, a hospital, to have him working over the New Year - apparently, vacations have been suspended. It would be unreasonable not to have extra staff on site at a hospital, where lives are at stake. Just how should a business plan for the New Year rollover?

We're not talking about life-or-death situations, but just regular old business as usual establishment, like a bank, accountant's office or gas station. These firms have no systems that, if they fail, will wipe out a community like a flash flood. They simply need to survive the New Year, protecting the customer's records, their own books and inventory.

First question: Do you need to have staff in the office over the weekend?

Many banks, attempting to calm fearful depositors, plan to be open on January 1, 2000. This is probably a good idea, except for the damage it will do to employee relations. Chances are the ordinary retail business will be open on January 1, anyway. We're talking about one of the busiest shopping weekends of the year. At the office, where Friday afternoon usually means the beginning of the weekend, the extra-cautious route is not to staff extra days but to shut down the computers at the end of business on December 31, 1999.

Second question: Considering fears about credit and debit card processing systems, does a business need extra cash on hand for the New Year?

The bank situation raises an interesting issue pointed out to me by an executive at a smaller banking company recently. Imagine that a bank advertises that whatever amount depositors need, it'll have it on hand. Suppose the bank goes so far as to say "We'll have a million dollars in cash at each branch." Bad idea.

"We don't think it would be prudent to have a lot of cash on hand," the banker told me. After all, the anxiety expected around the New Year, combined the many distractions the police may face, make the holiday weekend an ideal time for bank robberies. Generally, people talk about scams and burglaries related to Y2K. With more than $400 million in extra cash in circulation for the New Year, most will be in banks, making them prime targets for robberies.

The retail outlet may want to keep extra cash. Not because they will not be able to take credit cards, but because there may be greater than normal demand for change on cash transactions.

Only the office-based business is completely immune to additional cash demands. With the progress in banking and the very low chance of major Y2K problems, there will not be a good reason to have extra cash on January 3. Moreover, if there were problems, the bank is still a better place for funds, because the deposits are insured. If you do need extra cash for your business, be sure to document the transactions so that, should your business be robbed, you can prove to your insurer you lost cash.

Third question: Even if business is ready, won't panic turn normal business into a nightmare?

Recent surveys show that very few Americans plan to take extra cash out of the bank for Y2K. And that amount is not the thousands of dollars per household once projected by doomers, but a couple hundred bucks to deal with headaches. Besides, I can't think of a worse weekend to have a lot of extra cash in your pocket - New Year's Eve and Day, turn of the millennium (according to the marketers, rather than accurate timekeepers who will be celebrating a year later). This may turn out to be one of the great retail holidays of all time; bigger than already expected, because Y2K cash hoarders turn to splurging out of relief.

So, contrary to nightmares, Y2K may be a great weekend for business.

What if people do panic? The focus of panics will likely be localized within markets. In general, however, people don't turn on one another in a crisis, but to one another to provide help. Disasters, like the earthquake in Turkey or a hurricane, don't cause riots and looting, but do tend to drive hoarding in narrow areas of concern, like bread, beer and, following the Y2K scenarists, rice. Concerns about banks make this segment an area of concern, as are grocers, gas stations and sources of staple goods. A corner electronics store probably doesn't have anything to worry about.

Fourth question: If you're so confident, Ratcliffe, what are you doing about your business?

I operate a small business in Washington state, Internet/Media Strategies, in addition to serving as vice president of a Web startup in San Francisco. Both businesses' computers are Y2K compliant, and our banks, local utilities and ISPs are Y2K ready. My own company will not take any special efforts to prepare, and at ON24 Inc., the Web startup, we will probably be working hard over the New Year, because we are a news organization.

Having studied Y2K and how organizations can prepare for more than two years, I am comfortable with the preparations we've made and will not spend extra energy worrying as we head into the holidays. Likewise, I won't begrudge any business' efforts to prepare as they see fit.