Fire Departments are not businesses, they are critical infrastructure
Imagine if your doctor prescribed a daily dose of cocaine to maximize the production of your heart. After concluding your heart is underperforming 98% of the time, your doctor suggests she wants your heart run more like a business, at max capacity at all times. Recognizing the shock on your face, the doctor explains she is trained in business as well as medicine with a focus on competitive advantage. Concerned, you ask, “but if I am already at my maximum heart rate while at rest, what will happen when I need to run?” Solemnly, your doctor concludes that you will likely collapse and die from any additional work load, but that is the cost of keeping your heart competitive. Realizing the insanity of mixing dissimilar domains of medicine and business to manage your heart you stand up to leave. Intuitively you recognize your heart lacks competition since it is unique to your body and should be resilient opposed to competitive because it is unique. You avoid the daily ingestion of cocaine as well as further advice from physicians trained in business.
Frequently I hear the comment that fire departments should run more like a business. Having two business degrees and starting multiple companies, I understand the temptation to run government entities as optimized machines. But one could not be more wrong, public entities fail when operated like a business, just as businesses could not be competitive if managed like a government entities.
Businesses are easily replaced and profit driven; Fire departments are critical infrastructure and community driven. Like your heart, fire departments cannot be replaced if they fail; there are no competitors to fill the void. When it comes to disaster response, the fire department is the community’s first and only option.[i]
Forming its origins in the 1998 Marsh Report titled “Critical Foundations,”[ii] critical infrastructure is defined as “an infrastructure so vital that it’s incapacity or destruction would have a debilitating impact on our defense and national security.”[iii] Recognizing the fire service is an indispensable part of homeland security, Presidential Decision Directive 63 (PDD-63) placed fire departments into sector 3, “Emergency services” in 1998.
In 2009, “The National infrastructure protection plan” (NIPP) outlined two strategies for managing Critical infrastructure (CI): “Risk informed decision making” based on risk assessments and “resilient informed decision making” based on the ability to bounce back after a shock.[iv]
Maximizing profits and competitive advantage, the foundation of businesses, are not a part CI operation, but rather DHS suggests a methodical process to ensure long term survival by building robust and redundant systems.
Profit driven vs community driven; the Ferguson report
Public entities unravel when they operate like businesses, placing profit over the community. Consider the 2015 Department of Justice (DOJ) investigation of the Ferguson Police Department following the public uprising in Ferguson Missouri. Once the dust settled on the shooting of Michael Brown and subsequent trial, the DOJ launched an investigation into why there was such a massive public uprising. The answer, “the City’s focus on revenue rather than public safety” sowed deep mistrust in the community, undermining the “government’s legitimacy.”[v]
The report stated Ferguson’s “emphasis on revenue generation has a profound effect”[vi] on policies, creating a series of metrics based on “productivity” opposed to “public safety.” [vii]“Productivity” referred to officers writing citations and the courts collecting fees. Job performance reviews and promotions were based on “productivity,” shifting the mission of the agency from public safety to revenue. [viii]
City officials routinely urged the police chief and the courts to generate more revenue, resulting in the creation of erroneous citations covering all aspects of life such as “High grass and weeds,” “barking dog,” “running dog,” “permit to use trash service”, “permit to rent an apartment” and “manner of walking.”[ix] The result was 90,000 citations to a population of 20,000 residents, producing 3 million dollars of revenue in 2015.[x]
Ferguson’s attempt to run like a business lasted for five years before the complete collapse of public trust, resulting in civil unrest and a deployment of the national guard. Ferguson’s focus on revenue forced the removal of the Police chief, City manager, and Municipal Judge. The city will attempt a new start with emphasis on public safety and trust. Unfortunately, the damage done to the community during the “business” and “revenue” era may be insurmountable, lasting for generations.
The fire service is not profit driven, but rather community driven with the general mission of saving lives and property. Profit driven companies tend to be fragile while community driven entities must be resilient.
The fragility of company’s vs. the resilience of public entities
Companies, such GM and Goldman Sachs that survive the past fifty years are scarce events, while fire departments older than fifty years are the norm.
Companies have short life spans because they are forced to take risks, maximize profits, and optimize efficiently to stay competitive. As company’s trim costs and stretch every dollar, they lose the resilience to survive shocks. Small changes in the market force businesses into insolvency, which is why the average length of a company is only ten years.[xi] Companies come and go through a process known as creative destruction[xii], as one company exits the market, another is quickly formed to fill the void. And the companies that have survived for long periods of time typically owe their resilience to government support due to the designation of “too large to fail.”[xiii] Think of General Motors and the insurance giant AGI post the financial collapse of 2006.
As the machine of creative destruction churns fragile business, the fire departments must remain resilient.
After 158 years, Lehman Brothers Holdings Inc. (LEH) declared bankruptcy in 2008 because it could not bounce back from the subprime mortgage crisis. Lehman’s employees packed up their belongings and left the building to find other work.
After 136 years, FDNY faced a crushing shock in 2001. While the Twin Towers burned, FDNY employees fought for the citizens they took an oath to protect. When the event overwhelmed FDNY, firefighters from around the nation responded. No one packed up their belongings and left until the incident was stable and the community secured.
After almost two centuries, the profit driven Lehman Brothers is no more, while the community driven FDNY is stronger than ever.
When digital cameras hit critical mass, Kodak closed its doors, when the housing market fell, Washington Mutual filed bankruptcy. Businesses fail at the first shock and are quickly replaced.
When the 62 story First Interstate Bank Building burned, the LAFD doubled down; when the twin towers fell, FDNY kept coming; as the Cedar fire grew to 270,000 acres, nearly every fire department in California responded. The fire service can not quit. It is the community’s only option.
Profit driven and easily replaced, business can fail from small shocks; but the fire department must have a massive capacity to survive the unimaginable, the “whole city” of Houston being underwater.
If you find yourself talking about revenue more than public safety, read the Ferguson report.
If you think you should run critical infrastructure like a business, consider the average life of a company is ten years.
If you think your community can rely on the state or federal governments to solve your emergencies, consider that the DHS relies on the local fire departments as critical to national security.
Don’t try to run a part of critical infrastructure as one would an optimized business, your community may pay the ultimate price.
[i] Bush, George W. The national strategy for the physical protection of critical infrastructures and key assets. EXECUTIVE OFFICE OF THE PRESIDENT WASHINGTON DC, 2003.
[ii] Roche, Edward M. “Critical Foundations: Protecting America’s Infrastructures.” (1998): 49–50.
[iii] Clinton, William Jefferson. “Executive order 13010-critical infrastructure protection.” Federal Register 61, no. 138 (1996): 37347–37350.
[iv] Chertoff, Michael. “National infrastructure protection plan.” Department of Homeland Security (DHS), Washington, DC (2009).
[v] DOJ, US. “Investigation of the Ferguson Police Department. United States Department of Justice Civil Rights Division.” (2015).,2
[vi] Ibid., 2
[vii] Ibid., 2
[viii] Ibid., 2
[ix] Ibid., 7
[x] Ibid., 7–9
[xi] Daepp, Madeleine IG, Marcus J. Hamilton, Geoffrey B. West, and Luís MA Bettencourt. “The mortality of companies.” Journal of The Royal Society Interface 12, no. 106 (2015): 20150120.
[xii] Abernathy, William J., and Kim B. Clark. “Innovation: Mapping the winds of creative destruction.” Research policy 14, no. 1 (1985): 3–22.
[xiii] Dowd, Kevin. “Too big to fail.” Long-Term Capital Management and the Federal Reserve Cato Institute Briefing Papers 52 (1999).