Colonial Pipeline attack reminds us to prepare for the unexpected

Recently, about 80 percent of fuel depots in Virginia and North Carolina were running on empty. Lines of cars seeking gas quickly brought back eerie memories of the 1970s.

That shortfall reportedly stems from private sector adversaries, a hacker group known as Darkside, who had successfully shut down the flow of liquid energy. The result was a major decline in distribution capacity to Colonial Pipeline Co. Evildoers apparently had employed software manipulations to severely disrupt fuel flow. They informed their targets that this ransomware disruption would prevent the flow of gas until a large payoff had been made. The amount ranged between $5 million to $20 million. Colonial could not reverse the impact. Payment was allegedly made, and the energy flow was slowly restored.

A lack of gas sounds bad enough, but it may be only one of simultaneously appearing evils. If the action was meant to distract, what was the issue to be covered up? What nation gets the next turn? If this was just a preparation for future malfeasance, what obligations will arise and how costly will they be? When taking off shoes as a security precaution at an airport, it is not just the action that matters but rather the rationale and background that makes such actions necessary. 

Research at Georgetown has clearly indicated that the long-term indirect effects of terrorism far outweigh the short-term direct ones. When combining all these cost factors one can conclude that somewhere someone is cooking our goose and we struggle to protect limited targets and save up the ransom money.

We need to find and combat the culprits of such threats, and often it is us. With all our elegant computerization and artificial intelligence, we have largely lost control of management capabilities both at work and at home. At the same time, we are increasingly exposed to sudden shifts in our lives. We often work without backup with rising risk. Only five years ago, who would have prepared for a large and convenient “home office”? Many of us encounter a lack of clarity in communication that weakens our capabilities The COVID-based loss of one whole school year will offer serious repercussions for years to come.

Here is a collateral damage example. My family went to dinner leading up to an outdoor performance. We had explained our plans well in advance, including the dinner timeline so that we would be punctual. The time came and went, but no hosts were in sight. We knocked on the kitchen door where we found waiters in distress. As they told us, the computer did not perform and they did not know how to directly deal with pricing, adding and allocating meal expenses to guests. What a pity!

We need an annual event devoted to catching up. That time would help us to see and test the shortfalls in our understanding of processes. Flipping a switch or pushing a button should alert the system that attention is needed. Those on the controls need to know why they have just undertaken a measure and what it does. We need to remember what we may have forgotten. We must recall with a personal, replicable event the rationale, causality and linkages of our actions. Doing so will greatly strengthen our capabilities to plan, understand and reduce risk exposure.

Professor Michael Czinkota teaches international business, marketing and trade at Georgetown University in Washington, D.C. His latest book is “International Business” (11th Ed), published by Cambridge University.