International SOS: How to avoid turning a crisis into a drama
The safety company will go anywhere and do anything to get members out of danger, founder Arnaud Vaissié tells Sarah Arnott
Thursday 29 April 2010
From the outside, it doesn't look like a nerve centre. It looks like a nondescript London office block. But from the seventh floor, with glorious views over the Thames, teams of doctors and ex-military security experts are on call 24 hours a day, managing a worldwide network of medical facilities, security operations and, if necessary, evacuation teams.
The atmosphere in the International SOS alarm centre is calm, but alert. Most of the 300-plus daily calls can be resolved with advice, but they could be anything from a lost passport to a car crash to people shooting in the street. And at a moment's notice the facility can join forces with 23 others around the world to help pull clients' employees out of anything from an earthquake to a coup.
The company was set up in 1985 by Arnaud Vaissié, a Frenchman then working for a German company in San Francisco, and Pascal Rey-Herme, who was just back from a couple of years as the first medical attaché to the French embassy in Jakarta. Dr Rey-Herme had a plan for providing Western multinationals in South-east Asia with top-notch medical services for far-flung staff.
"It was a whole new concept, that just hadn't existed before," Mr Vaissié says, still bubbling over with enthusiasm. Despite his unthinking fluency in English, Mr Vaissié is sufficiently charming and well-dressed to be unmistakably French. But he has something of the British sense of humour. "I have had the unfortunate fate of being best friends with him from the age of four," he says of Dr Rey-Herme.
International SOS started small, offering 24-hour medical care and evacuation services with a single control centre in Singapore. But with their start-up capital of $100,000 (£66,000), Mr Vaissié and Dr Rey-Herme created a new industry. "Before we started, if a corporation wanted to deal with a medical issue abroad they either bought insurance or had their own medical department," Mr Vaissié explains. "There is a gigantic step from that to a dedicated professional service."
The timing was perfect. Back in 1985, less than a quarter of the top 500 US companies had significant operations abroad, now the majority do. "You can't have corporations providing an incredible level of care in their country of origin and then having other people around the world with no plan," Mr Vaissié says.
Twenty-five years on, the company operates anywhere in the world, however dangerous, except for active war zones. It has 6,000 staff, of whom 900 are doctors, and a global network of 31 clinics, 23 alarm centres, and four regional flight desks. Some 60,000 registered contractors provide medical, security and logistical support.
The business model is relatively simple. Corporations pay a membership fee. Any major operations, such as evacuations, are paid for additionally on a cost-plus system with margins of about 10 per cent. "The operational stuff is the substance of what we do, but the business model is around membership because that is what brings in cash and gives us the capability to have the infrastructure up and ready," Mr Vaissié says. "The alarm centres are all cost centres with negative results, but it is what we are selling so that's fine."
From the early ad hoc medical services business, International SOS has expanded to provide a full outsourcing service operating 450 sites across the world. The largest is at Freeport McMoRan's Belgium-sized mining concession in Papua, Indonesia, where International SOS facilities – including a purpose-built hospital – look after a 200,000-strong "city" of 20,000 employees and the local population.
But the biggest change in the business came with the fall of Indonesia's President Suharto in May 1998. With a very real risk of civil war, International SOS was called upon to evacuate the majority of Jakarta's expatriate population. All the airports were closed, but 4,500 people were shipped out to Singapore within 36 hours, using a military airport with hastily convened immigration and check-in counters staffed by the company's medics. "It was extraordinarily tense," Mr Vaissié says. "There were a couple of hundred of us working day and night for a week."
There were two overwhelming lessons from the experience. One was the demand for a security service, similar to the medical offering. The other was the central role of planning. "We were recommending people to leave from early on but nobody would move," Mr Vaissié remembers. But when the US embassy decided to evacuate its staff there was panic and International SOS had 4,000 people on its waiting list within two hours. "The problem in crisis management is that nobody wants to move until the thing is starting, and then there's panic," Mr Vaissié says. "That's why planning is fundamental."
Thus the second area of the business was born, offering security planning and crisis management. The alarm centres have a full team of security staff, all of whom have military backgrounds, the majority with operational experience. As well as crisis response, the company also offers training, on-the-ground support teams, and up-to-the minute analysis of geopolitical risk. Access to real-time expertise can be a lifesaver. Some 3,000 people rang in during the Mumbai terrorist attack in 2008. One call was from a man in the Taj Hotel, where the terrorists were going from room to room shooting the occupants. He was advised to move as soon as possible. Thankfully, the man survived. But those in the rooms on either side of his did not.
Such incidents may be rare, but they are compelling. Mr Vaissié says the biggest challenge is that organisations do not know what International SOS offers. But nearly three-quarters of the world's top 1,000 companies are members, and the market shows few signs of saturation. Recession has not been easy, slamming the brakes on annual expansion of nearly 20 per cent and putting the company into stasis. But growth is now back up to 10 per cent with revenues of $850m last year.
The fact that the company is private is crucial, says Mr Vaissié. Financing through the issuance of private notes in the US is "fabulous, very cheap and effective", and the management is not driven by short-term financial priorities. The recent crisis is a case in point. Rather than being forced to cut its highly trained and expensive staff, International SOS was able to ride things out on a cash pile, amassed when the going was good, that would itself have drawn City ire. "We were able to take the risk of looking at the mid-term horizon, rather than being constrained by the demands of the market," Mr Vaissié says. "We can also take risks, which is crucial in a completely new industry with no one else to follow."
Even the awesomely complex logistical challenges pale beside the strain of blazing a cultural trail. Mr Vaissié tells the story of a massive bus accident in China, with 20 of the company's Japanese clients seriously injured, and several dead. International SOS needed to bring everyone back to Shanghai, and from there to Tokyo. But the Japanese passengers refused to leave unless the bodies of the dead were on the same aeroplane, for cultural reasons not shared with the Chinese. It took three hours of intense negotiations to get the go-ahead, with the injured waiting on oxygen support. "We have to reconcile different cultural fundamentals, and that is no small thing."
Some such challenges have produced lasting results. In 2007, after a year and a half of talks, the company ran an air ambulance from China to Taiwan – the first flight between the two countries since 1949. "That is one of the things I am most proud of," Mr Vaissié says.
But to match the sublime, is also the ridiculous. The weirdest emergency ever? "A Japanese gentleman once rang because he lost his trousers," Mr Vaissié says. "We did find them – in a hotel in Hong Kong – but we never got to the bottom of it."
CV: Arnaud Vaissié
* Arnaud Vaissié is president and CEO of International SOS, the company he set up with Dr Pascal Rey-Herme in 1985.
* After graduating from the Institute of Political Sciences, Mr Vaissié worked for Germany's Clou Group in France before moving to San Francisco in 1983 to run Clou's US subsidiary, Compass Inc.
* He is Chairman of the French Chamber of Commerce in the UK and has co-founded a think-tank, Le Cercle d’Outre-Manche.
* He is a member of France's Legion of Honor.
* He is married, with three children, and lives in London.
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