The challenge of the constant crisis

The world is moving on quicksand—no one feels secure, and nothing is permanent or lasts very long anymore. Parameters have become variables, assumptions are losing their grounding, and reality is tinged with uncertainty. Whether we notice it or not, our behavior is adapting to this new, fluid reality. Decisions are now made on the fly, with little time for reflection.

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In this context, crisis management must become a part of our daily decision-making process.

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There are various ways to integrate this into our routine. For instance, we can add crisis monitoring and preparedness assessments to our weekly management meetings. We can appoint a project leader responsible for monitoring critical indicators and recommending and implementing impact mitigation measures. Additionally, we can implement a specific dashboard to monitor these crisis indicators and link certain outcomes to action plans.

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Contingency plans, long used by companies, remain useful, although they are typically tied to exceptional events requiring one-time measures, such as fires, hurricanes, or other natural disasters. However, when we are bombarded by multiple overlapping crises, we must live with a high level of uncertainty for an indefinite period. In such situations, it’s crucial to identify the essential measures needed for the survival of the business. To start, we should:

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·????? Speed up the decision-making process. If key decisions are made by a single individual (as in an SME or startup), ensure a continuous and open line of communication with them.

·????? Empower people where possible. Allow individuals to take responsibility and make decisions relevant to their sectors and functions. This frees up time for senior executives to focus on urgent matters. Delegation and empowerment become necessities in times of ongoing crisis.

·????? Establish continuous, two-way communication channels between senior executives and between them and the rest of the team. This will accelerate both decision-making and the implementation of those decisions within operational functions.

·????? Make necessary provisions for emergency actions, such as severance funds, reserves to cover cash deficits, technology backups, insurance policies, etc. One important non-accounting provision is identifying possible sources of rescue and emergency funds, whether from the owners’ resources, bank credit lines, client advances, or others. These agreements should be in place before a crisis hits.

·????? Prioritize. ?Evaluate the severity and urgency of each crisis and prioritize them based on their potential impact and consequences. Some crises may require immediate attention, while others can be addressed sequentially.

·????? Establish a crisis management team. Create a dedicated team or task force responsible for managing crises. Ensure this team includes individuals with experience in various relevant areas, such as communications, operations, technology, legal, and finance.

·????? Scenario planning. Anticipate how crises might evolve and develop contingency plans for different scenarios.

·????? Coordination and collaboration. Encourage collaboration and coordination among different teams and stakeholders involved in crisis management. Information should flow smoothly, and the actions taken by various areas should be aligned. In the case of a widespread market crisis, collaboration can even be sought with other companies, whether or not they are direct competitors. For example, in the case of a natural disaster or a deep economic crisis affecting the entire market.

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Another factor to consider is the potential of multiple overlapping crises to generate new crises and, even worse, create a negative synergy, where the combined impact of the crises is greater than the sum of their individual effects. This would be like a tsunami sweeping away everything we have built. This phenomenon is what’s called a Polycrisis. So, how should we react in such a situation? By doing the same thing—adapting, changing with the change, innovating, and, most importantly, selecting employees who possess these qualities and are ready to move in sync with us. Ultimately, if we are prepared for ongoing crises, we will also be equipped to handle multiple simultaneous crises.

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For more information or assistance in managing a business crisis, visit ahadvisory.net.

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#Entrepreneurship, #crisismanagement, #Leadership, #SMEs, #BusinessChallenges, #determination, #resilience, #overcomingfailure.

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