“HOUSTON, WE HAVE A PROBLEM!”

Article by Juan Manuel Gil de Escobar , Partner at EPUNTO Interim Management, a Valtus Alliance member .

Crisis Management as a strategic area of knowledge for companies

Companies are increasingly facing situations, in this exponentially accelerating world, that we commonly associate with crisis, often viewed from economic and social perspectives. These challenges are driven by new technologies, artificial intelligence, globalization, geopolitical changes, evolving regulations, climate change awareness, and corporate social responsibility, among other factors.

In this context, a business crisis can be understood as any situation that significantly and negatively impacts a company, whether as a real event or a looming risk, affecting its ability to maintain normal operations, competitiveness, profitability, viability, regulatory compliance, brand reputation, or even business continuity.

Given the seriousness of the aspects, the management often turns to emergency meetings, crisis task forces, or, in severe cases, crisis committees.

In all cases relocation of personnel, spending dedicated time to addressing the issue, and sometimes deploying extra resources, is necessary. Developing both official and ad hoc procedures, disrupting normal daily operations.

If these situations occur with increasing frequency, requiring constant response efforts, crisis management naturally evolves into a strategic area if knowledge within the company.

Over time, it becomes embedded in corporate leadership and operational know-how, ultimately enhancing the company’s resilience and even becoming a distinctive value appreciated by investors and the market.

Uncertainty is known and risk is controllable

There is a well-known expression that says that "Reality is stubborn" just as problems are. We can face them, but we cannot always control their causes and effects with complete reliability.

A crisis situation may require time, skills and expertise beyond what is available within the company due to its exceptional nature. Even if there is a well-established crisis management process, we may have no choice but to pick up the phone and say "Houston, we have a problem.”

Uncertainty is inevitable, conflict situations will occur throughout a company’s lifetime, at varying levels of intensity and impact. The unknowns are when and to what extent.

On the other hand, risk is controllable. Simply the awareness of the existence of potential crises, and planning for them in advance, allows for powerful and effective solutions.

This translates into an "if-else" condition based on the formulation of a straightforward question: “Do I have the necessary skills and knowledge in the company to face this extraordinary situation?”

If I do, I activate the established crisis management process.

If I don't, I need to ensure that I have that Ground Control emergency number.

Restructuring versus chaos

Executive Interim Managers are especially well-suited for this role, bringing order to disorder. They are the ones on the other end of that emergency call.

With their leadership skills honed over many years in similar situations, they have the ability to quickly adapt to a company’s ways of working, lead teams, and manage resources and tools, they immediately assume a key role in navigating extraordinary and unforeseen crises.

In addition to contributing with the needed specific skills and knowledge, the Interim Manager can provide additional time and focus that the in-house resources may lack.

Rapid situational awareness and assessment, efficient leadership in crisis response, advising and supporting internal structures, refining internal crisis management processes and procedures, and delivering hands-on executive action that drives solutions.

Viability, competitiveness, and value

A crisis is much like the famous Schr?dinger’s quantum cat, both existing and not existing. Although a crisis can be quantified in figures, its severity remains subjective, shifting based on perspective and priorities. Is it structural or circumstantial? Operational or existential? The answer depends on the observer and the timing.

The famous music group Supertramp’s album from the 70s: “Crisis? What crisis?”, says it all.

At a macro level there is no doubt, Executive Interim Management provides a comprehensive solution to both objective and subjective crisis scenarios, whether it is a severe case such as the refloating or turnaround of a subsidiary, or a less extreme case such as the internal restructuring of a production area to improve the company’s competitiveness.

Beyond their primary executive role, the Interim Manager contributes to consolidating crisis management as a strategic area of expertise, competitiveness, and market value.