Opportunity in Crisis

In 1959, John F. Kennedy said,

"When written in Chinese, the word "crisis" is composed of two characters - one represents danger and one represents opportunity."

This translation was later proven to be untrue. Wēijī is most accurately translated as “a dangerous moment, a time when things start to go awry,” with no aspect of “opportunity” explicitly or even implicitly conveyed.

So while the Chinese may not actually have a word for crisis that means danger plus opportunity, I felt there definitely should be one somewhere. So, I invoked my 6% Germanic and 28% Nordic heritage (according to 23nme DNA test) and adopted the word 'Krisegelegenheit'

In 2020, crisis has become a way of life.

So what?

Maxwell Maltz, author of Psycho-cybernetics says,

"Close scrutiny will show that most 'crisis situations' are opportunities to either advance, or stay where you are."

When facing a crisis, what you do, depends on how you approach it. Are you risk averse or are you risk taking? Or, are you risk neutral?

A crisis opens a vast pool of uncertainty, volatility and ambiguity which, for the person with right attitude, result in a positive outcome.

South Asian statesman Jawaharlal Nehru says,

"Crises and deadlocks when they occur have at least this advantage, that they force us to think."

In the past, human had only two choices in crisis- fight or flight. That is not the case anymore. Modern crises require you to think before you act. Think for what? Risk Planning with the aim of risk mitigation and risk response. Where necessary, risk acceptance, sharing and exploitation.

Lets stop here. We have gotten ahead of ourselves.

Lets define crisis:

Wikipedia says: "A crisis is any event that is going (or is expected) to lead to an unstable and dangerous situation affecting an individual, group, community, or whole society."

Oxford Dictionary adds : "a time when a difficult or important decision must be made."

Now let us define risk. This definition, though a twist on ISO 31000's definition, is my own creation:

Risk is the effect of volatility, uncertainty, complexity and ambiguity on objectives.

To make sense of a crisis, we must understand that it carries risk. To manage a crisis, we must manage the risks within it. Once the true magnitude of risks inherent to the crisis are gauged, the individual and the organization must reflect on a path to managing those risks.

Judy Smith, whose work in crisis management was inspiration for the hit T.V. series Scandal says,

"There's always an opportunity with crisis. Just as it forces an individual to look inside himself, it forces a company to reexamine its policies and practices"

This reexamination is a futile exercise if you fail you understand your own risk attitude. Warren Buffett, for example, in the COVID crisis has been risk neutral - he sold airline stock ($6.5 billion offloaded - United Airlines, American Airlines, Delta Air Lines and Southwest Airlines), trimmed U.S. banking stocks, and invested $6 billion in five Japanese companies (Mitsubishi, Mitsui, Sumitomo, Itochu and Marubeni).

Buffett is a man, who in history, probably has minted the most dollars out of crises. Why? He succeeds in risk identification, risk assessment and risk response. His thought process? Focusing on fundamental analysis over technical (Those millennial Robinhood and E*TRADE cowboys are headed towards a lesson of a lifetime). But more importantly, the hallmark for a mature risk approach, like Buffett's, is to have a deep understanding of the risk context i.e here, context of the crisis. Based on this knowledge, the reflection, examination and re-examination of policy, and risk response takes place. Doing nothing in a crisis is sometimes not an option, it can also become a risk in itself. But as C.J. Redwine says:

"Losing your head in a crisis is a good way to become the crisis."

In the COVID crisis, we have many threats and a few opportunities, however, all of them require reflection, reexamination and where needed, re-orientation - it requires risk based thinking. Not thinking, is not an option.

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"When faced with a radical crisis, when the old way of being in the world, of interacting with each other and with the realm of nature doesn't work anymore, when survival is threatened by seemingly insurmountable problems, an individual life-form -- or a species -- will either die or become extinct or rise above the limitations of its condition through an evolutionary leap." - Eckhart Tolle'

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