Successful crisis management includes analysis of the crisis situation as well as suitable ideas and strategies for dealing with the crisis. It is also a question of rapidly developing, introducing and assessing initial help measures – in order to then take further action and implement effective crisis communication.
Sounds comprehensive and plausible. Nevertheless, even experienced crisis managers in companies are reaching their limits with regard to the current coronavirus pandemic and its economic impact.
A gigantic challenge: crisis management in companies
The French crisis researcher Patrick Lagadec calls such global catastrophes megacrises. They confront traditional crisis management with unexpected questions and problems.
A particular challenge is that expected scenarios and strategies are based on past experiences, whereas a new, unexpected case arising can mean previously tried-and-tested knowledge, management, expected action and planned crisis communication may have to be discarded.
In the current situation, many small and medium-sized enterprises who are affected are wondering: would professional crisis management help us now? There is certainly no panacea. Too many different nations, industries, organisations and companies are affected. Nevertheless, possible crisis management approaches and communication strategies can be considered on the basis of case studies.
Hurricane Katrina case study: when computer models get it wrong
Nowadays, crisis experts are aware that managers and stakeholders especially tend to lose their heads when emergency scenarios planned for in advance do not occur as expected, but rather are surpassed by unforeseen events as natural disasters. This is shown by the case study of Hurricane Katrina.
In New Orleans, people were, in theory, well prepared for Katrina according to computer models and contingency plans. There were well-thought-out evacuation and communication plans. But the hurricane did not stick to the expected situation, and instead simply washed away the dykes, flooded the entire city and presented all the city’s leaders and employees with a new, totally changed situation and foundation.
This shows that disasters and megacrises cannot really be avoided with a plan. Instead, managers, employees and stakeholders should expect to be surprised, perhaps hugely, and then be able to take agile action within the company by means of crisis management.
The 3C Model: Conflict, Crisis, Catastrophe
It is difficult to precisely define a crisis or a catastrophe. In a specific case, it is often the view managers and others with responsibility take on the situation and (possible) planned measures that make the difference.
In line with the Zurich Resource Model (ZRM), Swiss crisis advisors set out a subdivision into the 3Cs and have defined the following terms:
- Conflict: as the smallest form of crisis
- Crisis: as an escalation from Conflict
- Catastrophe: as the ultimate level of severity
From the point of view of the company, whether a Conflict, Crisis or Catastrophe has been caused internally or externally still needs to be differentiated concerning business continuity.
Risk management: Helps companies identify threats, dangers and risks in good time and aims to prevent or minimise potential damage.
Conflict management: Includes various strategies to understand existing conflicts, whether internal or external, with the aim of preventing them from spreading or escalating.
Crisis management: Describes the systematic handling of crises, from analysis to the development of appropriate management strategies and the introduction and assessment of initial measures, followed by others. Support measures.
Crises disrupt normal operation, but can become a driving force for new developments
The six different phases of an extended crisis according to the Zurich Resource Model are also important for the understanding of crises and ability to act:
- Preparation for crisis cases
- Development or emergence of a crisis
- State of confusion, uncertainty or inaction
- Clarity or realisation
- Reorientation, restarting, constructive activity
- Post-processing of an experienced crisis
The model shows that, despite the preparation for it (1), every crisis (2) is characterised by a state of uncertainty or inaction (3).
Ideally, however, the confusion (3) is followed by a period of clarity and realisation (4), which in turn brings about reorientation and constructive activity (5). Crises, therefore, by definition, disrupt normal operation, but can also become a driving force for new developments – especially with the help of professional post-processing (6).
Successful crisis management plan: the integration of all knowledge and measures into your own approach
The Swiss crisis researchers Kristina Sommerauer and René Meier point out that phases 1 and 6 – i.e. preparing for crises and post-processing of crises – are particularly important for the responsible managers in companies.
The reason being that it is these two phases above all that enable the conscious and personal development of an empowering attitude towards conflicts, crises and catastrophes. It should also be borne in mind that the processing of crises and catastrophes as well as crisis management always take time.
The aim of a professional approach to crises should be to integrate all existing knowledge and personal experiences into your own approach – and then to quickly start crisis management and communication measures that initiate a series of appropriate actions.
In this way, SME managers can not only succeed in becoming more personally resilient against crises, but, depending on the company and industry, it is also possible to better understand and respond to the framework conditions of a crisis, the course it may take, the dangers and the opportunities.
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