Growing the business while preparing for a new crisis

The uncertainty of the economy and its potential impact on the labor market has often been tackled in previous TIP-IM editions. With the corona crisis, the feeling of uncertainty is probably becoming stronger than ever. As you are reading this article, no one knows exactly when a second or even a third wave of infections could arise and to what extent and for how long it will harm our personal life and professional activities.

One thing is certain though: what the world has been coping with in the last months will dramatically change our mindset towards our feeling of invulnerability. Who, today, would (still) dare to say “It will never happen to me (again)”?

So, should we freeze, fly or fight? The answer is obvious to those who want to move forward. And as preparation is half the battle, it becomes more important than ever to prepare better for the next crisis and, as far as possible, reduce the potential damage of it.

As prevention implies, seeking to reduce the risks that could lead to a crisis or, in circumstances like we have been through in the recent weeks, the impact of it, organization’s risk management programs and best practices become key.

As a result, we get some useful tips and are likely to be better prepared for a new crisis. Although, of course, the crisis and the consequences of a pandemic are not totally predicable, preparation can help to mitigate the impact.

Exogenous versus endogenous

The first mistake to be avoided, would be to consider the impact of a new wave of COVID-19 only as an exogenous shock. Of course, in our individual businesses, we are not responsible for the global turmoil we are currently confronted with. COVID-19 is a shock from exogenous origin which hits the world economy exceptionally hard. But our relative resilience to a new wave or to other issues is something we can work on, in order to avoid –  as much as possible – that we end up suffering from endogenous symptoms in  case those also hit us.

Learn about vulnerabilities

Dr. Sarah Kovoor-Misra, an Associate Professor of Management at the University of Colorado Denver, describes four areas to be investigated during a crisis. The first one is the cause of the crisis. Secondly, crisis preparedness: Was the organization prepared for the crisis? Was it possible to predict that such a crisis would occur? Were sufficient leadership capabilities built before this crisis? Was the organisation’s infrastructure adaptable enough? Were teams, plans, technologies and equipment effective to lower the impact of it? The third one, crisis containment, is meant to assess how the organization improvised, contained and performed under pressure.  The last one, the crisis recovery, evaluates how the organization managed to address, together with its stakeholders, the operational psychosocial, physical and reputational damages due to this crisis. Learning from these four areas is essential for an organization to be able to build its resilience by increasing its resources.

Recovering

The U.S. based Institute for Crisis Management points out the importance of the fourth phase when the worst of the crisis has passed (for the time being) and your organization starts getting back to normal. It is crucial at this stage, as it will be after the first COVID-19 wave, to have a crisis team debriefing and consider questions such as the following

  • How could the crisis have been minimized or at least mitigated within my organization?
  • What worked well in our response to COVID-19, and what did not?
  • What was the financial impact of the crisis, and how can we minimize that next time?
  • How well did our contingency plans work?
  • Which aspects of our crisis plans do we need to change?


Reputation Management 

In an article published in 2017, Forbes enumerated some golden rules to maintain an organization’s reputation as well as possible during a crisis. Many of them are topical today and widely spread in most reputation management manuals.

  1. Take responsibility: it may sound strange as in a major exogenous crisis, business leaders feel as victims and not responsible for what is happening to their company. Yet, it is important to acknowledge internal and external stakeholders’ concerns and queries, and show leadership by communicating and delivering messages to explain how you make the greatest possible efforts to manage the situation.
  2. Be proactive and transparent: reputation management matters more than ever as social media have transformed our world in a real-time world and even single attacks can have major impacts. Avoid the “no comment” answers at all time.
  3. Getting ahead of the situation: even in the mid of the (first) storm, it is important to send out the first message, to reassure the organization is still alive.
  4. Behave human: most crises and this pandemic in particular, hit people hard in their daily life. Sending messages of sympathy and solidarity is essential.
  5. Monitor all collateral damages as well as possible and start using your crisis plan to start responding.
  6. Listen to your team and stakeholders in order to fully understand how they experience the situation and how this might affect their perception of your organization
  7. Be prepared: anticipate potential crisis scenarios and define internal protocols for coping with them. The short test in this TIP-IM edition is meant to help you, with a simple exercise, measuring how well you are prepared, at this stage, for a new crisis.


Get external advice

Finally, it is important to realize it is not embarrassing to ask external experts for their advice on crisis management. On the contrary, the return on investment might turn out to be very profitable. And knowing that you are better prepared to handle potential crises, whatever their origin may be, will help you focus better on your key activities.


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