Crisis Avoidance

We read a great deal these days about crisis management, usually in connection with an organization struggling to survive after the impact of a major event, situation or trend. This is when options are severely limited, as is the time frame available for remedies. Not surprisingly, crisis management often fails or simply sets the stage for a new crisis.

The best crisis management is crisis avoidance. To do this, you need both adequate lead time and an understanding of how various kinds of crises might occur and how they might impact your organization.

Lead time Is Critical

It is almost impossible to mitigate the potential impact of a crisis situation without enough lead time. We are talking of years in most cases. Crises are rarely generated by easily fixed situations. A real crisis is one that in most cases cannot be remedied but simply managed with hope for the best.

Plan for Multiple Options

The best options for avoiding a crisis as well as for dealing with a crisis that cannot be avoided are those available only in non-crisis periods. Better yet, you are likely to have multiple options available. The best of these should be pursued so that at least one or two will remain open if a crisis cannot be avoided. Multiple options provide vital flexibility for absorbing and distributing the impact.

Evaluating Potential Outcomes

Using a properly designed and validated systems model, you can assess the potential outcomes of each scenario and action option that you generate. This analysis should identify points of greatest vulnerability as well as allowing you to rank your action options in terms of effectiveness.

Separately, your action options will normally be reviewed by management to evaluate feasibility and to elaborate on how each one might be implemented in practice. Many will require staging and step-by-step preparation. Some will be better than others simply because of a currently favorable environment. Some will have to be rejected because they cannot be implemented in any reasonable time frame or with resources likely to be available for this purpose.

 

Avoiding Crises

While you cannot count on being able to avoid all of the possible crises out there, you can at least increase your odds of avoiding or surviving.

You need first to have a list of major uncertainties that, should each occur, the impact would be substantial. This list also has to be prioritized.

Next, you need a way to estimate the impact on your organization for each scenario on your list. The most effective tool for this purpose is a systems model.

A third requirement is a list of possible actions that might succeed in avoiding a crisis or at least minimizing the damage. Each of these should be evaluated using your model. Once you have an idea of their likely effectiveness, you can begin to move them into your annual strategic planning process.

The last requirement is an early warning system designed to give you the greatest possible lead time to take action.