18.04.2023 Written by : Zaid Alshaalan & Fatma Hammami
Enterprises have faced national and international crises with significant financial consequences, particularly during the Covid-19 outbreak and what follows, such as job losses, economic recession, financial market instability, disruption of global supply chains, and increased government spending.
In addition, the Russia-Ukraine conflict has slowed economic growth, and the supply chain has broken down, causing prices for numerous raw materials, energy, intermediate products, and transportation services to skyrocket.
Therefore, crisis management is a key responsibility of leaders, who have a crucial role to play in building resilience and maintaining skills in times of uncertainty.
PREPARING FOR CRISIS MANAGEMENT
In order to build resilience and adaptability, leaders should make strategic and structural changes to their risk forecasting strategies.
- Anticipation Strategy by Forecasting Vs. Anticipation Strategy by Scenarios
In the past, crisis planning involved establishing capabilities and tools to prepare for crises. While it is impossible to predict everything, the new framework for crisis preparedness favours scenario-based forecasting.
Forecasting is based on the assumption that the future will be similar to the present and is therefore a less creative process that does not account for the dimension of uncertainty. By reviewing quantitative data from the past, forecasts determine what will or should happen.
On the other hand, the scenario approach is more forward-thinking and considers the future to be uncertain. This enables the development of a variety of potential solutions. It is a dynamic method that considers both qualitative and quantitative data.
While forecasts can only provide one possible future, scenarios can provide numerous different futures and responses. Both approaches to problem-solving offer distinct views and should be used complementarily.
- Developing A Recession-Proof Business Continuity Plan: Mitigation Tool
The succession of crises highlights the resilience of enterprises that have developed a proactive approach to ensure the continuity of their activities in the event of unforeseen catastrophes.
Business continuity management is a proactive process that enables businesses to identify weaknesses and potential threats and reduce the impact they may have on the enterprise's business, value chain, and employees. The implementation of a coherent strategy alone is insufficient. It should be supplemented by a monitoring procedure to ensure that the actions taken have been executed, as well as a monitoring framework to consider new threats that need to be integrated in order to alter decisions.
The Business Continuity Plan (BCP) is a strategy that enables any company, regardless of its size or sector of activity, to respond quickly and uncover new possibilities during a period of reduced activity and investment.
- From Preventative to Dynamic Learning
In times of uncertainty, leaders must focus on continuous analysis of macro and micro level hazards in order to respond promptly and limit the impact of potential threats.
During the preventive assessment process, leaders often fail to learn from the staff. Implementing a highly dynamic strategy through self-assessments at all levels of the organization provides a better visualization of strengths and weaknesses in decision-making.
During times of crisis, the goal is to provide a quick assessment of the company's decision-making capacity.
PROTECTING YOURSELF IN TIMES OF CRISIS
Uncertainty often causes burnout, a lack of motivation, declining productivity, and engagement among business leaders and employees. To address these challenges, leaders should prioritize the development of resilient cultures that foster innovation and employee inclusion. This calls for a balanced approach that incorporates people into dynamic management and decision-making processes to navigate unforeseen developments effectively. As such, there is a growing emphasis on the importance of creating a culture that values collaboration and empowers employees to contribute to problem-solving and decision-making processes. This helps to build trust and encourages engagement, leading to better outcomes for the organization as a whole.
- Building Capacity
During a crisis, the leader plays a critical role as they are looked upon for guidance and comfort. Transmitting fear and stress is inevitable, and therefore, leaders need to display a sense of control. This necessitates building and honing leadership, listening, communication, and resilience skills. Moreover, this approach is applicable across all levels of the organization. By adopting this strategy, leaders can identify the necessary skills to drive business growth, while empowering employees to pursue professional development within the enterprise. This fosters a sense of ownership among employees and enables leaders to ensure that their teams possess the requisite skills. Consequently, it is imperative to devise a development plan that outlines strategies for capacity building, such as micro-learning, conferences, workshops, and mentoring, within the enterprise.
- Putting Human Capital at The Heart of The Enterprise
Empathy is a fundamental aspect of design thinking and is highly valued in the corporate world, particularly during times of crisis. Leaders who wish to comprehend the needs of their employees should display vulnerability and strive to empathize with them, recognizing their contributions and concerns.
To ensure that essential skills are retained, it is essential to support employees through periods of change and prioritize their well-being within the company, rather than solely pursuing maximum profits. By placing human beings at the center of organizational priorities, organizations can foster a more positive and productive work environment.
- Protecting Employees
Enterprises spend a lot of money and time building their reputation, strengthening relationships, and building trust, so preserving these assets is the utmost importance.
Hence, maintaining an open line of communication with all stakeholders will go a long way to ensuring their support in times of difficulty. This also helps to strengthen the enterprise's relationships with partners, which will be of great importance during the recovery phase and will also create new development opportunities.
