COMPANY CULTURE / JAN. 12, 2015
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How to Predict an Organisational Crisis

Most of us, at one time or another, have said, “I should have seen it coming.” Whether it’s a cheating significant other or a bad performance appraisal, the signs are clear in hindsight. But sometimes hindsight is too little, too late. That’s especially true when you’re dealing with an organizational crisis. Learning how to predict a looming organizational crisis can make or break your business. Fortunately, there are a couple of strategies you can use to polish your crystal ball.

Working backwards

Working backwards is a lot simpler than it sounds at first. Start by making a list of events or trends that could threaten your business. This is brainstorming time, so don’t second-guess yourself. Just write down everything you can think of. Here are just a couple of examples:

Airlines

  • Plane crashes
  • Problems with an aircraft that makes up a major part of your fleet
  • Rising fuel costs
  • Regulatory changes
  • Strikes
  • Wars or natural disasters in destination countries that affect your routes
  • Financial crashes that affect passengers’ ability or willingness to travel
  • Technological advances (such as the ease and quality of video conference reducing the need for face-to-face meetings)

Manufacturers

  • Regulatory, socioeconomic, or taxation changes that alter the equation as far as manufacturing at home or offshore
  • Rising cost of commodities
  • Rising fuel costs that affect both the cost of procuring raw materials and shipping the finished product to market
  • Strikes
  • Natural disasters at the manufacturing site
  • Natural disasters where your customers live or along the delivery route
  • Product liability suits
  • Product obsolescence (think camera film)

Once you’ve identified potential crises, then work backward by brainstorming the warning signs of each one. For instance:

  • Other airlines experiencing problems with an aircraft you own
  • Increasing tensions between management and unionized workers
  • Increasing customer complaints about your products
  • Media reports of your products causing harm
  • Rumblings of political unease in partner countries
  • Political dialogue, both from candidates and from current officials

Once you’ve identified your “alarm bells,” the rest is a matter of discipline and paying attention. And, of course, a commitment to avoid denial: It does no good to see a crisis coming if you close your eyes and hope it passes you by.

Peripheral vision

Peripheral vision” is a term coined by Paul Shoemaker and George Day. It refers to the ability to see what’s happening on the fringes of your business and then looking forward rather than backward, imagining how what you see might someday affect you. Most of the time, these changes are subtle, so the “vision” lies in connecting random bits of information and seeing what that combined whole means.

For instance, most people know that, if you’re on a beach and the water starts retreating, a tsunami is on the way. It’s an entirely different skill set to be able to see animals behaving strangely, concluding that it could that mean some kind of natural disaster is imminent, and correctly determining what that natural disaster is most likely to be.

According to an article Shoemaker wrote for Inc., executives who are experts at using peripheral vision to predict organizational crisis share some common traits:

  • They’re able to see change at the fringes of their business and correctly determine whether it’s a game-changer. And they do it ahead of the competition.
  • They don’t just tolerate the naysayers within the organization; they encourage them to speak up frequently and loudly.
  • They constantly challenge established “facts” to see if they’re still true.
  • They connect the dots between seemingly random bits of information.

While working backward is about logic, scanning the periphery is about vision. Dozens of people may be aware of the same facts, but it takes a visionary to put them all together and see what they mean.

Every organization will undergo crises. The businesses that emerge stronger will be the ones that saw the crisis coming and took steps to mitigate its impact – or to avoid it altogether. Is your organization prepared for the next crisis?

 

Image source: iStock

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