Created by Franziska Müller

Why organisations need to strengthen their crisis awareness

Crisis. A frequently used term, not only since the beginning of last year, when the Covid-19 virus confronted us as people and, at the same time, entire organisations with completely new challenges. Crises occur in the private sphere as well as in the professional environment. Marriage crisis, trust crisis, financial crisis, job crisis, professional crisis, leadership crisis - sometimes it seems as if nowadays crises have become the normal state.

Nur, was ist es genau, das uns einen Zustand als Krise empfinden lässt? Wann definieren wir eine Erfahrung als Krise? Im privaten Bereich erscheint die Hürde, Situationen als krisenhaft zu bezeichnen, relativ gering. Im Gegensatz dazu, neigen Organisationen dazu, Krisen als einen absolut außergewöhnlichen Zustand zu betiteln und kommen recht spät zu der Einsicht, sich nun doch in einer Unternehmenskrise zu befinden.

But what is it exactly that makes us feel a condition as a crisis? When do we define an experience as a crisis? In the private sphere, the hurdle of describing situations as crisis-like seems relatively low. In contrast, organisations tend to label crises as an absolutely exceptional state of affairs and realise rather late that they are now in a corporate crisis after all.

The crisis in the organisational context

Are there any clear indicators at all that tell us that organisations or we are in a crisis? In the scientific literature, countless definitions of the term crisis can be found in different disciplines. For a long time, people were guided by the explanation from the medical field, which depicts a crisis as a turning point within a history of illness. However, a turning point did not necessarily mean a problematic state. For organisations, that description seems to be too short-sighted. But which definition is relevant for organisations? The answer is simple and yet so complex, even paradoxical, when one thinks of the different uses of the term crisis in private or professional contexts. 

For what exactly is called a crisis is primarily due to the subjective observation and evaluation of the respective situation: it is only at the moment of realisation that a situation is declared a crisis. The crisis as such is therefore an object of observation that is constructed by us quite individually. Following this insight, it is all the more important within a company to develop or sharpen a common understanding of this concept between management and organisational members and to anchor this culturally. Once again, leaders take on a role model function in this context.  

Understanding and realising the nature of a crisis and how to classify it is also so relevant for organisations because in today's corporate reality, between volatility, uncertainty, complexity and ambiguity, there is hardly any time for rest. Organisations are meanwhile in an extraordinarily dynamic state where each day can bring different challenges.  

The crisis as an opportunity

A helpful and positive perspective on crises in this sense was developed by Prof. Dr. Ulrich Krystek in the 1980s and thus influenced the term, especially in German-speaking countries. He points out that a crisis can be perceived as a risk or even a threat on the one hand, but also as an opportunity on the other. At the same time, the outcome of a crisis is not predetermined. Thus, organisations have a leeway in which they can influence the ambivalent outcome of the crisis. And this is where the clear recommendation for action lies: organisations can succeed in using the crisis as an opportunity for further development. A look at the different phases of a crisis helps. Before, during and after a crisis, different tasks arise, because each of these phases presents challenges that require different actions. As already emphasised, the preparation must focus on sharpening a common understanding. In addition, measures such as a communication plan should be prepared during this phase.  

At the moment of realisation and the common, shared perception that the organisation is in crisis, actions must be initiated as quickly as possible in order to remain able to act. After the crisis, it is important to look back at the measures and assess, for example within a lessons learned, how effective they have been.  

However, organisations must always be aware of one thing: no two crises are alike. This is also why it is difficult to prepare for these challenges in the best possible way. Because what was learned in the last crisis may be insignificant in the next one. However, addressing crises in organisations can bring a substantial advantage, because mental preparation alone makes a big difference. The attitude of whether or not we perceive crises and change as commonplace triggers different things in our mindset.  

Confidently heading for the future

Mental preparation can prevent us from suddenly finding ourselves in a state of shock during a crisis, which makes us unable to act. The surprise effect can be limited and there is a chance to deal confidently with the crisis and the associated challenges.  

Challenges do not necessarily have to be interpreted as problematic. Quite the opposite. They often turn out to be drivers for necessary developments and stabilising changes. Organisations should definitely ask themselves what added value they want to create in the future and what resources they need to do so. It would be a fatal mistake to close oneself off to the future and hope that everything will revert to its original state and one can continue as before. Such ignorance can be paid for dearly. 

 

Franziska Müller works as a consultant for transformation processes, leadership and team development, and virtual cooperation. She supports teams and their members and leaders in becoming aware of their own strengths and building on them in order to strengthen cooperation and to support and complement each other in the best possible way. This article is based on the content and results of her master's thesis in 'Organisational Development' at the TU Kaiserslautern. 

 

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