FREE online courses on Strategies for Managing Change - Using Weak Signals to Manage Change - Crisis Management

 

There is an increasing likelihood now that the firm will fail to perceive some rapidly developing and novel discontinuities until they forcefully impact on the firm.  When a change appears to imperil the firm's survival and places the firm under severe time pressures, the firm is confronted with a crisis.

 

As discussed earlier, when a crisis strikes, behavioral resistance is replaced by support.  But solutions are not obvious, and time pressures are great.  The initial task of top management is not to cope with resistance but to prevent panic and to generate a rapid and effective response.

 

However, as the firm emerges from the crisis, management must anticipate and counteract premature revival of resistance which usually accompanies early signs of recovery.

 

Frequently, a group of key managers convinces itself of the inevitability of an impending crisis, while the rest of the firm does not yet see it coming.  If this group has sufficient power and influence, it must take recourse to a coercive response.  The suggestions made earlier for effective use of coercive power apply, except that they must be executed under severe time pressures.

 

When a crisis is imminent, the managers who perceive its advent ahead of the rest of the organization have the following options:

 

1.                  Make a determined effort to convince others of the inevitability of the crisis and launch an anticipatory response.

2.                  Resign oneself to the inevitability of the crisis and prepare to play the savior role when the crisis arrives.

3.                  Trigger off an early artificial crisis, usually by inventing an external enemy, who threatens survival of the firm.  This is an approach which has been used by political leaders throughout history.

 

The first two alternatives are less risky than the third, which carries not only high personal risk for the leaders, but also severe ethical implications inherent in creating an artificial crisis which will not necessarily transform itself into a real one.  But its advantages are that it drastically reduces resistance, engenders support for the solution, and enhances the chances of a successful recovery.