Crisis Management Mindset – key to Sustainability and Growth in Business

Crisis situations in businesses come unannounced, specially if they are not due to reasons  internal to a business . Our crisis management style defines how the business moves after that.

Each individual or organisation has a unique way to handle the situation.The ones who come out of a crisis successfully with minimum damage; and may be, even emerge stronger and grow faster after that, are the ones who have what can be termed the Crisis Management Mindset.

Typical reactions to crisis situations

A crisis truly tests our management capabilities. When we are suddenly exposed to a crisis –

• some of us could get anxious and react with whatever first comes to mind;
• some others may sit back thinking there’s no solution.
•  But there are those who pause, work out plans to manage the situation and emerge stronger and successful.

Most of us probably do all three in parts as a natural reaction to an unexpected situation. But a few people are good at taking control of the situation and working out a swift and effective response to the crisis.

These people are also the ones who convert a crisis into an opportunity.

Now access all our services on mobile app

Crisis Management during Covid phase

The most recent example of managing in times of a crisis was seen in the years 2020-2022, deep in the midst of the Covid impact.

For startups, which are invariably running with multiple limitations, an out of the blue crisis, like the Covid situation was the worst they could have even imagined.

Yet, there were ways to tackle the situation and come out; may be bruised, but successful. Many startups, with their agility, actually showed even the larger corporates the way in this crisis.

Two large categories of successful businesses emerged from this –

1. Businesses that quickly re-oriented their processes to bypass the severe limitations of the lockdown periods; such as, offline product sellers who quickly moved to home delivery of customer orders; and service industries that moved online, such as in the education, medical, mental health, entertainment sectors.
2. Businesses that re-defined their products and offerings; for example,  apparel companies reducing formalwear and moving to WFH range; or launching fitness products, health foods etc to take care of WFH needs.

There were of course many others who couldn’t survive and had to fold up.

What makes the difference between Success & Failure in a crisis situation?

The difference between those who survived and others,  was the presence  of the appropriate crisis management mindset.

We can divide businesses broadly into three categories, based on how they responded to the Covid crisis –

• those who were the first to show how to adjust to the crisis

• those who quickly followed the first type

• those who didn’t change tracks, kept waiting for the crisis to ebb and lost heavily on business and/or eventually closed shop.

Crisis Management Mindset

Lets look at what would probably have been the mindset in the three scenarios mentioned above.

1. “Ok!!! Let’s figure out how to move beyond this!”
2. “Wow! Look at them. Let’s also move fast in a new way!”
3. “Wait! Don’t spoil anything. Let’s hope this gets over soon”; and eventually,  “God! That’s it! We can’t continue!”

There are 4 key attributes of the first two mindsets, that are clearly the effective crisis management mindsets. These are as follows –

1. A rational, logical approach

In other words, keeping one’s cool and being practical. This is the fundamental need to solve any problem.

It needs an open mind with –

• A willingness to accept that one could be wrong.
• The will to listen to others for their thoughts and ideas.
• The ability to get to the bottom of an issue to understand the root cause/s of the problem
• A willingness to identify and change the processes  that could be corrected; or alternative steps that could be taken
• The understanding of the time available on hand and the need to act fast enough to avoid getting deeper into the problem

It is this that enables the management to step back and look at the big picture afresh, narrow down to the real hurdle and work to by pass it.

The four key skills required for this are –

1. Listening to the verbal and non verbal messages of the team, customers, intermediaries and anyone else impacting the process is a key skill in management. It helps give as much visibility in a 360 degree way before taking critical steps.
2. The ability to filter the inputs based on strong logic and not based on emotions or attitudes.
3. Responding fast with changes in terms of products and processes, to meet the changed scenario.
4. Identifying and exploring new opportunities emerging in the new scenario. This builds greater positivity and conviction.

2. A faith in self and the environment

While often, in difficult times, we hear about keeping faith in God and going ahead, the truth is God is within each one of us. We have to do what is right, in order to come out of a situation.

So the faith really needs to be in  –

• Logical thinking, mentioned in the first point, that ensures we have looked at all the pros and cons of the situation.
• Oneself and the team working with us. We are in control of our situation, we know our needs and processes the best; and so we are the ones to make the changes.
• The fact that we can only change ourselves and what’s in our control; we can’t change others or situations external to us beyond a point.
• The understanding that change is a constant and new opportunities emerge with change.

3. The will to experiment and change direction in time

While we know we need to make the change and have understood what needs to be done, we falter due to the inability to decide whether to go ahead or not; and when to do so.

Call it a hope, somewhere deep within, that things will bounce back soon, without needing to make any changes;

or the lethargy to start the action, masked by repeated analysis,  group meetings and discussions.

Timing is one of the biggest differentiators between successful and failed initiatives. So taking hard decisions at the right time is critical.

Or else we are forced to take even more hard or difficult decisions once the situation worsens!

4. A confidence to manage the change within existing resources

As mentioned above, timely action is critical; And for that, accepting that one needs to work within existing resources is a key factor.

While we can and should look around for possible additional resources and support, wasting critical time in searching for more resources is a BIG NO.

It is important therefore that businesses, specially startups and SMEs, always stay alert, be ready with alternative ways or have a Plan B.

Lastly, a crisis can happen due to external or internal reasons. Irrespective of the reason, the crisis management mindset can play a big part in ensuring positive results.

So, even before hitting a crisis situation, it is worth designing the business model in such a way that we are in better control if and when a crisis hits the business.

As a part of the core business strategy, for example, it is worth having a reasonably diversified revenue stream mix for the same product or services .

In other words, do not put all eggs in one basket; it comes in very useful when the basket is stuck for some reason!

Sridhar Rao is a Management Coach and Mentor and is available for one to one sessions online as a part of the InfinumGrowth Coaching panel. Click to know more.

7

Please do leave your comments at the bottom and do share with others if you like this article.