How can companies turn crises into advantages

What do companies that can take advantage of a crisis have in common?

Deepankar Sanwalka,? Consulting Leader, PWC India

Today, most organizations are struggling with some kind of crisis, either caused by major internal or external factors, or caused by the accumulation of small events that can have multiple impacts across the enterprise. These crises disrupt business operations and threaten to damage corporate reputations. If not dealt with promptly, these crises can even threaten the survival of the enterprise.

In my more than 25-year career as a consultant, I've seen many of these crises, and here I break them down into four categories:

A company in crisis;

Companies that weather the storm but take a big hit almost permanently lag behind their competitors;

A company that turned a crisis to its advantage and became stronger;

Companies that didn't change and continued to face crises until fighting them became part of their daily routine.

The most interesting companies are those that have survived the crisis, emerged stronger, and continued to grow and become more successful. Almost all companies that can take advantage of a crisis have something in common -- they do their best to prepare for a rainy day.

When a crisis hits, the company's senior leadership (most likely the CEO) will respond when it hits. However, many different teams (finance, IT, legal) are involved in the company's crisis response, and if no clear leader is appointed, there may be conflicts of opinion. Similarly, not having a designated crisis management team in place and not being clear about who should be in charge and how action should be taken can create confusion within the company.

A prepared organization needs a defined leader in charge of crisis response and a response team with clearly delineated roles and responsibilities. These organizations invest in developing crisis management plans, test them and keep them updated.

Naturally, these organizations will work with the crisis management company responsible for simulation testing to run and test the crisis preparedness as a procedure. A good crisis management plan is based on the premise that a crisis is by no means an isolated event, it will always have a domino effect on all aspects of the organization, causing a huge impact on internal and external stakeholders. Through crisis simulation, gaps in the organization can be identified, understood and addressed before it is too late, and the organization can be more confident during a crisis.

The rapid and large-scale application of technology has created interconnectedness among organizations, and the consequences of crises can now be felt everywhere in real time. This affects human factors and again affects the relationship between internal and external stakeholders. News of important events can go viral these days. Therefore, a timely and sincere response to the crisis is essential, and this can only be achieved by responding to the crisis based on facts. Gathering accurate information quickly in a crisis is essential for a fact-based response to a crisis.

Crises come in all shapes and sizes, but they are generally the same. In general, large organizations are more vulnerable to crises. PWC's first-ever global crisis survey involved more than 2,000 companies, including the views of more than 150 senior managers from large listed Indian companies and those who have received private equity funding. Almost all Indian respondents (97%) expect they will be hit by the crisis in the near future; Eighty percent of respondents said they had experienced at least one crisis in the past five years

The results show that four out of 10 (37 per cent) Indian companies that responded well to the crisis had allocated a budget for crisis management before the crisis hit, and nearly half (50 per cent) saw revenue growth as a result. In addition, 87 percent of respondents in India recognized not only the importance of gathering information, but also the benefits of gathering accurate information quickly.

Is in good condition after crisis respondents to respond to the crisis has carried on the analysis of the causes: almost all respondents (98%) based on crisis acted as a result, one third (32%) underwent some reforms, to finish a quarter (25%) identified several projects and other (16%) are substantive action.

In India, the vast majority of companies that self-identified as "better positioned" (94 percent, 59 percent of whom strongly agreed) confirmed that they responded to the crisis by acting as a team, with the vast majority (92 percent) agreeing that they acted with integrity.

The crisis will become harder to control and harder to resolve. With increased scrutiny from stakeholders, regulators, and the media, there will be less room for error, so organizational leaders need to take responsibility for doing the right thing from the start.