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Crisis Management: Why You Need To Plan for Failure

Crisis Management: Why You Need To Plan for Failure 1

By Chris Middleton, Director Of Operations Quirk Solutions.

Eisenhower once said “the plan is nothing; planning is everything”. This simple quote rings true for any business, or any person looking to succeed. Planning for failure or planning in the expectation that things will go wrong, seems counter-intuitive, but is the key to adapting to an ever-changing landscape. Chris Middleton, Operations Director of Quirk Solutions, works day-in day-out helping a range of organisations and businesses, including central banks and operators of strategic national infrastructure, to optimise their planning – enabling them to make the right choices at the right time. He believes that the key to managing crises is to focus on potential negative situations, to understand what could go wrong before it does.

“If you pre-emptively immerse yourself in potential situations that might occur, you understand the factors that affect a plan far more than if you were to react off the cuff,” Chris explains. “Understanding those factors and how they relate to each other does not guarantee arrival the right answer in the first instance, but you will be able to orientate and iterate towards a solution far quicker as a result of doing that analysis.”

Why do organisations struggle when crisis calls?

Chris believes that organisations struggle when complex situations arise. Times when companies face a large number of new problems and factors, each with their own set of variables resulting in unpredictable outcomes, can have devastating consequences for firms.

“A lot of organisations really struggle with that complexity because there are rarely any visible or obvious answers. The lack of predictability inculcates a sense that you’ll get it wrong. This is where understanding becomes key to struggling organisations, as clearing the fog around crisis is a necessary step to make sure you can respond without inadvertently doing anything catastrophic”

Businesses across the globe have been faced with an unprecedented number of crises to adapt to in recent years. COVID, war and political turmoil have challenged the mental models of decision makers and employees across industries, and robust shock management has become more necessary than ever. Hertz, J.Crew, Virgin Atlantic and many more giants filed for bankruptcy in the wake of the pandemic, showing that no company is too big to avoid surprises and vulnerabilities in an increasingly unpredictable operating environment. Each company faced a snowballing collection of tightly inter-related problems, each exacerbated by new situations arising as we began our ‘new normal’.

How can you prepare for crisis?

These companies can be seen as a cautionary tale, showing other firms how important it is to prepare for the worst. But how can we do so? Applying practice to the theory is easier said than done – imagining what could go wrong is uncomfortable and difficult for ambitious firms.

One technique Chris puts into practice with clients is stress testing; either running contingency planning or crisis management exercises to protect organisations against potential threats. Quirk has used stress testing and war gaming with a range of clients to assess plans and threats, finding that when coupled with reflective learning, they are powerful tools for companies looking to curb risk. The approach seeks to avoid groupthink and identify blindspots by bringing employees from different departments and levels of the business together to work diagnostically, predict, and solve problems.

“We really focus on cognitive diversity in our sessions to maximise the perspectives and skill-sets working against a problem” Chris elaborates “In a room of 15 people, you will probably find 11 different reasons why a plan might fail. From there you can prioritise what the most important issues are”.

A key pitfall in business planning is focusing on familiar risks, rather than doubling down on less predictable or harder to solve risks.

“You can imagine the circumstance where a company fixates on a risk that they’re all keenly aware of and can marshal skills and resources to be able to deal with. For me, that’s not where effort should be prioritised. What we regularly see emerge from our exercises are risks that the company has no idea what to do about. Risks which are poorly understood, require novel capabilities to address, and which emerge quickly are the ones likely to prove the most dangerous.  By doing exercises such as this, organisations can prepare for the issues that they lack the skills to be able to deal with. By identifying the possibilities that you hadn’t considered, you can begin to formulate methods and contingencies to keep the road as smooth as possible.”

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