Crisis management for the resilient enterprise
Stronger, fitter, better
Despite the perception that crises are becoming more frequent, a 2018 Deloitte study finds that organisations’ confidence exceeds crisis preparedness.
Crises are on the rise. Are organisations prepared?
Organisations that are adept at crisis management take a systematic approach to mitigating potential crises and managing those that do arise with a focus on both preserving and enhancing value. The process is anchored in a sensing capability that continually assesses internal and external data for signals of change or conflict in the company’s environment. When such signals appear, these organisations know how to address the situation in a way that prevents an incident from escalating into a crisis.
In today’s society and economy, this know-how can be crucial to seizing a competitive advantage. Deloitte’s 2018 global survey of more than 500 senior crisis management, business continuity, and risk executives delves into the sources of this competitive advantage.
With respondents believing that the number of crises is on the rise, it is crucial for organisations to be ready to respond with agility to multiple scenarios that have been rehearsed and tested. Equally vital is to understand that many crises can be averted in the first place, allowing companies to focus on performance and growth.
Perhaps most important of all, the dramatic difference in outcomes when senior management and board members are involved demonstrates the urgent need for organisational leaders to proactively plan and prepare for crises, to contribute to risk management plans, and to take part in crisis simulations and exercises—all of which can substantially improve an organisation’s ability to not merely weather, but harness the power of a potential storm.
Our analysis of the survey responses revealed five central insights:
- Experiencing a crisis teaches organisations to avoid them. Undergoing a crisis galvanizes organisations to prioritize detecting and preventing crises in addition to managing them.
- Leaders need more development for crisis management. Helping leaders display their full range of competencies under the extreme pressures of a crisis can support effective decision-making and communication when they are most needed.
- Confidence outstrips preparedness. A company’s confidence in its crisis management capabilities is not always commensurate with its level of preparedness.
- Being at the ready significantly reduces the negative impact of a crisis. This is especially true if senior management and board members have been involved in creating a crisis plan and participate in crisis simulations.
- Third parties are part of the problem—and the solution. A number of companies are including partners and other outside organisations in crisis planning.
About the research
This report builds on the findings of our 2015 study A crisis of confidence, which surveyed more than 300 board members about crisis management and preparedness. For the current study, a quantitative survey was conducted via telephone by ComRes on behalf of Deloitte Touche Tohmatsu Limited. Fieldwork occurred between November 2017 and January 2018. All participants were crisis management, business continuity, and risk senior executives who were:
- In senior management positions, but below board level
- Working for large corporations in the private sector with an annual global revenue of at least US$5 billion for companies based in the United States, and at least US$1 billion for all other countries
The survey reached 523 crisis management, business continuity, and risk senior executives across 20 countries in five global regions: North America (109 respondents), Latin America (114), Europe (106), Middle East/Africa (69), and Asia-Pacific (125).