We asked more than 250 senior executives involved in their organisation’s crisis management how they approach and manage crises.
This suggests that organisations are missing a trick. They know they could be more resilient to crises, but aren’t taking the measures to do so.
Why are some organisations failing to make themselves resilient to crises?
- Not believing a crisis will happen and unwillingness to think about certain risks.
- Overconfidence - 70% of respondents are confident their organisation could respond effectively to a crisis.
Focus on cost rather than value
- Not considering the potential cost of a crisis when making investment decisions around crisis readiness and resilience.
Aversion to change
- Reluctance to change until you or one of your peers, faces a high-impact event. 70% of respondent organisations that faced a crisis in the last 12 months saw it as an opportunity to change.
- Lack of coordination and alignment of teams with operational and ultimate responsibility for risk management and crisis management.
How can your organisation be more resilient to crises?
Your organisation has an opportunity to make itself more resilient to crises and protect its existence, value and reputation. Does your organisation:
Approach resilience holistically? Map out what you do to identify, prioritise and mitigate risks and issues; and prepare for, respond to and recover from crises. Are there any gaps? Does your senior leadership team have oversight of and accountability for the whole crisis lifecycle?
Place accountability for crisis preparedness with the senior leadership team? If not, build your organisation's case on why it should be.
View risk management as a static periodic process or an ongoing dynamic process providing actionable intelligence for senior leadership? Are your data sources diverse and delivered in real time? Does senior leadership continuously and diligently make time to understand and address risks?
Challenge itself to discuss how it should mitigate and prepare for non-familiar and uncomfortable risks? Identify what risks are currently being addressed and ask honestly if there are others being ignored.
Ensure there is appropriate focus on the controllable risks that might lead to a crisis event? Are senior leaders confident business operations and activities are meeting legal and regulatory requirements?
Have the mindset to always think 'what if'? Use war gaming techniques to understand the long and short term consequences of big strategic decisions, major changes and possible crisis scenarios.
Consider the financing risks of certain crisis scenarios? Think through and scenario plan around crisis events that might put pressure on financial covenants and liquidity headroom, then work through the options to mitigate, for example refinancing or tactical M&A.
Learn from their mistakes and the mistakes of others? Make sure someone has responsibility for post crisis reviews and bringing the 'could this happen to us' discussion to the executive team when other organisations are in crisis. Asking the board to play this role can be helpful.
How we help clients
At Deloitte we help our clients not just through the good times, but also in the toughest moments of crisis. We know what it is like to face a critical challenge – and meet it decisively.
Our crisis services are founded on trust. We build the relationships that make organisations all over the world place trust in us to prevent the avoidable and prepare for the truly unavoidable. When things go wrong you may feel exposed to the fiercest scrutiny. But our unrivalled network including specialists from risk sensing, agile governance and critical communications, can help you turn the tide during a crisis.
Many of our clients have emerged from great challenges even stronger than before. Make our strength your strength.
To find out more, contact one of our team.