Burkhard Gnärig

26 January, 2016

From crisis management to transformative change

One of the many clever things Winston Churchill is supposed to have said is: “Never let a good crisis go to waste”. During the height of the financial crisis one could read this quote everywhere. What commentators usually assume, is that Churchill challenged leaders to use moments of crisis to launch in-depth change processes which would meet paralysing resistance in normal times. If we look back a few years we have to note that governments did not use the crisis to reform, let alone transform, the global financial system. At a lower level of intensity, with less popular attention, the crisis persists and it is only a matter of time until it returns into focus, making us aware that we did let “a good crisis go to waste”.

Looking back on my experience with managing international civil society organisations (ICSOs) and observing others who do so today, I find very few examples of leaders who managed to use crises to transform their organisations. I observe four different forms of reaction to crises:

  1. Denial is a surprisingly popular approach to crises. Explaiwaterfallning the crisis away or going to great lengths to show that the crisis will not affect “us” looks like the most widespread approach to crisis management. It may work at times – for instance when you are lucky enough to find that an external crisis has spared your organisation – but denial usually means that you waste the time you would have had to properly prepare for the crisis.
  1. Headless chicken” is another reaction to crisis, which all too frequently can be observed. Leaders start panicking and initiate all kinds of measures, fighting fires (real and imagined ones) wherever they arise. However, they lack a clear understanding of the overall goals they want to achieve and a strategy which turns the different measures into an effective programme. Often leaders who stuck to denial for too long turn themselves into headless chickens once denial is no longer possible. While frenetic, coincidental action may create the impression of a determined leader who addresses the crisis it will rarely help in overcoming it.
  1. Solid crisis management often aims to steer the organisation in its present shape through the crisis while preserving the status quo as far as possible. From my own experience I know that this is the instinctive reaction of leaders who have very much determined the present shape and size of their organisation. Crisis threatens their well-considered plans, and instinctively they try to defend their creation against any disruption. Good crisis managers can do impressive jobs in steering their organisations through major crisis with a minimum of fundamental change. Coming back to the example of the world financial crisis, we can say that the German government was one of the national governments that did a very good job in managing the crisis but it utterly failed in using the crisis to drive transformative change.
  1. Transformative crisis management is what Churchill was alluding to: using a crisis to transform your country or, in our case, your organisation into something better equipped for the future. The main challenge in transformative crisis management is being prepared. When the crisis strikes and people panic it will be very difficult to find the time and space to reflect on how to use the crisis for the advancement of your organisation. If you don’t have a transformation plan – or at least a very clear idea about the direction – you will be challenged to develop one in the midst of chaos and confusion. Besides having a plan for transformative crisis management you need to spot disruption early. The more time you have to match the emerging crisis with your plans for transforming your organisation, the better the chances of success.

As disruption is becoming a widely used word in our sector and as abrupt changes in government funding are leading to financial crises in a number of countries, ICSOs are entering a phase of major crises. These are very scary situations but they are also great opportunities to transform our organisations into relevant and sustainable entities able to pursue their missions under dramatically different circumstances.

In our next few blog posts we will hear from leaders who are in the process of transforming their organisations about the opportunities and challenges they face.

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