Wednesday, March 12, 2008

Patterns of Crises

The direct translation of these Chinese characters, which mean crisis, is "an opportunity riding a dangerous wind." Although crises present opportunities, most crises are unwanted and we feel better off without.

In his book, Will Your Next Business Mistake Be Fatal? Avoiding a Chain of Mistakes that Can Destroy Your Organization, Robert E. Mittelstaedt, Jr. describes a pattern traced back from crises. Mittelstaedt finds that the pattern includes these components (and I quote, from the book):

"- An initial problem, often minor in isolation, that goes uncorrected
- A subsequent problem that compounds the effect of the initial problem
- An inept corrective effect
- Disbelief at the accelerating seriousness of the situation
- Generally, an attempt to hide the truth about what is going on while an attempt is made at remediation
- Sudden recognition that the situation is out of control or “in extremis” (In extremis is a Latin phrase meaning "in the furthest reaches" or "at the point of death".)
- Finally, the ultimate disaster scenario involving significant loss of life, financial resources, or both, and ultimately, the recriminations."

If this pattern seems familiar, it should, because most business problems that become crises follow this pattern. Also, the large crises our governments face can be traced back through the same pattern.

What to do, then, to avoid these crises? Clearly, the chain of escalation must be broken. The first component of the pattern is the initial problem. So many crises start out small, in a manageable scope, yet go unfixed. An effective method of problem detecting and corrective action nips these problems in the bud.

When the initial problem gets past the first wave of defence, an interacting problem often amplifies the first one. Now a real mess is brewing. If corrective action fails here, the next phase in escalation is when those responsible begin hiding the problem or downplaying its significance. This can be done through filtering information as it goes up the chain of command. A boss can work to avoid filtering by having several lines of communication to compare messages and validate what he or she is hearing. When there is a disconnect, one of the sources is either filtering information or out of touch. Regardless, this is when help is needed but somehow doesn't show up.

Next, the crisis erupts in some undeniable way. People ask, "how could this happen?" There is enough blame to go around and lessons are learned and spread throughout the organization, but the key question is, is there a system in place to root out problems in their infancy and solve them completely? If not, be ready for more "opportunities riding dangerous winds."

With years of problem solving and corrective action experience, The Flying Toolshed implements corrective action systems so crises may be avoided all together. We believe creating opportunities for our clients rather than having opportunities thrust upon them.

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