Platt Perspective on Business and Technology

Proactively facing crisis and change management as separate points on a single continuum

Posted in strategy and planning, UN-GAID by Timothy Platt on March 11, 2013

I have written a number of times about change management, with much of that appearing in my Business Strategy and Operations and its Part 2continuation page. I have also written about crisis management, with that primarily appearing in my directory: United Nations Global Alliance for ICT and Development (UN-GAID), where I have focused on crises in which I have been involved in remediation efforts, through participation with that agency.

I recently found myself citing the two sets of issues together in a posting on leadership: Re-Visioning Leadership 6 – finding new ways forward in addressing change management challenges 1 and its Re-Visioning Leadership 7 continuation. My goal for this posting is to explicitly address the gap between crisis and change management, and how they are related and interconnect, and how they differ too.

I begin by noting a crucial area of overlap:

• A need for change management develops over an extensive and even prolonged period of time. Change management addresses long term inefficiencies and organizational and operational disconnects that have collectively brought a business to a true crisis situation.
• So every crisis might not call for or necessarily lead to a need for explicit change management per se. But the situations that lead up to a need for change management frequently and even usually remain unaddressed until that business is directly facing impending crisis.

As a point of clarification here, I would divide crisis situations as falling into two basic and distinctive categories:

• An acute crisis is a crisis that comes about as a result of an unanticipated and even unpredictable event, and with sudden severity.

This might mean a sudden and unpredictable natural disaster such as a flood, hurricane or earthquake, or it might be more of a manmade event such as a fire in a neighboring building, brought about by human carelessness but with damage that extends outward. I am thinking of a specific incident there in which a nonprofit I was involved with lost their building too, when the building next door burned down.

• An emergent crisis is one that develops and builds up over a perhaps very extended period of time.

Once again, these crises might develop as a result of ongoing natural events or through human actions – or as a result of a combination of natural and manmade cause. But the nature and potential severity of potential crisis challenge is not seen, or if it is, it is not appreciated for its potential scale and significance. Change management becomes necessary when emergent crises develop and to the point of severity and immediacy that they can no longer be overlooked or downplayed, or seen as other than what they are: true crises.

And that is the point where this narrative becomes more complicated. A crisis trigger: an event that immediately brings about and causes a crisis and even a true acute crisis might not be individually predictable. But the possibility of that crisis event happening might be statistically predictable, even if the specific event isn’t, and with sufficient time it might even be viewed as likely. And here I think of an individually unpredictable event such as Hurricane Sandy. This specific storm could not be predicted on anything like a long-term basis, and its specific storm path and timing most definitely could not be, with a maximum storm surge pushing up the Hudson River and into lower Manhattan and adjacent New Jersey and Long Island coasts at a full moon and at a peak high tide. But with global warming an increasingly understood challenge and with increased risk of massive storms and storm damage an increasingly known reality coming from that, the possibility of such a storm hitting the Northeast of the United States has been known. So if flooding was known to be a real danger if such a storm were to develop, why did so many facilities close to the Hudson and East River locate their emergency backup generators and other crisis management equipment at ground level or below, at basement level?

So Hurricane Sandy was a true acute crisis and one immediately resulting from an individually unpredictable trigger event. But the possibility of acute crisis was known and even prepared for. The problem was and I add still is, that too much of this preparation can at best be considered a source of false security. And this is where the type of preparation and strategic planning that would go into preventing a need for change management enters this narrative.

• The same types of preparation can be developed and put in place for limiting the likelihood of an acute crisis, or at the very least lessening its impact, as would be used to prevent a need for change management.
• Both call for a deep and well considered understanding of where the business or organization is now, and what its overall risk profile actually is.
• And both call for a real understanding of the risks of occurrence as well as consequences in the event that a risk is realized. Prioritization of preparation as a first cut would in most cases be based on comparison of the relative numbers developed by multiplying the cost if an adverse event happening, by the likelihood of it happening.

Considering Hurricane Sandy, global warming’s increase in the likelihood of a massive storm hitting, with massive storm surge flooding, would increase the perceived need to prepare for that type of event, and with the costs of preparation required – here moving backup generators and other resources to higher floors.

So there are some real differences between crisis management and change management, and most definitely where there are no realistic bases for determining likelihood of an acute triggering event occurring. But in many cases, and even when a specific event cannot be predicted, change and crisis have a great deal in common, besides both calling for significant response to what has become a significant source of problems.

You can find this and related postings at Business Strategy and Operations and its Part 2 continuation page, and also at United Nations Global Alliance for ICT and Development (UN-GAID).

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