When a company is in dire straits, they call in the “Spin Doctors” “Risk or Crisis Management Consultants” to conduct damage control. Therefore, companies need to ensure that they have appointed the best practitioners to handle the situation.
There is no industry or area of life, which is not susceptible to crisis. All industries have their areas of crisis, and while categorisation of crisis is difficult, they can include acquisitions and expansion, hazardous materials, health care, law, litigation, mergers, product contamination, and so on. No matter how proactive the strategic input from the corporate communications consultancy is, there are the inevitable and unforeseen incidents that cannot be forecast.
For example, the mining sector has taken enormous strides to improve occupational, health and safety standards, thereby reducing the numbers of risk fatalities and injuries. However, one still reads headlines of mining disasters. Careful planning by examining and assessing the potential weaknesses within an organisation’s industry can well lessen future crisis. However, humans are not infallible, and there are events in life that are beyond control.
Risk and reputation management is another growth industry with many sectors procuring the services of risk management assessors for their business. While it is a common business practice in the USA, more professional communications consultants in South Africa are working alongside risk management teams to focus on the key areas of potential concern and to prepare tools in the event of a disaster.
Shyamala Gopinath, Deputy Governor – Reserve Bank of India said, “The way to manage downturn and sustain growth in the banking and financial sector is to take advantage of the present crisis and move forward by making IT spending cost effective and revenue generating”. She observed that in the past considerable focus of IT spending was on customer services and products which did not extend to internal audit, back office and internal operations of the banks. There was also a marked reluctance to spend on these areas as they were not considered profit centres. She thus emphasized the need for greater IT spending by the banks on internal governance and control. Gopinath further elaborated on the various initiatives taken by the RBI in converting Indian banking from brick and mortar banking to virtual banking.
“There is marked improvement in various processes like fund transfers and settlement including RTGS, NFS, ATM’s and others. Paper transactions still continue to be in high numbers, which also carry high risk. RBI is thus considering to shift high value clearing to electronic mode”, stated Smt Gopinath. She expressed concerns of fraud; software and hardware glitches and money laundering resulting into tremendous loss. Smt Gopinath concluded by saying that response required from the IT providers would be in terms of affordability, availability, reliability, adaptability, convenience and operational comfort.
“IT related concerns include inadequate governance, inadequate alignment with business requirements, system failures, inadequate segregation of duties, unauthorized access, malicious activities like hacking, cost overruns and data integrity issues among others”, pointed Gopalakrishna.
Echoing Gopinath’s thoughts, Dr K C Chakrabarty, Chairman and Managing Director, Punjab National Bank, in his address said that this was the time for the Indian banking and financial services industry to turn crisis into an opportunity and emphasized on the need to focus on inclusive growth by generating domestic demand.
“It is necessary to make banking and financial products and services accessible to billions of Indian people by improving penetration. Taking products and services to masses will provide the necessary stimulus to the industry”, said Dr Chakrabarty. Explaining the role of IT, he pointed that information technology and infrastructure technology are the two vital pillars which can be utilized to effectively increase access to the masses. “Though these are tough times, we must expand but cautiously. Two things to be avoided in managing downturn are complacency and inaction”, highlighted Dr Chakrabarty.
Key challenges that the banking and financial industry are facing today are in terms of industrial growth rates dropping, investor and consumer confidence levels decreasing, credit becoming costlier and others. Technology can be leveraged to address these challenges and the role of technology in providing effective solutions to banks in managing downturn.
Banks can have a new role to play and technology will have to be part of the solution. There is the need to review of projects undertaken during boom times. I like to direct you to the importance of assessing the viability and profitability of such projects and only continue those which would be essential and profitable. I would also emphasize on the need of simple banking and financial products. You don’t need ultimate sophistication in times of downturn, but simple products to reach the masses. I recommend relying on information, focus on data quality and application driven planning and budgeting for better cost management. I think the industry should invest in technology to bring the economy out of the downturn.
What is it that you want?
The way success relates to “freedom” lies in the ability to devote your life to causes that you deem as more soul serving than working to make ends meet. Whether you are after just a little more each month or getting to a position where you no longer have money worries, each business can generate what they are looking for with some focused attention on a few key factors. Financial meltdowns can serve a huge opportunity for you and your business with some work and a fresh perspective.
Why is a financial crisis your best opportunity?
The problem with being constantly cash strapped is that over time it can seriously affect how you perceive opportunity in the world. I’m going out on a limb to say that since there is no shortage of opportunity, a limited perspective is one of the major reasons why it is so hard for small businesses to recreate their bank balance. A limited perspective makes it very hard to overcome obstacles and hardship. The good news is that a financial crisis turns your life upside down. Crisis has always motivated people to make great changes in their lives and your financial crisis can be the same gift of change, if you choose.
I would recommend the following steps to “Turn your Crisis into Advantage”:
1. Keep things in perspective
Things are rarely so bad – or so good for that matter – as they appear initially. I’m not talking about tragedy and death, but rather the day-to-day mundane events that seem to create setbacks for mere mortals but that great leaders thrive on. If you are facing adversity it is probably because you are pushing yourself and your organization to achieve greater goals. This is a good thing.
2. Look at the big picture
When we discuss an organisation, military is always a perfect example. The military has institutionalized this idea by giving every commander at every level a second-in-command. This way, the commander can focus on leading the troops and keeping his eye on the enemy and the evolving situation, while the deputy takes care of administrative manners and the “rear area”. How many civilian organizations do this? I don’t think many, and they would surely be more effective and, yes, even more efficient if they did so. An added benefit is that the deputy can replace the boss in some circumstances, thereby giving a chance for much needed rest and recuperation during difficult times. When we build organisations we need to build principles to run these by it, not personalities who can run organisations. As in the lack of this certain personality the organisation might fall but with principles, others can run the organisation as per written ethics. Learn to coordinate!
3. Stay Calm and don’t Over-React
The workers get nervous when their managers start running like headless chickens. My advice to all who are leaders is that should project calm and resolve no matter what the situation, lest they unnerve those they are leading.
4. When in Doubt, Follow your Instinct
My observation of many of senior managers and other high-level directors in Europe is that they all trust their instincts and are highly intuitive decision-makers. When all is said and done, reason can only take you so far in your decision-making. Information is never perfect in any case, especially when faced with crisis. Intuition is simply an inner knowing that comes from years of practice and reflection on a particular subject. Great leaders usually have well developed intuition because they have so much experience and are used to considering the emotional aspects of a problem in their decision-making. Even more important though, is that they listen to the little voice that tells them that something is wrong or is good and they act on it.
5. Communicate and lead with emotion
In May 1940, Britain faced its most trying circumstances of the Second World War. Winston Churchill gave an address to the nation. His words, “I have nothing to offer but blood, sweat, toil and tears.” In a series of stirring speeches over the weeks and months of that difficult summer, he appealed to the emotions of Britons and rallied them using the values and beliefs they held dear as a people. He didn’t sugar-coat the situation and because of that he was able to create an overarching sense of purpose and mission to their struggle. Had he simply listed the balance of forces it might have demoralized the people. Instead he made them truly believe that Britain was a beacon of hope and right for the oppressed peoples of Europe and that they would come to their defence.
6. Reinforce success and build on strengths
There is a need for revision of all SWAT analysis. Review your weakness, work out new strategies to overcome these weaknesses. And find ways to improve your strengths and successes through cost effective ways. Peter Drucker is widely credited with the concept that managers should build on strengths rather than constantly attempting to correct weaknesses. He believed and taught this over many decades but many managers still focus on the negative side of life rather than the positive side. In economic terms, this is known as comparative advantage and it is the fundamental logic underpinning international commerce and free trade.
7. Accept Personal Responsibility
Regardless of the perceived cause of your crisis, accept responsibility for it. To quote a popular saying, “you Can’t change what you don’t accept.” While external situations may have caused additional hardships, take back control for the fact that the solution now lays in your hands. If your financial slop has been brewing over a longer period of time, begin to ask yourself probing questions about how you view achievement, yourself, success and other successful people to greater understand why opportunity may continuously elude. The main point is that people who are personally responsible no longer feel scammed, cheated or defeated because they take advantage of each situation as a learning opportunity. Become solution oriented and forget spending time thinking about things that do not change your circumstance.
8. Don’t Always Depend On Others
As soon as you decide that you cannot rely on others for your financial well being, you will no longer accept less than you deserve. Are you holding out for a little while forsaking the opportunity to Be and Have more? Continuous “help” from others is a problem because it serves as a band-aid that only delays the need to hit “rock bottom” and become resourceful enough to figure out a solid plan of action. While assistance can be a lifesaver for the short term, don’t exchange it for the reward of being able to choose how you want to live.
9. Accept That There Is No “Secret” Formula
There is no “secret” that we can also be privileged enough to have success too. All of the highly successful people we have come into contact with have only been willing to do a few key things that others are not willing to do. Financial independence comes with a price though. There is a price to pay for everything. Do you have the discipline to delay your gratification in order to make sacrifices with your time and effort until you reach your goals?
10. Research To Grow Larger Than The Problems You Face
Most of us eventually arrive at our destination not because we’ve intended it to be this way but because we’ve fallen asleep at the wheel. You can be sure that the one thing that greatly influences every financial decision in your business is your own personal mindset about success. Use this crisis as an opportunity to understand how your thinking differs from those who are in the financial position you want to be in.
Once you begin to shift your perspective you will be in a much better position to take steps towards fixing your financial situation.
11. Invest In Yourself First
YOU are the best return on your business. When you consider starting a business, start small. Examine your financial goals, talents and passions and then take some steps to invest in yourself and your future.
12. Learn To Take Calculated Risks
The day we finally became sick and tired of our limited choices was the day we decided to take our first bold steps towards a new life. We were able to risk what others do not because we felt we didn’t have much to lose. Despite popular advice, we chose to risk it all because the life we had would always be waiting for us if we “failed.” Do you take the risks required to advance towards your dreams? When you do take a risk and it doesn’t provide the results you seek, does the cynic take over and you give up? Mature your “entrepreneur spirit” by taking small calculated risks that will season your tolerance level for taking bigger risks in the future . Don’t let any “problems” along the way become a roadblock for you!
13. Be Selective
Too many people take financial advice from people who are not walking their talk. Is your “adviser” earning a wage from his advice or is he financially free because of his advice? Big difference! If it is financial abundance you are seeking then it pays to learn a little about what the rich do to get wealthy. How do they think, how do they work, how do they see assets, liabilities, time, and opportunity. Their perspective is much different than what you will find on TV or from the popular “money guru’s” currently dispelling their advice. Also remember that much of the so called wealth you see around you is swimming in debt so never feel envy or competition towards others.
As a manager and a leader, the next time you are faced with a difficult situation, make a commitment to apply these principles. Even if you can’t do it well the first time, persistence will pay off. It will allow you to build resilience in yourself and your organization, and it will also contribute to making you a much more inspiring and effective leader.