The COVID-19 pandemic, the war in Ukraine, and now high inflation as well. It seems as though one crisis follows another. High energy costs, labor shortages, and resulting supply chain bottlenecks are posing significant challenges for companies. Companies such as the shoe retailer Görtz and the toilet paper manufacturer Hakle have already filed for bankruptcy—and they are not the only ones. Numerous other long-established companies are also being hit hard by the various crises. Experts even predict that a so-called “autumn of bankruptcies” is on the horizon.
Crisis Resilience: Options for Entrepreneurs
So what can be done? How can owners, managing directors, or executives in general best build crisis resilience? What measures have proven effective so far?
During the 2009 financial crisis, financial expert Robert Sutton of Stanford University initially advised rethinking one’s own role as a leader. In doing so, he identified four ways in which a person in a leadership position can counteract the crisis. He recommends the following to employees:
Predictability. Do not make the next steps arbitrarily.
Clarity. Be transparent about decisions and actions.
Control. Involve the team more closely and delegate more responsibility.
Empathy. Show empathy toward your team.
Look Ahead—Seize Opportunities
Many years ago, Sutton recognized the importance of soft factors in being better prepared for crises. But other researchers also recognize their potential and recommend, in particular, that psychosocial aspects be taken into account.
It is important for company leadership to be aware of its role as an influencer. They set the tone within the company—their task is to communicate to the team that a crisis can also represent an opportunity for the company. Thad Allen’s leadership logic also comes into play here. In an interview, the American disaster specialist spoke about how much influence people in leadership positions have on their colleagues during such crises.
If a company is already in the midst of a crisis, it can be helpful for the company and its employees to come together early on. Together, they can consider what the best possible outcome of the crisis would be and reflect on past successes. To grow from a crisis, the company’s opportunities should be brought to light. While negative emotions are human and certainly valuable for processing the situation, it is not productive to get lost in them—this applies to both company leadership and employees. Feelings such as fear should be acknowledged and discussed openly. By addressing them calmly and thoughtfully, it is even possible to find a way to grow from the crisis.
Common Crisis Measures in Companies
In 2020, as part of a study, consultants Georgiy Michailov and Hans-Joachim Grabow accompanied 33 German medium-sized companies through the COVID-19 crisis over several months. They found that many companies implemented common crisis measures such as “establishing a task force” or “communicating with stakeholders.” However, far fewer companies paid attention to significantly more important aspects such as revising their business model, developing scenarios, and, in particular, testing their crisis resilience.
The aumento value check is a specially developed method designed primarily to increase value, but also—particularly in crisis situations—to assess a company’s resilience and detect potential insolvencies at an early stage. By providing detailed answers to 100 questions, your company will be thoroughly assessed by licensed consultants—ensuring it is perfectly prepared for future crises. This qualitative approach enables early detection of insolvency. Based on the analyzed data, a crisis-resistant strategy can be developed that also increases the long-term value of your company.
