Crises Management

Effects of a crisis

Analogue to the Balance Scorecard the four levels financials, process, staff and customer are affected and are subject to an analysis.

Model of the Balanced Scorecard

Balance Scorecard

  • Financial level – Which effects can be expected?
    At the financial level crises especially have a short negative impact on planned returns. Furthermore, the liquidity of the company can be significantly reduced because – as the case may be – substantial investments might be necessary for the realisation of the solution. The “non-solution” of a crisis can be the economic ruin of a company.
  • Process level – What happens when?
    At the process level events and contents interact in a time course during the crises.
  • Staff level – Which impact have events, information and actions? Who is informed how and when about what?
    At the staff level a loss of confidence is highly critical in a company because with short notice manager and specialists could leave the company (termination). An accordant downsizing would have fatal effects for the existing crisis because an appropriate know-how and do-how could not be substituted in an adequate time and quality.
  • Customer level – Which impact can be expected for the customer?
    At the customer level loss of quality combined with a deficiency of communication will be answered with the withdrawal of confidence. Early information of the customer presenting the defined measures is necessary and vital.

Summarising the main effects of a crisis can be described as follows:

  • Customer detraction (bad service, loss of image)
  • Loss of confidence at the staff level
  • Negative impact on the company up to insolvency

Crisis patterns

Crisis prevention Crisis processing Synonym Result
good Crisis resolved "Nip the crisis in the bud"
good good "An avoidable training"
good bad "The crash"
bad good "be struck by lightning"
bad bad "It can’t get any worth"
bad/good Krise bleibt aus "Only a non-appeared crisis is a good crisis"