Becoming your own crisis hero

PwC’s Global Crisis Survey paints the new reality of crisis management

In my 25 years in Silicon Valley helping companies tackle the waves of corporate crisis that seem to barrage the technology industry every few years, I noticed a pattern. I observed that while some companies seem to become trapped in a cycle of crisis “whack-a-mole,” others take deliberate steps to work through a crisis, learn, improve and emerge stronger as a result. As Winston Churchill once said, “never let a good crisis go to waste.” These observations gave rise to a hypothesis: that crisis can actually be a positive inflection point for a business, opening the door to positive transformative change if you take the right steps.

To test our hypothesis, we launched the first-ever PwC Global Crisis Survey, a project analyzing over 4,500 crises across 43 countries to compile the most comprehensive repository of corporate crisis data ever assembled. We captured the implications of crises as well as insights that can help corporate leaders better understand how to anticipate and prepare for these inevitable situations.

The survey confirmed that crisis doesn’t discriminate; on average, companies have been through three crises in the last five years, and 95% expect to encounter one in the future, which makes it vital for companies to be prepared. In fact, our findings indicate that no company or industry has managed to avoid a crisis. Destigmatizing crises—or accepting that they don’t only happen to others—may have also shifted respondents’ perception of crisis from debilitating and permanent to unavoidably common.

While a crisis might be inevitable, companies that prepare for crises are best positioned to be resilient. Data also suggests that crisis plans must come off the shelf, not remain tucked away in case of emergency. Testing, practicing, and frequently reassessing crisis models streamlines the response and defends against major business shocks. While 82% of companies confirm they have a crisis response plan, only 25% actually review and test their plans regularly. Survey results suggest that the most successful companies prepare a plan thoughtfully, stress-test it, and in the end, expect the unexpected.

Diffusing responsibility is also a roadblock in creating a fool-proof crisis approach. Globally, our data shows that everyone thinks they own a piece of crisis—the Board, CEOs, IT, etc.—indicating there may be too many cooks in the kitchen. U.S. business owners, for example, are significantly more likely to assign defined responsibilities (32%), yet feel more vulnerable when it comes to team coordination compared to the rest of the world (8% in the U.S. compared to 3% globally).

Amidst these challenges, it seems some companies were in fact able to see opportunities in times of crisis. Confirming our observations from the front lines, 42% of executives who reported experiencing a crisis noted that they were “in a better place” afterwards. What did these companies do differently? Using their insights, we looked at what the benefits were of a successful crisis response, and found that those who emerged stronger took one or more of the following actions:

• Dedicated a budget to crisis management; half of the businesses that allocated budget to crisis before it hit came out stronger and were more likely to experience revenue growth afterward.
• Developed a flexible and agile crisis plan, keeping it up to date and implementing lessons learned; those that do are four times more likely to come out on top.
• Identified the root cause to apply productive changes moving forward; including ensuring the implementation of key remediation initiatives and scanning the long-term horizon for risks.
• Stayed authentic both to their values and in their communication with stakeholders.

We know crises in some form are inevitable, and in the age of the Fourth Industrial Revolution (4IR)—where digital technologies are blending together systems and services to become more connected and integrated—they’re becoming more complex and harder to contain. Any crisis, whether it be a product default, service disruption or natural disaster, has the potential to set off a chain of events that quickly escalate into a crisis, affecting every layer of today’s digitally connected organization. Companies are already starting to shift mindsets to plan and build teams to prepare for and anticipate crisis. Many leaders are even beginning to look at crisis preparedness as a competitive advantage. The new reality of crisis management is here—are we ready to embrace it?

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