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Be it a stock market crash, earthquake, or terror attack:
A crisis is what differs from the »normal«.
Organizations generally attempt to tackle states of emergency by following routines. And surprising as it may seem: This often works. For various states of emergency, they develop so-called alarm programs that scan the outside world for signs of crisis. If such signs are identified, the previously devised routines jump into place and emergency plans, evacuations, or the activation of financial reserves are initiated. If alarm programs work, organizations normally manage to ward off the crisis. But COVID-19 led to a state of emergency that made a mockery of even the best-laid plans. No organization was prepared for a crisis of this dimension.
What to do when there is no plan for such a crisis? When faced with insecurity, organizations usually look to other organizations. They observe and imitate. Sociologists term this behavior »isomorphism«. But for COVID-19, there were no best practices. Organizations watched each other search.
If, like now, there are no alarm programs, they work badly, or are insufficient, new pressure is exerted on an organization’s breaking points. It becomes clear whether it is completely trimmed on efficiency or still has the necessary reserves to buffer shocks, whether it is too dependent on individual suppliers, customers, or employees, or whether centralized and decentralized decision-making is in imbalance.
The simultaneity of these phenomena puts organizations under pressure: New tensions are created, existing ones reinforced or modified. In an analysis of more than 100 companies, we identified eleven areas of tension that characterize this crisis. These now need to cleverly balanced. This balancing act determines what the next normal will be. There is no patent recipe. We cannot apply the answers of the past. Rather, we need to ask the right questions for the future.