Apparently this Chinese character for "crisis" is a compilation of the characters for "danger" and "opportunity". A couple of weeks ago, I posted an article here called "A business in denial is a crisis already underway". In that article, I outlined a model for "the four stages of crisis". Can I use this model to make a prediction on what will be in the final report into the Minneapolis bridge collapse.Question: Why did the Minneapolis bridge collapse?
Predicted answer (using the four stage model):
- Essential data that would have otherwise presented early warning signs of danger was not being collected. This was a result of a combination of poor systems, and management decision processes heavily biased towards actions that had been successful in the past for reasons that were no longer valid (crisis stage one - "hidden crisis").
- When data was available, the early warning signs were explained away, mis-interpreted or not taken seriously enough (crisis stage two - "crisis denial").
- When the warning signs were finally recognised, only the symptoms were treated, instead of the underlying causes. As a result, the underlying causes of trouble kept on doing damage (crisis stage three - disintegration begins).
- Finally - the devastating collapse (crisis stage four - "collapse").
Why should this interest small business advisors? Because the answer appearing above could be applied to 90% of business failures. Why did XYZ Widget Importers Pty Limited collapse? Word for word, the answer above will more than likely provide the explanation. Ditto for HIH, Ansett and Westpoint. And ditto for all manner of disasters, from railway accidents, to space shuttle disasters, failed personal relationships, and boiled frogs.
This "four stages" model of business crisis has been in circulation for over twenty years. It should be a useful tool for business advisors wanting to practice "early intervention".
If you need a list of "early warning signs" of trouble, see page three of the ASIC document entitled "Insolvency: a guide for directors".
Hopefully understanding the Chinese characterisation of "crisis" gives us insight, and the impetus to help small business proprietors understand that if they respect the signs of "danger", they may then be better placed to seize the "opportunity"!
