President Jokowi, speaking at the plenary cabinet session on Thursday (18/6/2020), acknowledged that the impact of COVID-19 has reverberated across virtually every economic sector, with the potential to trigger a full-scale crisis. He urged ministers not to treat the current situation as business as usual, stressing that the same sense of urgency and the same calibre of policy responses must be applied across the board in a crisis environment. Standard measures, he cautioned, are simply inadequate in times of crisis.
Even as the country entered the New Normal phase, the COVID-19 pandemic continues to inflict crisis conditions on Indonesia and nations across the globe. The crisis wrought by the virus has struck organisations of every kind from businesses and government bodies to non-profit organisations, religious institutions, cooperative enterprises, and individual families. A stark illustration of this can be seen in the collapse of home-based small businesses and the suspension of corporate operations, which has left thousands facing mass redundancy.
Shrivastava and Mitroff describe the crisis confronting organisations as “events that threaten their most important goals of survival and profitability.” This may be understood as large-scale damage inflicted upon human life, the natural environment, and social and political institutions events that threaten the very continuity of human existence. Such major events, which cannot be anticipated, have the potential to produce a negative impact across all dimensions. The damage may be severe enough to destabilise an organisation, its workforce, the products and services it delivers, its financial standing, and the reputations of both the company and the government.
Crisis management scholar Fearn-Banks (1996) notes that a crisis typically disrupts normal transactions and, at times, threatens the very survival or continued existence of an organisation. Organisations generally cannot foresee that a crisis threatening their existence will emerge. As a threat, it must be addressed swiftly and with precision with the goal of restoring the organisation to normalcy in its aftermath. A crisis also carries consequences that simultaneously endanger an organisation’s core values, leaving only a narrow window of time in which to make critical decisions.
Given this compressed decision-making environment, organisations ideally must have a management system in place to govern and mitigate crises known as crisis management. Failure in crisis management leaves the organisation in an increasingly untenable position, as it demonstrates an inability to address its problems. Indeed, an organisation’s failure to execute effective crisis management may even invite accusations of irresponsibility in resolving the matter.
Crises within organisations can occur naturally, without warning, and are not invariably catastrophic for the organisation concerned. The outcomes of a crisis situation can strike a balanced score between positive (desired) and negative (undesired) results provided that crisis management is handled effectively. Navigating a crisis requires optimism as the primary capital for formulating the steps needed to exit the critical zone. Equally, media coverage both traditional and online that steers public sentiment in a negative direction must be addressed. This is essential in shifting the mindset of a pessimistic public and galvanising them to rise above the crisis.
A leader or manager within an organisation bears the responsibility of resolving the crises that arise, using every available means at their disposal. This begins with a strong sense of optimism and self-confidence, the full mobilisation of one’s capabilities and expertise, and the minimisation of harm to the organisation’s cash flow or reputation. A manager who succeeds in navigating a crisis demonstrates both their capacity and their competence in leading the organisation.
Managers can employ innovatively designed crisis management plans to address crises at various levels of severity. When an organisation finds itself in a state of crisis, managers can anticipate its escalation by deploying strategic planning and risk management frameworks. Every crisis must be confronted with absolute seriousness by the manager and communicated clearly to subordinates as the executing parties, so that the organisation’s goal of exiting the crisis zone can be achieved.
The crisis management plan is aimed at minimising risks and uncertainties to the greatest extent possible. Every organisation faces a continuously evolving future, the direction of which cannot be predicted. Crisis planning must therefore be conducted on an ongoing basis during the pre-crisis phase including through SWOT analysis of global opportunities and threats. To facilitate effective management, crisis prediction can be aided by mapping the crisis on a crisis barometer.
Further steps available to the manager include working to ensure that the crisis does not generate greater losses. This is followed by intervention during the crisis itself. Crisis intervention is aimed at bringing the crisis to an end, with damage control conducted during the acute phase. The steps in damage control proceed in sequence: identification, isolation, limitation, reduction, and ultimately, recovery. (*)
*) By: Rio Era Deka, S.Pd., M.M., Postgraduate Student, Universitas Islam Malang
*) This column is the sole responsibility of its author, and was also published at timesindonesia.co.id
