Crisis management and controlling – important elements for strengthening resilience

By /

An article by Achim Behrendt and Anette Anders on the new crisis management standard ISO 22361 was published in the Controller Magazine of the Risk Management Association RMA under the title “Crisis management and controlling – important elements for strengthening resilience”. You can find the article below and here for download.

The changing risk situation in recent years (coronavirus pandemic, Ukraine war) in particular has made many companies realize that risk management alone is not enough. Companies have therefore begun to focus intensively on the topic of business continuity management (BCM). The focus here is on intensive preparation for possible emergencies and restoring business operations as quickly as possible after an emergency. But what happens when both risk management and BCM reach their limits? Examples to be mentioned here:

  • A company’s normal business activities are disrupted by unforeseeable events such as massively affected by natural disasters. A quick response is required here.
  • Crises are very complex and require coordinated, targeted and rapid action at various levels. Crisis management focuses on efficient and rapid decision-making.
  • Crisis management involves extensive damage limitation in order to minimize the impact on the company and its stakeholders

It is therefore important for the company to also deal with the management of crises. Crisis management provides support in responding appropriately to unforeseen events, limiting damage, protecting reputation and ensuring coordinated crisis management. At this point, it must be emphasized that the new ISO 22361:2022 provides important information for a structured approach to setting up and expanding crisis management. In particular, the areas of “leadership in a crisis” and “crisis management skills” are explained in detail. However, the importance of the intersection of risk management / BCM / crisis management and controlling, which in our view should not be neglected, is not addressed. For example, risk controlling helps to identify potential crisis triggers in advance. It is therefore possible for the company to take appropriate measures to minimize or counteract these risks. During a crisis, controlling supports crisis management by providing real-time data and information to monitor the situation and support decision-making. This serves to obtain a holistic assessment of the situation. Financial controlling can be used to assess the financial impact of a crisis and deploy resources effectively; performance controlling can help to monitor the effectiveness of the crisis response and evaluate the success of the measures introduced. Furthermore, by analyzing past crises, controlling can subsequently help to identify preventive measures and improve the handling of future crises. Controlling can therefore also play a role in the development of crisis management strategies and plans. In summary, it can be said that BCM as well as crisis management, controlling and risk management complement each other by aiming to strengthen a company’s ability to cope with and recover from crises. Effective integration enables the company to be better prepared for unforeseen events and limit potential damage. Controlling therefore also plays an important role in strengthening a company’s resilience. The RMA’s “Crisis Management” working group is currently developing a “Crisis Management Guideline ISO 22361:2022”, which is intended to support companies in setting up crisis management.

Publications

  • In May of this year, Klaus Bockslaff and Martin Schnauber took part in the annual conference of Plattform e. V. – Menschen in komplexen Arbeitswelten with a presentation entitled “Leadership in crisis management according to DIN ISO 22361”. Plattform e. V. has now published a conference volume with a documentation of all contributions. This can be ordered on Amazon as an e-book or paperback. You can find the article by Klaus Bockslaff and Martin Schnauber below and here for download. Objectives and content of ISO 22361 The new standard is essentially aimed at management with strategic responsibility. The emphasis of the new DIN ISO 22361 lies in its methodology and in the fundamental question “How do I proceed in a crisis? If I have nothing left, do I at least have a procedure, a basic structure?” The aim of developing ISO 22361 in the period from September 2019 to November 2022 was to provide guidance for organizations of all kinds on an exemplary approach to crisis management. Strategic decision-makers are to be supported in developing and maintaining “crisis management skills”. This applies to all phases of crisis management: from planning and operation to continuous improvement. The standard is intended both to help develop an organization’s crisis management capability and to explain the context. The challenges of crisis management, including recognizing the complexity that a crisis team faces during a mission, are highlighted, as are successful communication during a crisis and learning from the crisis. Building crisis management skills In order to develop and maintain a crisis management capability in any organization (company, public authority, public corporation, foundation, association, institution, etc.), some elements of crisis management and the crisis management process must be defined and described. Leadership is not only required in crisis team work, but is also an essential task of top management in setting up, operating and improving crisis management. Therefore, the involvement of top management is crucial in order to reconcile the objectives of crisis management and their tailoring with the strategic direction and core values of the organization. Top management defines the strategy and objectives and communicates the importance and benefits of crisis management top-down. Furthermore, top management is responsible for the organizational structure, appoints the necessary functionaries, defines their resources and powers and provides guidelines for information and communication as well as quality assurance and the transfer of know-how in the aftermath of crisis management. The organization should promote a culture among employees that is designed to identify organizational risks by reporting minor incidents that may escalate (increasing risk awareness and resilience) in order to increase commitment to crisis management. This requires open communication of visions, goals and targets, as well as associated training and exercises. The development of awareness, knowledge and skills leads to a positive attitude towards crisis management. To this end, both the actual handling of crises and training courses and exercises are to be systematically reviewed and evaluated. This operational learning leads to continuous improvement in crisis management skills. The crisis management process sets out guidelines for anticipating, assessing, preventing and minimizing damage in the event of a crisis. For the process, the readiness of the crisis organization (alerting and availability), the response with the process organization, the recovery (return to “normality” taking into account strategic opportunities with regeneration of the organization and plans for further development) as well as continuous improvement by means of debriefing, learning from the crisis and implementation of the findings must be described. Leadership in the crisis Chapter 7.3 examines the various facets of “Leadership in crisis”. A diagram shows which key leadership skills and characteristics are required for the work of the crisis team, in particular for the management of the crisis team. From this compilation, a requirements profile specific to the respective organization can be extracted for each crisis unit function, which can be used when selecting personnel to fill the function. Matching the requirements profile of the respective function with the performance profile of the candidate leads to the best possible appointment to the function. If necessary, further education and training requirements can be derived. Fig. 7.1: Skills and abilities for leadership in a crisis For example, the requirement described by G. Hofinger and C. Becker “For managers whose tasks include staff work, corresponding competencies should be part of the selection criteria or be developed in a targeted manner” can be fulfilled if the requirements from ISO 22361 are used consistently. The standard writes: “The ability to lead effectively in a crisis should not be assumed or taken for granted as a consequence of an individual’s appointment or status. Managers who review their training and development needs may find crisis management skills useful. It is important to recognize that some people are not equipped to handle crisis situations and enforce crisis management, which can be identified as part of their training and exercises.” The standard addresses a very sensitive point with these statements. The success of a team’s work depends largely on the management’s ability to promote the “solution-finding skills” of the entire crisis team. What kind of personality does someone need in a crisis situation, a situation in which they don’t know a solution in order to lead their team to success? This is probably the fine art of crisis management, not just working through a checklist, but working with the crisis team to find a sensible and good solution. Meeting requirements such as “emotional intelligence” is a major challenge. Strategic decision-making during the crisis In Chapter 7.4, the standard describes strategic decision-making in the event of a crisis. The particular value of this chapter lies in the clear emphasis on the difficulties of decision-making. It not only lists the factors “why decision-making can be challenging” but also the “dilemmas, delays and avoidance of decisions” and “problems in decision-making”. For the actual work of the crisis unit, i.e. the “Effective Decision[1] Making”, the operational procedure of staff work, as described in Chap. 5.3.5 “Reaction” is of central importance. The core requirement for Read more

  • After the new DIN ISO 22361 “Crisis Management” was published in February 2023, the reactions on the market have shown that many companies are very interested in this standard. In our view, this involves the following points: Auditing: Companies are asked by their customers about the quality of their business continuity and crisis management system. It is actually about saving time and money. This is based on the observation that an increasing number of manufacturing companies are being your customers on the quality of the business continuity and crisis management system be asked. The question is: “Can you fulfill your delivery obligations under all possible circumstances?” The time and effort required for an audit by a customer is high and blocks a considerable human and financial resources over a longer period of time. This effort can be BCM can be reduced by referring to certification in accordance with ISO 22301. Certification in accordance with ISO 22361 is not currently planned for crisis management. The particular advantage of auditing in accordance with ISO 22361 is that the audit standard is applied by a globally applicable standard. We would be happy to submit an offer for such an audit with the following five steps: Guideline for the implementation of ISO 22361: A “Crisis Management” working group of the Risk Management & Rating Association e.V headed by Dr. Klaus Bockslaff, is working on a guideline for its implementation. Three levels of requirements were defined for organizations with different levels of crisis management requirements: Basic requirements, higher and highest requirements. For each element of the standard, the working group described how these requirements can be met. The writing of the texts in the subgroups is largely complete. The entire text is now merged. We expect the guide to appear in the RMA publication series in the fall. We will continue to report. Another guideline was published in June 2022 by the Association for the Promotion of German Fire Protection (vfdb) entitled “Crisis management for authorities and companies”. An accompanying text by Benno Fritzen, the head of the German delegation to the responsible ISO working group, puts these guidelines in context. Personal and professional requirements: As we reported in the INFOBrief of March 2023, the new ISO 22361 contains a list of the various requirements for leadership in crisis teams in chapter 6.1.1 on page 30. Appropriate leadership is the decisive success factor in crisis management. Self-reflection and knowing your own behavioral patterns in critical situations are important skills for surviving a crisis.Under the title “Crisis management for managers”, we offer a two-day seminar with GemaSim® that focuses on the behavior of participants in a stressful situation. GemaSim® is a training and group assessment tool for the ‘soft factors’. The software simulates an easy-to-use cockpit of a spaceship and the environment of the X-578 galaxy. The cockpit consists of two different stations with different displays and controls. Two astronauts operate the left-hand station and two the right-hand station. In addition to deepening the theoretical foundations and exchanging experiences with experienced coaches, you will learn how to use this computer-based simulation to shape the processes of leadership and decision-making and to train under pressure. Article on DIN ISO 22361: The latest issue of KES contains an article by Dr. Klaus Bockslaff on crisis management in accordance with DIN ISO 22361. The full text of the article can be found in KES 2023, issue 2. Overall, we are convinced that the new ISO 22361 can make a significant contribution to the further development of crisis management. The experiences of the last few months have shown what significance the “black swans” can have. It is essential to be prepared for such high-impact events with a very low probability of occurrence. We would be happy to make a contribution to this together with you, be it through a corresponding consulting project or our proven seminar program at our Verismo Academy or as an in-house event at your premises. We would be very pleased to hear from you.Your Verismo Team

  • The Association for the Promotion of German Fire Protection (vfdb) has produced a guide “Crisis management for authorities and companies” based on DIN ISO 22361. An introduction by Mr. Benno Fritze, Ltd Fire Director (ret.) can be found here: Introduction The guide itself is provided free of charge by the vfdb at the following link: Guide

All Publications