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.