How to get out of a crisis. «Three Step Rule»
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Technologies similar to Cookies
Similar technologies are technics or tools, using certain characteristics to identify devices so that visits to a website can be analyzed. It includes, for example, HTML5 local storage, local Shared objects, fingerprinting techniques, tracking pixels and plugins.
For ease of reference, cookies and similar technologies are referred as "Cookies".
Usage of Cookies
Cookies enable us to provide users with certain features and supply us with information about website visits.
We also make use of cookies to make our site more user-friendly, to better understand our existing and prospective customers, including associating a user with different devices and browsers that they may use for online targeting and advertising purposes.
If you can't measure it, you can't manage it' Peter Drucker
A crisis is an opportunity to grow. That sounds nice. Unless it doesn't apply to you and your business. Lower demand, higher purchase prices, logistical problems, falling revenues and a complete lack of understanding of where and how to go from here. Sound familiar?
Sometimes crises are unavoidable. They can occur both within a company and as a result of external factors. Regardless of the level and size of your business, sooner or later you will have to deal with a crisis. We will try to help you in this difficult endeavour and remind you of the 'Three Step Rule'.
Step 1: Recognise the crisis
Have you ever heard of 'learned helplessness syndrome'? Instead of taking action, we begin to justify our indecision, living in a 'comfortable' but flawed reality. A business crisis can be caused by a variety of factors, such as economic volatility, changes in the market environment, unforeseen events or internal company problems.
If your business is experiencing a gradual decline in sales or revenue over several periods, you may be on the verge of a crisis. The emergence of new competitors or increased competition can be a stimulus to growth or an indication of a pre-crisis period in the industry.
It is important to recognise that there is a crisis situation and that it is not going away. At this stage it is necessary to carry out, however minimal, an audit of the company's financial position, review internal processes, assess changes in the competitive environment and in selected segments of the target audience. It is important to think about anti-crisis measures in advance.
A crisis is an opportunity to grow. That sounds nice. Unless it doesn't apply to you and your business. Lower demand, higher purchase prices, logistical problems, falling revenues and a complete lack of understanding of where and how to go from here. Sound familiar?
Sometimes crises are unavoidable. They can occur both within a company and as a result of external factors. Regardless of the level and size of your business, sooner or later you will have to deal with a crisis. We will try to help you in this difficult endeavour and remind you of the 'Three Step Rule'.
Step 1: Recognise the crisis
Have you ever heard of 'learned helplessness syndrome'? Instead of taking action, we begin to justify our indecision, living in a 'comfortable' but flawed reality. A business crisis can be caused by a variety of factors, such as economic volatility, changes in the market environment, unforeseen events or internal company problems.
If your business is experiencing a gradual decline in sales or revenue over several periods, you may be on the verge of a crisis. The emergence of new competitors or increased competition can be a stimulus to growth or an indication of a pre-crisis period in the industry.
It is important to recognise that there is a crisis situation and that it is not going away. At this stage it is necessary to carry out, however minimal, an audit of the company's financial position, review internal processes, assess changes in the competitive environment and in selected segments of the target audience. It is important to think about anti-crisis measures in advance.
Step 2: Make a firm commitment to managing the crisis
If your company's costs are growing faster than its revenues and demand is falling, it's time to start talking about a crisis.
This is the 'acceptance' stage. The stages of denial, anger and bargaining, of not wanting to change anything about the business, are behind you. It has become clear that the situation is not going to resolve itself. It is necessary to define a strategy to overcome the crisis, taking into account the peculiarities of your business and the specific factors of the crisis. Possible options are: cutting costs, diversifying your product, looking for new markets or a different, narrower target group.
Evaluate all business expenditure. You may need to reorganise familiar business processes, renegotiate lease terms, optimise supply chains or cut marketing costs.
Step 3: Evaluate resources
Make an honest and unbiased assessment of your resources. What do you have? You may need to reallocate funds at this stage and cut off urgent payments. Re-analyse your sources of income, financial income and expenditure. Evaluate external factors: human resources, technical knowledge and skills, and your relationships with customers, partners and other stakeholders. A simple SWOT analysis can help you identify your company's strengths and weaknesses, as well as the opportunities and threats of a crisis situation.
If your company's costs are growing faster than its revenues and demand is falling, it's time to start talking about a crisis.
This is the 'acceptance' stage. The stages of denial, anger and bargaining, of not wanting to change anything about the business, are behind you. It has become clear that the situation is not going to resolve itself. It is necessary to define a strategy to overcome the crisis, taking into account the peculiarities of your business and the specific factors of the crisis. Possible options are: cutting costs, diversifying your product, looking for new markets or a different, narrower target group.
Evaluate all business expenditure. You may need to reorganise familiar business processes, renegotiate lease terms, optimise supply chains or cut marketing costs.
Step 3: Evaluate resources
Make an honest and unbiased assessment of your resources. What do you have? You may need to reallocate funds at this stage and cut off urgent payments. Re-analyse your sources of income, financial income and expenditure. Evaluate external factors: human resources, technical knowledge and skills, and your relationships with customers, partners and other stakeholders. A simple SWOT analysis can help you identify your company's strengths and weaknesses, as well as the opportunities and threats of a crisis situation.
Crisis. The most common types are
Financial crisis - a significant drop in demand for a product or service. The company loses the value of its assets and cannot afford to repay its debts. The result: financial loss, bankruptcy or closure.
HR crisis - loss of reputation or organisation due to employee resignation or unethical behaviour.
Organisational crisis - deception, misconduct, concealment or misrepresentation of information, i.e. a situation in which a company has caused significant harm to its customers or employees.
Technological crisis - problems of a technical nature that become disruptive to customers, causing a reduction or loss of functionality. E-commerce sites and software companies can lose millions of potential customers if their servers suddenly fail.
Natural crisis - natural disasters, extreme weather conditions, emergencies, epidemics.
Threat monitoring
If a crisis is imminent or has already hit your organisation, it's important to have a plan of action in place. While not every crisis can be predicted or prevented, you can't bury your head in the sand. Being proactive and understanding the situation will give you peace of mind.
Fincraft Capital s.r.o. monitors threats and develops crisis management plans for business partners. In order to reduce or prevent the consequences of a crisis before it happens, Fincraft Capital analysts forecast organisational crises and develop recommendations for proactive crisis damage control.
Financial crisis - a significant drop in demand for a product or service. The company loses the value of its assets and cannot afford to repay its debts. The result: financial loss, bankruptcy or closure.
HR crisis - loss of reputation or organisation due to employee resignation or unethical behaviour.
Organisational crisis - deception, misconduct, concealment or misrepresentation of information, i.e. a situation in which a company has caused significant harm to its customers or employees.
Technological crisis - problems of a technical nature that become disruptive to customers, causing a reduction or loss of functionality. E-commerce sites and software companies can lose millions of potential customers if their servers suddenly fail.
Natural crisis - natural disasters, extreme weather conditions, emergencies, epidemics.
Threat monitoring
If a crisis is imminent or has already hit your organisation, it's important to have a plan of action in place. While not every crisis can be predicted or prevented, you can't bury your head in the sand. Being proactive and understanding the situation will give you peace of mind.
Fincraft Capital s.r.o. monitors threats and develops crisis management plans for business partners. In order to reduce or prevent the consequences of a crisis before it happens, Fincraft Capital analysts forecast organisational crises and develop recommendations for proactive crisis damage control.