Death and taxes. Two of life’s great certainties. But maybe it’s time to add another to the list – corporate crises. After all, according to PwC, you can’t avoid them, you can only prepare for them.
The professional services group asked more than 2,000 companies about the worst crises they’d experienced for its Global Crisis Survey 2019.
Here are five things we’ve learned from their answers.
1. Be prepared – it’s only a matter of time
Just 5% of the companies in the survey say they do not expect to experience a crisis in the future. Everyone else is aware the odds are stacked against them and that it’s only a matter of time before something goes wrong.
And firms with more than 5,000 employees are more likely to have experienced an average of one crisis per year.
2. Crises come in all shapes and sizes
There are seven categories of crisis in PwC’s findings: operational, technological, humanitarian, financial, legal, human capital, and reputational. Operational crises are those most likely to occur, it says.
More than half of firms say at least one of the crises they have experienced fits into this category, with problems including operational breakdowns, competitive disruption and supply chain issues.
And one-third cite technology as a cause of these crises. That includes systems failing, data loss and cybercrime, with the latter being more likely to hit larger businesses with 5,000 employees or more.
3. It might not be the most newsworthy crisis that causes the most disruption
Headlines are often dominated by crises such as those involving ransomware, industrial espionage or state-sponsored cyberattacks.
But the reality can be more prosaic. The most common types of crisis businesses surveyed by PwC have faced are liquidity issues, technological failure, and operational disruption.
Despite this, business leaders say they are mostly concerned about cybercrime, marketplace disruption and ethical misconduct.
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4. Who’s responsible when things go wrong?
The most effective way to respond to a crisis is with clear, decisive action. But PwC says a wide variety of people across organizations claim responsibility for what happens in the event of trouble.
Senior executives are most likely to be involved at every stage of crisis response, but there is a lack of clear, consistent ownership across the businesses surveyed. A well-defined team with transparent roles is important here.
The survey also found that almost three-quarters of businesses have called in external help to handle a corporate crisis. And just under 30% have staff dedicated to preparing for, or responding to, such a situation.
5. A crisis could leave your company in a better place
Emerging from a close call with disaster has left many businesses stronger than ever – just under 20% say they have been damaged by such an experience.
Meanwhile, more than 40% say that they were “in a better place” post-crisis — with some even reporting revenue growth as a direct result of their management of the situation.
Factors that have helped those who came out stronger include being able to make decisions quickly, having a well-tested crisis plan in place, and knowing who the crisis team members are.