CRISIS MANAGEMENT
Strategic foresight
Hasitha Premaratne
Every crisis presents a unique set of challenges and opportunities, and the outcomes are dependent on how businesses or nations tackle them cohesively – this is Hasitha Premaratne’s belief.
At the outset, it is critical to understand the nature of the crisis and its real impact on value chains, he says. Thereafter, the formulation of an effective action and communication plan that addresses all pain points is essential to demonstrate resilience.
He continues: “In the aftermath, it is important that learnings are recorded for the future. In this manner, knowledge, analysis, communication, resource allocation and planning can be described as key to overcoming a crisis.”
STRATEGIC FORESIGHT It’s difficult to avert a crisis if these are national or global events such as a pandemic, a war and even an economic fallout, Premaratne asserts. He remarks that we’re all interconnected; at most therefore, we can work to reduce the impacts of a crisis on a business.
“What’s important is preparedness and the resilience to counter it. How well have businesses foreseen potential risks and what actions were taken to mitigate challenges?” he asks.
Premaratne retorts: “During the pandemic, businesses that had accumulated reserves, embraced innovation, and had the capacity to rewire supply chains and target markets more effectively than others probably came out stronger.”
CRISIS PREPAREDNESS So companies that maintained adequate reserves were better equipped to recommence business in the ‘new normal’ and more importantly, offer necessary critical assistance to employees to overcome the difficulties everyone experienced during that period.
Premaratne maintains that the apparel industry took the lead in offering financial assistance and rations to its associates, some of which continue today.
“Crises pose business risks that have wide-ranging financial implications. Risk managers and accountants need to conceptualise these models, and build in the necessary base and gearing, to ensure that businesses and employees can stay afloat to thrive in a post-crisis milieu,” he avers.
LEARNING FROM CRISES Premaratne believes that the pandemic strengthened our resolve and resilience.
He elaborates: “Despite the numerous challenges, the Sri Lankan people and businesses persisted – and in some instances, grew by turning the crisis into an opportunity. For example, the apparel industry moved to produce PPE and other pandemic linked products.”
A whole new digital ecosystem and economy sprung out of the pandemic, and he feels that Sri Lanka adapted relatively well. In fact, Premaratne says the pandemic served as a springboard to fast track acceptance of digital channels where we had previously been sluggish.
“Had our economy been on a stronger footing, we probably would have fared even better. But some takeaways would be the need for better structured communications and that entails providing the necessary freedoms for experts to do their job. This helps speed up and streamline decisions and outcomes on the ground,” Premaratne asserts.
He recalls that shipping and logistics presented some significant challenges during and following the pandemic, as costs rose fivefold and lead times were rendered unpredictable, which weighed heavily on costs and delivery models.
PEOPLE MANAGEMENT Managing people’s expectations is probably the central element in any crisis and Premaratne stresses that how one addresses this may be the key to success or failure of crisis management.
He explains: “This is where data driven solutions based on grounded real information become imperative, as actions need to touch the lives of people – and offer them hope and a way out of the crisis.”
Premaratne posits that building trust among stakeholders is critical: “Transparency and open communication are essential, as it becomes impossible to gain people’s trust if we haven’t offered real perspectives from the start.
His conclusion is that “if we lose trust, and there is no real connection between employees and management, or the public and government, a crisis will engulf you.”
