In a financial crisis such as the current economic recession, the worst enemy that i can think of is PANIC. As i recall reading earlier, we are unlucky for the current situation, because people knew of the recession even before it came, and since people are accustomed to act upon the media reports, they called upon the crisis even before the economically inviable circumstance striked.
How should people react to such a situation. That remedy is called “common sense and prevention”. No one would dispute that a trained driver can better withstand a skid on an icy road. This analogy also works for the behavior of managers who face the crisis in the economy and in their company. Many people confuse the crisis prevention with hastily cut costs. They think that laying off employees, canceling or minimizing planned investments and ordered external services, and introducing strict cost cuts will do. The good feeling about the immediate cuts might be soon replaced by consternation when the intended higher resistance does not come. With laid-off people, the company loses know-how that it did not even know about. While cutting external costs, the company loses strategic partnerships with contractors that have been built for many years. Cutting all possible costs might result in uncontrollable local optimizations that could have a tragic effect on the company’s effectiveness and its inner processes. What they fail to understand is that in the process, they are exaggerating the crisis.
Correct prevention is about identifying the risks that might be brought by the crisis and about defining alternative steps and solutions. It is also necessary to control how the steps are interconnected with each other. Most importantly, companies should not be attracted by cheap measures.
What a company needs to realize is the fact that crisis is only temporary. A smart chap will positively analyze the situation as an opportunity to rise. Since many firms will fallout during the crisis, if a company acts aggressively during the crisis and overcomes the economic downturn period, they will come on top and would have taken over a huge share in the market.
While most people will see the situation as "Survival of the fittest", i see the situation as "Surivial of the Smartest". I may not be sure of this fact, but what i am sure of is that if all people act smart, there would be no panic, and hence no crisis.
https://www.google.com:443/analytics/web/siteopt/signed/minisite?experimentId=uTQRgNsKRfKLP3ASroKxWw&webProperty=UA-4295058-1&signature=AFB3siaRoG4-jiS8TsGZfjXTDORZR9LkdNIO_9gpaj9_fGNv2DFChgsQI4JFqDupXUvg4C_z9aBpJxNrUtvl5FJD_PDp1Uvuyt2wpyP6H37Yamb91W1ng3mjge1wI3PHiNBTwANWaIvb&hl=en_US
How should people react to such a situation. That remedy is called “common sense and prevention”. No one would dispute that a trained driver can better withstand a skid on an icy road. This analogy also works for the behavior of managers who face the crisis in the economy and in their company. Many people confuse the crisis prevention with hastily cut costs. They think that laying off employees, canceling or minimizing planned investments and ordered external services, and introducing strict cost cuts will do. The good feeling about the immediate cuts might be soon replaced by consternation when the intended higher resistance does not come. With laid-off people, the company loses know-how that it did not even know about. While cutting external costs, the company loses strategic partnerships with contractors that have been built for many years. Cutting all possible costs might result in uncontrollable local optimizations that could have a tragic effect on the company’s effectiveness and its inner processes. What they fail to understand is that in the process, they are exaggerating the crisis.
Correct prevention is about identifying the risks that might be brought by the crisis and about defining alternative steps and solutions. It is also necessary to control how the steps are interconnected with each other. Most importantly, companies should not be attracted by cheap measures.
What a company needs to realize is the fact that crisis is only temporary. A smart chap will positively analyze the situation as an opportunity to rise. Since many firms will fallout during the crisis, if a company acts aggressively during the crisis and overcomes the economic downturn period, they will come on top and would have taken over a huge share in the market.
While most people will see the situation as "Survival of the fittest", i see the situation as "Surivial of the Smartest". I may not be sure of this fact, but what i am sure of is that if all people act smart, there would be no panic, and hence no crisis.
