Why Crisis is Good
For Management

Companies are experiencing turbulence and uncertainty in face of the global financial crisis, but is a crisis good or bad for organizations? People generally dread changes, especially if they are major and unexpected, but opportunity lies hidden amidst crises for the organizations that have prepared.

So is a crisis good or bad? To answer this, I have a story from my consulting experiences:

A mother or spouse often warns us, after taking a hot bath, to refrain from going outside when it is windy. They worry that we will catch a cold. In Finland, however, people relax in a sauna, sweat, then roll in the cold snow outside. They don't get sick, but rather, they feel invigorated. Some people in Siberia, even the aged, will dig a hole in the ice on a lake or river, and then dive into the freezing water...and they do not fall ill. If I did that I would catch pneumonia and surely die.

Why do such extreme changes invigorate some and threaten others?

The cause of the illness is neither the wind nor the freezing water, but rather, unpreparedness for CHANGE. This phenomenon applies to organizations as well. Organizations that are prepared to deal with change are invigorated by it; those that are not risk death. This is Darwin's theory of evolution.

Allow me to relate one more story.

I used to consult to the automotive company, Porsche. The President of the company at the time, Peter Shultz, told me about something interesting that happened when he was first appointed President. He visited each department to introduce himself and become acquainted with each division. At the engineering department, he asked if the Porsche Company competes in Le Mans, which is the premier racing track for any sports car company.

"No, we don't," they said. Since Porsche is a leading auto manufacturer within the sports car industry, Peter gave them a challenge, " build a car to compete in Le Mans and win."

The Engineers took the challenge seriously. They worked like ants, day and night, designed the engine and the racing car, tested it, and took their car to Le Mans to compete. Lo and behold, they won.

A big, big celebration followed...but it was short lived. The racing committee unexpectedly changed the rules for the next year's race and Porsche's Engineers had to start from scratch to design and test a new car.

As one would expect, morale plummeted. Peter had a different opinion, saying, " We should be happy they changed the rules. They didn't change it just for us. They changed it for everyone. Who will win now? Who will succeed? Those who are faster and more effective in dealing with the change will succeed. The weak ones will die." And here is the last sentence from his speech, which has become like a mantra for me:

"When there is no change, THE MEDIOCRE catch up."

Change provides the opportunity to leave the competition behind. Change can be invigorating for the strong. Change provides the opportunity for the strong to out-pace the weak and sick. Change is the best ally if you are ready for it.