Enhancing a chemical company’s ability to withstand crises by integrating external scenarios with financial stabilit
STARTING SITUATION – THINGS ARE ALWAYS CLEARER IN HINDSIGHT
A chemical company that had suffered serious setbacks as the result of a crisis needed to ensure that any repeat of the situation would not have such devastating consequences. As far as the Board of Management was concerned, it was particularly important to develop a management system that could respond optimally to turbulent situations, without curtailing its freedom to act. Owing in particular to the growing unpredictability of the crises, the company had to date found it difficult to determine the early warning signs. It was also unclear on how best to proceed during the crisis. There were no effective countermeasures in place, and there was uncertainty as to what needed to be considered if such measures were called for.
PROJECT APPROACH – ACTING INSTEAD OF REACTING
Before it was possible to talk about crisis management, it was necessary to have a clear and transparent view of where the company was at, and what options were available to it. Our solution combined internal financial health with the foreseeable external prospects, and revealed the specific actions that needed to be taken. By defining and evaluating suitable countermeasures, the company was able to avoid responding with a wholesale, largely disproportionate overreaction. Building on the crisis scenarios that were jointly defined, it was possible to implement packages of measures with differing degrees of severity, combined with a coordinated escalation concept, in an efficient and targeted manner.
FINDING – A CRISIS IS CRITICAL ONLY FOR THE UNPREPARED
In order to survive a crisis and then get a business back on track again, a unified, seamless crisis management system is required. Many companies make the mistake of underestimating the scope of this kind of management system. Defining the crisis scenarios is merely the first step towards proactive business management. Only if the company is in a position to predict crises and implement the predefined response essentially as a matter of course can it look to the future with confidence.
- Integrating financial sustainability with crisis scenarios.
- Developing a wide range of crisis scenarios.
- Implementing packages of measures and escalation concepts.