Use a Crisis to your Advantage

Use a Crisis to your Advantage

 The leader of the recovery process can use special events that are viewed as “crises” by stakeholders as a tool to drive change. Such crises might include:

  • Bond rating downgrade
  • Closure of major employer/taxpayer
  • Change in elected or appointed leadership.  


Using a Crisis is Not without Risk

The recovery leader that considers using crises as a lever for change should be aware that: 

  • A crisis can mask the depth and breadth of the true causes of distress. A crisis is frequently just the most visible symptom of distress, rather than the root cause.
  • The nature of the crisis can color the responses people will want to take to recovery. For example, the closure of a major employer could lead stakeholders to focus on economic development issues, when in fact the current fiscal distress is caused by an unrelated factor.
  • People might adopt a “siege” or “bunker” mentality, making change and innovation less likely. 
  • Overplaying a crisis may reduce confidence in management if stakeholders perceive that the crisis was avoidable or at least foreseeable. 


Reduce Risk by Framing Perceptions

Framing the perception of others is crucial.

  • Carefully analyze the “crisis” event. If the recovery leader is knowledgeable about the crisis, then he or she will be a more credible interpreter of what is occurring. The leader can then frame the crisis as a call-to-action, and others will be less likely to interpret it as a panic-inducing disaster.
  • Share information about the event. Making information available can reduce feelings of uncertainty among stakeholders and constituents. 
  • Provide information in a structured, guided format. This makes it easier for others to understand, allows it to reach a broader audience, and increases leader credibility.

Continue to Bring in Outsiders

Return to the Stage 1: Recognition main page

Return to the 12-Stage Financial Recovery Process diagram

Return to the 12-Stage Financial Recovery Process homepage