Monday,14 March 2011
By : Jameel W. Karaki
KUWAIT: The political instability in Egypt brought many questions to the surface, and one of which is whether it is feasible to keep running a business in the Egyptian market or not. Dr. Anil Khurana, Director in the Operational Strategy and Private Equity practice at PRTM, believes that companies can deal with this situation through crisis management strategies. In an exclusive interview with Al Watan Daily, Khurana shed light on this issue, asserting that Egypt is a large country with a significant consumer base - so companies will be hard-pressed to exit this market permanently.
How should companies deal with the crisis in Egypt?
Khurana: This depends on the company's organizational resiliency, which is its level of preparedness to "bounce back" from disruptive events. If the company has, ex-ante put in place a crisis management structure and plan, then, it is a matter of customizing the plan to the risks created by specific external events and then executing the plan. In the absence of a pre-determined crisis management structure in a company, the situation becomes more difficult to manage. However, even in this situation, companies can create and deploy a crisis management plan that concentrates on prioritizing the businesses' critical functions, assessing risk (to production, revenue, cash), responding to finance and banking related issues, managing client expectations, focusing on business recovery, and launching a strategic communications plan.
How can companies prepare?
Khurana: Companies can prepare by having structured risk management and crisis management strategies. Crisis management, which is inherently reactive, is deployed as an event occurs for its duration. It is designed to interpret how external events are impacting the company, inventory goods, stem losses, track human resources and communicate with stakeholders, in a structured and orderly manner.
In contrast, risk management, inherently proactive, is a holistic approach to risk identification, assessment and necessary action. Companies that adopt risk management strategies routinely scan their operating environment to identify and quantify legal, economic, socio-political, information technology related and operational risk. This awareness drives structural changes to guarantee operations and delivery to customers. As part of their long-term risk mitigation strategy, they might source from a slew of suppliers, spread their operations across various geographies, and create redundancies in personnel by eliminating single points of failure. Ideally, an effective risk management strategy allows the company to foresee or recognize external events as they begin to occur, slashing response time. The crisis management strategy minimizes the cost of the event to the company.
What is a crisis management plan, and how do you develop one?
Khurana: A crisis management plan is one that allows a company to operate, to the extent that it can, without endangering the safety of its human and physical assets, during or immediately after a crisis. The plans are usually deployed in the short to medium-run, but can be extended if a crisis has a "long tail". Creating a crisis management plan involves three general steps, such as assessing the external situation and identifying priorities, staffing the crisis management team and identifying options and executing the plan.
What crisis management strategies should companies implement in order to cope, and to smoothly get through a crisis like this?
Khurana: There is no one answer to this. The crisis management strategy is based on the type of risk that a particular event creates, calibrated to the business model and operating strategy. With that said, the core aspect of any crisis management strategy is to ascertain status (inventory human and physical assets), create short-term priorities for the business, direct all available resources to achieve these priorities by facilitating partial operations, and communicate with clients and stakeholders.
Why is it important to keep your business running? If you are in the midst of a crisis, aren't your customers also struggling themselves?
Khurana: The crisis might be a long one, your customers might not be the end-users of your goods and services; they might be intermediate consumers who are bound by agreements with their clients and may not be located in the same geographical location or affected by the crisis. International customers might not be able to empathize with your situation and they might be legally bound to meet contractual SLAs (Service Level Agreements), regulatory requirements, providing an opportunity to showcase organizational resiliency and create brand value.
http://alwatandaily.kuwait.tt/resources/pdf/1029/11.pdf
By : Jameel W. Karaki
KUWAIT: The political instability in Egypt brought many questions to the surface, and one of which is whether it is feasible to keep running a business in the Egyptian market or not. Dr. Anil Khurana, Director in the Operational Strategy and Private Equity practice at PRTM, believes that companies can deal with this situation through crisis management strategies. In an exclusive interview with Al Watan Daily, Khurana shed light on this issue, asserting that Egypt is a large country with a significant consumer base - so companies will be hard-pressed to exit this market permanently.
How should companies deal with the crisis in Egypt?
Khurana: This depends on the company's organizational resiliency, which is its level of preparedness to "bounce back" from disruptive events. If the company has, ex-ante put in place a crisis management structure and plan, then, it is a matter of customizing the plan to the risks created by specific external events and then executing the plan. In the absence of a pre-determined crisis management structure in a company, the situation becomes more difficult to manage. However, even in this situation, companies can create and deploy a crisis management plan that concentrates on prioritizing the businesses' critical functions, assessing risk (to production, revenue, cash), responding to finance and banking related issues, managing client expectations, focusing on business recovery, and launching a strategic communications plan.
How can companies prepare?
Khurana: Companies can prepare by having structured risk management and crisis management strategies. Crisis management, which is inherently reactive, is deployed as an event occurs for its duration. It is designed to interpret how external events are impacting the company, inventory goods, stem losses, track human resources and communicate with stakeholders, in a structured and orderly manner.
In contrast, risk management, inherently proactive, is a holistic approach to risk identification, assessment and necessary action. Companies that adopt risk management strategies routinely scan their operating environment to identify and quantify legal, economic, socio-political, information technology related and operational risk. This awareness drives structural changes to guarantee operations and delivery to customers. As part of their long-term risk mitigation strategy, they might source from a slew of suppliers, spread their operations across various geographies, and create redundancies in personnel by eliminating single points of failure. Ideally, an effective risk management strategy allows the company to foresee or recognize external events as they begin to occur, slashing response time. The crisis management strategy minimizes the cost of the event to the company.
What is a crisis management plan, and how do you develop one?
Khurana: A crisis management plan is one that allows a company to operate, to the extent that it can, without endangering the safety of its human and physical assets, during or immediately after a crisis. The plans are usually deployed in the short to medium-run, but can be extended if a crisis has a "long tail". Creating a crisis management plan involves three general steps, such as assessing the external situation and identifying priorities, staffing the crisis management team and identifying options and executing the plan.
What crisis management strategies should companies implement in order to cope, and to smoothly get through a crisis like this?
Khurana: There is no one answer to this. The crisis management strategy is based on the type of risk that a particular event creates, calibrated to the business model and operating strategy. With that said, the core aspect of any crisis management strategy is to ascertain status (inventory human and physical assets), create short-term priorities for the business, direct all available resources to achieve these priorities by facilitating partial operations, and communicate with clients and stakeholders.
Why is it important to keep your business running? If you are in the midst of a crisis, aren't your customers also struggling themselves?
Khurana: The crisis might be a long one, your customers might not be the end-users of your goods and services; they might be intermediate consumers who are bound by agreements with their clients and may not be located in the same geographical location or affected by the crisis. International customers might not be able to empathize with your situation and they might be legally bound to meet contractual SLAs (Service Level Agreements), regulatory requirements, providing an opportunity to showcase organizational resiliency and create brand value.
http://alwatandaily.kuwait.tt/resources/pdf/1029/11.pdf
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