Many blame certain companies for insufficient crisis management. But is that reasonable? How many of us have experienced crises like these and would they have done better. I remember the words of an ex-CEO; we are facing a complete meltdown of the financial system. Clients and readers are not served by these statements. Yet if management saw these problems shouldn't they have consulted other institutions? That is either not without risk; a rumor easily enters the market. Then do not underestimate the role of hedge funds, they target "preys" and have strong funds... Although, not any more it seems.
A basic mistake of all times seems to be too much optimism when doing an acquisition. But information management and communication is also an area.
Some manager must have worked very hard. Like engineers solving the financial problems in their company. But does the CEO tell people about it? Financial engineering requires more and more communication about what is going on. Getting bad news out soon (Time-to-market) and not letting people make up their own story ("something must be really bad"). Communicating a "possible meltdown" doesn't serve clients. That is more the role for the media to get in some sensation. The basic premise: get out the bad news, before others will.
Another mistake is informing clients by setting up websites, when the market is screaming for action. The main problem with this is that timing makes the action worthless (it comes too late), but the main question is: does information ease emotion?
When the first problem of information management is not done properly, the problem escalates to a next level of emotion. At such a stage, responding with information is like quenching a fire with wind. It doesn't help any more. This is a lesson Edward de Bono taught management trainees with his thinking hats. Red versus White - Very basic.
Yet some humility can't be left out here. Again, who has dealt with these situations before? Probably not many. In such moment you are on your own, you cannot call another company / external advisor and ask, "tell me, how did you solve your problem when your product was thought to be infected with a virus." Todays' events and their solutions can only be used as tomorrows' jurisprudence.
H.J.B.
2008 Hans Bool
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