Transforming crises into a competitive advantage
We often hear that we have to learn lessons from the crises that we experience. Beyond lessons, there are also great opportunities to take advantage of, such as improving practices, rethinking the status quo, and reinventing yourself. For organizations, dealing with the post-crisis period is just as important, if not more important, as how we cope with turmoil.
In a context where corporate social responsibility (CSR) is increasingly brought to the forefront of discussions, how have organizations that have experienced great upheaval managed to take advantage of it? How have they regained the trust and sympathy of the public? Here is a case that particularly caught my attention.
In 2013, Barilla’s Chairman said on national Italian radio: “I would never do a commercial with a homosexual family, not for lack of respect, but because we don’t agree with them;”
Guido Barilla had just dropped a bomb on prime time. After poor press releases and a drop of 21 positions in the Reputation Institute’s annual ranking, it took five years for CEO Claudio Colzani to restore the company’s reputation. He got there by appointing a Chief Diversity and Inclusion Officer, forming an external advisory board, hiring an external public relations firm to lead their communications, and by allocating an ambitious annual budget of $5 million for reputation recovery. And it worked.
The following year, the company received a perfect score from the Human Rights Campaign’s corporate equality index – a score it has maintained ever since – and now sits 11th on the Global RepTrak 100. Barilla has gone from an unreputable company that held offensive beliefs, to a company that offers inclusive packaging.
There are great opportunities in the aftermath of a crisis. First, the opportunity to conduct a post-mortem and to identify successes and failures, to improve processes in place, and better prepare for the future. It is an opportunity for organizations to emerge stronger, and even create a competitive advantage. PwC’s Global Crisis Survey indicates that the companies that were most successful in taking advantage of a crisis take these five actions:
- They allocate a budget to crisis management;
- They have a plan, they test it and stick to it;
- They adopt a fact-based approach and they don’t neglect key stakeholders;
- They perform a root-cause analysis and follow up;
- They act as a team, and they hold to their values.
To transform a crisis into a competitive advantage, organizations must be resilient. And that’s precisely what Barilla did.
A well-managed crisis helps organizations develop their immunity. Ultimately, the crisis should be seen as an element of strategic risk watch, as it can potentially allow an organization to seize more ambitious opportunities with the experience gained from previous crises. It is the ability to take calculated risks that becomes your competitive advantage.
After COVID Comes Sunshine?
We are going through an unprecedented crisis. Before the COVID-19 pandemic, business leaders were already worried about a variety of threats: cybersecurity, global economic uncertainty, trade wars, climate change, to name a few.
Chances are that many companies had never even thought about the possibility of a global pandemic that would completely disrupt their operations, let alone cripple the entire world. However, this tragedy, like all crises, offers a great opportunity to rethink strategies and take the necessary step to review objectives. Any organization, regardless of its size, must have a crisis management plan. If you don’t know where to start, drop us a line!