Understanding And Managing Various Business Crises

Roman Reznikov, Ph.D. – Driving digital transformation through innovation, leadership, and cutting-edge technology.

Crises are inevitable, but the way organizations respond can define their longevity and success. Drawing lessons from real-world examples, this article offers strategic insights into effective crisis management.

Learning From Past Business Crises

Operational Crises

Operational crises like the 2024 supply chain disruption by Nike, due to global logistical problems, are being mitigated through the use of advanced predictive analytics and AI-driven supply chain management tools that can minimize operational downtime and maintain customer satisfaction.

Similarly, Toyota had difficulties after the Great East Japan Earthquake in 2011 when many facilities were badly damaged and supply chains were broken. Recovery for the company included diversifying suppliers and implementing business continuity plans. The blockage of the Suez Canal by the Ever Given in 2021, which caused severe delays throughout global supply chains, showed that those companies with flexible logistics networks and a variety of shipping routes had few difficulties from the crisis.

Reputational Crises

Reputational crises can also be instructive. Johnson & Johnson’s Tylenol crisis in 1982, in which cyanide-laced capsules resulted in several deaths, involved the company recalling 31 million bottles nationally. Its prioritizing of consumer safety over financial loss and transparency reestablished people’s trust and set a new benchmark within the industry in terms of product safety.

Financial Crises

Finally, financial crises are important to learn from as well. Many of the companies with robust risk management frameworks and diversified revenues went through the recent global financial turmoil with minimal hassles and added “agile” to their financial planning with real-time data analytics to adapt quickly in volatile markets.

During the 2008 global financial crisis, banks and companies got back faster by restructuring debts, cost optimization and diversification of investment portfolios. During the Asian financial crisis in 1997, those firms that had exposure to the affected economies reduced long-term impacts through diversification, good governance and international partnerships.

How Businesses Can Stay Resilient

Key methodologies and frameworks are crucial in crisis management:

• ISO 22361:2022 gives guidelines on establishing and improving strategic crisis management capability.

• ISO/TS 22360:2024 defines basic concepts to understand and manage crises.

• ISO 31000 presents principles and guidelines for efficiently managing risk.

For organizations seeking to build resilience, several proactive steps can make a significant impact.

Shift from reactive to proactive risk management.

Throughout my career, I’ve learned that reactive crisis management can leave businesses at risk of severe disruption. If you’re only reacting to breaches instead of preparing for them or constantly innovating as the industry progresses, you could be left behind.

Companies like Maersk, which rebuilt its cybersecurity after the NotPetya attack, and JP MorganChase, which identifies real-time fraud with AI, illustrate the power of proactive strategies. To do the same, I believe companies should employ AI-driven risk simulation and cross-industry sharing of risk intelligence to forecast and disable threats ahead of them turning into significant problems.

Diversify supply chains.

Overdependence on a single supplier or region can be a major vulnerability. Tesla, for instance, mitigates risks by sourcing critical materials from multiple continents. Beyond geographic diversification, companies can explore blockchain tracking and active dual-supplier systems to provide transparency and ensure supply continuity even during crises.

Strengthen communication and leadership.

Clear, focused communication prevents crises from spiraling out of control. For example, Singapore’s live reportage during the Covid-19 pandemic maintained public trust. I’ve found that providing regional managers with real-time data and utilizing AI-powered messaging software can help improve crisis response.

Invest in people and infrastructure.

Crisis resilience depends on both digital and human infrastructure. Google’s remote work investments and mental health programs maintained productivity during disruptions, while TSMC’s water recycling plants ensured semiconductor production even in droughts. One suggestion for how this can be achieved is by integrating VR-based crisis training and building decentralized infrastructure to minimize single points of failure.

Embed crisis management into corporate culture.

Resilience must be ingrained in daily operations rather than treated as a compliance task. Toyota’s kaizen culture enables continuous risk assessment, while Netflix’s chaos engineering actively stress-tests its systems. Regular crisis simulations, leadership rotations in crisis roles and real-time risk dashboards ensure preparedness becomes second nature.

Conclusion

Disruptions cannot be avoided, but their intensity is a result of how prepared organizations are. Companies that make the shift from reactive firefighting to proactive risk management, diversify supply chains, develop great leadership, invest in resilience and embed crisis preparedness as part of the culture not only weather disruptions but emerge stronger.

The distinction between the failed and the successful isn’t luck—it’s strategy. Firms that make crisis management a core competency will navigate uncertainty, turning adversity into an opportunity for future growth.

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