CIPM ESSAY: PEOPLE RISK MANAGEMENT STRATEGIES IN AN ERA OF CRISIS

   INTRODUCTION

    How truthful is the statement of Hippocrates, the ancient Greek physician, that "extremis malis extrema remedia"? Literally, for extreme diseases, extreme methods of cure, as to restriction, are most suitable[1]. Today, this establishes the fact that desperate times call for desperate measures.  As a medical expert in Greek mythology, he delved into the hearts of many complicated medic related crises in his time. And the truth, he came up with his informed conclusion that actions that might seem extreme under normal circumstances are appropriate during adversity. To strike nothing but balance, I suppose. Could we possibly rationalize such adversity in an era where technology and science seem to have reached their perfect altitudes and reliance for humanity? No less, what could have informed such desperation in the 21st-century global markets? Crisis! Definitely, this is the force that stimulates both human and his institutions into a stampede. Is it not crisis that inspired such critical measure of founding a new security outfit – Operation Amotekun– in the Southwestern part of the country? This unprecedented action was simply due as a remedy to the emergency of many criminal and terrorism acts prevalent in the region. Is it not crisis that makes a peaceful state of a nation be pronounced as a state of emergency?

    

    BACKGROUND: Definitions of Terms

    What is An Era of Crisis? 

    A few years back, 14th May, 2013, following the massacre of 200 people in the town of Baga, Borno State, by Boko Haram insurgency, President Goodluck Jonathan declared the city as a state of "emergency". In consonance, President Trump declared a state of "emergency" in U.S. in an bid to contain the scourge in the country. Now, what makes crisis? 

    The word “crisis” is said to emanate from Greek origin, which is “krisis”. Meaning, any event that is expected to lead to an unstable and dangerous situation affecting an individual, group, community, or whole society[2]. 

    According to Merriam Webster, the term means differently but I pitched my preference with two of them which are most suitable for the subject; “boiling point” and “breaking point”. Crisis depicts a trying time, when the whole system of organization and human community seem tangled up. A state of emergency, in precision. 

    However, Crises are 'negative' changes by design in either of the security, economic, political, societal, or environmental affair of a system function[3].

    From Coombs and Timothy Coombs, "crisis" is “the perception of an unpredictable event...” strong enough to downturn the capacity of its subject. In furtherance, they argue that crisis brings about "threat" in a system operation, so causing serious damage.

    In all, Seeger, Sellnow and Ulmer put that all crises have three defining characteristics common to them. They are “unspecific” because they range between a network of activities, “unexpected” due to its unpredictable nature of occurrence, and usually with a “series of events” that threaten an organizational operation[4]. 

    As an era of crisis, the pandemic presents a new reality of crisis to world. We might have erred thinking that our societies are bound to only socio-political, economic and ecological crises. Not until the scourge caused a global standstill in health sectors which in turn affected other parts of life. Accordingly, the pandemic has wreaked more havoc within the short time of its ravage than terrosim[5]. This justification makes Covid-19 an era of crisis. As such, how has the Covid-19 made 'people' to risk management strategies?  

    

 Management Strategies

    The management blueprints, literally put. 

    From the words of Thompson and Strickland (2003), the term "strategy" is the game plan management has to position the company in its chosen market arena, compete successfully by pleasing customer and achieving good business performance[6]. For the duo, strategy is the design and road map set up by the management to effectively navigate the operation of an organization toward gaining a competitive advantage. 

    Plus, strategy is building blocks, which are used in attack, defense and maneuver. What strategic plan, therefore, suggests is questioning the status quo[7]. Regarding this, "questioning the status quo"  suggests the innovation of new business plans at a challenging time with an end to create competitive advantage. However, hard measures are consequences of hard times. No wonder the foremost Nigerian construction company, Julius Berger, announced to her stakeholders, lately, the intention to diversify the company's focus in Agro-processing. With this, the board wanted to maintain and strengthen the Company’s competitive advantages in the Construction sector, and Capital market[8]. I ask, what could inform such desperation? That is rhetoric! The point, this is aimed at cushioning the possible affectation the company might suffer during Covid-19 global lockdown. 

    So, management strategies are the road maps, antidotes and aspirin capsules for companies that are experiencing hard times of crisis. This must be why Thompson and Strickland (2003) argue, a company without a good strategy cannot operate successfully. 

    

    What is Risk? 

    The word "risk" has complexity of origin[9]. It is argued to have originated from Arabic language, which is "risq",  meaning "fortune". Or, from Latin "risicum", meaning "to run into danger.” Perhaps, from Greek word "rhiza", which refers to the hazards of sailing around a cliff. Or, the French word, "risque", which is quite speculative "qui risque rien n'a rien", meaning “nothing ventured, nothing gained”. However in English, it is used in nuances of different contexts, often leading to confusion and misunderstanding. 

    Undoubtedly, the diversity of opinions and sources makes the term registered differently with "people". By "people", human beings making up a group or assembly or linked by a common interest[10]. The literal and connotative usages of the word are intended:. In broader sense, it could have meant individuals or community of people, or an institution or business personnel. In furtherance, "risk" to the insurance people is not equivalent of what tourists hold as risk, or the kind given in everyday dictionaries.

    The Commission on Insurance Terminology of the American Risk and Insurance Association approved the following of risk: "Uncertainty as to the outcome of an event when two or more possibilities exist."[11]. 

    In all, it is chronicled from  Bowers  and  Khorakian  (2014), Risk is “reasoned  decision  making  responses  to  risks,  and  typically involve  assembling  and  analyzing  information,...”[12]. Without modicum of doubt,“risk”, to the entrepreneurs, is to "innovate" ideas. Ideas  that resolve crises, most sturdy challenges and bring about competitive edge. Bowers  and  Khorakian added, it is a kind of innovation that leads “to estimates  of  risks(crises), strategies to mediate these, and consideration of the extent of the remaining uncertainties.” Therefore, innovation is a key factor to business personnel, because it gives assurance to the success of the company. 

    

    What Should People Do in An Era of Business Crisis? 

    People risk management strategies in an era of crisis because the chances of survival become very narrow. In other words, crisis stifles movement of the demand and supply curves, thereby, causing stagnation in the market flow. So, when situation gets serious, people should get tough. One of the founding fathers of United States of America, John F. Kennedy, was quoted to have said, “when the going gets tough, the tough get going”[13]. 

    No amount of time is sufficient to avoid crisis, little time of dedication can change the narrative. In business, innovation is central to development and success, as growth to humanity. Whereas, crisis is not desirable to any entrepreneur, just as man arbors problem, yet it is inevitable.  

    The following are some of the possible steps a management must take to subdue the trying time; Form a Crisis Management Team, A Good Leader, Diversion, Digitalization, and Collaboration. 

    

    Form A Crisis Management Team (CMT) and Good Leadership 

    Also known as Business Continuity Team[14]. Crisis is a norm in business reality. As business is about enterprising – risk taking. An unpredictable incident usually can cause grave damage to a business performance. Depending on how hard the company is affected, such damage can bring a once blooming business to its knee. Hence, a business that wants to see the light of the future to come must anticipate by creating CMT to protect itself from the existential crisis. Leo Flanagan(Ph.D)(2019) from Notre University puts that when people are in crisis, they need to know what to do[15]. He adds that crisis is of diverse nature, and to maneuver it, a company needs to rely on a stable Business Continuity Team(BCT). Thus, the team is the company's first line of defence, designs strategies and is responsible in that it provides early intervention to prevent or manage unpredictable occurrences. This team should be headed by a good leader, because leadership is a pivotal seat in any organization even if situation warrants the changing of inactive one. An industrious leader should possess such qualities like cognitive flexibility, doggedness, tenaciousness, empathy, transparency, communication skill, decisiveness, conflict resolution skill, to mention a few. Then, membership should comprise other intelligent employees across departments of the company. To provide rooms for cross fertilization of ideas. 

    This team would perform, basically, two functions; internal and external[17]. Internally, it evaluates the company's capacity using SWOT analysis. Looking at: Strength –what does the company do better than others? Weaknesses –what improvements are needed to work on? Opportunities –what market trend could lead to competitive edge in sales? and, Threat –what advantages do competitors have over your company? 

    However, it focuses on the external capacity using PESTLE. Examining how any of Politics, Economics, Society, Technology, Law or Ecology can inhibit or assist the success of the company. 

    To illustrate, LUG, a luminary company headquartered in Poland, factored in her consideration the context of the changing demands in the market as a result of the outbreak, which made the firm to prioritize the development and production of a new family of luminaires which use UV-C technology to combat harmful microorganisms. This newly risked product was unprecedented. 

    Nonetheless, LUG's BCT looked within to leverage on the strength of the company to innovate opportunities which give competitive advantage. Then, the company keeps flourishing despite the existing uncertainty. In converse, the companies that remained passive are badly hit. Report had it that over hundred thousands small scale businesses, in America, have shut permanently since the start of the pandemic[18]. So, they lost in the battle for probably making no effort. 

    

    Diversion of Trademark 

    An attempt to diversify the focus and trademark of a business might mean more than we credit. If it be possible, a nylon manufacturing company might decide to risk producing customized school bags made of nylon and raincoats for school students. That alone would not only change company's focus and increase returns, but also attract more customers. However, if this is not ideal considering the company's financial stumbling block, it should invest more in the CMT to come up with innovations. 

    As a case study, during 9/11 terrorist attack of the Pentagons, airlines were forced to stop operations throughout USA to solemnly mourn the victims of the event. Consequent upon this directive, many airlines were conditioned to cut staff because they went insolvent. However, James Parker, Southwest Airline manager, never cut staff. Rather, he leveraged with them to divert the focus of the company by creating a movie cinema wherein stranded customers enjoyed themselves[19]. And, the decision made by Julius Berger Management Board is a typical example. 

    

    Turn Digitalization into Advantage 

    There is no gainsaying that technology is creeping steadily and inevitably into business activities just as it does to social lives of individuals. Either positively or negatively, it must have constituted a lot in every life. Numerous studies from the world’s leading research institutions state that the transition to a digital economy is the key global trend organizations believe to impact their operations. Try shifting the scope of  company's operation from manual to digital,then, from physical transactions to online transactions (e-commerce). Jack Ma, Co-founder and Executive Chairman, Alibaba Group, was quoted to have said, “... In 2030, more than 85% of businesses will be e-commerce. And, 99% of business transaction will be online...” 

    So, an objective oriented business needs the following; Updated Skillset – training employees to think and adapt to the new system: Redesigned Processes–redesigning business technology processes with professional yet simple design practices, to help organisations find new ways to automate existing processes, as well as build entirely new ones: New Digital Solutions –utilizing cutting edge technology solutions to offer streamlined customer and end-user experience and automate business processes[20]. 

    At least, start with virtual business plans, meetings and content marketing, if possible, start transaction. Then, benchmark your business using other business models to fast track development. 

    

    What about Collaboration? 

    At today's time, the pandemic has made it believable for all that despite the cultural, geographical, racial and ideological differences that seem to exist between human at one end, we are homogenous at the other. No doubt, the earth is our only home. When the uncertainty broke out, we felt it jointly. In light of the above, business personnel who share common identity on trademarks should collaborate and find peace in relating with each other. 

    Even, if there be need that the weak organization uses the name of the strong one as franchise for survival, there should be no cause for alarm. Of course, desperate times attract such hard decisions. 

    Conclusion  

    In summary, there is no crisis-free zone in business. Business personnel need to be nimble and responsive in keeping with changing climates, else it gets stuck. The two elements, hence, ensure viability for the business. These involve being innovative and dynamic in action and thinking, like LUG company did.  If, however, the managements of businesses must succeed they must initially take responsibility of crisis, become nimble and responsive, risk the above management strategies that would create competitive edges for the organization. 

    In all, there needs no debate that desperate times call for despirate measures: as long as uncertainty(crisis) remains a concern in the business environment, business personnel must keep innovating strategies to adapt to the changing climate.

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    References

    1. "Desperate Times Call for Desperate Measures". https://www.gingersoftware.com/  & https://www.yourdictionary.com/

    2. Maximilian Groh, (2016). "STRATEGIC MANAGEMENT IN TIMES OF CRISIS". Retrieved from https://www.researchgate.net. & "Crisis" https://en.m.wikipedia.org/wiki/

    3. "Strategic_Management". Retrieved from https://en.m.wikipedia.org/ 

    4. Julius Tapera, (2016). "The Importance of Strategic Management to Business Organizations". Retrieved from https://www.researchgate.net/ 

    5. Hannah Ritchie, Joe Hasell, Cameron Appel & Max Roser, (2019) "Terrorism". Retrieved from https://ourworldindata.org/ 

    6. https://searchcio-techtarget-com.cdn.ampproject.org/ 

    7. Same as reference "4"

    8. Omokolade Ajayi, “Julius Berger to Diversify into Agro-processing”. Retrieved from https://www.thecable.ng/

    9. François Outreville J., (2016). The Meaning of Risk. Retrieved from https://www.researchgate.net 

    10. "People", Mariam Webster Dictionary 

    11. François Outreville J., (2016). The Meaning of Risk. Retrieved from https://www.researchgate.net

    12. Allan M. Williams, Isabel  Rodríguez  Sánchez & Vlatka  Škokić, (2020). INNOVATION,  RISK  AND UNCERTAINTY: A STUDY OF TOURISM ENTREPRENEURS, Journal  of  Travel  Research, England.

    13. “When the going gets tough” and other English proverbs”. Retrieved from https://www.english-study-online.com/ 

    14. Vandana Menon, "Here are 3 Ways Businesses Can Survive and Thrive Through COVID-19 and Beyond". Retrieved from https://www.weforum.org/ 

    15. Same as reference '14'.

    16. "How Leaders Emerge During Challenging Times". Retrieved from https://www.notredameonline.com/ 

    17. Tanya Sammut-Bonnici, (2017), "Strategic Management". Retrieved from https://www.researchgate.net/  & reference "2"  

    18. Heather Long, "Small business used to define America’s economy". The pandemic could change that forever. Retrieved from https://www-washingtonpost-com 

    19. Same as reference '16'.

    20. Juha Huovinen, Menno Huijben & Pavel Haimi, "WHY BUSINESS TECHNOLOGY?". Retrieved from https://www.sofigate.com/