How To Manage in Times of Crisis

  Introduction to the new edition

 
In 2008 there was a big financial crisis. I was invited to speak to IBS at the Russian Academy of Economics. My presentation was transcribed, and the result is this booklet.
 
Since then, years have passed but the phenomenon that there is a financial and/or, social or political crisis has not stopped.   And each new crisis appears to be more complicated to handle than the previous one.  While 2008 was mostly an economic crisis, the emerging ones are multi-dimensional. Social unrest, the political left in serious conflict with the political right, religious confrontations, an unprecedented surge in crime, an unprecedented level of innovation led by unprecedented technological advancements which impact income and wealth distribution, and more.
 
The crises are getting more acute because the rate of change is accelerating and impacting not just one subsystem like the economic one, but multiple subsystems, the social, religious, economic, and political, all simultaneously. The challenge of what to do is more much demanding than ever in the past.
 
Many companies are going to fold. Many businesses are going to close. Yesterday I was walking the main street of the town I live in, Santa Barbara California. Every third store on that main street was empty and for lease. What is growing are the outlets that serve food. A variety of formats, fast foods, take-out food, and sit-down restaurants. There is a cultural change.  Habits are changing. The technological change (internet) impacted social change (people looking for an experience, not just a product) which impacts the economic sphere. Companies that are behind with the advances in technology are folding and new types of enterprises are emerging or flourishing that provide for needs technology cannot.
 
Adapting to changes demanded by the environment we operate in, requires changes in who we are, how we operate, and what we believe in, and changing our business model, including the suite of products and services we offer. And that can cause internal disintegration because our marketing program changes faster than our capability to adapt our sales effort or the information needed or the attitude and aspirations and competencies of the people in the company to deliver what the new changes require.
 
What to do?
 
An organic system has a mechanism, homeostasis. It is a state of balance among all the body systems needed for the body to survive and function correctly.
 
The role of sleeping is to enable homeostasis. During the day different organs in our body are activated and adapt at different speeds to what is happening.   That is why when we work very hard and under stress we have a tendency to say, “I am falling apart.”
 
With the high rate of change “out there”, adapting to it “in here”, can cause disintegration within the system.  So, the system needs to pause to readjust. To reintegrate. Experiments done with animals that were put into a situation of sleep deprivation for a long time show that sleep deprivation causes death. They all died.
 
The body needs sleep.  During deep sleep the body reintegrates itself and we wake up in the morning after a good uninterrupted sleep fresh to start the new day and fall apart again till the next call to go to sleep.  
 
All animals sleep. Fauna, and flora sleep. Anything alive sleeps or falls apart and dies.
 
And this applies to organizations too. They are organic systems too.  They need to take a break from focusing only on the market and doing endless strategic planning and need to look inside the organization at how to realign all systems to reach organizational homeostasis.
 
 And that is what this little pamphlet is about. And it is applicable today even more than it was applicable in 2008.

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