ACTIVE CRISIS GENERATION


CLASS
A
PHASE
Predisposition
APPLICATION FIELDS
Mostly strategic planning
ASSUMPTIONS
This technique has no particolar requirement
PROS
The analysis of possible crises enables a company to find new stimuli so that they do not become fossilized on present competitive advantages only.
CONS
A precise methodology for finding possible crises that a company may face is not given.
DESCRIPTION
Active Crisis Generation allows a company to reach a position of 'creative imbalance'. The aim of this technique is the generation of crises, discrepancies as events which are not coherent to the company's expectations, in order to trigger a change process for the survival of the company. For this reason, managers must be able to face actively and consciously these circumstances and exploit the positive aspects. There are three ways to generate controlled crises:
  1. Overextension crisis;
  2. Perspective crisis;
  3. Amplifying difficult situations;

1. Overextension crisis
It is produced by a behaviour finalized to extend existing capabilities of the enterprise and enables to create new competences as a basis for further development. With this technique, very hard goals are established so that a strong sense of inadequacy is created, generating a crisis inside the organization.

Example 1

«In the ‘80s the Head Committee of S.d.A. Bocconi in Milan decided to fill two kinds of gaps in their Management School: scarce presence and image on international market and low teaching capabilities in English. Then, using the concept of overextension crisis, it was decided to offer the most complex course totally in English and in the most difficult market, that is, international market, within 2 years. This fact created a deep sense of crisis which induced teachers to develop those weak capabilities, which are necessary to compete on the international scene. In a few years, the School had a teaching staff completely proficient in English and a strong international image.» (Vicari, 1998)

Example 2

« Even though Benetton hadn’t reached significant dimensions on international market yet, this company understood that a strong image all over the world was a great competitive advantage. Then it decided to start an international development immediately even if its national presence was not yet widespread. The crisis caused by this decision enabled the company to create in a brief time an image on which all further growth was built.» (Vicari, 1998)

2. Perspective Crisis
Perspective crises can be created by diffusing all over the company the idea of imminent environmental threats, of company’s inability to tackle future events without any significant change. In fact new points of view are necessary in order to use creativity to solve problems.

Example 2
«Anders Moberg, Ikea President, is worried about future. “Ikea had an extraordinary success, but what turned out to be winning today will not necessarily be tomorrow”. Two years ago he reported to his staff that Ikea was going through a crisis. He says: “I just wanted to stir them up a bit”.
Moberg’s effort seems to work. During the financial period up to Aug 31st 1997 the sales of the group increased by 21%. Although prices of furniture, toys, home appliances were 20-30% lower than competitors, experts state that Ikea’s sales per square metre double the average value in this sector.[...] Anyway, Yngvar Kamprad, founder of the company, and Anders Moberg still keep their 35.000 employees under pressure. » (Vicari, 1998)

3. Amplifying difficult situations;
It consists in increasing the complexity of some objectively difficult situations, till they are made almost unsolvable. As an example, Japanese firms often exploit difficulties by amplifying floats and giving great importance to contradictions. Problems and difficulties thus created must be solved in a creative way, also by inciting cooperation within the organization. Creative enterprises continuously generate crises that can spur new development. Chaos creation means continuous destruction of previous balance in order to bring forth new points of view, new opportunities, new development.
REFERENCES
  • Vicari Salvatore, La creatività dell’impresa, Etas Libri, Milano, 1998