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The management of crisis and turnaround
■ Clients/line managers/staff/users are becoming more willing to accept profes-
sional, specialist advice but they increasingly expect to be more active and
involved in the processes of diagnosis and implementation of change.
■ Expects challenge and criticism from line managers/users and others involved.
Recognizes that people will employ a range of criteria in evaluating choices. Sets
out to develop informed choice and internal commitment for everyone involved.
■ Recognizes that planning, implementing and establishing change is a corpo-
rate activity and responsibility.
All this is fine if there is the time, energy and money to allow for it, but what if
the organization is in, or close to, crisis? It is to looking at recent experience of
managing in the crisis situation that we now turn to see whether this situation
demands different management styles.

The management of crisis and turnaround

We often say that we learn more from our failures than from our successes. Our
understanding of organizational effectiveness can be enriched by examining the
causes of failures. Whether a failure is associated with the use of technology, or the
collapse of a business, a close examination of the events leading up to the failure
will identify opportunities which might have been used to forestall the failure. The
lack of prior intervention is clearly ‘ineffectual’ behaviour. Failures may appear to
be caused by changes of environmental conditions that organizations cannot con-
trol; events may cause severe difficulties for any organization, and nothing can
change that. However, in so far as failures are caused by problems within organiza-
tions, these causes are both deep rooted and important. Environmental change
raises questions of how to respond. Competitive pressures may require innovation
in product design or production processes. Managers are not simply subject to envi-
ronments but can also respond to them to ensure continued effectiveness.
Increasingly, the study of failures is becoming a part of organization studies.
Much credit for this development must go to Hall (1980) and to Bignell et al.

(1977). Both Child (1984) and Bignell et al. (1977) identify some of the indicators
or conditions of failure.
Child (1984) identifies a number of ‘warning signs of a structural problem’.
These include overloads of work, poor integration between departments, a reduc-
ing capacity for innovation and weakening control. Bignell et al. in their introduc-
tion also develop a number of ‘conditions of failure’. Typically, the background to
a failure will be characterized by the following five factors:

1 A situation or a project in which members of several organizations are
involved.
2 A complex, ill-defined and prolonged task which gives rise to information dif-
ficulties.
3 Ambiguities associated with the way to handle the situation or project (rele-
vant regulations being out of date or not enforced).

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