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Procurement Perspectives: Panic and the management of a crisis

Stephen Bauld
Procurement Perspectives: Panic and the management of a crisis

The current COVID-19 pandemic has created a response to the crisis somewhere between fear and panic in some parts of the world, and interrupted the process of supply chain management in general.

One major distinction that we all need to consider is to understand the difference between fear and panic. Fear is a natural feeling of anxiety or agitation. It is caused by the presence or proximity of a threat of harm or loss, or some type of danger.

Panic is a sudden, hysterical over-response to the threat that gives rise to fear.

While fear is a natural response to a perceived threat, panic is not an acceptable response. COVID has also created the fear and uncertainly of the unknown, and the future, causing the supply of goods and services to be disrupted.

When panic sets in within an organization, it will usually spread quickly. Threats of ill fortune and the fear of panic to which they give rise, are things that every CEO must be prepared to deal with during his or her tenure during these difficult times.

Companies need to remain calm and focused when placed under pressure. Panic can only lead to disaster, while calm in the face of this pandemic can often salvage victory.

The concept of crisis management is fine in theory, but in the real world an organization never knows for sure how it will perform under pressure until a crisis has actually arisen. Experience generally shows, however, that it is best for an organization to prepare itself to the greatest extent reasonably possible for the types of crisis like COVID, and any others that are likely to occur.

Every company must immediately be seen to be doing something about it. Nothing looks worse, or in reality is worse, than indecision or a refusal to confront a problem.

Very frequently, the solution to the problem will not be immediately apparent and it will be even more difficult to identify the root cause and to devise and implement a long-term strategy to ensure that similar problems do not arise in the future.

Even so, every CEO and procurement person must be seen as responsive to the symptoms of a problem.

So many supply chains for both goods and services have been interrupted and delayed during this pandemic, that this issue has, or will affect, almost every company that purchases manufactured products.

As an example, the price of lumber and steel, as well as many other products has increased as much as 20 to 30 per cent in some cases, and needs to be addressed to maintain profitability.

Senior managers are most required in critical situations, like now during the pandemic and the aftermath of it. This means that the demand for the greatest leadership are likely to coincide with times of greatest stress.

Stress affects the entire organization as well as its individual members due to uncertainty and staff must remain focused on the goals that have been set to navigate these difficult times.

When times are bad, it is likely that many individuals in an organization will take their cue from the leadership of that organization. Perhaps in no other setting is this need so clearly brought home as with respect to military leaders.

As the U.S. Field Manual observes, in war a key objective of each side is to increase the stress to which the other is subjected. The ability to control combat stress can be the deciding factor between victory and defeat. Training soldiers to withstand the various factors of battle that contribute to stress is therefore of critical importance.

Controlled combat stress, when properly focused by training, unit cohesion and leadership, gives soldiers the necessary alertness, strength and endurance to accomplish their mission. It can inspire loyalty, selflessness and heroism.

Stephen Bauld is a government procurement expert and can be reached at swbauld@purchasingci.com. Some of his columns may contain excerpts from The Municipal Procurement Handbook published by Butterworths.

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