Methods of crisis prevention in companies

It goes without saying that I work in accordance with recognised standards as developed by the Institute of Public Auditors in Germany (IDW). In particular, my company valuations and my restructuring concepts comply with recognised standards.

As a management consultant working at the interface of science and business practice, the current state of scientific discussion also flows into my work, just as I feed the findings from my project work into the scientific discussion through publications and make them generally available. I aim to be methodologically sound and to make the available methods more practice-oriented.

Preventive, stability-promoting measures include, above all, mindful process optimisation, planned backwards from the customer’s benefit, so that blind and faulty performance is avoided. For agile coordination and adaptation at the process interfaces on site, the processes must be provided with stabilising feedback loops (feedback). Coupling between processes is also important for holistically coordinated action in the company.

It is very important that processes are not written for the ISO 9001 audit, but are lived. If defined processes are bypassed, they are obviously not good enough and should be polished. Deviants are not necessarily outlaws, but often sources for improvement approaches.

In the case of highly standardised processes, it is even possible to have them executed directly via workflow applications. In such cases, the quality of the process definition is particularly important.

Our (business) world is dynamically complex. Mental models that reduce the existing complexity hide the complexity that is actually at work. They do not represent the world appropriately. Each of us forms such models to cope with our (working) life. But we have to be aware of the limits of such mental models at all times. That is why I recommend a mindful approach to my clients without blocking alternative paths. In dynamic-complex environments, the essential asset is to have options for action (variety) in order to be able to react to changes.

Although the overall degree of complexity is to be taken as given, the composition of complexity can certainly be shaped in one’s own sense. In this way, an unnecessarily high number of variants can be reduced. This reduces the value-destroying complexity within the company; however, it also reduces the number of options that can be offered. The relationship between external and internal complexity must be balanced. An unwelcome competitor creates external complexity that you can hardly influence on the surface. If you acquire this competitor, you have tamed the complexity that emanates from this competitor. But it does not disappear; rather, it turns into internal complexity, because you now have to manage this acquired company.

With the System Dynamics method developed by Jay Wright Forrester, complex interrelationships can be modelled vividly. This method requires special software, such as Vensim, which can mathematically capture and process the multiple mutual interrelationships. Such software can do what our brains cannot. Already during the modelling, which should be carried out in the circle of a management team if possible, the participants become aware of important findings about effective interrelationships, which they can include in their decisions in the future. It becomes interesting when scenarios are simulated with modelled realities, i.e. the effects of alternative decisions are executed.