Crises and uncertainties: companies facing risks | O Magazine

On March 29, a special event took place during Paris Arbitration Week 2022. It should be remembered that this arbitration week aims to stimulate exchanges between experts and practitioners of dispute resolution between companies on an international level. In this context, the independent consulting firm Eight Advisory organized a breakfast on the theme: “New risks, new uncertainties: how to manage change?” “. Four experts then spoke about the proliferation of challenges that companies have to face.

Article written by: ZIEL Jerome

In order to establish the framework of the exchanges, Celine Leroyassociated Eight Advisory in terms of conflict resolution, took stock of the current state of risks. “Economists tell us that the great economic and financial crises are coming back every eight to ten years, she began by recalling. In 1987, the first stock market crash occurred affecting computer stocks. Then, in 1997, the start of the Asian crisis was marked by the bursting of a real estate bubble in Thailand. It then quickly spreads to the whole of Southeast Asia.

In 2001, the internet bubble burst. Then, the subprime crisis affected the United States before spreading to the rest of the world in 2008. In 2012, Greece narrowly avoided bankruptcy following the euro crisis. More recently, we experienced the health crisis (2020), before moving on to the war in Ukraine (2022). According to Celine, “crises are therefore more frequent. Moreover, they become almost instantaneously global. So that uncertainty is now at a never-before-seen level.

Marie Hombrouck (c) Atorus Executive / Céline Leroy (c) Eight Advisory / Taoufik Lachheb (c) Karbett Consulting / background: Feodora Chiosea – (c) iStock

Breakdown of types of risk

Construction

Taoufik Lachheb, old pole vaulter high-level Frenchman, polytechnician and partner of the firm Karbet Consultingis a expert involved in the sector of construction. As such, he faced a number of emergency situations. These refer to social conflicts as well as natural disasters, acts of war, kidnappings or even industrial accidents. However, he points out that “the culture of risk is traditionally part of the DNA of construction players”. The central point is to transpose the levels of risk incurred into financial terms. While bearing in mind that they are difficult to quantify.

Human ressources

Marie Hombrouck, founder of Atorus Executive, headhunting firm specialized in transition management, then intervened. She mentioned the hybridization of skills now required on the labor market, in the face of rising risks. According to her, “The borders between the different functions are increasingly porous (HR, legal, finance, communication). So much so that a certain transversality is essential with the crisis. Which results in a shortage of candidates with profiles of good crisis managers”.

IT risks

As for Xavier D.negotiator at the GIGN, he warns against the emergence of new threats, such as cybercriminality. This requires adapting to be able to manage the crises linked to the Ransomware, especially. In such incidents, “a hacker will encrypt the servers of a company or an institution. He then monetizes the restitution of the pirated data”. In the case of hackers, negotiators seek to influence their behavior through screens. “So we have to think about ways to infuse the emotional in the exchange of emails, sms or visios, in particular in the conduct of financial negotiations”, he continues. “It can happen by emphasizing certain words. While taking into account the fact that cyber criminals no longer obey the rules of honor of their elders. For them, purely financial logic now takes precedence..

Different ways to manage risk

For dominate the crisis, it is important to know how to anticipate it upstream, while being able to manage the consequences once it is triggered. Anticipation and ex-post analysis therefore play a major role in the risk management.

Contracts: the unpredictability clause (hard ship)

According to Céline, risk management, particularly in its financial aspects, requires the introduction of contingency clauses (hard ship) in contracts. This type of clause refers to a mechanism allowing the revision of a contract in the event of unforeseen circumstances. The parties can then ask for a renegotiation if the execution of this contract becomes ‘excessively expensive’. Problem, according to Céline: ” How can we determine the level cost at which a contract becomes ‘excessively onerous’ to perform? »

“We started using prediction tools based on artificial intelligence (IA) to quantify the damage potentially incurred by the partiesshe continues. However, AI is oriented towards the analysis of past phenomena. The fact of wanting to reproduce certain standards can therefore block the emergence of creative solutions. This type of tool should therefore only be considered as an aid to analysis and decision-making. Because they are not not infallible”. In this regard, Marie adds that “if technology adds depth and exhaustiveness to the analysis of situations, we should never lose sight of the human determinants”.

The strength of the military: the debriefing

Also for Xavier, information is the key to crisis resolution: ” What is it about ? from whom? in what place? As soon as a crisis breaks out, we seek to gather as much information as possible. Then we set up processes, plans that we practice first in the workshop, then in situ. We build different hypotheses, while taking into account the eruption of non-compliant cases, in order to prepare us for a change of course in the midst of a crisis”.

Once the incident is resolved, comes the time for feedback, “essential if we don’t want to miss out on elements that will allow us to do better in the future”. The debriefing is done in two stages, first hot, without filter. “It is essential to have a good reading of what really happened”. Then, once the adrenaline subsides, the team proceeds to a feedback Cold.

In all cases, “It’s about getting rid of the fear of saying the way you really felt. Debriefings should bring out the key elements in the sequence of events. Feedback must therefore include all members of the team, from the highest to the lowest. A well-prepared crisis is a well-managed crisis,” according to Xavier. Taoufik adds that, “In high-level sport too, hot debriefing is a tool very powerful “.

risks uncertainty economy business
Dontree M – (c) iStock

Faced with risks: dialogue and psychology

In order to understand what could have happened on a mega-construction site, Taoufik stresses that it is important to put yourself in the place of your interlocutors and to integrate the human aspects related to crises. As he explains, “it is important to know how to handle the art of questioning and listening. Because, as experts, we somewhat play the role of psychologists. It is therefore essential to fully understand the group dynamics and the stories at work before the outbreak of the crisis. And spot the significant detail which will shed light on a seemingly inextricable situation”.

He remembers having intervened in the context of a big dispute involving a refinery. “Management was concerned with defending its position, more than seeking explanations. It was necessary to go down to the most modest hierarchical levels to finally understand what had happened”. In another case, in Saudi Arabia, his team had to content itself with analyzing documents, without being able to directly question the actors involved. “Afterwards, we were finally allowed to do an interview. In three hours time, the fog lifted. And we were able to form an opinion on the sequence of events at the origin of the incident”.

According to Taoufik, the role of any expert is to assess the consequences of future or past crises. “The key to our success as experts lies in the fact of do not seek, in an authoritarian way, to impose our answers. We do not offer certainties, but explanatory models. What the judges and arbitrators in charge of establishing the responsibilities of crises fully appreciate”.

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Crises and uncertainties: companies facing risks | O Magazine


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