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November 2020 − Dossier
Time and again, throughout the course of history, humans have found themselves facing the abyss. Crises, however, not only signify danger, but they also trigger positive developments.
The object which triggered one of the major crises of mankind was, in fact, notably small. It was also misshapen, shriveled and brown, and, from today’s perspective, it was a common everyday item. It was the tulip bulb which, in 1637, plummeted the Netherlands into an economic crisis of massive proportions, and which brought the world’s first stock market crash to the country. So great was the greed for the bulb which gave rise to the most elaborate dreams of bloom that collectors would pay as much as €25,000 in today’s currency – until the speculation bubble burst and the market collapsed. It would take the Dutch economy a long time to recover from the tulip crisis.
The tulip crisis: it is but one example of a multitude of crises that have led humans to the edge of the abyss throughout history. In addition to personal life crises, it is political disaster, including the refugee crisis in Europe; economic and financial crises; ecological crises such as climate change – but also pandemics like COVID-19 that upset the stability of people and entire nations. Originating from Greek, “crisis” translates to “turning point” or “decision”. Thus, the crisis will either end in disaster or the situation will improve. Crisis: it signifies the simultaneous co-existence of danger and opportunity.
Scientists have attempted to uncover common themes in the unfolding of crises. According to Swedish psychiatrist Johan Cullberg, every crisis can be subdivided into four phases: shock and inner chaos; reactions such as fear and hopelessness; processing and the search for solutions, and, finally, reorientation. Being aware of the phase of the crisis in which one currently finds oneself may help conquer the situation. At the same time, the way that people handle internal and external impacts varies considerably between individuals. Some people, and even companies and governments, will falter, whereas others will emerge from the crisis with renewed strength.
Flawed risk assessments
Companies, in particular, have been preparing for impending crises of all kinds for years, states the Institute for Crisis Research in Kiel, Germany. They appoint crisis and risk managers, conduct crisis drills and compile a crisis handbook. According to the “Crisis Prevention Survey 2019”, most managers worry about hacker attacks, blackouts, “perfect storms”, natural disasters, political upheaval and exposure by the media. On the other hand, almost nobody expected a pandemic. “The implications of climate change, new technologies, digitalization, demographic changes, artificial intelligence, and financial and political uncertainties have moved many of us. We saw a significant event coming, but the pandemic has likely taken it at least one level up from our expectations“, says Felix Arndt, expert in entrepreneurship at the University of Guelph in Canada.
The fact that even crisis and risk managers often misjudge risks has been confirmed by Professor Werner Gleißner, member of the board of directors of the German Society for Crisis Management (DGfKM). For example, the risk assessment report of the World Economic Forum at Davos listed “green risks” like natural disasters and the consequences of climate change as the number one risks expected by experts. Topics such as pandemics or economic/financial crises of larger magnitude, on the other hand, ranked low on the list – a dramatic miscalculation, as evidenced by the global financial crisis of 2007, the Euro crisis of 2009 or the emergence of COVID-19.
If life hands you lemons, make lemonade
Despite all the negative economic and social fallout, there are solid reasons for taking a positive stance following a crisis. “When life hands you lemons, make lemonade”, wrote Elbert Hubbard in 1915. Psychologists found that people do on occasion emerge from a crisis with renewed strength. They call this phenomenon, which allows people to experience inner growth following grave life crises, “post-traumatic growth”. According to Michaela Brohm-Badry, president of the German Society for Positive Psychological Research, empirical data from cancer patients, as well as data from victims of fires, maritime disasters or violence, show that suffering and the resulting stressful emotions may in fact be followed by strengthening, positive emotions. “I am happy and successful – not in spite of my life crises, but because of them”, explains former kidnapping victim Marc Wallert. In 2000, he was held for a period of four months on the island of Jolo by Islamic extremists. In his book “Strength through crises: From the art of not losing your head”, he speaks about his experiences.
Lessons from history
Economists Alexander Tziamalis and Konstantinos Lagos of Sheffield Hallam University in the UK, too, recognize the opportunity within a crisis, and they provide historic evidence to support their theory. “Crises often bring forward positive change“, emphasize the researchers. “If there is one lesson from history, it is that the economy will pick up again. Unemployment will be reduced, salaries will increase, the stock market will rise to new unprecedented highs and our factories will be producing more goods than ever before”, states their optimistic forecast – even in 2020.
The fact that crises may initiate positive change is also evidenced by the significant contributions that women made to the workforce in the UK during the First World War. More than one million women kept the economy afloat while working in positions that had thus far not been open to them, including work in factories, as drivers or even in the police force. “The long – and still ongoing – process that would recognize women’s skills and talents in the workforce was accelerated“, summarize the scientists.
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Inefficient structures dissolve
Following crises, inefficient or outdated structures are frequently abandoned, found Tziamalis and Lagos. In the opinion of the scientists, even the corona crisis harbors opportunities for positive change. “Stronger public health, reduced unnecessary commuting, less pollution and international pharmaceutical cooperation can improve our world. So can increasing the pay, as well as recognition, for key workers.“ Everyone has the opportunity to make a positive impact in the wake of a crisis.
At the end of the crisis, the motto is: look ahead into the future – and plan for the next disaster. Jena University, for example, will offer a degree program in International Crises this upcoming semester. “After the crisis equals before the crisis. The question is, what do crises have in common, and how can we meet them in order to better prepare society”, says Jena-based professor Rafael Biermann. The next crisis is sure to come.