What is a crisis?

An important point but one that is often left vague is the definition of a crisis.  In the corporate world there is no clear and standard definition of this term.  The same problematic situation faced by two different companies may be classified as a crisis by one and merely a problem or issue by another.  Much depends on the organization’s culture and its level of concern about its brand, or corporate, reputation.

Some basic definitions of the term crisis include:

• A difficult or dangerous situation that needs serious attention – Merriam-Webster.com
• A time of great danger, difficulty or confusion when problems must be solved or important decisions must be made – Oxford Advanced Learners Dictionary
• Acrucial or decisive point or situation, especially a difficult or unstable situation              involving an impending change – The Free Dictionary
• Critical eventor point of decision which, if not handled in an appropriate and timely manner (or if not handled at all), may turn into a disaster or catastrophe – Business Dictionary.Com

For the purposes of this discussion I choose to define a crisis as a situation that has at least the following three elements:

1. It is a surprise – it is hard to imagine having ample forewarning about a situation and still calling it a crisis when it occurs. That said, in retrospect it is clear that many crises stem from a known issue, but the specific instance that needs to be addressed occurs without warning [a bolt from the blue event].
2. It must be dealt with immediately – if a situation does not require immediate action/resolution it is not a crisis but rather a problem to be addressed when resources are available. A crisis demands attention.
3. The situation poses a significant threat to the operation and/or reputation of the organization – if there is no risk or if the risk is minimal the situation is not a crisis. This last point is open to considerable interpretation by different organizations.  Some look at a relatively minor quality defect as an existential threat, while others wait for a major catastrophe before recognizing a crisis is in effect.