Wednesday, October 22, 2008

Types of Crises

Sudden crises are unexpected events that organizations have virtually no control over or responsibility for, such as a devastating earthquake or terrorist attack. These are what might be called low probability, high-impact events. And, while they may be foreseen by some, such events are unanticipated by most.

Smoldering crises, on the other hand, start out as diffuse problems. These problems are well known but never receive attention until they reach crisis stage. Crises such as the meltdown of Wall Street this year, or the collapse of New York City's finances in 1975, are characteristic of smoldering problems whose dimensions were understood to be unsustainable and that should have been addressed earlier on a large-scale. However, the considerable political and economic costs of dealing with the underlying problems were simply too daunting and nothing was done to mitigate or prevent the subsequent economic and social dislocation.

Read the rest of Paul L. Posner, writing in Governing, on
the crisis next time.

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