Risk management and decisions under pressure: what most management boards are missing (and how to quickly improve this)
In the business world, it is not the companies that make no mistakes that win. It is those that can make decisions quickly, rationally, and responsibly—even when conditions are unpredictable.
In practice, this means one thing: the quality of a board's work under pressure and risk is a key competitive advantage today.
And yet, many organizations still operate as if risk were an "optional" event. Only a crisis reveals whether the management board has a system or just meetings.
In this article, I will show:
why management boards make worse decisions in a crisis,
what mistakes are most often repeated,
how to strengthen the board's ability to manage risk and negotiate and make decisions under pressure.
1. Pressure does not reveal character. Pressure reveals the system
Under stress, people do not perform "better." They perform as they have been trained to perform.
If the management board does not have orderly working rules under normal conditions, then in a crisis:
decisions are made in chaos,
communication is contradictory,
internal conflict grows,
issues are "pushed through" by force,
strong emotions and defensive reactions arise.
That is why companies in crisis do not just need a "strong leader." They need an efficient, well-coordinated management team with clear rules.
2. The market is not the biggest risk. The biggest risk is a decision-making error.
Management boards invest in:
audits,
compliance,
financial analysis,
legal advice.
This is important. But the most costly risk in a company remains a wrong strategic decision.
Examples of decisions that cost millions:
making a bad investment,
reacting too late to market changes,
cutting costs too aggressively,
ill-advised restructuring,
conflict with a key customer or partner.
The common denominator? Time pressure, emotional pressure, and a lack of a clear decision-making framework.
3. Crises are usually predictable, but ignored
What we call a "crisis" often builds up over months.
Management often sees the signs:
margins are falling,
staff turnover is increasing,
customers complain more often,
costs are rising faster than sales,
projects are not being delivered.
However, the organization does not react because:
"it's not an alarm yet,"
"it will normalize,"
"we have other priorities."
This is where the topic of risk management in practice comes in: management must have a process for identifying risks and being ready to respond before things get heated.
4. Management teams fail not because of a lack of data, but because of cognitive errors
The most dangerous thing in management is that people are prone to predictable errors in thinking.
The most common mistakes made by management boards are:
overconfidence ("we can do it"),
escalation of commitment (persisting with a bad project because "we've already spent so much"),
groupthink ("don't stick your neck out, everyone is in favor"),
authority effect ("the CEO knows best"),
ignoring data that does not fit the narrative.
A good management team does not eliminate these mistakes by "will." It eliminates them through process: the structure of meetings, the way questions are asked, and the format of decision-making.
5. Risk management is also about negotiation (internal and external)
Most high-risk situations are also negotiation situations.
Management negotiates:
with banks and investors,
with key customers,
with suppliers,
with trade unions,
with the supervisory board,
and also... among themselves.
And here we come to the point: without negotiation skills, management loses control of the situation in a crisis.
6. The biggest mistake under pressure: lack of a consistent message
Companies fail not only financially, but also in terms of communication.
When the management board does not communicate consistently:
rumors arise,
panic grows,
managers do not know what to say to their teams,
engagement declines,
the best people start looking for jobs.
In a crisis, communication is not an add-on. It is a risk management tool.
A consistent message means:
telling the truth (within reason),
showing the direction of action,
clear decisions,
short, regular updates,
visible accountability.
7. Organizational resilience is the responsibility of management, not the operations department
A company's resilience does not come from "cost savings." It comes from management.
A resilient management team:
works on scenarios,
develops a culture of responsibility,
has a management rhythm,
makes decisions quickly and consistently,
manages conflict without politics,
negotiates and finalizes agreements.
All of this can be trained. And that's good news: management can be prepared for pressure, instead of hoping that "somehow it will work out."
Summary: in a crisis, a company will not grow beyond its management capabilities
When difficult times come, a company will not perform better than its decision-making center. That is why developing management in the areas of negotiation, decision-making under pressure, and risk management is not a fad, but a necessity.
A company's greatest advantage is not the absence of crises.
It is the ability to win in a crisis.
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