How to anticipate and manage a crisis within an organization 

Conflict can often undermine efficiency. Municipalities that wish to effectively serve their citizens must closely monitor their partner organizations.

In order to fulfil their missions, municipalities entrust contractors with certain projects. However, the number of conflicts and crises within such organizations has multiplied in recent years and had a major impact on the population, municipalities and even contractors. 

Early intervention is required to prevent these crises and reduce the impacts.  

Below are the signs you should watch out for and the solutions to better manage the potential consequences of such conflicts. 

Which signs of a potential crisis should you watch out for? 

Complaints from citizens and corruption allegations  

If you note an increase in citizen complaints or decreased satisfaction with services, you should take a closer look. These factors are evidence of shortfalls.   

You may also have noted late payments to employees or suppliers and heard rumours of favouritism in certain operations, which could undermine citizen trust. 

Isolated incidents are cause for concern. A series of events brought to light creates a negative narrative that damages the contractor’s image and, in turn, the municipality’s relationship with citizens. Any such warning signs should lead you to take action before public perception dominates reality. 

Instability among employees and members of the Board of Directors  

A high turnover of employees or directors also reflects management issues such as recurring internal conflict and insufficient communication. This lack of stability damages business continuity and the efficiency of services offered to the public.  

Failure to comply with applicable laws, rules and regulations  

You must also take action in the event of repeated failure to comply with applicable laws, rules and regulations, or insufficient reporting. These are all signs of governance issues. The same approach should be taken following unfavourable audits or sanctions applied by the authorities. All of these gaps expose both the municipality and the contractor to legal risks. 

Inefficient operations  

You should worry if you spot rapidly growing deficits, a lack of internal controls or a cash shortfall. These issues could be related to either the business context or poor management practices. 

If no action is taken, all of these factors could cause a severe crisis. 

What solutions can help you manage these risks? 

Promote communication 

The first stage of effective action is opening up dialogue. The goal is to clarify which subjects to broach and with whom. Ongoing communication between the municipality and the contractor’s management team will create a trusting environment. This open approach allows leaders to discuss their challenges without fear and gives you the opportunity to quickly pinpoint the issues and intervene in a proactive way. 

Clarify and review projects 

In order to ensure the relevance of projects, take time to clarify and review those entrusted to partner organizations. Ongoing analysis involving all stakeholders allows you to ensure that everyone understands the roles and expectations.  

Too often, agreements between municipalities and contractors were concluded 10 or 15 years ago and no longer reflect today’s conditions. Clear and measurable mandates aligned with current needs are the recipe for success. 

Strengthen governance 

Focus on ongoing training for both board members and employees. You could also conduct periodic independent evaluations. These tools can help you to quickly identify weaknesses. The earlier you spot governance issues, the better you can manage them. During this process, the municipality plays a key role in supporting organizations and offering the training that they need. 

Request an external audit 

If you’re unsure about an organization’s viability, an impartial external audit can be a valuable tool. This objective analysis will show: 

• the service quality; 
• the financial situation; 
• regulatory compliance; 
• human resources management. 

This overview will allow you to identify challenges and propose tangible avenues for improvement. 

Depoliticize board nominations 

To protect mandate integrity, you must depoliticize board nominations. Appointing board members must be based on objective and well-defined criteria. This can prevent elected officials from undermining the independence of the decision-making process. Clear and transparent mechanisms allow organizations to take action while respecting their mandate and collective interests. 

Focus on transparency 

In order to build trust, focus on transparency. Financial and activity reports, smooth ongoing communication and a public online portal are a few measures to maintain the municipality’s relationship with its citizens. 

These solutions foster collaboration between the municipality and its contractors. As a result, you can prevent crises and enhance the quality and sustainability of services offered. You must take a proactive management approach and intervene quickly when issues are identified in order to ensure sound governance while maintaining the trust of your citizens.