Polycrisis: What is a polycrisis?
In our fast-moving and complex world, companies are increasingly encountering the phenomenon of the ‘polycrisis’. This term, which has become established in economic and political discourse in recent years, describes a situation in which several crises occur simultaneously or in close succession and influence or reinforce each other.
Here you will find a definition of the term polycrisis and how it is derived. We also shed light on where polycrises occur, how they can affect companies and what well-known examples there have been in the past.
Definition of polycrisis: derivation and origin
The word ‘polycrisis’ is made up of two parts: the Greek prefix ‘poly-’ and the word ‘crisis’.
- Poly-: This prefix comes from the Greek and means ‘many’ or ‘several’. It is used in the German language to indicate multiplicity or multiplicity. Examples of its use in other words are ‘polyglot’ (multilingual) or ‘polymorph’ (multiform).
- Crisis: This word has its roots in the Greek ‘krisis’, which originally meant ‘decision’. In the modern context, however, it is usually used to describe a difficult or dangerous situation that involves a turning point or significant change.
When put together, ‘polycrisis’ literally means ‘many crises’. In a figurative sense, the term refers to a situation or scenario in which several crises occur simultaneously or in close succession and can influence or reinforce each other. These crises can be of different natures – such as economic, ecological, social or political – and often have complex and far-reaching effects.
Origin of polycrisis
The roots of the term ‘polycrisis’ lie in political theory and economics. It was originally used to describe complex geopolitical situations in which several crises occur simultaneously and influence each other.
Over time, the scope of the term has expanded to include economic, environmental, social and technological crises. A polycrisis is characterised by its complexity, multidimensionality and the potential to challenge or change existing systems and structures.
Where do polycrises occur?
Polycrises are a global phenomenon and can occur wherever complex systems and diverse interests come together. They are particularly present in globalised economic systems, where interdependencies between different sectors and regions mean that crises can spread and intensify quickly.
Polycrises can be of natural origin, such as climate disasters, or caused by human activity, such as economic recessions or technological failures.
Polycrises in companies
For companies, polycrises often manifest themselves as a combination of economic, technological, environmental and social challenges. These can affect supply chains, market demand, employee health and safety and technological infrastructure.
Organisations must be able to manage these multi-layered challenges simultaneously and develop adaptive strategies to ensure resilience and sustainability. Polycrises challenge, among other things, business continuity management, which is essential for the continuation of the company.
Known examples from the past
There are several concrete examples of polycrises that have had a specific impact on individual companies. These situations often show how a combination of challenges from different areas can lead to a complex crisis. Here are some examples:
- Toyota recall crisis (2009-2011): Toyota had to recall millions of vehicles due to safety concerns, triggering a polycrisis. The situation combined production defects, safety concerns, legal challenges and significant reputational damage. This affected not only the company’s financial performance but also consumer confidence in the brand.
- BP oil spill in the Gulf of Mexico (2010): The explosion on the Deepwater Horizon oil platform and the resulting massive oil spill led to a poly-crisis for BP. The crisis included environmental destruction, legal disputes, public outrage, huge financial losses and long-term damage to the brand image.
- Lehman Brothers collapse (2008): The collapse of Lehman Brothers during the global financial crisis was a poly-crisis caused by a combination of risky financial practices, market collapse and inadequate regulation. This had a far-reaching impact on the global economy and permanently changed the banking industry and financial market regulation.
- Enron scandal (2001): The collapse of Enron following a widespread fraud and corruption scandal was a poly-crisis involving financial, legal and ethical issues. This led to significant losses for investors, changes in corporate legislation and a profound loss of confidence in corporate governance and auditing.
These examples show how polycrises can affect individual companies by bringing with them a combination of challenges from different areas that the company must overcome simultaneously.
They emphasise the need for companies to develop robust risk management and crisis management strategies and to take the necessary precautions in advance. Alerting systems, such as those from safeREACH, can support you in crisis management and alerting in emergency situations.