It's not so much that organizations, per se, are reluctant to accept that they are in a crisis situation. It has more to do with the core perceptions of those in the organization who can define when a situation constitutes a crisis—those in an organization's decision-making loop. There is no crisis if "I've got everything under control." Often, employees who are not in the decision-making loop have concluded that a crisis exists long before the decision-makers come to the same conclusion.
Assuming that some kind of "control limits" have been devised, i.e., measurements of various aspects of operations are being made against a particular set of standards, in the minds of the decision-makers, a crisis doesn't exist as long as the measurements either remain within the control limits or do not exhibit a trend toward one of the limits. Obviously, the perceptions depend upon whether the control limits have been properly established, maintained and timely observed.
Low level employees work where 'the rubber meets the road." Decision-makers usually don't work there. They depend upon getting necessary information through the channels established for that. Often, there is excessive lag-time in the process and the message can become garbled.
The real truth is: (1) Crises usually start small and are "below the radar horizon." At that point, the situations don’t look like they will become crises. They are looked at in isolation—out of context. This makes what is happening look like an isolated case, rather than the beginnings of a pattern, and therefore, not a problem that needs immediate attention. As a result, when the problem does "pop up onto the radar," i.e., it gets big enough to “get in your face,” it’s easy for the decision-makers to have the impression that the the problem has appeared suddenly, without warning, almost "overnight." Cognitive dissonance has a strong hand in this. (2) Crises usually occur when one or more basic principles has been totally overlooked or, if not totally overlooked, under-appreciated.
Without a strategic plan, the operating elements of the organization are in constant confusion. People mill about, confusing activity with accomplishment. Money and time are wasted on go-nowhere projects. Morale remains low. It is difficult to get people to participate in organizational activities. Everything that seems to “go wrong is always “somebody else’s fault.” And usually, everything is going wrong.
Drafting a strategic plan requires the planners to “think strategically.” A significant problem with thinking strategically is that few people sufficiently understand “strategy.” In fact, although the term is thrown about by almost everyone, most people don’t agree on just what it is.
So, what is "strategy" and how does one think and plan strategically? To simplify, “strategy,” as differentiated from “tactics,” which are the actions taken to fulfill a strategy, comprises the position one takes to reach a particular goal. In other words, “strategy” provides a direction so that, over time, choices of courses of action can be made that have a high probability of propelling the organization consistently in the direction intended.
Obviously, if an organization has no vision, i.e., where it wants to go, and no clear mission, i.e., what it wants to do to get there, planning strategically is impossible.