Without delving into the juice of the sensational details dominating today’s headlines about WiseTech Global, there are valuable lessons for businesses of all sizes. Let’s learn our own lessons from the front pages.
The current situation presents a 101 in crisis planning for SMEs in two critical business risks: key person dependency and the phenomenon of creeping crisis.
The recent turmoil at WiseTech Global exemplifies the inherent vulnerabilities of founder-led companies. While such companies have historically outperformed others — delivering 400% returns compared to the ASX200’s 65% over five years — the current crisis demonstrates how quickly this advantage can unravel. A staggering $5 billion market value decline and ASIC scrutiny highlight how swiftly market confidence can evaporate.
Key person risk, though often overlooked, stands out here as a fundamental business threat. It occurs when an organisation becomes overly dependent on one or a few individuals for its success and continuity. While many business owners view their company’s reliance on them as a badge of honour, this overlooks the hidden vulnerabilities being created.
In smaller operations than WiseTech, this key person risk can be minimised by recognising warning signs, including decision-making bottlenecks, lack of documented processes, and client relationships tied to a single individual.
No one can say this crisis was a surprise in any realm of possibility, so today’s WiseTech situation also perfectly illustrates the concept of a creeping crisis.
As early as 2019, there were significant red flags — a board member resigned, citing concerns about bullying, intimidation, and corporate governance issues. The pattern continued with subsequent departures of the head of legal and another board director. In this day and age, businesses cannot expect such issues to remain hidden indefinitely. Instead of making excuses for behaviour or governance issues, WiseTech should have been investing in its crisis plans, stakeholder engagement, and media relations.
This day of reckoning was always coming, and the time to address these risks was before they became front-page news.
What makes this a classic example of a creeping crisis is its incremental nature. Problems evolve slowly, bit by bit, swept under the carpet, and not considered a risk until a tipping point is reached. The danger lies in the false sense of security it creates. When concerns were raised about WiseTech’s founder-CEO Richard White’s behaviour, the response was notably dismissive, suggesting people should exercise “founder empathy” and accept such behaviour as characteristic of “genius”. Let’s not get started on the billions of excuses that are made for bad behaviour, but instead focus on the clear lessons for any business, regardless of size:
Recognise key person risk as a serious threat and implement strategies like cross-training, succession planning, and robust systems that reduce over-reliance on any single individual.
And always, always be aware of the creeping crisis. One of the greatest myths in crisis management is that it’s the urgent overnight crisis that ends a reputation or a business. It almost never is; it’s the one that has been swept under the rug for so long that the business loses its footing.
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Sally Branson Dalwood is the director of Sally Branson Consulting, founder of The Suite Set and co-founder at FOMO Alerts.
