crisis and opportunity thrasyvoulos loukas (akis), eleni thalassinou, tobias lensker, martin...
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Crisis and Opportunity
Thrasyvoulos Loukas (Akis),Eleni Thalassinou, Tobias Lensker,Martin Dimmler, Tobias Friedrich
Virtual organizations in a dynamic contextToon Abcouwer & Bas Parson
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Agenda
Crises: opportunities for change
Real life examples
How can it be done? Lessons from the theory
Translation in terms of the adaptive cycle model
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Wise men said…
In a crisis, be aware of the danger, but also recognize the opportunity.
- John F. Kennedy
We are continuously faced by great opportunities brilliantly disguised as insoluble problems.
- Lee Iacocca
The pessimist sees difficulty in every opportunity. The optimist sees opportunity in every difficulty
- Winston Churchill
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Some etymology
The word crisis comes from the Greek “κρίσις”, meaning “choice” or “decision.”
Only two options:
1. either we remain inert and lament our sad fate when crises eventually overtake us
2. or we mobilize our resources, change, become creative, and make decisions
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The value of innovation
http://www.youtube.com/watch?v=BpZt_ar_8IM
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The old school approach
Seek golden recipes
Avoid crisis – Even deny its existence!
Secure stability
Ignore threats - tunnel vision
Ostrich algorithm in action
Crisis management in a static way
Crisis descriptors inappropriately focusing on:Homeostasis,Equilibrium,And, static developmental notions of crises…
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But is denial really an option?
http://www.youtube.com/watch?v=juLcLxVoOac
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New ways of thinkingSwift in the way we view crisis.
Acknowledging the inevitability of crisis step towards the right direction.
Next step: find opportunity in crisis
It has been done in the past.
…Opportunities within crisis, real life examples.
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Crisis at a national level
Argentine economic crisis 1999
By 2002 GDP growth had returned, surprising economists and the business media.
Military dictatorship’s legacy
severe economic problems
Hyperinflation, corruption, riots
Crisis as a chance for change
Wealth redistribution
Emerge of cooperatives
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Crisis as an opportunity at politics - USA
President Franklin Roosevelt uses the great recession of1930s to bring a new economic agenda.
1973 Arab-Israeli shocks the Middle East status quo: President Jimmy Carter completes the historic Camp David peace accords between Egypt and Israel.
Crisis creates a sense of urgency. Actions that once appeared optional suddenly seem essential. Moves that might have been made at a leisurely pace are desired instantly.
Crisis opportunity for Obama. Plans for an activist government agenda given a boost by crisis atmosphere.
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“Never waste a good crisis”
Rahm Emanuel, Mr. Obama's
former chief of staff
http://www.youtube.com/watch?v=_mzcbXi1Tkk
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Crisis as an opportunity for a local business1993: Jack in the box restaurants – USA’s fifth
largest hamburger chain.
Bacteria epidemic kills 4 children and 600 more report sick…
Crisis-management absent – managers literally burst into tears hearing the news.
Microbiologist David Theno becomes vice president. This leads to the first HACCP program, ensuring the safety of food at every point.
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Crisis as an opportunity for a local business
Entire new food cooking system in place and rapid change at every level.
"It wasn't just for show. It's a different mindset. I think everyone realizes that we needed to overhaul our procedures but more importantly how we thought about our customers. It's like a whole new company with a new culture, a new self-image.”
Took them only 2 years to bounce back. Nowadays 2200 stores. Plans to expand worldwide.
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First commercial after the outbreak – mindset shift
http://www.youtube.com/watch?v=zGeUl7h5Kcc
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“The Toyota Way” Since 1937, more than rich history.
Able to overcome and even thrive through crises, including the Oil Crisis(1970s), the Recession (2008) and the Recall Crisis (2009).
Main axis: respect for people and continuous improvement.
5 principles
1. Challenge
2. Kaizen (improvement)
3. Genchi Genbutsu (go and see)
4. Respect
5. Teamwork
To see how they made it
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The NYPD case - 1994 Double challenge: reduce crime within the city
and fight internal corruption
NYPD was homeostatic at equilibrium phase but without seizing any benefits
Harlem Mosque incident: Muslim activists hold hostages two police officers.
Chance to broadcast the message that ‘law and order will be enforced”.
“revolution in blue”
CompStat Software
Bratton’s Strategy: putting NYPD in disequilibrium to break its resilience stage that had neutralized all the previous reform initiatives and then rebuilding a new system.
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France 1999 – The BNF caseBibliothèque Nationale de France - 7.2 billion FF project
“Driven by ‘technical arrogance’, a direct consequence of its political arrogance!” (CEO’s words)
Super sophisticated IS is implemented without asking the librarians.
Result: General strike for many months
Management decision uses the strike to put the project back on track through a new participative strategic plan.
The crisis gave the project the resilience it never had saving a huge investment from certain failure.
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But is it easy to find opportunity in a crisis?
http://www.youtube.com/watch?v=Mw266W5dXpI
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So, how can it be done?There are no recipes
but there is relevant theory.
Models, frameworks etc.
Here we make a selection of useful material taken from separate scientific fields.
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Since there are people advertising it…Consultancy firm Price Waterhouse Cooper
“Identify opportunities offered by the crisis to achieve significant changes that bring lasting value to your organization, such as process efficiency improvements, enhancement of governance and control structures and sharpening your risk management capabilities.”
Four steps function:
1. Acknowledge the crisis
2. Communicate
3. Take control
4. Use the pain for future gain
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Step 4:Use the pain for future gainSee the big picture, chance for major
transformations.
In crisis nothing is a taboo.
Rebuild to the latest standards.
Capitalize on the cost.
“Radical Surgery” approach: a crisis can only be a symptom: find the cause, all that is wrong and eradicate it.
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The Bounce model – Sam Cawthorn
1. Crisis: Uncover all the aspects of the problem, try to fix it.
2. Downturn: This is the point of make or break. Crucial time for tough decisions.
3. Bounce: Things will begin to turn around. Most trying time, lowest point of the circle.
4. Opportunities: Time to act; things are looking up and more and more opportunities are coming as you continue to create and innovate.
5. Bounce Forward: It’s not about bouncing back from the crisis, it’s about being the thought leader and enjoying the rewards of coming through the Bounce Cycle.
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The Bounce model is based on five principles
Principle 1 – Crisis Moments Create Opportunity
Principle 2 - Focus on causes not symptoms
Principle 3 - Holding Hands in Traffic
Principle 4 - Bouncing forward not back
Principle 5 - Different problem different thinking
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Crisis management framework - Ian Mitroff 1993
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Learning - MitroffReflection and critical examination, lessons learned Many organizations do not since “only reopens old
wounds.”Reverse has been found in those organizations that
integrate lessons learned into their crisis management process.
"no fault learning”: without assigning blame (except in cases of malfeasance) so that all pertinent information -both positive and negative- can surface.
Focus on improving future capabilities and fixing current problems
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Crisis Types - Mitroff
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Preventative Actions - Mitroff
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Archetypal Stakeholders within a crisis - Mitroff
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Crisis Life-Cycle Model – Harvard 2005
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Leadership Strategies
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Crisis as an opportunity for leadership
A difficult and illusive key to leadership is creating enough disequilibrium to keep the organization in the learning zone but out of danger.
During the emergency phase, leaders have a small window of opportunity.
“there is nothing ideal or good about a state of equilibrium …
…achieving adaptive change probably requires sustained periods of disequilibrium.” Ronald A. Heifetz
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What you could also do… or another life cycle “model”:
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So, change is critical but are people willing to change?
http://www.youtube.com/watch?v=9qZofcaI5U8
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Linkage with the Adaptive Cycle of Resilience
Crisis can be a chance to realign:1. Reevaluate what you want2. Challenge what you can do 3. Rediscover what you need
desirablenecessary ac
hieva
ble
Optimum would be one overlapping circle
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Linkage with the Adaptive Cycle of Resilience
At the equilibrium quadrant there is no room for opportunity.
Running on the right hand side of the model provides room for innovation and change.
The crisis quadrant is associated with high danger but also with opportunity to evolve, change mindsets, perform Gestalt switches etc.
Opportunity is high
Certain room for
opportunity
Little space for
opportunity
Almost no opportunity
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Linkage with the Adaptive Cycle of Resilience
The key point is to take advantage of the revolt force.
Make use of the modern meaning of the term “creative destruction”.
This transition gives room for experimentation, revolution, major change.
But as mentioned before danger is real and this is not easy to ignore…
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Leadership can make the difference… To operate at the right side of the model successfully
you need managers that are:
Systemic, functional, integrative, interdependent, existential, flexible, questioning, accepting and most of all creative.
In terms of the Spiral Dynamics theory you need people that mainly belong to the yellow color.
“Wave Riders are curious people possessed of an innate capacity to go with the flow, constantly seizing upon opportunity when others see no possibility, or even
disaster.”
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And something to close with: “Crisis is good!”
http://www.youtube.com/watch?v=1guZfD0tBts
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References Pearson, C., & Mitroff, I. (1993). From crisis prone to crisis
prepared: a framework for crisis management. The academy of management executive, 7(1), 48–59. Retrieved from http://www.jstor.org/stable/4165107
Co, V. S. (2004). Crisis and Opportunities THOUGHTS AND LESSONS, (January). Retrieved from http://scholar.google.com/scholar?hl=en&btnG=Search&q=intitle:Crisis+and+Opportunities+THOUGHTS+AND+LESSONS#9
Mead, S. (2001). Crisis as an Opportunity for Growth and Change, (September), 1–3.
Get up to speed presentation price waterhouse cooper retrieved from https://www.pwc.com/en_GX/gx/consulting-services/pdfs/get_up_to_speed.pdf
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References continuedBraden, V., Cooper, I., & Klingele, M. (2005).
Crisis--A Leadership Opportunity. Retrieved from http://oai.dtic.mil/oai/oai?verb=getRecord&metadataPrefix=html&identifier=ADA477120
Liker, J., & Orden, T. (2011). Toyota under fire: Lessons for turning crisis into opportunity. Retrieved from http://scholar.google.com/scholar?hl=en&btnG=Search&q=intitle:UNDER+FIRE+LESSONS+FOR+TURNING+CRISIS+INTO+OPPORTUNITY#0
http://www.openspaceworld.com/waveriders.htm
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Thank you for your attention!
Any questions?