dr. william h. glick
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Plenary Session Three. Thought Leadership on Risk and Change. Dr. William H. Glick Dean and H. Joe Nelson III Professor of Management at the Jesse H. Jones Graduate School of Business Rice University. Perfect Storm. Is the current storm good or bad for your firm?. - PowerPoint PPT PresentationTRANSCRIPT
Dr. William H. GlickDean and H. Joe Nelson III Professor of Management at the Jesse H. Jones Graduate School of Business
Rice University
Dr. William H. GlickDean and H. Joe Nelson III Professor of Management at the Jesse H. Jones Graduate School of Business
Rice University
Thought Leadership onRisk and ChangeThought Leadership onRisk and Change
Plenary Session ThreePlenary Session Three
Perfect Storm
Is the current storm good or bad for your firm?
36%
64%
1. Good
2. Bad
Returning to Normal Profits
Are you trying to be the first in your sector to return to normal profitability?
73%
27%
1. Yes
2. No
Silver Lining in Storm Cloud
“Watch out for emergencies. They are your big chance.”
Fritz Reiner
Symphonic Conductor
Don’t waste a crisis
"Never let a serious crisis go to waste…it's an opportunity to do things you couldn't do before.”
Rahm Emmanuel
White House Chief of Staff
Crisis is an Asset
“When you have a crisis, the crisis itself becomes one of your biggest assets … Everyone gets very modest and humble and listens. If you need to do rough things, you do rough things.”
Carl-Henric SvanbergPresident and CEO of Ericsson Incoming Chairman of BP
Crises Force Us to Think
" Crises and deadlocks … have at least this advantage, that they force us to think.”
Jawaharlal Nehru
First Prime Minister of India
Academic Perspective
“There is no crisis to which academics will not respond with a seminar.”
Old saying
Crises Stimulate Change
Photocopies
Paperback Books
Jet Engine
Television
Great Depression
Crises Stimulate Change
Great Depression
Car Radio LSD
Dot.Bomb
iTunes 99¢ Solution
Crises Stimulate Change
Reinvention as Competency
•Seismic Exploration to Submarine Detection
•Cell Phones to Embedded Processors
Capacity to Change
Confronting Change
Mergers National Oil Companies
What happens to you?
Disrupted or Disruptive Innovator?
How can you survive and thrive as the change leader?
Unfreeze
Move
Refreeze
Simple Model of Change
Unfreeze
Challenge of Change
• Knowing when to change
•Challenging beliefs
Supply Chain Volatility Amplification:“The Bullwhip Effect”
Customer Retailer Distributor Factory Tier 1 Supplier
Information lagsDelivery lagsOver- and under orderingMisperceptions of feedbackLumpiness in orderingChain accumulations
SOLUTIONS:Countercyclical MarketsCountercyclical TechnologiesCollaborative channel mgmt. (Cincinnati Milacron & Boeing)
Equipment
Source: Fine, MIT
Feeling the Crack of the Whip
Are you on the wrong end of the bull whip?
48%
52%
1. Yes
2. No
Scapegoats
Is Scapegoating effective?
13%
87%
1. Yes
2. No
Unfreezing Beliefs
• Lead, follow, or get out of the way
• We have a winning team, but game has changed
• Compelling case for action/ burning platform
• Reframing context as opportunity rather than a threat
Opportunities for Change
Move
• Creative exploration
• Thriving on knowledge of others
• Crafting a vision
• Communicating a vision
Refreeze
Reinforcing Change
• Small wins
• Positive reinforcement
• Creating heroes
Unfreeze
Move
Refreeze
Simple Model of Change
Which Crisis?
Which crisis will give you the greatest opportunity?1. Access to reserves (4)
2. Uncertain energy policy (6)
3. Price volatility (new)
4. Cost containment (3)
5. Worsening fiscal terms (2)
6. Human capital deficit (1)
7. Climate & environmental concerns (8)
8. Competing services from IOCS & OFS (new)
9. Supply shocks (9)
10. Aging infrastructure (new)
2009 (2008) Ernst & Young Business Risk Report – Oil & Gas
Legacy of 1980’s
Lessons from the past• Dramatic down-sizing• Inability to predict long-term prices• Bullwhip effects on supply chain• Talent supply chain
Rebuilding Talent Supply
• Executive Education• Executive, Professional, and Full-time
MBAs• Undergraduates• K-12 focus on science and math
Energy at Rice
• Center for Energy Education & Leadership• Jones Graduate School of Business
• Rice MBA concentration in energy management• Fulbright & Jaworski Energy Director’s Conference• Energy Finance Forum
• Baker Institute for Public Policy• Richard E. Smalley Institute for Nanoscale Science
& Technology /AEC• Rice’s Energy & Environmental Systems Institute
Conclusion
• Strategic change starts with an idea
• The winner in the next decade will be the smartest investor, not the first to turn a profit