Transcript Diapositiva 1 - Adaptive Cycle

Virtual organizations
in a dynamic context
Toon Abcouwer & Bas Parson
Crisis and Opportunity
Thrasyvoulos Loukas (Akis),
Eleni Thalassinou, Tobias Lensker,
Martin Dimmler, Tobias Friedrich
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 thinking
 Swift 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”
http://www.youtube.com/watch?v=_mzc
bXi1Tkk
Rahm Emanuel,
Mr. Obama's
former chief of
staff
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Crisis as an opportunity for a
local business
 1993: 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.
13
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 case
Bibliothèque 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 gain
 See 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 - Mitroff
 Reflection 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
locked in the comfort zone keep their values, culture, or operating paradigm static in
relation to the ever-changing environment.
Crisis Life-Cycle Model –
Crisis Life-Cycle Model
Harvard 2005
Danger Zone
Disequilibrium
(Stress or Chaos)
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B
Maximum Amount of Stress an
Organization Can Tolerate
System
Stress Level
A
Learning Zone
Comfort Zone
Preparation
Phase
Emergency
Phase
Time
Adaptive
Phase
Minimum Amount of Stress
Required for Change
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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 want
2. Challenge what you can do
3. Rediscover what you need
desirable
Optimum would be one overlapping circle
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Linkage with the Adaptive
Cycle of Resilience
Little space for
opportunity
Opportunity is
high
 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.
Almost no
opportunity
Certain room
for opportunity
 The crisis quadrant is
associated with high
danger but also with
opportunity to evolve,
change mindsets, perform
Gestalt switches etc.
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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+LESSO
NS#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/consultingservices/pdfs/get_up_to_speed.pdf
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References continued
 Braden, V., Cooper, I., & Klingele, M. (2005). Crisis-A Leadership Opportunity. Retrieved from
http://oai.dtic.mil/oai/oai?verb=getRecord&met
adataPrefix=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+TUR
NING+CRISIS+INTO+OPPORTUNITY#0
 http://www.openspaceworld.com/waveriders.ht
m
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Thank you for your
attention!
Any
questions?