Surviving the crisis - a visual summary

GenesisManagement Consulting Surviving and thriving in the global economic crisis Decisions, strategy and leadership.GenesisManagement Consulting

GenesisManagement Consulting Surviving and thriving in the global economic crisis Decisions, strategy and leadership. In the latter half of 2011, a small global group of experts formed part of a digital workshop to consider the types of challenges that individuals and organisations face when taking strategic decisions in the current global economic crisis. The objective is to provide some actionable advice for people who are looking for ways to lead their organisation through the challenge and to grasp the new opportunities that always abound in such environments. Executive Summary Results of an expert panel survey Research driven by THOUGHTstreamGenesisManagement Consulting

The one page summary … now read on for further details Fundamental Massive Global economic Political Increasingglobal changes uncertainty power shifts maneuvering unemployment The result Shorter time- Reduced risk Internal Financial Haphazard frames tolerance focus conservatism response Impact on Challenges to intuitive Challenges to analytical Decision styledecision making approach approach changes requiredAdvice from the On: On: On: Expert Panel Decision making Strategy Leadership Process Careful Flexibility in Positive vision in place framing strategy Know External Challenge Personal what you views assumptions commitment know Use Holistic, Innovate and Communicate available systems disrupt widely tools view

The impact of the crisisGenesisManagement Consulting

The impact of the crisis: massive uncertainty The major impact of the economic crisis has been one of leaving individuals, organisations and governments facing massive uncertainty – with the majority of people insufficiently prepared or lacking the experience to handle this uncertainty. Massive uncertainty Uncertain demand Changing consumer spending patterns Economic uncertainty (all levels) John Gilbert’s sculpture of “symbol of uncertainty”GenesisManagement Consulting

The impact of the crisis: global economic power shift Global economic power shifts Acceleration of growth differentials eg BRICS and developed economy Economic and power eg Northern and Southern EuropeGenesisManagement Consulting

The impact of the crisis: political maneuvering Political maneuvering Government and business Political parties Left versus right Nation states Unions and State Regulators and everyone!GenesisManagement Consulting

The impact of the crisis: increasing unemployment (not universal) A vicious cycleDebt to unemployment to debt!GenesisManagement Consulting

How business has respondedGenesisManagement Consulting

Business response: shortening time-frames Shorter time-frames Shortening time-frames: Planning Decision-making Strategy OperationsGenesisManagement Consulting

Business response: reduced risk tolerance Increased risk sensitivity Reduced risk tolerance Less long-term investments More short-term actions (eg cut R&D spend)GenesisManagement Consulting

Business response: increased internal focus Increased internal focus Controllable items Cost cutting Fixed costs to flexible costsGenesisManagement Consulting

Business response: cash hoarding and financial conservatism Hoarding cash Reduced funding available, so .. Holding on to cash Conservative use of cash Slow creditors paymentsGenesisManagement Consulting

Business response: increased regulations of financial services Increased FSI regulations Financial services regulations Capital requirements and risk Separating investment business Bonuses and pay structures Forced mergersGenesisManagement Consulting

Business response: haphazard response to the crisis Haphazard response to a range of pressures React to symptoms Non systemic reaction Fire-fighting Patching the leaksGenesisManagement Consulting

Impact on decision typesGenesisManagement Consulting

Impact on decision types: highly analytical approach Decision styles are stressed within the economic crisis… Data dependent Changing, complex environment – what are “the facts”? Fundamental changes taking place Time-consuming Advice: “Know what you know; and know what you don’t know”GenesisManagement Consulting

Impact on decision types: intuitive approach Decision styles are stressed within the economic crisis… Intuition = judgment + experience Relevancy of experience Past patterns offer no clues Unforeseeable events Blurred border between emotions and intuition Advice: “Don’t confuse intuition with emotion”GenesisManagement Consulting

Surviving and thriving in the crisis: critical success factors Decision making Strategy LeadershipGenesisManagement Consulting

Decision making in the crisis: decision making process Robust decision making processCrisis decision making process in place before decisions are necessary Steps Information Who’s involved Final judgmentGenesisManagement Consulting

Decision making in the crisis: framing the decision Clarity on decision boundaries Frame the decision correctly What are the boundaries? What are we not deciding? Example: Are we deciding on making a potential acquisition? OR Are we deciding whether acquisition is the correct strategy?GenesisManagement Consulting

Decision making in the crisis: systemic view of the context Take a holistic and systemic view of the context What are the issues? How are they inter-related?What are the consequences of action? How will players react?GenesisManagement Consulting

Decision making in the crisis: know what you know Know what you know; and know what you don’t know. “There are known knowns. These are things we know that we know. There are known unknowns. That is to say, there are things that we now know we don’t know. But there are also unknown unknowns. These are things we do not know we don’t know.” United States Secretary of Defence Donald Rumsfeld What are the boundaries of our knowledge? Are there critical unknowns? Are “the facts” really “the facts”GenesisManagement Consulting

Decision making in the crisis: get external views Seek external and different views The executive do not know everything! Distributors, regulators, consultants,experts, salesmen, machine operators, customers …. all may enrich the perspective.GenesisManagement Consulting

Decision making in the crisis: use tools and technologies Use available tools and technology Decision process facilitation Data analytic tools Thinking-support toolsGenesisManagement Consulting

Strategy in the crisis: build in flexibility Create flexibility in your strategy Options thinking Recognise the decision sequence Scenario analysis Bayesian analysisGenesisManagement Consulting

Strategy in the crisis: challenge assumptions Challenge assumptions and the status quo Separate assumptions from facts Understand your mental models Recognise which changes are fundamental and which are cyclicalGenesisManagement Consulting

Strategy in the crisis: innovate and disrupt Change + technology = opportunity Be opportunity seeking Challenge existing business models Encourage innovation Stimulate creativity Experiment and prototypeGenesisManagement Consulting

Leadership in the crisis: promote a positive vision Promote a positive vision Maintain an optimistic perspective Do NOT hide from the facts Paint a picture of the future The crisis will endGenesisManagement Consulting

Leadership in the crisis: commitment to values Demonstrate a personal commitment to values and ethics Share the pain Demonstrate own commitment Lead by exampleGenesisManagement Consulting

Leadership in the crisis: support and align Support and alignAlign activities, incentives and performance No room for passengers Remain human Support the “survivors” Genesis Management Consulting

Leadership in the crisis: communicate widely Communicate widely in all directions Share the risks and difficulties Encourage two-way communication Keep all stakeholders informedGenesisManagement Consulting

Summary and conclusion Detailed report available at Genesis web-site On decision making  Ensure a robust strategic decision-making process  Take care to frame the decision correctly  Hold a systems view of the context and issues  Understand what is known and unknown  Get external inputs  Use the available tools and technologies On strategy:  Develop flexible strategies that are opportunity-seeking.  Challenge assumptions and status quo  Innovate and disruptOn leadership: Promote a positive vision Demonstrate personal commitment to values and ethics Communicate widely in both directionsGenesisManagement Consulting

Take a step back … Are you doing all you can to survive the crisis? Have you given enough thought to the opportunities that are present? Speak to us at Genesis Management Consulting about how we might help you to take a few days away from “the frontline” and really work out how your organisation is going to SURVIVE and THRIVE in the global economic crisis.GenesisManagement Consulting

Benefits of the workshop Survive Motivate Communicate Show leadership Increase range of inputs Take back control of your destiny Find the new opportunities Obtain commitment Look externally Risk test ThriveGenesisManagement Consulting

GenesisManagement Consulting For further information, contact: Simon Gifford email: sgifford@genesis-esp.com web: www.genesis-esp.com blog: www.genesismc.co.uk/blog Madrid Office: Calle Concepción Jerónima, 22 London Office: Falcor House Madrid 28012 68 Crockford Park Road Madrid Addlestone, Surrey, KT15 2LU Spain United Kingdom Telephone +34 607950562 Telephone +44 7914622467GenesisManagement Consulting

Research methodology A global expert panel was compiled and, through the use of a web-based software tool over a period of 6 weeks, an interactive workshop was held. The panel was asked to (independently) list the key issues around strategic decision making under the current crisis conditions. These ideas were shared, grouped and converged into themes. Finally, the panel prioritised the issues in terms of importance. The members of the panel were selected on the basis of their experience in decision-making and their general business experience. Furthermore, to achieve diversity in responses, they were chosen from different geographic locations: United Kingdom, Spain, Israel, Thailand, United Arab Emirates, South Africa and the USA. Their names and roles appear on the page that follows. A web-based, facilitation tool (THOUGHTstream) was used to manage the process of input collection, issue grouping, convergence, prioritization and reportingGenesisManagement Consulting

Expert panel Name Organisation Address Keith Ten Brook Decision Innovation, USA Keith.tenbrook@decisioninnovation.com Bill Cabiro Strat-Wise Consulting, USA Bill.cabiro@gmail.com Thomas L. Doorley Sage Partners, USA Tdoorley@sagepartners.net Gary DeGregorio Decision Innovation, USA Gary.degregorio@decisioninnovation.com Nicky Bicket The Katale Partnership, UK Nbicket@katale.co.uk Eulogio Naz SCS (and others), Spain Eulogionaz@gmail.com Jenny Sutton RfP Company, Asia Jenny@rfpcompany.com David Brock Ben Gurion University, Israel; Dmb.ios@gmail.com Oxford Said, UK Ianna Contardo SP Jain Centre of Management, UAE Ianna.contardo@spjain.org Rhonda Stewart Stratfund Consulting, SA Rhonda@stratfund.co.za Goodnews Cadogan Village Leadership, SA Goodnews@villageofleaders.com Project directed by Simon Gifford of Genesis Management Consulting LimitedGenesisManagement Consulting

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Surviving the crisis - a visual summary

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