The art of quantum planning applied to the building industr. july 2010 sv
 

The art of quantum planning applied to the building industr. july 2010 sv

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Stale Ideas, conformity and lack of imagination stymie strategic [planning. Here, Gerald Harris uses seven concepts from quantum physics to pry open minds, eradicate unhealthy groupthink, spur ...

Stale Ideas, conformity and lack of imagination stymie strategic [planning. Here, Gerald Harris uses seven concepts from quantum physics to pry open minds, eradicate unhealthy groupthink, spur creativity, and revitalise strategic planning.

Demonstrates how seven concepts from quantum physics can inspire new solutions to strategic planning problems

• Offers real-world examples of these ideas in action in a wide range of settings

• Includes exercises and detailed practical advice for applying these ideas in your organization

Planning today is plagued by a lack of imagination. It’s often difficult, when working with a business, organization, or any group of people, to upend traditional thinking and unlock new ideas and new possibilities. If you are a strategic planner, or anyone charged with managing growth or facilitating change, it is important to add to your arsenal tools that will allow you to break unhealthy groupthink, avoid old patterns, and escape narrow safe zones. In The Art of Quantum Planning Gerald Harris takes seven concepts from the scientific study of tiny particles and applies them in the larger world, showing how they can pry open minds, spur creativity, and make the planning process far more innovative and effective.

The dual nature of light—it can be both a wave and a particle—serves as a jumping-off point for a discussion of how either-or thinking can limit our sense of what options are open to us. Heisenberg’s Uncertainty Principle, which says we cannot know both the position and the speed of an electron, reminds us that it is impossible to be aware of every variable, and so planning must be a learning process that continually incorporates new information and makes adjustments. Harris explains quantum concepts in layman’s language and, using real-world examples, gives practical advice on applying the ideas in actual planning situations—including improving techniques for scenario analyses that help managers function in an uncertain business environment.

This approach demands an open mind and a willingness to venture into unexplored territory—also keys for effective leadership. Using the lessons provided as triggers for thinking The Art of Quantum Planning will help readers to a more profound understanding of how to create successful strategies.

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The art of quantum planning applied to the building industr. july 2010 sv The art of quantum planning applied to the building industr. july 2010 sv Presentation Transcript

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    Towards The Art of Quantum Planning Applied to the Building Industry Dr. Llewellyn B. Lewis July 2010
    • THE STRATEGIC FORUM
    • A place of assembly
    • for strategic conversations
    THE STRATEGIC FORUM www.strategicforum.co.za
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    THE ART OF QUANTUM PLANNING www.strategicforum.co.za
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    THE ART OF QUANTUM PLANNING www.strategicforum.co.za My core belief about what makes for quality strategic planning is to have a learning-oriented approach. Planning is a way for an organization to learn its way forward and compete more effectively by making quality decisions. (Gerald Harris: The Art of Quantum Planning: 2009) “ We understand that the only competitive advantage the company of the future will have is its managers’ ability to learn faster than their competitors.” (Arie P. de Geus, “Planning as Learning” Harvard Business Review, March–April 1988)
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    THE ART OF QUANTUM PLANNING www.strategicforum.co.za At the end of 2008 and early months of 2009, the world economy was going through economic turmoil that is being compared to the Great Depression of the 1930s. The economic stress is the result of a host of factors, including bad lending practices in mortgage markets, the creation of complex and hard-to-value financial instruments (known as derivatives), plain old fraud (the Bernard Madoff investment scandal), and, from my point of view, poor strategic planning by the managers of some of the world’s biggest companies. (Gerald Harris: The Art of Quantum Planning: 2009)
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    Where we intended to go Found something better quicker Missed it completely Events pushed us here on the way The uncontrollable factors in the environment and in our organizations lead to different results What we expect versus what happens THE ART OF QUANTUM PLANNING www.strategicforum.co.za (Gerald Harris: The Art of Quantum Planning: 2009)
  • How do we end up somewhere we had no intentions of going?
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    Political Change Social Change Economic Shifts Environmental Issues Technological Change Demographics Financial Markets New Values THE ART OF QUANTUM PLANNING www.strategicforum.co.za (Gerald Harris: The Art of Quantum Planning: 2009)
    • Ways to get out of unhealthy group-think, old patterns, and safe comfort zones
    • New models and metaphors for thinking about how the organization can grow and adjust to uncertain developments and new opportunities
    • Ways to bring the whole person into planning and creative work
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    Do we need any more evidence than today’s headlines? What Needs Improvement in Strategic Planning? THE ART OF QUANTUM PLANNING www.strategicforum.co.za (Gerald Harris: The Art of Quantum Planning: 2009)
  • Why better planning can be found in ideas from Quantum Physics
    • Quantum physics is the study of the structure of the universe as a whole system starting from the tiniest particles (light photons, electrons, etc).
    • Planning involves thinking systemically , framing ideas, and using models and metaphors to improve understanding.
    • By nature human beings draw from nature and many other fields of activity to create meaning.
    • Powerful ideas and models for thought exist in quantum physics and can be translated and used to help find meaning in other areas of human endeavor.
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    THE ART OF QUANTUM PLANNING www.strategicforum.co.za (Gerald Harris: The Art of Quantum Planning: 2009)
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    Quantum Physics Quantum Ideas and Metaphors Creative Thinking Metaphysics Strategic Planning Organizational Design &Development Study how the universe works Take some good ideas on structure and flow to open thinking and drive creativity Turning ideas into creative and innovative services and products Bring in information on key aspects of the business: markets, technology, competition, regulation, finances, economic issues Investment in Operations Decide how to combine people and physical assets into a productive system. Product or Service The core business learning loop The Pathway from Quantum Physics to Success in Business Strategy The core quantum thinking loop THE ART OF QUANTUM PLANNING www.strategicforum.co.za (Gerald Harris: The Art of Quantum Planning: 2009)
  • We Can Learn to Be More Creative from the Way the Universe Works!
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    • Seven Big Ideas
    • Non-Duality
    • Uncertainty and Positionality
    • Observation and Intention
    • Time and Space as Illusion
    • Many Worlds
    • Field of All Possibility
    • Everything is Energy
    Open Thinking Quality Questions Learning Creativity Innovation THE ART OF QUANTUM PLANNING www.strategicforum.co.za (Gerald Harris: The Art of Quantum Planning: 2009)
    • Non-Duality (Thinking beyond duality)
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    Idea in Quantum Physics Quantum Idea Translated for Planning & Creativity Light has the properties of both a particle and a wave. It is both and can display the properties of both. Depending on your point of observation it can be one or the other. We must see things and ideas for what they are and the direction they are moving. The needs and desires of a customer can be both discrete and continuous. The purpose of the organization can be very specific and multi-faceted. An event in the business environment can mean more than one thing depending on the point of view from which it is observed. THE ART OF QUANTUM PLANNING www.strategicforum.co.za (Gerald Harris: The Art of Quantum Planning: 2009)
    • Non-Duality (Thinking beyond duality)
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    Idea in Quantum Physics Quantum Idea Translated for Planning & Creativity Light has the properties of both a particle and a wave. It is both. Avoid over-simplified thinking. Beware of positionality – taking a position, holding to it, and arguing from it as if it were the absolute truth. THE ART OF QUANTUM PLANNING www.strategicforum.co.za Mortgage Bonds: Defined as Debt (not Investment). Repayments not regarded as savings Household debt too high – therefore curtail mortgage loans Rental versus Ownership. A reinvented model required? Observing influences what is being observed. Property valuers appointed by Bank or Owner? Who pays the Piper? Banks through Valuers influence valuations – then report it and it becomes input thus confirming their point of view. Is it wise for Banks to report average House Prices? (Based on Gerald Harris: The Art of Quantum Planning: 2009)
    • Non-Duality (Thinking beyond duality)
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    Mortgage Bonds: Defined as Debt (not Investment) Repayments not regarded as savings Household debt too high – therefore curtail mortgage loans Rental versus Ownership. A reinvented model required? Observing influences what is being observed. Property valuers appointed by Bank or Owner? Who pays the Piper? Banks through Valuers influence valuations – then report it and it becomes input thus confirming their point of view. Is it wise for Banks to report average House Prices? Idea in Quantum Physics Quantum Idea Translated for Planning & Creativity Light has the properties of both a particle and a wave. It is both. Avoid over-simplified thinking. Beware of positionality – taking a position, holding to it, and arguing from it as if it were the absolute truth. THE ART OF QUANTUM PLANNING www.strategicforum.co.za International Housing Solutions managing partner Soula Proxenos says too many local property developers are holding on to old fashioned notions of Home Ownership. “ Given SA’s huge housing backlog and the lack of delivery to meet demand, I believe we have a great opportunity to provide both home ownership and rental options”. (Business Day, 14 July 2010). “ We cannot afford to rely on home ownership alone and in fact we do our fellow citizens a disservice if we rely on home ownership to solve the backlog.” (Soula Proxenos: Business Day, 14 July 2010). (Based on Gerald Harris: The Art of Quantum Planning: 2009)
    • Non-Duality (Thinking beyond duality)
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    Mortgage Bonds: Defined as Debt (not Investment) Repayments not regarded as savings Household debt too high – therefore curtail mortgage loans Rental versus Ownership. A reinvented model required? Observing influences what is being observed. Property valuers appointed by Bank or Owner? Who pays the Piper? Banks through Valuers influence valuations – then report it and it becomes input thus confirming their point of view. Is it wise for Banks to report average House Prices? Idea in Quantum Physics Quantum Idea Translated for Planning & Creativity Light has the properties of both a particle and a wave. It is both. Avoid over-simplified thinking. Beware of positionality – taking a position, holding to it, and arguing from it as if it were the absolute truth. THE ART OF QUANTUM PLANNING www.strategicforum.co.za According to the FNB Estate Agent Survey for the 2nd quarter of 2010, buy-to-let buying expressed as a percentage of total property buying reached a new low of 7%, down further from the previous quarter’s 9%. The buy-to-let percentage has slumped a long way since being estimated at around 25% back in 2004 at the peak of the residential boom. (John Loos, FNB Property Market Analytics, 14 July 2010). So where will the rental stock come from? The conventional Investment model must be challenged. Reinvention is required. (Based on Gerald Harris: The Art of Quantum Planning: 2009)
    • Non-Duality (Thinking beyond duality)
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    Idea in Quantum Physics Quantum Idea Translated for Planning & Creativity Light has the properties of both a particle and a wave. It is both. Avoid over-simplified thinking. Beware of positionality – taking a position, holding to it, and arguing from it as if it were the absolute truth. THE ART OF QUANTUM PLANNING www.strategicforum.co.za Mortgage Bonds: Defined as Debt (not Investment) Repayments not regarded as savings Household debt too high – therefore curtail mortgage loans Rental versus Ownership. A reinvented model required? Observing influences what is being observed. Property valuers appointed by Bank or Owner? Who pays the Piper? Banks through Valuers influence valuations – then report it and it becomes input thus confirming their point of view. Is it wise for Banks to report average House Prices? In the USA The Home Valuation Code of Conduct, adopted in May 2009 to ensure appraiser independence, bars mortgage brokers and bank loan officers from selecting appraisers. Mortgage brokers and realtors complain that the rules have produced low-ball appraisals that have blown up deals, while appraisers argue the change has harmed appraisal quality . (Jessica Holzer, WSJ, June 2010). (Based on Gerald Harris: The Art of Quantum Planning: 2009) So what is the response of the Building Industry? Does it accept the situation that the Banks have inordinate power and influence over the fortunes of the industry? Some PARADIGM REINVENTION IS REQUIRED.
  • 2. Uncertainty and Positionality (Inescapable uncertainty)
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    Idea in Quantum Physics Quantum Idea Translated for Planning & Creativity You cannot simultaneously know (measure) the speed and the position of an electron. The very process of measuring the speed or position affects the other. Uncertainty is inescapable. It is not possible to get all the information needed to make the exact right decision. Taking a position that any perspective is “right” is inherently limited by that subjective point of view. A shift in point of view changes what we can measure and see. No analysis can be complete or definitive because what something is now may not be what it is in the future. THE ART OF QUANTUM PLANNING www.strategicforum.co.za (Based on Gerald Harris: The Art of Quantum Planning: 2009)
  • 2. Uncertainty and Positionality (Inescapable uncertainty)
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    THE ART OF QUANTUM PLANNING www.strategicforum.co.za Idea in Quantum Physics Quantum Idea Translated for Planning & Creativity You cannot simultaneously know (measure) the speed and the position of an electron. There is NO WAY TO ESCAPE UNCERTAINTY in the business environment or marketplace. Assumptions and context should be vigorously CHALLENGED to support more open learning. Must there be NO RISK/UNCERTAINTY before the Banks lend? What are the Banks waiting for to increase lending? Certainty? Economic recovery? Consumer confidence? Have the Banks lost their appetite for LT lending? (Based on Gerald Harris: The Art of Quantum Planning: 2009)
  • 2. Uncertainty and Positionality (Inescapable uncertainty)
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    Must there be NO RISK/UNCERTAINTY before the Banks lend? What are the Banks waiting for to increase lending? Certainty? Economic recovery? Consumer confidence? Have the Banks lost their appetite for LT lending? THE ART OF QUANTUM PLANNING www.strategicforum.co.za Idea in Quantum Physics Quantum Idea Translated for Planning & Creativity You cannot simultaneously know (measure) the speed and the position of an electron. There is NO WAY TO ESCAPE UNCERTAINTY in the business environment or marketplace. Assumptions and context should be vigorously CHALLENGED to support more open learning. “ . . . They (the Banks) do hold the key to economic recovery and to the survival of small businesses. Although we are seeing the return of some stability in the market, there will be no real recovery until stable consumers can access credit.” (Bus. Report, 26 November 2009). (Based on Gerald Harris: The Art of Quantum Planning: 2009) More than 50 percent of home loan applications are still being declined despite many banks relaxing their credit criteria. (Business Report, 17 March 2010) So where will the development finance come from? The conventional Investment model must be challenged. Reinvention is required. Mortgage Advances in 2009 of R195 Billion in real terms was the lowest level since 1991. This compares with almost R502 Billion in 2006 (at 2009 values).
  • 2. Uncertainty and Positionality (Inescapable uncertainty)
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    Must there be NO RISK/UNCERTAINTY before the Banks lend? What are the Banks waiting for to increase lending? Certainty? Economic recovery? Consumer confidence? Have the Banks lost their appetite for LT lending? THE ART OF QUANTUM PLANNING www.strategicforum.co.za Idea in Quantum Physics Quantum Idea Translated for Planning & Creativity You cannot simultaneously know (measure) the speed and the position of an electron. There is NO WAY TO ESCAPE UNCERTAINTY in the business environment or marketplace. Assumptions and context should be vigorously CHALLENGED to support more open learning. Britain's economic recovery was at risk of being undermined by the lack of bank lending to businesses, Business Minister Vince Cable was quoted as saying yesterday. "We could have a second credit crunch if we don't get credit flowing, there is a real danger that growth in the economy could be undermined," Dr Cable said in an interview in the Independent on Sunday. (Business Day, 19 July 2010) (Based on Gerald Harris: The Art of Quantum Planning: 2009) The bankers have done it again. After almost destroying the economy and strangling small businesses by refusing desperately needed credit, they are now declaring record profits and are again enjoying giant bonuses. The Times, London ©, 10 August 2010)
  • 2. Uncertainty and Positionality (Inescapable uncertainty)
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    Must there be NO RISK/UNCERTAINTY before the Banks lend? What are the Banks waiting for to increase lending? Certainty? Economic recovery? Consumer confidence? Have the Banks lost their appetite for LT lending? THE ART OF QUANTUM PLANNING www.strategicforum.co.za Idea in Quantum Physics Quantum Idea Translated for Planning & Creativity You cannot simultaneously know (measure) the speed and the position of an electron. There is NO WAY TO ESCAPE UNCERTAINTY in the business environment or marketplace. Assumptions and context should be vigorously CHALLENGED to support more open learning. (Based on Gerald Harris: The Art of Quantum Planning: 2009) This leads to the third explanation for the paradox of financial affluence amid economic squalor. We rail against banks and bankers, but we need more credit to revive the economy. The more public spending is cut, the more urgently private bank lending is required. The banks, therefore, have society in a choke hold. The Times, London ©, 10 August 2010) What is needed is for regulators to suspend their normal rules and to encourage banks to take more risks – whereas the backlash against reckless casino banking has done the opposite. The Times, London ©, 10 August 2010)
  • 3. Observation and Intention (Intentions, Actions and Reality)
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    Idea in Quantum Physics Quantum Idea Translated for Planning & Creativity The probability of where a particle is gets reduced when we observe it. Our observation at the moment we make it and measure it is real. Other observations from other points of view are also real. Our observations and intentions are powerful and influence the reality we are observing. However, our intentions and observations do not cause a single reality. A different point of observation with different intentions can create a new reality. Intention must be paired with openness. THE ART OF QUANTUM PLANNING www.strategicforum.co.za (Gerald Harris: The Art of Quantum Planning: 2009)
  • 3. Observation and Intention (Intentions, Actions and Reality)
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    THE ART OF QUANTUM PLANNING www.strategicforum.co.za Idea in Quantum Physics Quantum Idea Translated for Planning & Creativity The probability of where a particle is gets reduced when we observe it. The intentions of the Organisation give focus to and influence events in the business environment.
    • Understand the context. Dig deep to unearth the dynamics.
    • The aversion against Low Cost Housing closes opportunity
    • The grass is greener offshore
    • The lack of trust (the golden triangle)
    • Set the intent. Work from the future backwards.
    • What is the Vision of the Building Industry? Is there a vision?
    • The success of the Soccer World Cup is a prime example.
    (Based on Gerald Harris: The Art of Quantum Planning: 2009)
  • 3. Observation and Intention (Intentions, Actions and Reality)
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    THE ART OF QUANTUM PLANNING www.strategicforum.co.za Idea in Quantum Physics Quantum Idea Translated for Planning & Creativity The probability of where a particle is gets reduced when we observe it. The intentions of the Organisation give focus to and influence events in the business environment.
    • Understand the context. Dig deep to unearth the dynamics.
    • The aversion against Low Cost Housing closes opportunity
    • The grass is greener offshore
    • The lack of trust (the golden triangle)
    • Set the intent. Work from the future backwards.
    • The success of the Soccer World Cup is a prime example.
    • What is the Vision of the Building Industry? Is there a vision?
    Minister Sisulu said the Department aimed to double delivery in the next two years from the 250000 annual delivery of houses to 500000, which is estimated to cost R345 Billion by 2014. (Business Day, 5 March 2009) (Based on Gerald Harris: The Art of Quantum Planning: 2009) So how will the Affordable Housing be delivered? The conventional Investment model must be challenged. Reinvention is required.
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    MIXED USE INTEGRATED DEVELOPMENTS: REINVENTED FUNDING MODEL DEVELOPMENT FACILITATION PROCESS Commitment and sustainability of Funds provide NEWCO with major Differentiating feature Newco can on-sell to Professional Managing Agent (e.g. JHC, Trafalgar) INVESTOR 20% BANK/S 70% FTHB BUY OR RENT OR RENT TO BUY (DEFERRED PURCHASE) FTHB Leveraged Venture Capital Funds provide potential for lowering Cost of Affordable Housing Finance Financial Charter (FSC) Points. Risk Sharing. Exit or re-mortgaging potential after second exit point. (Bankruptcy remote) DEVELOPER has potential to buy out Banks and Investor through re-mortgaging and to become Property Landlord at second exit point Contractor can focus on productivity and quality and is assured of timeous payment. DHS Vision of Sustainable Integrated Housing is achieved FTHB can develop credit rating to obtain mortgage for Home Ownership (Banks or NHFC) Exit at Second Exit Point with Funds recycled into other developments DEVELOPER 10% CONTRACTOR NEWCO INTEGRATED HOUSNG VENTURE CAPITAL FUNDS DHS INSTITUTIONAL SUBSIDY
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    This immediately raises the question of the future of SA housing and its underlying delivery and mortgage finance structure? The performance of Affordable Housing is a KEY UNCERTAINTY with very HIGH IMPACT. Following are ideas for the next 12 years. A futuristic outlook is informed by a scenario structure to think about this question and more importantly to raise deeper underlying questions which might help in the formulation of solutions and policy. THE ART OF QUANTUM PLANNING www.strategicforum.co.za
  • Key Drivers Shaping the SA Housing Market in the Future
    • SA economic growth (GDP growth)
    • Interest rates (monetary policy)
    • Housing backlog
    • Job growth (quality, quantity and location)
    • Growth in consumer spending/credit/mortgages
    • Government policy on housing finance/subsidies
    • Market and competitive structure in private/bank lending
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    This list is not exhaustive and can be added to by you as you think about this issue as well. THE ART OF QUANTUM PLANNING www.strategicforum.co.za
  • Key Drivers of Change and the Scenario Map
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    Nature of SA Economic Growth Nature of Mortgage Finance Investment in SA Nature of SA Economic Growth: How strong will growth be? What will it be driven by (consumer spending, government investment, trade growth, new technologically driven markets)? Nature of Mortgage Finance in SA: How and at what levels will long term private money come back into housing finance? How will government policy support housing (tax breaks, mortgage subsidies)? What institutional structure will emerge to support housing finance? THE ART OF QUANTUM PLANNING www.strategicforum.co.za (Based on Gerald Harris: The Art of Quantum Planning: 2009)
  • Drivers of Change and the Economic Scenario Map
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    Nature of SA Economic Growth Nature of Mortgage Finance Investment in SA Moderate Stable Slow Unstable Limited Substantial NOW 2Q 2010 Keynes was right Government to the Rescue Subsidies Infrastructure Friedman was Right SA Social Capitalism; Growth through Redistribution; The Golden Triangle. SA A Third World Country THE ART OF QUANTUM PLANNING www.strategicforum.co.za SA Social Democracy; Redistribution through Growth (Based on Gerald Harris: The Art of Quantum Planning: 2009)
  • Drivers of Change and the Housing Scenario Map
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    Investment Climate NOW, 2Q 2010 Muddling along as we are, or change . . . Government intervention, PPP’s; Subsidies, Infrastructure SA Social Capitalism; Growth through Redistribution; The Golden Triangle. SA Social Democracy ; Redistribution with Growth SA Communism; Redistribution with or without growth SA – A Third World Country 1. The High Road 2. Upper Middle Road 3. Lower Middle Road PROPERTY A POOR INVESTMENT / AVERAGE / GOOD / A PREFERRED INVESTMENT Paradigm Regression Paradigm Paralysis Paradigm Shift Paradigm Reinvention BOUYANT GROWTH > 5 % PA GDFI > 25 % OF GDP SUBSIDIES 3 - 5 % OF BUDGET AVERAGE GROWTH 2 - 5 % PA GDFI 20 - 25 % OF GDP SUBSIDIES 2 - 3 % OF BUDGET LOW GROWTH 0 - 2 % PA GDFI 15 - 20 % OF GDP SUBSIDIES 1 - 2 % OF BUDGET NEGATIVE GROWTH < 0 % PA GDFI < 15 % OF GDP SUBSIDIES < 1 % OF BUDGET NO CONFIDENCE LOW AVERAGE HIGH CONFIDENCE Risk Avoidance Risk Aversion Risk Tolerance Risk Taking Investor Confidence 4. The Low Road THE ART OF QUANTUM PLANNING www.strategicforum.co.za (Based on Gerald Harris: The Art of Quantum Planning: 2009)
    • THE HIGH ROAD (UBUNTU: Partners in Building South Africa): MEDIUM TO LOW PROBABILITY
    • Route 1 (The High Road) can be described as a type of SA Capitalism which recognises the responsibility of the rich helping the poor, but also acknowledges that this can only be achieved through economic growth . It is therefore based on the DUALISTIC principle of Growth through Redistribution and Redistribution through Growth
    • This is a world in which government policy accentuates competitive market solutions and they work. Policies that allow market-based solutions, though initially painful produce the quickest and most stable results. Real cost and values are allowed to play out. Innovation results and all forms of housing investment recovers on a base of sound private management.
    • This requires courageous political leadership based on an IGNITING VISION, a collaborative mindset and the PRODUCTIVE CAPABILITY to fund and build 5 million Affordable houses eliminating the housing backlog by 2020 and creating 300 000 new jobs annually.
    • The strategy for Sustainable Integrated Housing Settlements is visionary and achievable.
    • SA has demonstrated the productive ability to succeed through the Soccer World Cup and can continue to do so, provided all the resources of the GOLDEN TRIANGLE are deployed.
    • The rewards will be a healthy building industry acting as an engine for economic growth, wealth creation and nation building through home ownership, with SA a world model of a reconciled, winning Nation.
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    THE ART OF QUANTUM PLANNING www.strategicforum.co.za Description of Scenario Routes (Based on Gerald Harris: The Art of Quantum Planning: 2009)
    • THE UPPER MIDDLE ROAD (Long walk to freedom); MEDIUM TO HIGH PROBABILITY
    • Route 2 (The Upper Middle Road) can be described as a type of SA democracy verging on socialism.
    • There is a desire to uplift the populace through the provision of housing, health and education, but the low growth scenario results in increasing unemployment.
    • This is a world in which a balanced combination of government intervention and competitive market initiatives are put in place. This leads to a moderate return of private investment in long term housing finance by some institutions, but also buffers some of the harsh impacts of total free-market solutions.
    • Bubble-based economic growth is avoided but government spending and deficits remain an issue, with housing subsidies increasing steadily to 2020.
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    THE ART OF QUANTUM PLANNING www.strategicforum.co.za Description of Scenario Routes (Based on Gerald Harris: The Art of Quantum Planning: 2009)
    • THE LOWER MIDDLE ROAD (Pretoria will provide): HIGH PROBABILITY
    • Route 3 is a world of muddling along in which government policy accentuates affirmative action and BEE solutions with a result that the “rich get richer.” Social justice is part of core SA values but political will subverts application. Government focuses on PUNITIVE TAXES of the limited number of tax payers to fund spending. An expanded ghetto-ization of SA housing results.
    • It is characterised by an entitlement culture based on redistribution with or without growth and at any cost.
    • The entitlement culture is funded by the increasing tax BURDEN of the limited number of taxpayers in the country supporting a disproportionately large and growing army of dependents through social grants as well as huge subsidies for housing, health and education.
    • In the long run this scenario is unsustainable and the risk of deterioration to the Low Road is ever present. SA could continue muddling along with some half hearted attempts at cooperation between Government and the Private Sector and end up back where we are with SA failing to live up to its potential.
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    THE ART OF QUANTUM PLANNING www.strategicforum.co.za Description of Scenario Routes (Based on Gerald Harris: The Art of Quantum Planning: 2009)
    • THE LOW ROAD (Cry the beloved Country): MEDIUM TO LOW PROBABILITY
    • Route 4 (The Low Road) can be described as a type of SA Socialism verging on Communism with SA becoming a Third World POPULIST Country like Zimbabwe.
    • Corruption is out of control and housing delivery is almost non-existent and backlogs unmanageable.
    • The majority of people end up in unserviced squatter camp ghettos without any hope of home ownership.
    • The inability to deliver because of corruption, nepotism, cadre deployment, tender-preneurs, Affirmative Action and BEE results in the continued deterioration of Provincial and Local Government Services, infrastructure, health and education AND INCREASING HOUSING BACKLOGS.
    • The risks for endemic social unrest and violence increases progressively, and the environment will be supportive of populist leaders.
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    THE ART OF QUANTUM PLANNING www.strategicforum.co.za Description of Scenario Routes (Based on Gerald Harris: The Art of Quantum Planning: 2009)
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    THE ROLE OF AFFORDABLE HOUSING IN THE ECONOMY: 2009 www.strategicforum.co.za 5 Million houses built in next 12 years and Backlog eliminated by 2020. The target remains the eradication of all slums, or informal settlements, by 2014. For this to happen, some 500 000 new units a year must become available, according to the Department of Housing’s Strategic Plan 2008 to 2011.
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    *) Subsidy and stand included because affordability is determined in this way. Investment in Sustainable Integrated Housing Developments: 2009 www.strategicforum.co.za If the 5 million houses can be built in the next 12 years this will result in investment of R1,5 Trillion (land excluded). And . . . Create 300 000 additional jobs in the process.
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    Investment in Sustainable Integrated Housing Developments: 2009 www.strategicforum.co.za
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    Investment in Sustainable Integrated Housing Developments: 2009 www.strategicforum.co.za
    • Affordable Housing delivery is bedeviled by political and financial considerations.
    • Zuma’s Government has committed to “upgrading” informal settlements for 400 000 households by 2014 as a core outcome.
    • Of course this begs the obvious questions:
    • What about the commitment to eradicate squatter settlements by that time?
    • What are the subsidies then for?
    • This is the usual prevarication which successive Housing Ministers have been known for. It leads to confusion and lack of political will to solve the problem once and for all.
  • 3. Observation and Intention (Intentions, Actions and Reality)
    • BMI-BRSCU
    THE ART OF QUANTUM PLANNING www.strategicforum.co.za Idea in Quantum Physics Quantum Idea Translated for Planning & Creativity The probability of where a particle is gets reduced when we observe it. The intentions of the Organisation give focus to and influence events in the business environment.
    • Understand the context. Dig deep to unearth the dynamics.
    • The aversion against Low Cost Housing closes opportunity
    • The grass is greener offshore
    • The lack of trust (the golden triangle)
    • Set the intent. Work from the future backwards .
    • The success of the Soccer World Cup is a prime example.
    • What is the Vision of the Building Industry? Is there a vision?
    “ Basil Read had earmarked public-private partnership (PPP) projects totaling R45 billion in various industries for work that would be carried out over the next two years”, Marius Heyns, the chief executive of the listed construction firm, said on Friday.(Bus. Report, 15 March 2010) “ Basil Read’s goal was to become a R5bn plus group by 2010. With that goal firmly in sight, we have set a new target of becoming a global construction group with R10bn in turnover by 2013,” CEO Marius Heyns said. (Bus. Day, 19 April 2010) (Based on Gerald Harris: The Art of Quantum Planning: 2009) The importance of intent and Vision in achieving objectives is well proven . Who articulates the Vision for the Building Industry?
  • 4. Space and Time Illusion (Things and Order)
    • BMI-BRSCU
    Idea in Quantum Physics Quantum Idea Translated for Planning & Creativity Some particles can travel at greater than the speed of light and are not confined to time. Some properties of particles occur at faster than the speed of light in the universe so they happen in no time. The creative power of the universe is not limited by time. The universe can create without time as an essential ingredient. Perceptions about the past or the future are not limitations on creativity or what is possible. Any “this” before a “that” is only a perception from a particular point of observation, not reality. What can be created is not limited to a particular sequence that stands for all time. Something new can appear out of “nowhere” and change everything. THE ART OF QUANTUM PLANNING www.strategicforum.co.za (Gerald Harris: The Art of Quantum Planning: 2009)
  • 4. Space and Time Illusion (Things and Order)
    • BMI-BRSCU
    Idea in Quantum Physics Quantum Idea Translated for Planning & Creativity Some events in the Universe occur at speeds faster than the speed of light and are not confined to time in the sense of past or future. Change assumptions, add new observations and shift the point of view and another plausible sequence is possible. THE ART OF QUANTUM PLANNING www.strategicforum.co.za
    • Something can suddenly emerge at a time and place when it had not been there an instant before (The sub-prime crisis)
    • Acknowledging a locked-in position on a sequence can pinpoint where there may be big risks should it prove wrong (eg investment fund industry).
    (Based on Gerald Harris: The Art of Quantum Planning: 2009)
  • 4. Space and Time Illusion (Things and Order)
    • BMI-BRSCU
    Idea in Quantum Physics Quantum Idea Translated for Planning & Creativity Some events in the Universe occur at speeds faster than the speed of light and are not confined to time in the sense of past or future. Change assumptions, add new observations and shift the point of view and another plausible sequence is possible. THE ART OF QUANTUM PLANNING www.strategicforum.co.za
    • Something can suddenly emerge at a time and place when it had not been there an instant before (The sub-prime crisis)
    • Acknowledging a locked-in position on a sequence can pinpoint where there may be big risks should it prove wrong (eg investment fund industry).
    The Sub-Prime crisis is the name for what is a historic turning point in our economy and culture. It is at its core, the result of a speculative bubble in the housing market that began to burst in the United States in 2006 and has now caused ruptures across many other countries in the form of financial failure and a global credit crunch. (Shiller, Robert J. 2008 : 1) (Based on Gerald Harris: The Art of Quantum Planning: 2009)
  • 4. Space and Time Illusion (Things and Order)
    • BMI-BRSCU
    Idea in Quantum Physics Quantum Idea Translated for Planning & Creativity Some events in the Universe occur at speeds faster than the speed of light and are not confined to time in the sense of past or future. Change assumptions, add new observations and shift the point of view and another plausible sequence is possible. THE ART OF QUANTUM PLANNING www.strategicforum.co.za
    • Something can suddenly emerge at a time and place when it had not been there an instant before (The sub-prime crisis)
    • Acknowledging a locked-in position on a sequence can pinpoint where there may be big risks should it prove wrong (eg investment fund industry).
    The sub-prime loans in the US represent only 3% of total mortgage debt. In fact, when the IMF made its estimate of total US financial sector losses in its global financial stability report, it estimated that of total losses of $1,4-trillion, only around $150-billion could be traced to mortgages and only a fraction of that to sub-prime mortgages. So much for the idea that US sub-prime lending caused the crisis. It was merely the fuse that lit the bomb. The explosive was non-traditional lending outside the banking system, centering on securitization. (Dr. Vince Cable: The Storm: The World Economic Crisis and what it means: 2009) (Based on Gerald Harris: The Art of Quantum Planning: 2009) Scenario Planning and regular monitoring helps to prepare for events that can suddenly (or slowly) emerge.
  • 5. Many Worlds (Catalytic and Kaleidoscopic Thinking)
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    Idea in Quantum Physics Quantum Idea Translated for Planning & Creativity A different point of observing a particle can lead to different measurements of its position and different probabilities of its velocity. All the different measurements are real from their position of observation. Therefore there can be multiple realities. Perception about the business environment and events set context. Depending on the point of observation there can be multiple contexts; each one valid. Creativity and planning has to challenge all assumptions and “sacred cows” in the organization. Openness to different world views is required for more robust planning. THE ART OF QUANTUM PLANNING www.strategicforum.co.za (Gerald Harris: The Art of Quantum Planning: 2009)
  • 5. Many Worlds (Catalytic and Kaleidoscopic Thinking)
    • BMI-BRSCU
    Idea in Quantum Physics Quantum Idea Translated for Planning & Creativity A change in perspective changes the potential of what the organisation can become. Even one person “seeing it” might be sufficient. Competitors, regulators, customers and other stakeholders/outsiders may observe the same set of events and trends and draw very different, and equally valid, perceptions. THE ART OF QUANTUM PLANNING www.strategicforum.co.za (Based on Gerald Harris: The Art of Quantum Planning: 2009) Cement Statistics, perceived as collusion by the Competition Commission and an invaluable source of strategic information by the Industry; Mortgages seen as Debt; Rental seen as preferable to Ownership; Sub-prime seen as cause of financial crisis; Foreign ownership seen as a threat; Golf Estates seen as elitist and an environmental threat; Contrast between the Developer and Contractor Paradigms; World Cup seen as impossible;
  • 5. Many Worlds (Catalytic and Kaleidoscopic Thinking)
    • BMI-BRSCU
    Idea in Quantum Physics Quantum Idea Translated for Planning & Creativity A change in perspective changes the potential of what the organisation can become. Even one person “seeing it” might be sufficient. Competitors, regulators, customers and other stakeholders/outsiders may observe the same set of events and trends and draw very different, and equally valid, perceptions. THE ART OF QUANTUM PLANNING www.strategicforum.co.za Cement Statistics, perceived as collusion by the Competition Commission and an invaluable source of strategic information by the Industry; Mortgages seen as Debt; Rental seen as preferable to Ownership; Sub-prime seen as cause of financial crisis; Foreign ownership seen as a threat; Golf Estates seen as elitist and an environmental threat; Contrast between the Developer and Contractor Paradigms; World Cup seen as impossible; The possibility of a ban on foreign ownership of land in the country was raised earlier this month in the context of a resolution which will go before the African National Congress's (ANC's) national conference next month. The resolution calls for &quot;usage patterns in the country, especially the sale of land to foreigners, which leads to pricing beyond the reach of South Africans&quot; to be investigated. (Business Day, 14 November 2002) (Based on Gerald Harris: The Art of Quantum Planning: 2009)
  • 5. Many Worlds (Catalytic and Kaleidoscopic Thinking)
    • BMI-BRSCU
    Cement Statistics, perceived as collusion by the Competition Commission and an invaluable source of strategic information by the Industry; Mortgages seen as Debt; Rental seen as preferable to Ownership; Sub-prime seen as cause of financial crisis; Foreign ownership seen as a threat; Golf Estates seen as elitist and an environmental threat; Contrast between the Developer and Contractor Paradigms; World Cup seen as impossible; Idea in Quantum Physics Quantum Idea Translated for Planning & Creativity A change in perspective changes the potential of what the organisation can become. Even one person “seeing it” might be sufficient. Competitors, regulators, customers and other stakeholders/outsiders may observe the same set of events and trends and draw very different, and equally valid, perceptions. THE ART OF QUANTUM PLANNING www.strategicforum.co.za (Based on Gerald Harris: The Art of Quantum Planning: 2009) ERWIN RODE: I would say that 99% of South African houses are not affected by foreign buying. (Moneyweb, June 2004) The ANC Youth League, becoming increasingly vocal and more controversial in its views, gives investors in South African residential property its blessing - provided they are not foreigners. This was the message from Floyd Shivambu, spokesperson for the ANC Youth League. (Realestateweb, 3 February 2010)
  • 5. Many Worlds (Catalytic and Kaleidoscopic Thinking)
    • BMI-BRSCU
    Cement Statistics, perceived as collusion by the Competition Commission and an invaluable source of strategic information by the Industry; Mortgages seen as Debt; Rental seen as preferable to Ownership; Sub-prime seen as cause of financial crisis; Foreign ownership seen as a threat; Golf Estates seen as elitist and an environmental threat; Contrast between the Developer and Contractor Paradigms; World Cup seen as impossible; Idea in Quantum Physics Quantum Idea Translated for Planning & Creativity A change in perspective changes the potential of what the organisation can become. Even one person “seeing it” might be sufficient. Competitors, regulators, customers and other stakeholders/outsiders may observe the same set of events and trends and draw very different, and equally valid, perceptions. THE ART OF QUANTUM PLANNING www.strategicforum.co.za (Based on Gerald Harris: The Art of Quantum Planning: 2009) According to Malema, &quot;we no longer want townships and rural areas, we want our people to live as equals. Where there is land for settlement, let's get that land for our people to settle.” … &quot;It doesn't matter where that land is located. If it is in the beachfront of Cape Town, let's use this land for the benefit of our people and let's not sell it to the foreigners.&quot; Malema insisted that &quot;we need a government that will say we're going to take this land then we will determine the price... take it, or leave it.” (F W De Klerk Foundation, 24 September 2010), 3 February 2010)
  • 5. Many Worlds (Catalytic and Kaleidoscopic Thinking)
    • BMI-BRSCU
    Cement Statistics, perceived as collusion by the Competition Commission and an invaluable source of strategic information by the Industry; Mortgages seen as Debt; Rental seen as preferable to Ownership; Sub-prime seen as cause of financial crisis; Foreign ownership seen as a threat; Golf Estates seen as elitist and an environmental threat; Contrast between the Developer and Contractor Paradigms; World Cup seen as impossible; Idea in Quantum Physics Quantum Idea Translated for Planning & Creativity A change in perspective changes the potential of what the organisation can become. Even one person “seeing it” might be sufficient. Competitors, regulators, customers and other stakeholders/outsiders may observe the same set of events and trends and draw very different, and equally valid, perceptions. THE ART OF QUANTUM PLANNING www.strategicforum.co.za (Based on Gerald Harris: The Art of Quantum Planning: 2009) And then Rudy Giuliani - you might remember, he was the man who made a name internationally after 9/11 in New York - he said that when he hosted Nelson Mandela in 1994 he was assured there by our former president that property rights and intellectual rights in South Africa would always be protected, and that there would never be nationalisation - which was a big issue at that time. (Alec Hogg, Moneyweb, 11 August 2010) The respect for Property Rights is fundamental for a healthy Building Industry . Who promotes these VALUES for the Building Industry?
  • 6. The Field of All Possibility (The Unified Field Theory)
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    Idea in Quantum Physics Quantum Idea Translated for Planning & Creativity Everything is connected to everything else in a unified field. The unified field balances weak and strong forces. The state of the field is not confined to time or a particular sequence and can change instantaneously. All that is possible is in the field. The field will always be in balance and change what needs to change to achieve it. Planning and creative activity have to be based on a shared understanding the interconnectedness of all and the infinite range of what is possible. What is possible in the market cannot be limited or controlled from any single position. All actions affect the market and cause reactions. Creative work must acknowledge both infinite possibilities and the requirement of balance. THE ART OF QUANTUM PLANNING www.strategicforum.co.za (Gerald Harris: The Art of Quantum Planning: 2009)
  • 6. The Field of All Possibility (The Unified Field Theory)
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    Idea in Quantum Physics Quantum Idea Translated for Planning & Creativity Everything is connected in a unified field and in balance. The totality of all the powers in the field causes all of existence to come into reality at any given moment. The entire company, its people, its products and services, its relationships – everything about it – are connected either weakly or strongly to everything in its business environment. THE ART OF QUANTUM PLANNING www.strategicforum.co.za The Building, Construction and Property Industry is a large, interconnected system of some R3000 Billion. It has critical mass, momentum and a future. Building and Construction activity amounts to R329 Billion annually. Total Mortgage Advances amount to R200 Billion annually (down from R450 Billion in 2007). Commercial property ownership amounts to R1,5 Trillion and Residential Property to R4,4 Trillion (land included). Total Mortgages outstanding amounts to R1000 Billion (2009). Employment provided for 1 million people. (Based on Gerald Harris: The Art of Quantum Planning: 2009) The role of the Building, Construction and Property Industry in the economy is without doubt . Who promotes the role of the Building Industry in the economy to Government?
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    BUILDING & CONSTRUCTION INVESTMENT R329,26 BILLION BUILDING INVESTMENT R151,99 BILLION CONSTRUCTION INVESTMENT R177,3 BILLION TOTAL MORTGAGE ADVANCES R195 BILLION RENTAL INCOME R34 BILLION ADDITIONS & ALTERATIONS R33 BI0. RES MORTGAGE ADVANCES R174,3 BILLION RENTAL INCOME R34,6 BILLION PUBLIC SECTOR NON RES BUILDING STOCK R577 BILLION FACILITIES MAN R58 BIO. PRIVATE SECTOR NON RES BUILDING STOCK R941,48 BILLION REFURBISHMENT R437 BI0. REFURBISHMENT R58 BIO. PRIVATE SECTOR RES BUILDING STOCK R4 369 BILLION COMMERCIAL MORTGAGE ADVANCES R20,5 BILLION THE ROLE OF BUILDING, CONSTRUCTION AND PROPERTY IN THE ECONOMY: 2009 www.strategicforum.co.za TOTAL MORTGAGES OUTSTANDING R1000 BILLION RES MORTGAGES OUTSTANDING R700 BILLION COMMERCIAL MORTGAGES OUTSTANDING R300 BILLION REFURBISHMENT R94 BIO. FACILITIES MAN R94 BIO. RENTAL INCOME R56,4 BILLION
  • 7. Everything is Energy! (Organisations as Energy Systems)
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    Idea in Quantum Physics Quantum Idea Translated for Planning & Creativity Everything in the Universe is composed of energy at its various levels. Energy equals matter vibrating at the square of the speed of light [E=mc(squared)] tell us that all matter is composed of energy vibrating at various levels m=E/c(squared). Our organizations and businesses are composed of energy - they are alive. The assets (mass) of our organizations have to be used in a high vibration manner to create the energy that gives our organization life. The ease of use and accessibility of the value our organizations deliver sets the vibration level. THE ART OF QUANTUM PLANNING www.strategicforum.co.za (Based on Gerald Harris: The Art of Quantum Planning: 2009)
  • 7. Everything is Energy! (Organisations as Energy Systems)
    • BMI-BRSCU
    Idea in Quantum Physics Quantum Idea Translated for Planning & Creativity Everything in the Universe is composed of energy. The frequency or vibration level of the energy makes a difference in the form a particular thing takes. The organisation has energy. It is alive and should be viewed as such. The energy level can rise and fall and affect the state of the organisation. It is based on the ideas, values and culture of the organisation. THE ART OF QUANTUM PLANNING www.strategicforum.co.za The Building, Construction and Property Industry is a POTENTIAL HOTSPOT. An igniting Vision of Building as an Engine for growth and wealth creation and property a preferred investment, combined with a collaborative culture and a cooperative mind-set, cross boundary networking and the productive capability CAN make South Africa a Winning Nation. And a repetition of the sub-prime crisis will not catch a cooperating industry unawares. (Based on Gerald Harris: The Art of Quantum Planning: 2009)
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    Productive capacity Alliances, Joint Ventures Cross functional Networking Enterprise Development, BEE Skills Training and Development Leadership, Lobbying, Advocacy Modeling cooperative behaviour REINVENTION The Hot Spot Scenario: mapping emergence (Based on Gratton: 2007: 145) Building: The Engine for Growth and Wealth Creation. Property a preferred investment Management Training and Development BUSINESS Government Labour THE ART OF QUANTUM PLANNING www.strategicforum.co.za
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    Productive capacity Alliances, Joint Ventures Cross functional Networking Enterprise Development, BEE Skills Training and Development Leadership, Lobbying, Advocacy Modeling cooperative behaviour REINVENTION The Hot Spot Scenario: mapping emergence (Based on Gratton: 2007: 145) Building: The Engine for Growth and Wealth Creation. Property a preferred investment Management Training and Development BUSINESS Government Labour THE ART OF QUANTUM PLANNING www.strategicforum.co.za The GOLDEN Triangle It’s BUSINESS that creates Economic Stability, not the Government. It’s BUSINESS that generates the wealth and the value that enable Government to invest in other areas. (Allan Leighton on Leadership: 2008: xxv) Government must create the climate conducive to investment and promote growth through countercyclical investment in infrastructure, housing, health and education. At the Brait Debate, Gordhan made a similar plea for a reinvention of how we view ourselves in relation to our country and each other. Calling for humility and self-awareness, he called for “a new engagement of the issues in a constructive national spirit”. (Bus. Day, 10 June 2010)
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    GFCF R540,6 BILLION (22% OF GDP) BUILDING INV. R115.47* BILLION (21.4% OF GFCF) CONSTR. INV. R177,3 BILLION (32,8% OF GDFI) GDP R2494 BILLION GOVERNMENT BUDGET R739 BILLION (30% OF GDP) TRANSFER DUTY R8- R9 BILLION PA FTHB SUBSIDIES (1,9% OF BUDGET = R13,8 BILLION) (230 000 HOUSING UNITS) INVESTMENT IN AFFORDABLE HOUSING (R200 BILLION 2010-2020) RESIDENTIAL AND NON RES BPP AND BUILDINGS COMPLETED (BC) PRIMARY AND SECONDARY PROPERTY MARKET R195 BILLION PA MORTGAGE ADVANCES PA R1000 BIO MORTGAGES O/S LISTED PROPERTY SECTOR MARKET CAPITALISATION R98 BILLION ANNUAL HOUSING NEED (POP. GROWTH ONLY) 250 000 INTEGRATED HOUSING EMPLOYMENT IN BUILDING & CONSTRUCTION > 1 000 000 PEOPLE * When the UNRECORDED Home Improvement is taken into account Building Investment = 28% of GFCF PROPERTY OWNERSHIP ENGINE FOR GROWTH AND WEALTH CREATION R4,5 TRILLION RES PROPERTY R1,5 TRILLION NON RES PROPERTY URBAN HOUSING BACKLOG 1,5 MILLION UNITS IN 2009 GOVERNMENT INFRASTRUCTURE SPEND (R852,5 BILLION 2010-2020) THE ROLE OF BUILDING, CONSTRUCTION AND PROPERTY IN THE ECONOMY: 2009 www.strategicforum.co.za
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    RESIDENTIAL INVESTMENT R59 340 MILLION CURRENT REALITY OF BUILDING & CONSTRUCTION: 2009* CURRENT REALITY: BUILDING & CONSTR: 2009 BUILDING & CONSTRUCTION INVESTMENT R329 259 MILLION BUILDING INVESTMENT R151 988 MILLION CONSTRUCTION INVESTMENT R177 271 MILL CONTRACTOR (50,8%) R66 905 MIO SUBCONTRACTOR (49,2%) R64 798 MIO LABOUR (40%) R131 704 MIO DIRECT TO USER (40%) R79 022 MILLION MATERIAL (60%) R197 555 MIO INDIRECT VIA DISTRIBUTION (60%) R118 533 MILLION LARGE IND BUILDERS MERCHANT (10%) R19 756 MILLION LARGE CHAIN BLDRS MERCHANT (25%) R49 389 MILLION HYPERMARKET/SUPERMARKET (5%) R9 878 MILLION SPECIALIST SHOP (5%) R9 878 MILLION LOCAL HARDWARE STORE (15%) R29 633 MILLION RESIDENTIAL INVESTMENT R12 775 MILLION NON RESIDENTIAL INVESTMENT R56 125 MILLION UNRECORDED ADDITIONS AND ALT’S INVEST** R36 523 MILLION * 2009 Prices ** Residential and Non Residential
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    The High Road Scenario will not require a major miracle to be realised. But . . . Political will and Leadership is essential. THE ART OF QUANTUM PLANNING www.strategicforum.co.za
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    Stage 1 Hubris born Of success Stage 2 Undisciplined Pursuit of More Stage 3 Denial of Risk and Peril Stage 4 Grasping for Salvation Stage 5 Recovery and Renewal WELL FOUNDED HOPE STRATEGIC DRIFT AND REINVENTION www.strategicforum.co.za ? What will it take? (Source: Based on Collins: How the Mighty Fall: 2009)
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    STRATEGIC DRIFT AND REINVENTION www.strategicforum.co.za Can the Building Industry TRANSFORM and REINVENT itself – can it recover?
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    STRATEGIC DRIFT AND REINVENTION www.strategicforum.co.za It will FUNDAMENTALLY depend on the strategy of the FINANCIAL INSTITUTIONS.
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    Low High POWER INTEREST (STAKE) UNAFECTED STAKEHOLDERS Low High PLAYERS Demand creators Future oriented Proactive Innovative Entrepreneurial Risk Takers RESERVES Demand Responders Current orientation Reactive Responsive Service oriented Risk Managers ONLOOKERS Demand observers Past orientation Passive Risk Avoiders REFEREES Demand Facilitators Current orientation Reactive Responsive Mediating Gatekeepers Risk Averse BYSTANDERS ACTORS Building Industry Stakeholder Analysis STRATEGIC DRIFT AND REINVENTION www.strategicforum.co.za
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    Low High POWER LEVEL OF INTEREST (STAKE) UNAFECTED STAKEHOLDERS Low High PLAYERS Committed In the Know RESERVES Involved Keep Informed CROWD Interested Minimal Effort REFEREES Concerned Keep Satisfied BYSTANDERS ACTORS Building Industry Stakeholder Analysis STRATEGIC DRIFT AND REINVENTION www.strategicforum.co.za
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    STRATEGIC DRIFT AND REINVENTION www.strategicforum.co.za INTEREST (STAKE) UNAFECTED STAKEHOLDERS Low High BYSTANDERS ACTORS Low High POWER PLAYERS Property Entrepreneurs, developers, Public Sector, FINANCIAL INSTITUTIONS (Mortgage Origination, Approval, Advances) RESERVES Architects, Specifiers, Manufacturers, Distributors, Contractors, FINANCIAL INSTITUTIONS Deposits, Repayments, Insurance) CROWD Labour, Unions, Consumer bodies, FINANCIAL INSTITUTIONS (Property Values, Property reports (HPI), Statistics) REFEREES Govt Prov-, Local-Authorities, CIDB, NHBRC, SABS, Agrement Board, MBA’S, SARB, State Tender Board, FINANCIAL INSTITUTIONS (Valuations, LTV ratios, Mortgage Rate, term, Affordability) Building Industry Stakeholder Analysis Financial Institutions have INORDINATE Power and Interest. They play in all the quadrants of the Stakeholder Matrix and are SIMULTANEOUSLY PLAYERS, RESERVES, REFEREES and CROWD . They make the rules of the game and influence every facet of it.
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    How can we create an environment that gives us the leverage to influence the Financial Institutions? “ Are we making the same mistake again, not to see a crisis in the making?” Relationships and tools that can be used to manipulate a crisis have to be prepared for years – sometimes decades – in advance. This reflects (Holling’s) belief that in a changing eco system the persistence of relationships matters more than anything else. That’s a reason that the re-acquiring of habits of international cooperation in everything from food aid to nuclear energy is so essential. It lets us begin to rebuild the webs of contacts, influence, and leverage to shape the environment around problems that we’ll never be able to attack directly. (Ramo: 2009: 214) STRATEGIC DRIFT AND REINVENTION www.strategicforum.co.za
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    STRATEGIC DRIFT AND THE PROPERTY BUBBLE www.strategicforum.co.za The decline in Total Mortgage Advances was a massive R246,5 Billion . . . . 4 Times the size of annual New Residential Building Construction!
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    STRATEGIC DRIFT AND THE PROPERTY BUBBLE www.strategicforum.co.za The decline in Total Mortgage Advances was a massive R246,5 Billion . . . . 4 Times the size of annual New Residential Building Construction! Did the Banks lose their appetite for long-term “Debt”?
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    Building Industry Stakeholder Analysis Low High POWER INTEREST (STAKE) UNAFECTED STAKEHOLDERS Low High PLAYERS Property Entrepreneurs, Property developers, Public Sector, Building Industry RESERVES Architects, Specifiers, Manufacturers, Distributors, Contractors, Financial Institutions, Building Industry CROWD Labour, Unions, Consumer bodies, Building Industry REFEREES Govt, Provincial, Local-Authorities CIDB, NHBRC, SABS, Agrement Board, MBA’S, SARB, State Tender Board, Building Industry BYSTANDERS ACTORS Think “outside the box”. Change the “rules of the game”. Become a PRO-ACTIVE PLAYER in each of the quadrants of the Stakeholder Matrix. How can we create an environment that gives us the leverage to influence the Banks? STRATEGIC DRIFT AND REINVENTION www.strategicforum.co.za
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    STRATEGIC DRIFT AND REINVENTION www.strategicforum.co.za Building Industry Stakeholder Analysis Low High POWER INTEREST (STAKE) UNAFECTED STAKEHOLDERS Low High PLAYERS Property Entrepreneurs, Property developers, Building Industry (Mortgage Origination, Approval, Advances) RESERVES Architects, Specifiers, Manufacturers, Distributors, Financial Institutions. Building Industry (Contractors, Deposits, Repayments, Insurance) CROWD Labour, Unions, Consumer bodies, Building Industry (Property Values, Property reports (HPI), Statistics) REFEREES Govt, Prov-, Local-Authorities CIDB, NHBRC, SABS, Agrement Board, MBA’S, SARB, State Tender Board, Building Industry (Valuations, LTV ratios, Mortgage Rate, term, Affordability, Quality) BYSTANDERS ACTORS Develop an Igniting Vision and a Grand Strategy: Promote Building as the engine for growth, nation building and wealth creation through Property Ownership.
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    STRATEGIC DRIFT AND REINVENTION www.strategicforum.co.za Every American President including George Bush promoted Home Ownership Who promotes Home Ownership and Property as a preferred Investment in South Africa?
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    STRATEGIC DRIFT AND REINVENTION www.strategicforum.co.za Is this the NEXT STEP for SA? Geithner is leading the Obama administration’s effort to develop a housing finance strategy by January next year, “ We need to delineate more clearly the public policy goals of how best to promote reasonably priced and stable mortgage costs for most Americans from how best to provide access to affordable housing for lower-income Americans.”
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    STRATEGIC DRIFT AND REINVENTION www.strategicforum.co.za “ Fixing this system is one of the most consequential and complicated economic policy problems we face as a country,” Mr Geithner said. “This is a test for Washington. The stakes are high. The housing industry supports millions of jobs. For many Americans, their home is their largest financial asset.” The system’s size and complexity mean that a wrong move by the Obama administration could restrict credit, drive down home prices, increase foreclosures and slow the economy, housing advocates and industry participants say. “ It’s like building an aeroplane while you’re still flying it,” said David Ledford, senior vice-president of mortgage finance at the National Association of Home Builders in Washington. Housing investments and related services account for 15% of gross domestic product, according to the group, ranking the industry second to healthcare.
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    • The Major GAMEBREAKING POTENTIAL lie in the following areas:
    • An igniting vision of nation-building through home-ownership, property as a preferred investment and building as an engine for growth and wealth-creation;
    • Interest Rates falling further by 2-3 percentage points;
    • The Banks relaxing their stringent lending criteria and promoting Home Ownership as an Engine for Growth and Wealth Creation;
    • Return of Investor Confidence, Banks first and then Consumers;
    • Property a preferred Investment. (Source: BMI-BRSCU)
    STRATEGIC DRIFT AND REINVENTION www.strategicforum.co.za
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    STRATEGIC DRIFT AND REINVENTION www.strategicforum.co.za
    • The Major GAMEBREAKING POTENTIAL lie in the following areas:
    • An igniting vision of nation-building through home-ownership, property as a preferred investment and building as an engine for growth and wealth-creation;
    • Interest Rates falling further by 2-3 percentage points;
    • The Banks relaxing their stringent lending criteria and promoting Home Ownership as an Engine for Growth and Wealth Creation;
    • Return of Investor Confidence, Banks first and then Consumers;
    • Property a preferred Investment. (Source: BMI-BRSCU)
    Retail Motor Industry chief executive Jeff Osborne is calling on South Africa’s banks to open the credit taps and on government to play its role by reducing the prime interest rate by a meaningful 2 percent. (Bus. Report, 26 November 2009) “ . . . They (the Banks) do hold the key to economic recovery and to the survival of small businesses. Although we are seeing the return of some stability in the market, there will be no real recovery until stable consumers can access credit.” (Bus. Report, 26 November 2009)
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    STRATEGIC DRIFT AND REINVENTION www.strategicforum.co.za Brian Joffe, CEO of Bidvest, the R112 Billion annual turnover company employing some 105 000 people recently stated that much more must be done to stimulate the economy and to promote growth. “ The lending criteria of the Banks are hopelessly too strict. It makes it very difficult for the economy to grow. Interest Rates are also too high. It must reduce and then things will happen. The Government must become more aggressive (in promoting growth).” (Sake24, 7 March 2010)
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    In order to achieve the VISION FOR THE BUILDING INDUSTRY SYSTEM a collaborative culture is required based on trust and cross boundary networking and dynamic Public, Private Sector Partnerships that can deliver on Infrastructure, Housing, Health, Education, Safety and Security et al and make South Africa a Winning Nation and a World model of Nation Building and Reconciliation. (Source: BMI-BRSCU) STRATEGIC DRIFT AND REINVENTION www.strategicforum.co.za
    • BMI-BRSCU
    We have concluded that it is not one single body or institution or company that should develop and drive an igniting vision for the building industry. The industry COLLECTIVELY must take ACCOUNTABILITY to develop an igniting vision of Nation Building through Home Ownership, Property as a Preferred Investment and Building as an Engine for Growth and Wealth Creation. We envision that every major organisation in the Building Industry from Development to Manufacturing, to Distribution, to Contracting and Finance should adopt this overarching vision and customise it for their own vision . Then the Building and Property Industry will indeed become a HOT SPOT industry driven by an igniting vision, a collaborative mind-set, cross boundary networking and the productive capability to make South Africa a Winning Nation. Then a repetition of the sub-prime crisis will not catch a cooperating industry unawares. THE ART OF QUANTUM PLANNING www.strategicforum.co.za
    • BMI-BRSCU
    NATIONAL ISSUES GROWTH WEALTH EMPLOYMENT PROPERTY ORGANISATION’S ROLE INVESTMENT ENVIRONMENT MARKETING LOGISTICS VISION Building is the engine for growth and wealth creation through Property Ownership and THE ORGANISATION is the preferred Partner for good as the green BUILDING solution of choice. MANUFACTURING BUILDING INDUSTRY A FORCE FOR GOOD REINVENTION Doing well while doing good. YESTERDAY’S ECONOMY TOMORROW’S ECONOMY NARROW FOCUS ON COMPANY BROAD FOCUS ON CONTRIBUTION TO NATIONAL ISSUES Overarching vision aligned with National Issues, adapted and customised by the organisation for their own vision and values. THE ART OF QUANTUM PLANNING www.strategicforum.co.za MISSION Developing and growing competitive awareness, knowledge and support of PRODUCTS and maintaining consistent standards in the environmentally friendly production of PRODUCTS for good value and performance in building.
    • VALUES
    • The Organisation has an igniting vision, a culture, or mind set of co-operation, collaboration and cross-boundary networking; and a production capability to facilitate delivery of fit for purpose products and solutions and based on the unashamedly ethical values and code of conduct of:
    • Respect
    • Responsibility
    • Honesty
    • Integrity
    • Accountability
    • Collaboration
    BORROW BUY BURN ENVIRONMENTAL SUSTAINABILITY SOCIAL SUSTAINABILITY ECONOMIC SUSTAINABILITY Social development and equity, economic growth and financial performance, and environmental conservation and protection (the triple bottom line) are at the core of sustainability. And sustainability is at the heart of corporate social responsibility . To mainstream sustainability, leaders will need to drive corporate social responsibility out of the sphere of corporate affairs, risk, compliance and philanthropy, and into the domain of corporate vision, strategy and overall corporate thinking and behaviour.