Economic Policy - The Fountain of Change

Resource Book on Economic Policy & The Fountain of Change
Facilitator: Jan Nicolai Hennemann
Economic Policy
&
The Fountain of Change
Resource Book
(Draft Version)
Name: ______________

Welcome!
This booklet was developed during the last two years.
This course connects principles of economic policy to the origin of development and progress: crisis.
Therefore, this lecture is designed in a workshop format providing theoretical background information,
exciting cases, state of the art managing tools and last but not least enough time and space to practice
and hone your capabilities in an international environment.
On Day One we lay the foundations to this course and use the iceberg model of economic thoughts to
step into Case Clinic I.
On Day Two we connect core principles, key wording and stakeholders to different economic policies
and draft a plan to crisis communication.
On Day Three we drive into design work and prototyping to handle crisis you experience on your
environment and life.
On Day Four (exam day) you will present your own prototype on crisis management to your fellows
and close with a journaling exercise.
This class is designed to be a unique, fast moving learning experience and will be a lot of fun and your
feedback at the end of this class is highly appreciated to enhance the quality of this class for
prospective students.

Table of Contents
Welcome!...........................................................................................................................................2
Table of Contents................................................................................................................................3
Getting Started (Self) ..........................................................................................................................5
Crisis & Economics (other) ..................................................................................................................6
Introduction to Economic Policy..........................................................................................................7
Introduction to Crisis ..........................................................................................................................9
The Iceberg Model: Paradigms on Economic Thoughts......................................................................10
Listening...........................................................................................................................................11
Case Clinic.........................................................................................................................................12
Egypt ................................................................................................................................................13
Athens..............................................................................................................................................14
Greece..............................................................................................................................................15
Roman Empire..................................................................................................................................16
Room for Reflection..........................................................................................................................18
Economics Before the Industrial Revolution......................................................................................19
The Foundation of Classical Economics .............................................................................................20
Theories After the Industrial Revolution............................................................................................21
From Accumulation to Distribution ...................................................................................................22
The Great Crisis and the Theory of Keynes ........................................................................................23
Theories of Central Planning and the Socialist Crises.........................................................................24
From Keynesian Economics to Stagflation.........................................................................................25
Development, Collapse and New Theories........................................................................................26
Post 2008: Challenging the Foundations............................................................................................27
Crisis Management...........................................................................................................................28
Crisis Communication .......................................................................................................................29
Crisis Communication – DRAFT (Case Clinic 2)...................................................................................30
Reflection .........................................................................................................................................32
Design a Prototype ...........................................................................................................................33
Prototyping Worksheet.....................................................................................................................34
Presentation of Others......................................................................................................................36
Journaling.........................................................................................................................................37
Notes................................................................................................................................................38
Sources & Further Reading................................................................................................................39

DAY ONE

Getting Started (Self)
I am doing the EPP because:
My most important question right now is:
The level at which the content of the EEP may be relevant is (personal, professional, …):
The EPP will be a success for me when:

Crisis & Economics (other)
Think about a crisis situation… how does this situation impact the way how you deal with (financial)
things…?

Introduction to Economic Policy
The economic policy of governments covers the systems for setting levels of taxation, government
budgets, the money supply and interest rates as well as the labor market, national ownership, and
many other areas of government interventions into the economy.
Most factors of economic policy can be divided into either fiscal policy, which deals with government
actions regarding taxation and spending, or monetary policy, which deals with central banking
actions regarding the money supply and interest rates.
Such policies are often influenced by international institutions like the International Monetary Fund
or World Bank as well as political beliefs and the consequent policies of parties.
Economic policies of and within states are usually influenced by economic history and the history of
economic thinking. Economic events are necessary either to test or to inspire new economic theory
that sooner or later become economic policy – or just stays a theory. But the reverse is true, too.
When economic agents (e.g. politicians) take economic decisions they are (unconsciously) influenced
by (old) economic theory and may give birth to new economic theories by their policymaking.
Therefore, Economic theory and economic policy have an organic relationship.
Here are three examples for economic policies (in a nutshell):
· Keynesiansim was used to be the operational economic theory for post-war Western
Governments employing expansionary fiscal policies to face recessions
· Monetarism was in the 1980s the operational economic theory for the then Government in
UK and the Administration in the US. The aim was to strictly control the money supply in
order to fight inflation.
· Marxism was the organizational theory in the centrally planned economies, in which
decisions on setting prices were justified by appealing to the labor theories of value as
developed by its founders.
Later in this course we will have a deeper dive into the differing economic policies and their
characteristics.
Apart from economic policies as themselves it also seems interesting to get an idea on how economic
policies are implemented. Although, it is impossible at this point to identify all implementation
methods that have been around in the history of economics and policymaking we can categorize
them into four main approaches:
· Prescriptions include measures, laws, commands and rules devised to determine the
economic conduct of individuals and societies, but they lack of wider philosophical or
scientific foundation
· Descriptions include comments, thoughts and observations that are made by historians,
travelers, intellectuals or rulers themselves on various economic phenomena. More often
than not, they are a collection of unconnected essays rather than a coherent and integral set
of thoughts.
· Admonitions are a comprehensive combination of prescriptions and descriptions aiming to
influence decisions and guide behavior. The most famous example in admonitory political
philosophy is “The Prince” written by Nicoli Machiavelli in the 16th
century.

· Theories are the most integrated approaches on economic matters, by structuring their
principles in a systematic way and allowing their conclusions to be tested empirically so that
they can be used to explain and / or foretell economic developments.

Introduction to Crisis
There is no universally accepted definition of crisis. But you may note among the following
definitions many conceptual similarities even when the definitions are not exactly the same. The
definitions are given by will-known crisis experts and cover a wide range of disciplines, including
public relations, management and organizational communication:
Crisis is not a bad thing. It may be a radical change for good as well as bad.
Crisis are turning points in organizational life.
Crisis is an incident that is unexpected, negative and overwhelming.
Crisis is an event that is an unpredictable, major threat that can have a negative effect on the
organization, industry, or stakeholders if handled improperly.
A crisis is an interruption of normal business transaction and can sometimes threaten the existence
of the organization.
Crisis is a specific, unexpected and non-routine organizationally based event or series of events which
creates high levels of uncertainty and threat or perceived threat to an organization’s high priority
goals.
Crisis management can be defined as a set of factors designed to combat crisis to lessen the actual
damages inflicted. Moreover crisis management seeks to prevent or lessen the negative outcomes of
a crisis and thereby protect the organization, stakeholders, and / or industry from damage. One can
think of crisis management as a process with many parts, such as preventive measures, crisis
management plans, and post crisis evaluations. The set of factors that constitute crisis management
can be divided into three phases: pre crisis, crisis and post crisis.
Crisis communication embraces collection, processing and dissemination of information required to
address a crisis situation. In the pre-crisis phase, crisis communication revolves around collecting
information about crisis risks, making decisions about how to manage potential crisis, and training
people who will be involved in the crisis management process. The training includes crisis team
members, crisis spokespersons, and any individuals who will help with the response. Crisis
communication includes the collection and processing of information for crisis team decision making
along with the creation and dissemination of crisis messages to people outside the team (the
traditional definition of crisis communication). Post-crisis involves dissecting the crisis management
effort, communicating necessary changes to individuals, and providing follow-up crisis messages as
needed. Crisis communication is highly visible to stakeholders and usually reflect the quality of the
entire crisis management process.

The Iceberg Model: Paradigms on Economic Thoughts
Source: O. Scharmer, K. Kaufer, Leading from the Emerging Future
These are three icebergs. Only 10 percent of the iceberg is visible above the waterline. Usually the
outcomes of our current situation are visible and explicit parts of our reality. These outcomes can be
clustered into the ecological divide, the social divide and the spiritual, cultural divide.
The ecological divide deals with our consumption patterns. We live on one planet earth while we
leave an ecological footprint of 1.5 planets. We use 50 percent more resources than our planet can
regenerate.
The social divide means that two and a half billion people on our planet exists on less than USD 2 per
day. Additionally, the top 1 percent of planet earth’s population has a greater collective worth than
the entire bottom 90 percent.
The spiritual-cultural divide reflects the rapidly growing figures on burnout and depression, which
represent the growing gap between our actions and who we really are. According to the World
Health Organization (WHO) in 2000 more than twice as many people died from suicide as died in
wars.
Think about the different “bubbles” and “awarenesses” in the chart above. What do they mean for
you?

Listening

Case Clinic
Case Giver: Share your challenge that is current, concrete, and important, in which you happen to be
a key player. You should be able to present the case in 10 – 15 minutes and the case should stand to
benefit from the feedback of your peers. Include your personal learning threshold.
Coaches: Listen deeply. Do not try to “fix” the problem, but listen carefully to the case giver while
also attending to the images, metaphors, feelings and gestures that the story evokes in you. Suspend
your voices of judgement, cynicism etc.
Timekeeper: One of the coaches manages the time.
Step Time Activity
1 2 min Select case giver and time keeper
2 15 min Intention statement by case giver
Take a moment to reflect. Then clarify these questions:
· Current situation: What key challenge or question are you up against?
· Stakeholders: How might others view the situation?
· Intention: What future are you trying to create?
· Learning threshold: What do you need to let go of – and what do you
need to learn?
· Help: Where do you need input or help?
Coaches listen deeply and may ask clarifying questions (do NOT give advice!)
3 3 min Stillness
· Listen to your heart. Connect with your heart to what you’re hearing
· Listen to what resonates: What images, metaphors, feelings and
gestures come up for you that capture the essence of what you heard?
4 10 min Mirroring
Images (open mind), feelings (open heart), gestures (open will)
Each coach shares the images / metaphors, feelings and gestures that came up
in the silence or while listening to the case story.
Having listened to all coaches, the case giver reflects back on what s/he heard.
5 20 min Generative Dialogue
All reflect on remarks by the case giver and move into a generative dialogue on
how these observations can offer new perspectices on the case giver’s situation
and journey
Go with the flow of the dialogue. Build on each other’s ideas. Stay in service of
the case giver without pressure to fix of resolve his/her challenge.
6 8 min Closing Remarks
· By coaches
· By case giver
How do I now see my situation and way forward: What is clarified for
me (open mined)? How fo I feel now / how’s my energy (open heart)?
What actions will I take (open will)?
Thanks & acknowledgment: an expression of genuine appreciation to each
other.
7 2 min Individual journaling to capture the learning points.

Egypt
According to the biblical narrative the Pharaoh invited Joseph to interpret a strange dream he had.
Joseph foresaw the seven years famine that would follow. Subsequently the Pharaoh appointed
Joseph to become Head of Treasury and Joseph was responsible for the distribution of grain.
Therefore, Joseph organized a system of compulsory grain storage, imposing a tax of 20% of the grain
production. He also sent tax auditors to monitor production and collection.
New state silos were built to store the grain and during the high-time of the famine Joseph enforced
a system of food rationing. Since Egypt’s neighbours were not as prudent, they were soon begging to
buy grain from Egypt. Exports increased state revenue and influence abroad but reduced the
quantities available for the Egyptian population. Stocks were sold at very high prices.
When the famine came to an end the clergy and the Pharaoh had increased the amounts of land in
their property. The so developed state ownership of the agricultural economy required central
planning that is based on a huge bureaucracy. As a result the power of the Pharaoh decreased and
shifted into the hands of the clergy, the rising bureaucratic super-power. This bureaucratization had
its own price, as the operation of the Egyptian economy became less efficient the influence of Egypt
on the world eventually declined.

Athens
The famine in Egypt was a landmark in history and other states thereafter did their best to ensure
that it would be spared such a fate. In ancient Athens there were several periods of low grain
production, but the city never suffered a famine.
That was thanks to its ingenious and comprehensive system of supply and regulation in the grain
market ensuring that Athens was well supplied in normal times and sufficiently in times of hardship.
Most of Athen’s grain supplies came from its colonies. The supplier states were geographically
scattered, thus minimizing the risk of simultaneous destruction caused by an invasion or adverse
weather conditions. The Athenian fleet protected trade routes from pirates and often transported
the grain to Athens.
As in ancient Egypt, the grain was put by the merchants in large silos on the nearby port and then
transported to Athens supplying the grain dealers who sold it to the final consumers. It is interesting
to see how the market was organized and supervised. In order to avoid oligopolistic practices and
tamper with prices, grain dealers were not allowed to transport more than 50 baskets of grain per
day. It is notheworthy that, by doing this, Athens chose to regulate supply by imposing quantity
quotas instead of price caps, as the latter often leads to hoarding and smuggling.
The implementation of rules was the duty of the grain guards. In today’s words: the market
regulator. Penalties were severe and the public was anxious to see them punished. However, grain
dealers often spread false rumors that crops had withered or that the fleet transporting it to Athens
sunk, or that the merchandise was contaminated, in order to cause uncertainty regarding future
deliveries, fuel current demand and finally leading to rising prices.
In order to deal with these abusive practices, the Athenian state doubled the number of grain guards
and extended their powers.

Greece
In ancient Greece the monetary system was metallic and the exchange value of each currency
depended on the metal it was made of and its weight. The tetradrachm, a coin depicting Alexander,
circulated throughout his empire from India and Afghanistan to Egypt and Libya, was perhaps the
first international currency in history.
Money corrosion: besides mining, another – less costly – way to increase money supply was by
scrapping and collecting the fillings from the coins and amalgamating them with cheaper metals to
recast new ones with the same nominal value. Scrapping was the first recorded method of tampering
with the value of money and was a widespread practice, especially in periods when the state was in
great need of further resources.
But scrapping was not the only way to increase money supply. Episodes of bank crisis were not
uncommon in Athens as bankers were sometimes unable to return the deposits. A major scandal
erupted in the fourth century BC when deposits from the Temple of Athena given to bankers could
not be redeemed and the vault of the Temple was set on fire to destroy records of the transactions.
Solon’s debt forgiveness program was the first ever recorded incident of insider trading. Some of
Solon’s friends knew beforehand what would happened and rushed to get loans to buy land in
expensive areas. After the debt forgiveness law passed, they were also included in the debt
forgiveness program, keeping the land and becoming wealthy overnight. The incident naturally
caused a huge scandal and Solon himself was implicated by his political adversaries. Solon spent
many years in self-exile to Egypt.
When sovereign debt reached non-viable levels, ancient rulers would take measures that in essence
are not dissimilar to the policy responses during later crises. Another example is the case of Dionysius
of Syracuse. He invented a drastic method to pay back his debt. Therefore, he issued a decree that all
money in circulation had to be surrendered to him and then stamped the coins with twice the
original remuneration and gave half of them back, saying that they could be used at the new nominal
value. The other half was used to pay off his debts, effectively imposing a 50 percent cut at his
subjects’ real balances and purchasing power.

Roman Empire
The Roman Empire relied on slave labor. So there were almost no need for technical innovation.
Nevertheless, the recurrence of economic crisis exercised a constant pressure to improve policies
and institutions. As an example Caesar invented a scheme of financial support to save households
and banks when a real-estate bubble collapsed. Economic thinking was advanced in the Roman
Empire ranging from pragmatic rules on lending and profit to the concept of single tax and rules on
maximum prices in times of galloping inflation.
Especially the latter one gives a good example for abusive reactions: commodities priced above the
cap disappeared from normal transactions and traded in the black market. At the same time,
commodities priced below the ceiling skyrocketed, hitting purchasing power. Products were hoarded
by farmers and the grain trade collapsed.
On the other side Rome promoted military technology, invented multistoried buildings and
constructed imposing infrastructure such as aqueducts, sewage systems and international road links.
But no machines. At that time Hero of Alexandria invented a device known today as steam engine
that spins when heated. As there was no incentive to reduce labor costs there was no motivation to
foster the development of that machine. Hence, is was showcased on religious festivals, only.
Imagine you were present during that time: What challenges do you see? What makes you feel
uncomfortable?

DAY TWO

Room for Reflection

Economics Before the Industrial Revolution
At the dawn of the modern era, the combination of political liberties and rational thinking was quickly
undermining the dominance of religious doctrines and superstitions. Social order could not be any
more imposed by ruthless repression. Political philosophers set out to propose a new balance between
individuals and the state with various degrees of state empowerment and individual choice.
As deep conflicts of interest emerge among the protagonists of the new economic order, rival
economic theories are formed to defend them:
· Mercantilism supports the expansion of trade as the only means for a nation to accumulate
wealth.
· Physiocracy argues in favor of land owners and producers.
The ceaseless quest for overseas investment opportunities and the increasing availability of credit lead
to speculative bubbles and the outbreak of the first financial crisis. Governments are puzzled on
whether individual and collective interests can ever be compatible and new challenges open up for
economists.
Thomas Hobbes (1588 – 1678), John Locke (1632 – 1704), Jean Jacques Rousseau (… - …) and
Immanuel Kant (1724 – 1804) exercised significant influence on economic policy at that time – what
are the main characteristics?

The Foundation of Classical Economics
Three events in the late eighteenth century revolutionized the economic, sociopolitical and geopolitical
landscape worldwide: the Industrial revolution, the French Revolution and the Declaration of American
Independence.
The new horizons opened up by technological advances were combined with the unlimited potential
of trade and the search for a better life by previously oppressed populations. This development
alarmed rulers and posed new questions for economic thinkers. Answers they found differed across
countries.
On the eve of the industrial revolution, new economic theories were sought to displace mercantilism
and physiocracy. Instead savings and investment were promoted as main drivers for economic growth.
A combination of technological advance, market incentives and better institutions made England the
hotbed of the new age, leaving behind wealthier – yet dysfunctional and repressive – France.
Adam Smith provided a theory on how markets can ensure unhindered progress for the mankind,
laying the foundations for modern economic theory. Subsequently, Malthus warned on the limited
availability of resources and the risk of a society collapsing if population expansion is not checked.
Ricardo reaffirmed the potential of continuing growth if capital accumulation is freed from high land
rents and trade is liberalized so that each nation is specialized in its competitive advantage.
If the Industrial Revolution sprang out of the European state system – it did so – why did it occurred
in England but not in France?

Theories After the Industrial Revolution
The optimism of Adam Smithdid not exactly resonate withthe reality of markets. Persisting imbalances
between supply and demand quickly led to the first capitalist crisis. With falling profits, wages were
further squeezed and soon a new movement was born demanding better conditions for the working
class.
Two Germans interpreted the crises as a structural weakness of the capitalistic system that would
inevitably lead to its destruction. Building upon the Hegelian premises of historical phases, the newly
founded Marxist theory advocated a new economic order that eventually would replace markets and
ownership and uproot the profit mechanism for the benefit of the working class.
The second half of the nineteenth century is marked by the second wave of industrialization, deep
social divisions on how output is distributed and new monetary structures to achieve better
coordination worldwide. New schools of economic thought in Germany (Frankfurt) and Austria
(Vienna) disputed the prevalence of economic process and focus on the importance of history and the
actions of individuals as the engine of growth.
In the fast-rising US, economists search for how to stabilize wages and prices. Disapproving of the
unproductive wealthy classes, Veblen supported the new strata of engineers and managers as the
driving force towards more efficient production.
Explain to your fellows the views of Hegel and Marx, Frankfurt School and Vienna School and the
difference between policy agendas in Europe and America.

From Accumulation to Distribution
The founding fathers of economics were too concerned with the accumulation and production process
to pay attention on whether the product is fairly distributed to the various social classes. Utilitarianism
appears in the nineteenth century as a new theory that attempts to resolve the issue, but agreement
was not easy.
In the course of history, utilitarianism served as the basis of the welfare state but also provided
arguments for those pursuing sectarian policies in the name of society. In the meanwhile, a middle
class is emerging and this makes the polarization between capitalists and workers look less threatening
than in the early years.
Capitalism proved to be lot more resilient than the Marxist prophesies foresaw, but not as much in
equilibrium as envisaged by its own theorists. A succession of peaks and crises is becoming a common
characteristic of the developed economies, and a constant challenge to economic theories.
What can we says about the succession of peaks and crises from our viewpoint today? What can we
learn and where are blind spots?

The Great Crisis and the Theory of Keynes
No other single event has so profoundly changes the fundamentals of economic thinking as the Great
Crash in 1929. In the aftermath of the crisis, academic orthodoxy and policy makers were passively
waiting for the economy to automatic return to normality, while Marxist orthodoxy way contemplating
the doomsday of capitalism.
It took a radical new approach to understand the intricacies of the crisis and mobilize a new type of
policies that ultimately succeeded in restoring employment and confidence in the system. The rise of
Keynesianism inspired a host of related disciplines on measuring and modeling economic phenomena
and ushered in a new period of understanding economics and conducting economic policy.
Studying fluctuations became a central theme in economic theory, but views were still in conflict as to
whether they can be dampened by policy intervention or should be left to attenuate themselves.
Work on the different stages of the Great Crisis. What can be distinguished? And what are the key
messages drawn by Keynes?

Theories of Central Planning and the Socialist Crises
Marxist theory was certain about the inevitable demise of capitalism but less so on the system that
would succeed it. Critical problems of production and distribution were only coarsely dealt with, this
the practical implementation of socialism was full of ideological experimentation,policy shortcomings,
and food shortages.
Early famines led to the formation of a highly bureaucratic central planning which enabled a speedy
industrialization of the Soviet Union (former Russia) but failed in the production of consumer goods
and the efficient allocation of investments.
The failures of central planning invited a variety of critiques, from the suggestion of an intermediate
mix of markets with socialist production to the utter denouncement of price dirigisme in the economy.
Several economic and political thinkers put in doubt the very character of the socialist system and tried
to explain it as a modern replica of Asiatic despotism.

From Keynesian Economics to Stagflation
Marxist economists were not alone in their complacency that cycles are rules out under central
planning. The stability of post-war economies has made Governments and mainstream economists
alike to believe that Keynesian fine-tuning is able to thwart any sort of recessionary threat. In a parallel
development, microeconomics was dealing with all problems of individual behavior and market
imperfections so that distortions could be minimized and a high level of prosperity would be constantly
attained.
The disintegration of the Bretton Woods system opened the Pandora’s Box of economic malfunctions.
Soon, Western economies were engulfed in the oil-price turbulence and a novel type of crisis that
pushed both unemployment and inflation upwards.
This development shattered dominant theories and ushered in the era of monetarism, rational
expectations and strategic behavior. But as unemployment was piling up, economic theories and
governments had to pay more attention to market imperfections and this enabled a more consensual
approach among the old rivals of Keynesianism and Monetarism.

Development, Collapse and New Theories
Economic growth became the catch word for many countries in the postwar period, no matter their
ideological preferences and political realities. New theories try to explain the laws of capital
accumulation and how the process can be improved so as to ensure a balanced and sustainable
trajectory. Two off-springs of Keynesianism offered competing explanations on capital accumulation.
While e.g. countries in South America attempted to achieve it by curtailing imports and mobilizing
domestic resources. In most cases, inward economic development was mired with rising indebtedness
and countries ended up with heavy adjustment programs and external surveillance.
In other cases with a thin domestic accumulation, development was encouraged by international aid.
Yet again, misallocation and abusing of foreign resources trapped many poor countries into high debt.
Economic theories faced several challenges on how a debt-crisis is efficiently handled and what kind
of institutions can minimize the recurrence of malpractices.

Post 2008: Challenging the Foundations
Dominant economic theories were too confident on the efficiency of markets to guide and discipline
the private sector. Therefore, they concentrated on providing Governments with advice and rules on
how to impose fiscal and monetary prudence. In most developed economies, the lessons paid off:
inflation was checked, public debt was put under control and investment flourished.
The collapse of communism led to further integration of international markets and a new era of global
growth and prosperity seemed to be dawning. Some speculative bubbles appeared and disappeared,
but were capable neither of destroying the big moderation of fluctuations nor undermining the
prospects of further growth. In such exuberance, explosive external imbalances between over-saving
and over-consuming nations went unnoticed for a long time.
The global crisis of 2008 was soon reverberated as a crisis of economic theories and several questions
on how our understanding of inherent instability can be improved are still pending.

Crisis Management
In crisis management we distinguish between the pre crisis phase, the crisis response phase and the
post crisis phase.
Pre-Crisis Phase: Pre(vention) involves seeking to reduce known risks that could lead to a crisis. This
is part of an organization’s risk management plan, selecting and training the crisis management
team, and conducting exercises to test the crisis management plan and crisis management team.
Crisis Response Phase: The crisis response is what management does and says after a crisis hits.
Public relations plays a critical role in the crisis response by helping to develop the messages that are
sent to various stakeholders (= multiple publics). Crisis response may be split up in initial crisis
response and reputation repair.
Post-Crisis Phase: In the post-crisis phase, the organization is returning to business as usual. The
crisis is no longer the focal point of management’s attention but still requires some attention. Also
this phase may be used for reputation repair and requires decent follow-up communication

Crisis Communication
For the sake of this course we deal with crisis communication as crisis response and distinguish
between three steps on crisis response:
Step 1: Initial Crisis Response Best Practices
• Be quick and try to have initial response within the first hour
• Be accurate by carefully checking all facts
• Be consistent by keeping spokespeople informed of crisis events and key message points
• Make public safety the number one priority
• Use all of the available communication channels including the internet, intranet and mass
notification systems
• Provide some expression of concern/sympathy for victims
• Remember to include employees in the initial response
• Be ready to provide stress and trauma counselling to victims of the crisis and their families
including employees
Step 2: Reputation Repair Best Practices
• Attack the accuser: crisis manager confronts the person or group claiming something is wrong
with the organization
• Denial: crisis manager asserts that there is no crisis
• Scapegoat: crisis manager blames others for the crisis
• Excuse: crisis manager minimizes organizational responsibility by denying intent to do harm
and / or claiming inability to control the events that triggered the crisis
• Justification: crisis manager minimizes the perceived damage caused by the crisis
• Reminder: crisis manager tell stakeholders about the past good works of the organization
• Ingratiation: crisis manager praises stakeholders for actions
• Compensation: crisis manager offers money / gifts to victims
• Apology: crisis manager indicates responsibility and asks for forgiveness
Step 3: Return to business as usual
• Deliver all information promised to stakeholders as soon as that information is known
• Keep stakeholders updated on the progression of recovery efforts including any corrective
measures being taken and the progress of investigations
• Analyze the crisis management effort for lessons and integrate those lessons in to the
organization’s crisis management system

Crisis Communication – DRAFT (Case Clinic 2)

DAY THREE

Reflection

Design a Prototype
Prototyping translates an idea or a concept into experimental action. Prototyping allows an individual
or group to explore the future by doing. To design a prototype the following six principles may be
useful:
1. Clarify core questions related to you vision and intention every day. Therefore, form a place
of silence to explore with your prototype.
2. Form a core team: “Never doubt that five people can change the world” – find a small group
of fully committed people and cultivate your shared commitment.
3. Iterate, Iterate, Iterate. “Fail fast to succeed sooner”. Act rough, rapid and then iterate.
Design a tight review structure and accelerate through fast feedback.
4. Create landing strips. The quality of the holding space determines the quality of the result
(container).
5. Listen to your cosmos. Always be in dialogue with your cosmos and strive to widen it.
Stretch beyond borders and ask people simple questions on your ideas, products, and
services.
6. Integrate head, heart and hand. Always navigate your prototype between the two major
pitfalls and dangers: mindless action and actionless minds.
Prototypes are an early draft of what the final result may look like. There, you often go through
several iterations based on the feedback generated from stakeholders. This feedback is then the
basis for refining the concept and its underlying assumptions. A prototype is a practical and testes
mini-version of what later becomes a pilot project that can be shares and eventually scaled.
Think about prototypes and pilot projects. What is similar, what is different?

Prototyping Worksheet
The following seven questions may help you to clarify the intention of your prototype:
1. Is it relevant?
Does it matter to all the key stakeholders involved individually (for the person involved),
institutionally (for the organizations involved), and socially (for the communities involved)?
Often, the relevance for each stakeholder is framed in a quite different language and way.
2. It is right?
Does it have the right size and scope? Does the microcosm that you are focused on reflect
the whole (eco-system) that you are dealing with? For example, ignoring the patients’
perspective in a health project, the consumers in a sustainable food project or the students
in a school project, misses the point.
3. Is it revolutionary
Is it new? Could it change the game? Does it address and change (some of) the root issues in
the system?
4. Is it rapid?
Can you do it quickly? You must be able to develop experiments right away in order to have
enough time to get feedback and adapt (and thus avoid “analysis paralysis”).
5. Is it rough?
Can you do it on a small scale? Can you do it locally? Let the local context teach you how to
get it right. Trust that the right helpers and collaborators will show up when you issue the
right kinds of invitations to the universe.
6. Is it relationally effective?
Does it leverage the strength, competencies and possibilities of the existing networks and
communities at hand?
7. Is it replicable?
Can you scale it? Any innovation in business or society hinges upon being replicable and
whether or not it can grow to scale. In the context of prototyping, this criterion favors
approaches that activate local participation and ownership, and excludes those that depend
on massive infusions of external knowledge, capital and ownership.

DAY FOUR

Presentation of Others

Journaling
Guided journaling leads participants through a self-reflective process to access deeper levels of self-
knowledge, and finally to connect this knowledge to concrete actions. For the next 17 questions
participants have 3 minutes for each question:
1. Over the past two days, what have you noticed about your self?
2. Who have been your helpers in your life’s journey so far?
3. Where do you feel the future in your life and work right now?
4. What about your current position and / or personal life frustrates you the most?
5. What are your most important sources of energy and happiness in your life and work?
6. Watch yourself from above (as if in a helicopter), What are you doing? What are you trying to
do in this stage of your professional and personal journey?
7. Watch your collective journey from above: what are you trying to do collectively in the
present stage of your collective journey?
8. Given the above, what questions do you now need to ask yourself?
9. Listen to your younger self: Look at your current situation from the viewpoint of yourself as a
young person, at the beginning of your life journey: What does that young person have to
say to your current self?
10. Imagine you could fast-forward to the very last moments of your life, when it is time to pass
on. Now look back to your life’s journey as a whole. What would you want to see at that
moment? What footprint do you want to leave behind on the planet?
11. From that future point of view: what advice do you give to your current self?
12. Now return again to the present. What it is you want to create: your vision and intention for
the next 3-5 years. What vision and intention do you have for yourself and your work? What
are some essential core elements of the future that you want to create in your personal,
professional, and social life? Describe or draw as concretely as possible the images and
elements that occur to you!
13. Feel the connection with the larger global community of change makers present across the
planet in this moment: what is our collective highest future possibility? What could we be an
instrument for? What could we collectively create within the next 3-5 years?
14. What would you have to let go of in order to bring your vision into reality? What is the old
stuff that must die? What is the old skin (behaviors, assumptions, etc.) that you need to
shed?
15. Over the next 3 months, if you were to prototype a microcosm of the future in which you
could discover the new by doing something, what would that prototype look like?
16. Who can help you to make your plans a reality? Who may be your core helpers and partners?
17. If you were to take on the project of bringing your intention into reality. What practical steps
would you take over the next 3 days?

Notes

Sources & Further Reading
Nicos Christodoulakis, How Crisis Shaped Economic Ideas and Policies
C. Otto Scharmer, Theory U

Economic Policy - The Fountain of Change

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