World Economic Forum 2012 .. some thoughts

Davos 2012.
Some thoughts on the WEF conference

Having trawled through many of the summaries, videos, tweets and other reports on the conference, I am trying to pull together my overall feelings and perceptions about the 2012 Davos conference.

There were hundreds (perhaps thousands) of issues discussed, but the big themes arising were the Eurozone crisis, the jobless situation particularly among the youth, the impact of social media, the questioning of the capitalist system and the gap between the have’s and have-nots (included/excluded; in-system/marginalised). Naturally, there was also discussion around the ubiquitous topics of energy, social entrepreneurship, visions and values.

I had (still have) a level of discomfort about the composition of the gathering. The governments, regulators and financiers, who must hold some of the blame for what is a less-than-comfortable world economic environment, are those selected to discuss the situation and what should be done about it – without much input from the other 99,999% of the world who are trying to muddle through the mess. And doing it at a venue that costs most of the business people about $40,000 to attend the 5 day event!

A classic example, Vikram Pandit (CEO of Citibank), co-chair of the Forum said “Jobs should be our number one priority”. A few stats about Citibank: they took a $45bn bailout, share price has fallen 91% since Pandit took over in 2007; they announced a 4,500 job-cut in December and Vikram received a $3,7m bonus for his 2011 performance. I am sure some must doubt his capability to envision and champion job creation schemes.

Having said that, I do fully support the Forum and believe Klaus Schwab’s initiative is very important. Perhaps there were fewer solutions forthcoming in this round, but at least the debates were had and new ideas put on the table. Furthermore, despite the tough times and apparent insurmountable problems, the almost TED-like feeling of optimism and good-will that most delegates take away has to be a good thing given the power that many of them wield.

One of the sources of optimism and a highlight of the conference, was the input from the 70 YGL’s (young global leaders) who were invited to participate. Many of them with fresh perspectives on issues and with significant successes already achieved, they offered a new energy and challenge to the status quo. I can recommend watching the closing video  (Note: WEF web-site sometimes has some technology issues in accessing the videos – keep trying!)where 4 of those YGL’s were on the podium – including a young South African woman: Rapelang Rabana. She was an inspiration, especially in comparison to the tired panel called “Africa: from transition to transformation” chaired by Gordon Brown and with 5 African heads of state including SA’s Zuma – all except perhaps Condè (President of Guinea), were embarrassing to watch as they blamed everyone and anyone (except themselves) for non-delivery on the continent and seemed unable to articulate an inspiring and credible vision for Africa. (The fact that some of these leaders continue to address Gordon as Mr Prime Minister left me wondering if they knew he is one of the millions who has recently lost his job!).

I would encourage Klaus to continue including these Young Global Leader’s and also try and open it up to other inspiring segments of the world population who are making positive changes in the world – after all you don’t have to be in the top 0,001% of the worlds richest or less than 30 years old to “make a dent in the world”.

Another theme that is not new, but is increasing in importance and close to our hearts here at Genesis, is the issue of collaboration in decision making. As leaders become more alert to the ramifications of their strategic decisions and the impact that the outcomes have on many lives across continents and even generations, there is a growing acknowledgement that more people must be included in the decision making process. We are not saying that all decisions should be consensus decisions; in fact, we believe the overlap between consensus decisions and intelligent decisions is probably not that large – but where possible, “outcome-stakeholders” need to give their input. Not only by reminding decision makers about the potential impact of the decision, but frankly many people who do not sit at the boardroom table are able to offer crucial, creative and critical insights into the deliberations that could have a significant impact on increasing the possibility of a good outcome. Given we are in a world where many problems require new and innovative solutions and not simply a refinement of past responses, the broader and richer the input, the more likely we are going to make decisions that take us to new heights in growth and exciting, positive results.

At Genesis, we have been lucky enough to find technology partners who are able to provide solutions that can take us beyond old, stale ways of thinking and more importantly allow us to creatively and rapidly gather rich inputs from a broad range of stakeholders. These inputs are important whether we are solving problems, taking decisions or crafting new strategies – and we would be happy to see how we, or our partners, could help you to gain these benefits. Call or mail me for a discussion or demonstration of some of these tools.

Let me leave this summary with (my interpretation) of the thoughts of 3 of the young global leaders when asked what advice they would give the “older generation” when addressing the tough issues of today:

  • Listen: to everyone, not just your colleagues in the boardroom. Listen to youth, disenfranchised people, women, customers … really listen!
  • Do not always think linearly – think divergently and creatively.
  • Consider new technology and the scalability that can be gained through harnessing some of the tools available.
Occupy Davos supporters in their "igloo"

 

Teach a man to fish, you’ll feed him for a lifetime. Expose a man to the Internet & you’ll change his life.
Rapelang Rabana

Surviving and thriving in the global economic crisis

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Leadership and strategic decision-making in the global economic crisis

The global economic crisis is impacting on almost every organisation in one form or other. From a decision making perspective, there are two broad ways in which we are impacted

  • We are being forced to make certain decisions because of the crisis. For instance:
    • Do we investigate new markets to make up for our falls in revenue from traditional sources; or increase our focus on our existing markets?
    • Should we be retrenching staff or considering other ways to reduce costs?
    • How can we discover, and capitalise on, the opportunities that are hidden within this environment?
  • Our normal decision making process is also impacted through the need for more frequent strategic decisions and greater uncertainty when making them. For instance:
    • The decision to make a capital investment in new capacity is made more complex through the difficulty in forecasting future demand.

In the latter half of 2011, a small global group of experts formed part of a digital workshopglobal crisis to consider these types of challenges that individuals and organisations face when taking strategic decisions in the economic crisis that the world is facing. The objective is to provide some actionable advice for people who are looking for ways to lead their organisation through the challenge and to grasp the new opportunities that always abound in such environments.

The full article can be found here:

We are also building a knowledge repository of useful information concerning leadership through the crisis on our web-site; and have started with some workshop ideas. Go to the page by clicking here:
Decision making in the crisis

 

 

Opportunities abound – you just need to know where to look!

Hidden treasures inside your organisation
How to discover and mine them! 

Many companies have great treasures waiting to be mined inside their organisations. There is a tendency, especially among larger organisations (but not solely) to gather more assets and competencies than they can exploit at one time. Often, some of these get left behind or ignored through lack of resource or just not being right for their time. Here is an interesting short article by Bain & Co discussing this.

What they do not cover in the article is HOW you go about finding these treasures. We have a technique that allows you to do that: INSTRAT.  Using a proven process and a novel, web-based tool (THOUGHTstream), you can tap into near and far-flung parts of your organisation seeking such opportunities – and go on to assess and prioritise the best opportunities.

Here is a link to a broad overview on how INSTRAT may be used, containing further links to the underlying process and a video on the THOUGHTstream tool itself.

INSTRAT

Bain & Co article

For a discussion on how you can use INSTRAT to discover possibilities of growth within your own organisation, drop me a line at sgifford@genesis-esp.com. The process is efficient, inexpensive and can generate significant value in a short time-frame – and which company could NOT do with some of that right now!

Or write to us and we will contact you

 

 

 

Intuition and rationality – how it works in decision making

Rationality, intuition, the brain and decisions

Iain McGilchrist’s TED talk.

Through the use of RSA animations, Iain gives a brilliant talk on left brain and right brain differences. He claims to destroy a few myths about how the left and right brain function in relation to rationality.

In the end however, it seems that he puts across those same myths only in a slightly different light – rather than destroying the myths. Basically he says that in almost all thought-types, both hemispheres of the brain are used – but in certain activities, one hemisphere dominates. He explains how each side of the brain views the world. To me, these dominating activities and persepctives do not appear substantially different to the myths he is claiming to destroy.

Having said that, the talk is still immensely interesting and amusing; and he ends with a call for greater emphasis on the right-brain type activities and intuition. The video flies by in 11 minutes, but I would recommend taking the time out to have look if this topic is of interest to you.

 

 

 

 

 

 

Strategy in the crisis – keep it simple!

Strategic decisions are complex – lets not make the job tougher!

Jo Whitehead of Ashridge Strategic Management Centre, writing for the Executive Education section of the Financial Times struck a cord with me. His call was for Business Schools and strategy text book writers to get back to the basics. More and more text books are offering complex strategy models that do nothing  to help with the real challenge of strategy: the need to make and implement hard choices in an uncertain environment, with limited information.

Jo talks about students and professors wanting to talk about the latest new and sexy ideas and leave the basics behind. Furthermore, they do not have the time or inclination to put these concepts into practice other than applying them to a few after-the-fact case studies rather than in the crucible of real life, messy situations.

It leaves us with graduates (and executives) talking about these flashy ideas, but when they are required to develop a strategy, they go back to over-simplistic approaches like a SWOT analysis. Jo calls for a smaller number of foundation-type models upon which to build a rigorous set of strategy skills.

After having been in the field of crafting strategy for about 25 years, I have seen many of theses trends come and go – and admittedly have often got caught up in the excitement of some of them myself. I am not saying that they are not without value. For instance, working with a team while at Deloitte, we used the concept of “core competencies” to help convert a company manufacturing arms and ammunition into one that manufactured other peace-time products (a classic swords to ploughshare project). However, core competency thinking cannot be applied universally in all strategies and frankly it took the immense experience and brain-power of our consulting team (Dr, Adriaan Davidse and Karola McArthur) to make it practical.

All good strategy results in one, or a series, of critical decisions – always taken in complex environments with uncertain futures. Strategy tools that help us visualise, understand and manage this complexity add insight. Strategic concepts that make it more obscure or unnecessarily add another level of complexity are seldom useful. As we constantly remind ourselves at Genesis Management Consulting, strategy is ultimately “what are we going to sell to who, and with what basis of competitive advantage”. And if you cannot answer that question at the end of your strategy development process, you had better follow Jo’s advice and go back to the basics!

Link to FT article

 

For further information about how to combat the complexity of strategic decisions, contact Simon at sgifford@genesis-esp.com

 

Habito 1: tener lo fundamental claro

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Los 7 habitos de los tomadores de decisiones altamente efectivos
Habito 1: tener lo fundamental claro

Ahora tenemos el slide show disponible en español.

Puedes descargar el slide show aqui

 

 

 

 

The error often made by powerful people when taking decisions

Flaws in decision making – the over-confidence of power!

The effect of confidence on taking advice in decision making

Here is an interesting article discussing the level of advice people are likely to take related to the amount of power they perceive they have. It is based on a number of real experiments conducted by the researchers.

In summary, the findings are:

  • People who perceive themselves as wielding power in their own organisation are much less likely to take advice from others when making decisions. This is mainly caused by their level of confidence in their own judgement.
  • This is far more prevalent in men than in women.
  • In the experimental cases, the results of the decisions of the more powerful (and took less advice) groups were less accurate than those groups who considered external inputs.
This reminds me about the findings from Surowiecki’s famous book “The wisdom of crowds” which postulates (and goes some way to proving) that in many cases large groups of people are smarter than a few experts. However, we accept that in many cases, leaders do not have the time (or for other reasons) to tap into large crowds – but that does not mean they should shun all advice. At Genesis we have designed a tool that is perfect for the task of gaining input to strategic decisions: INSTRAT (see below for more details).

 

 

 

(Or see our “Decision Shop” for a special offer on initial use of the tool).

 

If you would like to discuss this topic with us, drop me a line at sgifford@genesis-esp.com and we can arrange a no-obligation Skype call.

 

The 3rd Habit : Subscribers Only

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The 3rd habit of highly effective decision makers:

Using Visualisation

You will have reached this page because you are registered on the Genesis mailing list and receive notification of our latest research and publications.

Here you can view and download our latest publication: “The 3rd habit: using visualisation to combat complexity” – part of the series of “the 7 habits of highly effective decision makers”.

The 3rd habit

This is also viewable from our slideshare page at : Habit 3 via slideshare

At the end of the slideshow, we give details of training on using visualisation within your own organisation. If you would like to find out more, click on the link below and we will contact you with further information.

Training programme: using visualisation in your own organisation.

 

 

 

Flexible strategy in action – adapting the business model

Agile strategy
Adapting the business model to create flexibility 

Pop-up stores.

There has been much talk for the last decade about having an agile strategy or being a flexible company. This is seen to be even more important in crisis situations – such as much of the world is currently facing. However, although there is a great deal of information about the “why”, there is less about the HOW and far less about real case studies of such.. So when we came across this article about pop-up shops (Inc. mahgazine) we thought we should publicise it as an example of how this can work in practice.

The article discusses how a New York City beauty chain store launches pop-up shops (temporary shops) to capitalise on the Halloween season – with significant success. This may sound like a tactical or short-term move – but in reality it is part of their overall strategy and is carefully planned.

For us, there are 2 points of particular interest:

  • They use a model that seems to be more similar to a prototyping model than more traditional strategic models. They try, learn and refine based on their new knowledge.
  • It is built into their overall strategy. For instance, if a particular pop-up store is successful in attracting young females they may convert the temporary store into a permanent one as the location obviously works for their target market.

 

We recommend you read the short article (click on the link) and while doing so, consider whether or not there may be analagous things you might be doing to to generate new revenue streams – especially if you are suffering in the current crisis. Are there parts of your business model that may not be as “fixed” as you believe? (eg Do retail stores have to be permanent fixtures? Must you own manufacturing facilities or warehouses?)

 

Look out for the latest in our series The 7 Habits of Highly Effective Decision Makers: Habit 3 Using Visualisation. In this document, you will find ideas about using visualisation to stimulate creativity and innovation – which could be useful in thinking about your agile strategy (Habit 3 to be published tomorrow 11 October 2011)

 

If you would like to discuss how you might go about deciding whether you should make your strategy more agile or how you should go about it, drop Simon a line at sgifford@genesis-esp.com.

 

HBR classic readings on strategy – supporting your strategic decisions

Key strategy readings – strategic decisions, business models, 5 forces, ….

Maybe you are a CIO trying to get to grips with strategy and how you should be influencing your own organisation’s strategic thinking. Perhaps you are a young, ambitious engineer with their first general management role. Possibly you are a CEO facing challenging times who needs to take time out to seriously reflect about the direction of their business. Or you could even be a seasoned strategy consultant who wants to recall the basics (and that is not a bad idea in this age of fast change and complexity).

Whatever category you fit into, skim through these Harvard Business Review Classics and stimulate your thinking about your business. Each article has a summary of the concept, the article itself and some suggested further reading. Below the image of the contents is a click-able link that takes you to a pdf with the set of articles. (Note clicking on the contents themselves only gives you a larger picture of the image).

The HBR Strategy Classics

 

At the moment, we at Genesis are finding ourselves in a number of conversations about business models – are they still valid? do we need to tweak our model? are we becoming outdated? can we use new tools and technologies to reinvent ourselves?

We would be delighted to have a conversation with you about your organisation and help you to DECIDE if, and how, you should be reviewing your business model – by using our own set of tools together with our expert Associates from a range of industries and disciplines.

Drop me a line at sgifford@genesis-esp.com and lets start a dialogue.