MSc BIS What theory can be found to

MSc BIS What theory can be found to underpin the inevitability of a crisis? MSc HCM Group 3: Perry Trienekens Bram Boerman Janine Jaquet Kenny Ensink Daan Verkaik 1

MSc BIS Contents of this lecture ¢ ¢ ¢ ¢ Crisis in all its forms Chaos theory MSc HCM Icarus paradox Black Swan Disruptive innovation Business Case: Municipality of Amsterdam Thomas Kilmann Test 2

MSc BIS Crisis in all its forms MSc HCM What is 'crisis'? 3

MSc BIS Crisis in all its forms MSc HCM 4

MSc BIS Crisis in all its forms MSc HCM 5

MSc BIS Crisis in all its forms MSc HCM 6

MSc BIS Crisis in all its forms MSc HCM 7

MSc BIS "Communication, organization, and crisis" Seeger, M. W. et al. ; (1998) Crisis in all its forms Defining characteristics of crisis: 1. 2. 3. 4. MSc HCM unexpected (i. e. , a surprise) creates uncertainty is seen as a threat to important goals need for change 8

MSc BIS 'Understanding the Complexity of Economic, Ecological, and Social Systems', Holling ( 2001) Crisis in all its forms Three properties shape the future of a system: 1. Inherent potential MSc HCM 2. Internal controllability 3. Adaptive capacity "Surprise and structural change are inevitable in systems of people and nature. " p. 391 9

MSc BIS 'De logica van chaos in veranderingsprocessen' (the logic of chaos in change processes), Zuijderhout, Wobben, ten Have, Busato (2002) Chaos Theory ¢ Chaos theory suggests that sometimes you can't manage change. That you have to let go. MSc HCM ¢ ¢ When a system or organization builds up energy it gets complexer. In the end the complexity will bring forth chaos. However the system will bring order to itself if it gets the chance. 10

MSc BIS Chaos Theory MSc HCM 11

MSc BIS Chaos Theory Outcomes from the chaos: MSc HCM 1. The tension fades We go back to the old way of working. 2. A new order A new way of working is gets implemented and then refined. 3. Recession The old order is rejected by the organization, but there isn't a new order. 12

MSc BIS Chaos Theory Stuck in chaos? MSc HCM There are three things you need to get out. 1. The pressure to change. 2. Elements that can't stay the same. 3. New options. 13

MSc BIS 'The Icarus Paradox: How exceptional companies bring about their own downfall' , Danny Miller (1992) Icarus paradox ¢ ¢ ¢ Successful organizations are prone to failure. Working strategies get supported and MSc HCM integrated into processes. Company starts to lose sight of other ideas. Same goes for people. They found 4 main tracks that a company/ person can follow. 14

MSc BIS Icarus paradox Craftsman -> tinkerer A focus on high quality products turns into an obsession with small unimportant details. Builder -> Imperialist MSc HCM A smart mind that knows how to expands starts expanding without reason. Pioneer -> Escapist The thirst for being the first turns into blindly choosing the latest technology. Salesman -> Drifter Great marketing turns into bland all the same sales pitch where the product doesn't matter. 15

MSc BIS Icarus paradox The momentum a company builds comes from a couple of sources. MSc HCM 1. Leadership traps 2. Current culture and skills 3. Power and politics 4. Memories 16

MSc BIS Icarus paradox The paradox has two sides 1. Success can lead to failure. MSc HCM 2. The things that can make you succeed can also make you fail. Can we combat the paradox? Reflection and keep monitoring the situation. 17

MSc BIS 'The black swan: The impact of the highly improbable' , Nassim Taleb (2010) The Black Swan http: //www. youtube. com/watch? v=BDbu. Jt. Ai. A BA MSc HCM 18

MSc BIS The Black Swan ¢ ¢ ¢ They are hard to predict They have a big impact/consequence MSc HCM Not able to predict beforehand but "obvious" after it happened. 19

MSc BIS The Black Swan Why is it hard to see a Black Swan coming? ¢ We are looking for patterns and predictability £ ¢ MSc HCM Enterprise Risk Management (ERM) Focus on the White Swans Blind for coincidence and let us run opportunities… 20

MSc BIS The Spectrum of Variability MSc HCM Different kind of crisises 21

MSc BIS Coping with Black Swan events Need to learn to be able to deal with them. Don’t try to predict them. MSc HCM ¢ ¢ Investing in resilience Building in redundancy Organization not operating ‘on the edge’ Focus on positive ones Prepare for the impact 22

Disruptive. MSc Innovation BIS MSc HCM 23

MSc BIS Disruptive Innovation ¢ Established Companies £ Traditional view � ¢ MSc HCM Customer needs Technology changes £ Not radically new 24

MSc BIS Disruptive Innovation ¢ Technological Innovations MSc HCM £ Sustaining technologies � £ Maintain Rate of improvement Disruptive technologies � Different package 25

MSc BIS MSc HCM 26

MSc BIS Disruptive Innovation How to spot & cultivate Disruptive Technology? MSc HCM ¢ Determine Disruptive / Sustaining ¢ Locate initial market £ £ Customers Experimenting rapidly, iteratively and inexpensively with both product & market 27

MSc BIS Disruptive Innovation How to spot & cultivate Disruptive Technology? ¢ Strategic Significance £ Plotting product performance in a graph MSc HCM 28

MSc BIS Disruptive Innovation Spot & cultivate Disruptive Technology MSc HCM ¢ Responsibility for building disruptive technology ¢ Keep disruptive organization independent 29