Webinar Handouts December 10 2008

1. Leading Effectively Webinar Series
Good News - We Have a Crisis!
Seven Pointers to Finding Opportunity in Adversity
David Hurst
e-mail: david@davidkhurst.com
website: www.davidkhurst.com

2. Understanding Why There Is Opportunity in Adversity:
It’s the Way Complex Systems Work
=
A Theory of Change and Action
You never want a serious crisis to
go to waste. What I mean by that
is it's an opportunity to do things
that you think you could not do
before. This is an opportunity...
Rahm Emanuel
“Nothing lasts unless it is incessantly renewed”
Charles de Gaulle

3. In Complex Systems
It’s “both...and” not “either...or”
Stability and Change coexist
Scale matters in space and time
“Stability Through Change”
And
“Change Through Stability”

4. Idealized Forest Succession
INCREASING COMPETITION
INCREASING EFFICIENCY
INCREASING SCALE
DECREASING VARIETY
REDUCED RESILIENCE
Annual Perennial Shrubs Softwood Hardwood
Plants Plants and Trees Trees
Grasses
Weak CONNECTEDNESS Strong

5. The Birth, Growth, Destruction and Renewal of a Forest
Weak CONNECTEDNESS Strong

6. The Birth, Growth, Destruction and Renewal of a Forest
Smokey’s a Manager; Flammy’s a Leader;
a preserver of continuity; a catalyst for change;
Develop policy, enforce discipline: continually probing,
Does this fit with our procedures? testing - are you growing?
Do you have the authority to do Or are you deadwood?
this? Where is the budget? Can we redeploy our resources?
Drip-Torch
Weak CONNECTEDNESS Strong

7. Takeaways on Resilience and Change
! Don’t think of structures: think of movements
! Ask: “Why do things stay the same?” “What feedback processes sustain
this behaviour?”
! There is no choice between stability and change: it’s change on our scale
and timetable vs. someone else’s
! Change takes place on the edges of systems and in open patches where
variety and diversity can flourish
! Fire changes the way resources flow through the system - the resulting
change is on a narrow front but deep
! Be small and mobile for quick experimentation and rapid prototyping
where feedback is specific and fast
! The seeds of destruction are in the fruits of success: large scale and
homogeneity lead to a lack of resilience
! Creation requires destruction: look for opportunities on disturbed ground -
turbulent markets where information is poor

8. “increasingly complex financial
instruments have contributed to the
development of a far more flexible,
efficient, and hence resilient financial
system than the one that existed just a
quarter-century ago.”
Fed Chairman Alan Greenspan in 2005

9. MANAGEMENT
&
LEADERSHIP
IN A
RECESSION
Leadership
Management
Objective Thrive
Survive
Mantra “Where’s the Opportunity?”
“Cash is King”
Mode Decentralization
Centralization
The challenge is to execute a
centralization of everything
simultaneous
to do with cash and spending while
decentralizing responsibility for
focused innovation and learning

10. Pointer #1
DON’T PANIC! It’s going to be tough for many organizations
and people, which is why no one chooses to have a crisis.
But we’ve got it, so the only question is what we make of it.
There is danger but there is also opportunity.
Some Thoughts
! A sense of urgency is the most important ingredient for
personal and organizational change - now we’ve got it!
! The worst emotion is dread - the sense that something
bad is going to happen and that you can’t do anything.
! The relationship between reason and emotion is like that
between a jockey and a powerful horse. Fear can be
harnessed if it can be focused on coordinated action.
! In times like these you can do things that were unthinkable
before because people are listening and conventional
wisdom no longer supplies the answers.

11. Pointer #2
If you are going to have to reduce people in force then make
the moves as soon as possible but only AFTER you have
explored every option and MADE IT CLEAR to people that
you have! Organizational values are the bedrock here.
Some Options
! Lay off all temporary workers, if any.
! Eliminate overtime, if any
! Volunteers for back to school, start families, retire etc.
! Ask people to go part-time
! Go to a shorter work week
! Keep people but reduce compensation
! Always give the rationale for what you are doing e.g. a
ratio breakeven model or similar

12. Pointer #3
The organization needs to ‘flow’ i.e. go into task force mode.
You need a top management team to guide the turnaround
and it may not be the same people as currently make up the
senior management team.
! Line managers may be best left alone to run their operations
! You are going to need generalists rather than specialists
! Communications is going to have to be excellent - no turf
protectors
! It sends a message if some members are “Young Turks” from
the edges of the organization
! If they can’t play on the team then they can’t stay on the team
! A story teller is essential to every team: we need narratives to
make sense of what’s happening

13. Pointer #4
In the top team decide on the major issues and set up cross-
functional, cross-organizational task forces to handle each of
them. Create “open patches” (space, time, organizational
cover, roadblock removal) as required
Some Considerations
! Clear, broad mandate for each team with a tight deadline
! Give them access to all the information they want
! Give them access to team tools e.g. mind and process
mapping
! Go for flexible generalists but use specialists as required
e.g. financial, legal etc.
! Don’t forget the storyteller - the “sponge”
! Make it clear that you are depending on them for
recommendations and that you will act on them

14. Pointer #5
Choose the appropriate methods and tools to generate issues
and ideas. Incremental or radical innovation? Are you going to
use internal people only? Select group or organization wide?
External experts? Select group or open to all?
Some Possibilities
! Own backyard: where are we already doing it right?
! Hold an innovation fair to see what’s being done
! Idea contests offering recognition and awards
! Large-scale virtual brainstorming with new technology e.g.
wikis and other open source platforms
! Deliberate innovation processes like a “design charrette”,
Open Space Technology or the Conference Model

15. Pointer #6
Don’t underestimate the power of face-to-face communication
at times like this. It’s vital to building trust and telling people
what’s happening. It’s also critical to understanding exactly
what people are thinking and anticipate what they will do next.
Deal with each of your major stakeholders.
! Talk to your customers - how are their needs changing?
! Talk to your suppliers/supply chain - what system-wide
savings can be made?
! Talk to your workers and unions keeping them up to date
with the situation and asking for their help
! Talk to all your people on a regular basis - town hall
meetings
! Talk to yourself! Keep a diary and publish a daily blog that
everyone can access
! Where you ARE communicates what you CARE about

16. Pointer #7
For people to perform well under pressure they have to feel
that they are on a mission NOT a treadmill. This is where the
power of stories comes in. Use stories to create a narrative
center of gravity and synchronize the innovation activities:
! Use the organization’s history to set the context: “Once
upon a time...
! Introduce the actors (people, firms, institutions), their wants
and needs
! Identify the dramatic conflict between the actors and the
situation
! Outline the gap and the challenge - use vivid language and
images
! Show how the challenge will be met - what action is
needed?
! Ask for their support (in good movies we care about the fate
of the actors and the outcomes)

17. Think Like a Movie-Maker!
! Things were fine until everything changed
! Desire to restore the balance - make it right
! Forces arrayed against us - cruel reality
! Need to dig deep - scarce resources, danger
! Decisions, actions, risks, surprises, paradox
! Energy comes from the dark side. Nothing is
pure good or pure evil: they are tangled up
inside each one of us. Make it human!
Text Source: Robert McKee

18. Summary of The Seven Pointers
1. Don’t Panic!
2. Downsize early
3. Go into task force mode
4. Identify key issues and focus teams
5. Use the appropriate methodology and tools
6. Face-to-face communication is critical
7. Tell the story to build the mission
It’s discipline AND freedom -
“squeeze and release”

19. There Is Opportunity in Adversity!