An interesting (video) overview of data visualisation and its power to influence decisions from the World Economic Forum Ideas Lab in 2011

Gaining Understanding from Data Visualization | World Economic Forum-Gaining Understanding from Data Visualization.

As we lead up to the annual WEF Davos meeting (The Great Transformation: Shaping New Models) starting this week, I thought I would bring to your attention their latest global risk report.

Any critical initiative – whether it be taking a strategic decision or crafting a new path to guide you through the continuing global economic crisis, it is critical to consider the future environment in which the initiative will be undertaken. An important part of this is understanding how the environment could change and the WEF Global Risk 2012 report is excellent input to this.

The report is detailed and well put together, but I strongly recommend having a look at the  ”data explorer” section which has an exceptional set of interactive graphics. Click on the link below to reach the report.

WEF Global Risks 2012

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 workshop 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:

Please tell us a litle about yourself and we will send you a free copy of the article: surviving and thriving in the global economic crisis.

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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

Given the current turmoil with Greece potentially leaving the Eurozone, this blog post may provide some useful insights on the situation.

The Real Instituto Elcano is an independent Spanish based think tank that analyses and debates on international affairs, with somewhat of a closer focus on Spain and Europe. They recently published a paper entitled “A new reading of the crisis and the dilemmas of economic policy”. In brief it discusses the financial shock waves that hit the world on August 2011 and calls for a review of the diagnosis of the crisis.

It appears to be an accurate and well written explanation of the crisis (or at least the current status and its challenges).

The broad outline of the article is that:

• In July 2011, it appeared as if the recession of 2008/2010 was finally easing in the majority of countries
• Suddenly in August 2011, the markets went into free-fall again after another Eurozone-sparked crisis – and so it became clear that the economic crisis was far from over.
• The authors then demonstrate that the apparent “end of crisis” had merely been a mirage caused by government economic stimulation.
• The article then discussed the view of two economists (Reinhart and Rogoff) who after studying 800 years of recessions and crisis, have re-diagnosed the current situation. They describe how we have got here and what are the implications. ( The 4 D’s: Debt. Deficit. Downgrade. Default)
• The authors then go on to explain how little the vast majority of governments are able to do in terms of economic or fiscal policy – showing how they are basically caught up in a debt trap with conflicting demands (eg to absorb debt and implement austerity measures; versus stimulate growth and create employment).
• They put forward two possible radical moves, but both of which are fraught with uncertainty, high risks and a good deal of injustice to many players.

Our comments:

First it is a well-written article and, although a little gloomy, is quite factual – and facing the truth may not be comfortable, but is necessary if the situation is going to be sensibly addressed.

Secondly, it seems to us that a more creative approach to solving the crisis must be adopted. Perhaps using  government and banking economists to advise governments, fraught with conflicts of interest (they are bombarded by lobbyists AND would probably like to continue to govern), may not be the best people to come up with a really innovative, system-disrupting solution? Especially as these are the people who must bear at least some of the responsibility for getting us here in the first place!

Furthermore, like any other decision-making team, they are also probably constrained in their outlook by their own perspectives around economic theories and the efficacy of various actions.

We are not saying that there is some obvious silver bullet that is going to fix everything; but it may be that the policy makers who have the task of moving  the world back to economic stability (and perhaps a system that is economically fairer to all participants) should start listening to other inputs and ideas.  And consider other options. For instance, given the majority of jobs (90% of the worlds workforce) are created by small and medium-sized businesses (see infographic) – perhaps if there is any stimulus available, it may be better used in assisting these organisations, rather than doomed construction companies or lobbying-multinational banks!

Who knows, maybe the 15M movement of Spain, or the Occupy movements around the world do have something to add to the debate? At a superficial level, if you can understand what they are saying, it appear that they are making ridiculous demands and ignoring the consequences and realities of such. But are governments and business really listening to them? Are there not suggestions and ideas here that are not so extreme if considered with an open mind. Theories around the wisdom of crowds may be useful here!

In conclusion, we at Genesis do not claim to be expert economists, nor are we necessarily in support of the Occupy / 15M movements. However, we do have significant empathy for those feeling they are being abused by, or at least victims of, a system that does not seem to be fair to all classes of society. We also believe that there may be some truth in the quote that is attributed to Einstein:

“The thinking it took to get us into this mess is not the same thinking that is going to get us out of it.”

 Perhaps, policy makers could use some basic decision-making science and process to consider the issues at hand. Such as: a proper framing of the challenge, making sure the right people are included in the deliberations and using some creative means to come up with options that are not merely an extension of current policies. This may sound overly-simplistic – but perhaps a return to the basics is not a bad way of approaching the complexity!

RIE article – English version

RIE articulo – version Español

Coming soon is an original article directed by Genesis Management Consulting, but compiled from the wisdom of a panel of global experts on taking decisions and managing through the crisis.

If you would like to discuss the implications of the current economic recession and uncertainty on your business, please contact me at sgifford@genesis-esp.com .

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 complete the form and we will contact you …

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.

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

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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.

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