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What theory can be found to underpin the inevitability of a crisis?

What theory can be found to underpin the inevitability of a crisis?. Group 3: Perry Trienekens Bram Boerman Janine Jaquet Kenny Ensink Daan Verkaik. Contents of this lecture. Crisis in all its forms Chaos theory Icarus paradox Black Swan Disruptive innovation

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What theory can be found to underpin the inevitability of a crisis?

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

  2. Contents of thislecture • Crisis in all its forms • Chaos theory • Icarus paradox • Black Swan • Disruptive innovation • Business Case: Municipality of Amsterdam • Thomas Kilmann Test

  3. Crisis in all its forms What is 'crisis'?

  4. Crisis in all its forms

  5. Crisis in all its forms

  6. Crisis in all its forms

  7. Crisis in all its forms

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

  9. '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 2. Internal controllability 3. Adaptive capacity "Surprise and structural change are inevitable in systems of people and nature." p. 391

  10. '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. • 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.

  11. Chaos Theory

  12. Chaos Theory Outcomes from the chaos: 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.

  13. Chaos Theory Stuck in chaos?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.

  14. '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 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.

  15. Icarus paradox Craftsman -> tinkererA focus on high quality products turns into an obsession with small unimportant details.Builder -> ImperialistA smart mind that knows how to expands starts expanding without reason.Pioneer -> EscapistThe thirst for being the first turns into blindly choosing the latest technology. Salesman -> DrifterGreat marketing turns into bland all the same sales pitch where the product doesn't matter.

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

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

  18. 'The black swan: The impact of the highly improbable' , NassimTaleb (2010)The Black Swan http://www.youtube.com/watch?v=BDbuJtAiABA

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

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

  21. The Spectrum of Variability Different kind of crisises

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

  23. DisruptiveInnovation

  24. DisruptiveInnovation • Established Companies • Traditional view • Customer needs • Technology changes • Not radically new

  25. DisruptiveInnovation • TechnologicalInnovations • Sustainingtechnologies • MaintainRate of improvement • Disruptivetechnologies • Different package

  26. DisruptiveInnovation How to spot & cultivate Disruptive Technology? • Determine Disruptive / Sustaining • Locate initial market • Customers • Experimenting rapidly, iteratively and inexpensively with both product & market

  27. DisruptiveInnovation How to spot & cultivate Disruptive Technology? • Strategic Significance • Plotting product performance in a graph

  28. DisruptiveInnovation Spot & cultivate Disruptive Technology • Responsibility for building disruptive technology • Keep disruptive organization independent

  29. DisruptiveInnovation EnablingDisruptiveInnovation • Internal • HR • Organisation • Structure

  30. DisruptiveInnovation Enabling Disruptive Innovation • Context • Customer

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