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Surfing the Edge of Chaos

Surfing the Edge of Chaos. By Harry Joosten Ontario CUMA Conference Monday, 07 October 2002 Niagara Falls, Ontario. Purpose of Presentation. Not to provide predictions or forecasts Outline various ways to: view and approach the future form multiple world views

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Surfing the Edge of Chaos

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  1. Surfing the Edge of Chaos By Harry Joosten Ontario CUMA Conference Monday, 07 October 2002 Niagara Falls, Ontario

  2. Purpose of Presentation • Not to provide predictions or forecasts • Outline various ways to: • view and approach the future • form multiple world views • plan for success … no matter what happens • Stimulate thinking, reading, talking, debating, …

  3. Sniff the wind & catch the waves • … or stay on the beach • Classic stance • Arms out • Knees bent • Eyes front

  4. This Morning’s Presentation • Concepts • Order, Chaos and Complexity • Scenario Planning • Systems Thinking • Organic Organizations • The Three Questions • The Double-Naughts Decade • WorldViews • Financial Services • Fun, frolics, madness & mayhem • AKA interactive group discussions • Done in time to catch the bus for golf

  5. Order, Chaos & Complexity • Simple rules and algorithms, given enough iterations, give rise to: • Order – static, rigid, crystalline • Chaos – confusion, turbulence, anarchy • Complexity – self-organization taking place at the interface/boundary/edge • Patterns underlying • Math, physics, chemistry, biology • Social sciences including economics

  6. Scenario Planning • Progressing beyond linear/single point strategic planning and budgeting • Developing descriptions of a range of different possible futures • Stories and pictures of tomorrows • Comparing and testing alternative strategies within each future world

  7. A Scenario is … • a specially constructed view of the future … a story of what might happen … a distinct but plausible world • Includes: • A unique title or name • Elements of 4 basic environmental factors [technology, economic, social, political] • Set of background vignettes • Set of key sign-posts [events or trends] • [optional] some quantitative industry projections or benchmarks [population, GDP, etc]

  8. “Scenarios are …” “… comprehensive, internally consistent, long term perspectives of the future: they serve as a framework for strategic thinking. They provide an insightful understanding of the dynamics of change and a fuller consideration of the range of opportunities and threats facing the organization, thereby reducing vulnerability to surprises.” Dr. Richmond Smith, Lincoln University

  9. “Scenarios encourage …” “… an expanded range of strategy options, a more resilient, flexible strategy and a better assessment of risks. They also provide a sound basis for continuous monitoring of the organization’s environment and a common framework for its decision-makers’ thinking about the future.” Dr. Richmond Smith, Lincoln University

  10. Why Use Scenarios? • Anticipate and leverage change • Stimulate “out of the box” thinking • Reduce future risk • Develop a consistent framework • Maintain participation in and commitment to planning process • Reduce reaction time • Reduce reliance on and vulnerability to single point or linear projections • Improve organization’s learning process … including development of common internal language and “memes”

  11. Systems Thinking • Part of “The Fifth Discipline” • Personal Mastery • Mental Models • Shared Vision • Team Learning • Systems Thinking

  12. Systems Thinking • Inputs and resource constraints • Feedback loops • Positive examples = personal learning, open communication, trust • Negative [self fulfilling prophecies] • Delays [OK if awareness adjusted] • Self reinforcing growth [snowball] • Requires integration, alignment

  13. Organic Organizations • Living Companies • Structures, methods, outlooks are organic vs. mechanic • Approach is both/and vs. either/or • Both big and small • Both tight and loose • Both fast and slow

  14. Cells & Memes • Cells = individuals, units, teams, departments, companies, groups • Hire for attitude, aptitude & capacity • Train for skills & expertise • Retain for experience & judgement • Memes = rules for interaction • values, processes, instructions [corporate DNA, culture]

  15. Self-Organization • Cells interact according to memes • At all scales • Work independently and with others • Process inputs and produce outputs • Divide, reproduce, die • Both cells and memes evolve and co-evolve

  16. Three Questions • First posed by Rabbi Hillel, from “The Three Questions: Prosperity and the Public Good” by Bob Rae, 1998, Penguin Books • If I am not for myself, who is for me? • If I am only for myself, what am I? • If not now, when?

  17. The Double-Naughts Decade • 2001 – 2009/2010 • Not Utopia, Valhalla or Eden • Not Armageddon or Apocalypse

  18. 1. Uncle Sam Sulks • US reacts negatively to world wide criticism of its foreign policies, military excursions • US becomes more isolationist & protectionist re: trade, travel, homeland security • US cancels treaties re: NAFTA, WTA, UN, etc. • Any positive implications? …

  19. 2. Mother Earth Erupts • following trends accelerate and combine during next decade: • global warming, droughts, floods • hurricanes/cyclones/typhoons • AIDS [breaks out again from Africa] • unprecedented flood of refugees to all developed countries, including Canada • Any positive implications?

  20. 3. Hydrogen Hallelujah • technological breakthrough [hydrogen/oxygen fuel cells] makes “new” source of energy cheap, clean and accessible to all • consider impact on: • Middle East [Iraq, Saudis, etc.] • GM, Ford etc. existing plants & models • Utilities with coal, nuclear & gas plants • Alberta, Hibernia, Sable Island

  21. 4. “Momma Mia” Medicine • Major medical breakthroughs • Gene therapy [human genome project] • Anti-rejection drugs [transplants] • Neurological regeneration [cures for MS, Parkinson's, Alzheimer's and more] • Implications: • Demand for transplant “parts” • Added stress on healthcare budgets • Accelerated ageing of population

  22. What may happen re: Financial Services in Canada? • CUCC Environmental Scan • Especially good article re: CRM • Clash of Privacy vs. Anti-Terrorist/ Anti-Money Laundering legislation • E-Payments • HyperWallet vs. CertaPay • Remember VHS vs. Beta? • Bill C-8 • Community Accountability Statements • Federal Co-op Bank Consultation

  23. Whoa! STOP … uhh, Harry … Is there a consistent theme here? • Surfing … courage + work + balance + flexibility + vision = the building blocks • The Edge of Chaos … self-organization emerges at the boundary • Scenario Planning … considering and preparing for multiple possible futures • Systems Thinking … taking everything into account, putting it all together • Organic Organizations … and bringing it to LIFE

  24. OK, … so now what? • Everyone: • Write down number of kilometres you personally traveled from home to this hotel or from home to airport to get here • Add your age in years • Subtract tenure [years with credit union] • Person with highest number go 2 tables to front, right or clockwise • Person with lowest number go 1 table back, left or counter-clockwise • If any table near you has 2+ fewer people, person at your table sitting nearest goes to that table

  25. That was fun … what’s next? • Assigning roles • Everyone at table, close eyes, raise right arm and slowly lower, pointing at someone else at the same table • Who is the person at whom most pointed? Stand up. • Person opposite =Boss. • Person to left of Boss = Secretary • Person to left of Sect’y = Reporter

  26. Three Questions # 1 • From which galaxy does Harry originate and what has he been smoking since he got here?

  27. Three Questions # 2 • Meanwhile, back at the ranch … • Imagine, at this very moment, one of your member/owners walks into your CU office and asks to see all your files on him/her, both paper and electronic. • As of now, can you predict what response your staff would give? • Would that response be OK?If not, what needs to change at your shop?

  28. Three Questions # 3 and the beat goes on • Sarbanes-Oxley + Bill C-8 + ?? • Fast forward to 2006 … all FI’s, not just banks, must file annual Corporate Governance & Community Accountability Disclosure Statements • What might be included/required? • Would your credit union be in a position to easily comply?

  29. Selected Responses to Qs 2 & 3 • Q2: Access to own files • How many would give free/easy access today, no questions asked? Why? • How many would not? Why not? • Q3: Accountability Statements • How many think this might happen? • What would be included? • How many could comply today?

  30. Transparent, Accountable Passion, Compassion Sustainable Growth Innovative, Creative Trustworthy, Honest $ Profitable, Stable, Compliant

  31. A Successful Organization has… • POISE: a calm, cultured, balanced stance • POISES itself for whatever may come • Proactivity [creativity, innovation] • Openness [transparency, accountability] • Integrity [trustworthy, honest] • Self-Improvement [growth, development] • Empathy [passion, compassion] • Standards [profitability, stability, compliance]

  32. Openness Empathy Self-Improvement Proactivity Integrity $ Standards

  33. The End • Copies of reading list available

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