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Always look at the bright side of life. The crisis: people’s perspective. Michiel Hupkes Msc Van Hall-Larenstein Netherlands. Homo Faber. The hard working being, with a natural drive to work and creativity, aiming at creating a personal environment to live in (Marxism and Anarchism).
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The crisis: people’sperspective Michiel Hupkes Msc Van Hall-Larenstein Netherlands
Homo Faber The hard working being, with a natural drive to work and creativity, aiming at creating a personal environment to live in (Marxism and Anarchism)
Homo Economicus Humans are most and for all economical beings, focused on satisfaction of needs on a rational efficient and logical way:the calculating individual leading to best social economical organization of society Capitalism, liberalism
The crisis: people’sperspective • Human resource management • Personal skills • Peoples choices • Personal development • Teamwork • Economics Michiel Hupkes Msc Van Hall-Larenstein
This presentation • The human perspective • The facts and the believes • Your ideas and facts • The future • Preparing a proposal Do ask questions and disagree!!!!!
Discussion Let me see how you think about the crisis and what you learned about it
Economic crisis: the human factor • The crisis is caused by shareholders of big companies who were gambling with money
Economic crisis: the human factor • The crisis is a big opportunity for innovation
Economic crisis: the human factor • The crisis touches only those who are private business owners
Economic crisis: the human factor • The financial crisis is not about money but about trust
Economic crisis: the human factor • The crisis has no economical reason, only psychological
Economic crisis: the human factor • The rich people will not feel the crisis, the poor will pay for it
Simplifying the crisis? • The Chesnutt village • Discuss in pairs: solutions you can propose
We have more than one crisis • Credit/financial crisis • Climate crisis • Social crisis • Energy crisis
What do we see of the crisis? • Just some news……..
The Crisis day 312 • Air France-KLM turnover in past 3 months 5,19 miljard euro (20,5%) less then last year • McDonald, 8 % less benefit: 1,09 miljard dollar against 1,19 miljard dollar last year
Statistics in China • Growth in china (7,9 procent) seems too nice to be true; authorities have benefit from good figures • There are lies, big lies and statistics: :british politician Benjamin Disraeli • Statistics are like bikini’s: the pull your attention, but hide the essential
Analysts on stock market are like animals in a herd (dutchnewpaper of 18/7) The results of Goldman Sachs, ASML, TomTom, Apple, KPN, Ford, were all better than analysts had expected. • Why are they so wrong, and pessimist? • They run behind the facts • Time to digest the information is needed and with big fluctuations they are behind • Emotions play a role, they are people… • They play safe…… And still figure of the stock market play a big role in decision making
Where are we? • Is the worst behind us or still to come. Figures and declarations are contradictive
What is a crisis • A crisis is a real emergency situation in which the system and it’s way to function get’s seriously disturbed • In real life it has a negative meaning, however originally it is a neutral word:It’s origin is from the Greek: krinomai, which means: separate, distinct, decide, judge • Which in reality means that a crisis could be considered as a moment of truth…..a moment where decisions are going to be taken with a big impact on the future
Crisis models Attention Time Acute crisis Fluctuating crisis Nagging crisis
Why are we so uncertain about the crisis? • Economists tried to explain what will happen and when it will happen • However economist can only analyze what happened and try to extrapolate this to the future
Seven phases of economic crisis awareness • Denial • Rage • Hope • Apathy • Acceptance • Confusion, Frustration • Real acceptance
Real acceptance During real acceptance we see that new opportunities start to be elaborated. The story about the two neighbors Conclusion: a crisis leads to creativity if dealt with properly
From crisis to green revolution • Green New deal saves us from credit crisis and climate crisis. • Role of government or not? • Growth must be sustainable or financial feasible?
Keynes analysis • It sees OK to stimulate the economy with Keynesian measures if careful and structural implemented and chosen • But do not make the mistake to think that making the economy sustainable (cradle to cradle, investing in solar energy…) is the same as Keynesian measures: it will not serve the climate change
Crisis and management behavior • My brother works for AIG • They lost100 billion dollar in a year (2 billion a week, 50 million per hour) • AIG has now a CEO who works for 1 dollar a year, and does a good job
Crisis and company strategy Toyota has changed her objectives From the CEO (Akio Toyoda) speech: “ Rather than asking, “How many cars will we sell?” or, “How much money will we make by selling these cars?” we need to ask ourselves, “What kind of cars will make people happy?” as well as, “What pricing will attract them in each region?” Then we must make those cars.”
Where do we go from here? • Adam Smith (founder of the economic science) already said: It is our nature to feel sympathy for our fellow citizen. By nature we are altruistic. Egoism is more a matter of short sightedness, an expression of non understood individual interest
Turning point? • The crisis is a turning point, that is for sure, but what is going to be the direction? • Better moral standards? • Let’s restart talking about progress instead of growth…….
The economic system is in troubleNow let’s test our system, can it adapt? • Roles (government, banks) • Application of rules • Leadership • Way to deal with each other • Problem solving Rigid • Stay the same • Strict • Authoritarian • Passively reactively • Solutions imposed Chaotic • Changes • Changes of rules • Laissez-faire • Pro-actively • Impulsive, ad hoc
Samuelson (1976) When a populist mixed economy is running badly, (inflation and unemployment), will there emerge a demand for a fascist takeover, to restore “ orderly conditions an promote economic growth” ?
What I see in Holland? • More government ownership of productive ressources • More planning • Redistribution of income • Peaceful and democratic evolution • ???????
Strategic thinking in crisis situations • Understanding the situation, an instrument • The impact of crises on innovative thinking and acting • A way to make proposals attractive and accepted by the others who need to contribute
Idea owner Idea
Idea • Not always tangible • But someone has it
Idea owner(s) • The one(s) who feel(s) in charge of the idea • Not always the one who invented it
Power Idea owner Idea Force
Power • Power makes the world turn round • Power is name, fame, position,… • Power in Roemenia is…. • Power in Holland is…….
Force of the idea • Can you support it with facts • Does it feel challenging • How does it fit in trends • Relation to crisis
Havard: Ury and Fisher To negotiate a proposal you need • To be able to think in interests and not in positions • To develop criteria and negotiate about them • To have alternatives for a negative result of negotiations
Support for the owner Power of the owner Idea owner Idea Force of the idea
Support Do others feel committed to the idea: • - Who • - How many • - Where • - Relation to owner • Or can you easily make others enthusiastic