MSc BIS
What theory can be found to underpin
the inevitability of a crisis?
MSc
HCM
Group 3:
Perry Trienekens
Bram Boerman
Janine Jaquet
Kenny Ensink
Daan Verkaik
1
MSc BIS
Contents of this lecture







Crisis in all its forms
Chaos theory
MSc
HCM
Icarus paradox
Black Swan
Disruptive innovation
Business Case: Municipality of Amsterdam
Thomas Kilmann Test
2
MSc BIS
Crisis in all its forms
MSc
HCM
What is 'crisis'?
3
MSc BIS
Crisis in all its forms
MSc
HCM
4
MSc BIS
Crisis in all its forms
MSc
HCM
5
MSc BIS
Crisis in all its forms
MSc
HCM
6
MSc BIS
Crisis in all its forms
MSc
HCM
7
MSc BIS
"Communication, organization, and crisis" Seeger, M. W. et al.; (1998)
Crisis in all its forms
Defining characteristics of crisis:
1.
2.
3.
4.
MSc
unexpected (i.e., a surprise)
HCM
creates uncertainty
is seen as a threat to important goals
need for change
8
MSc BIS
'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
MSc
HCM
"Surprise and structural change are inevitable in
systems of people and nature." p. 391
9
MSc BIS
'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.
MSc
HCM

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.
10
MSc BIS
Chaos Theory
MSc
HCM
11
MSc BIS
Chaos Theory
Outcomes from the chaos:
MSc
1. The tension fades
We go back to the old way of HCM
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.
12
MSc BIS
Chaos Theory
Stuck in chaos?
MSc
HCM
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.
13
MSc BIS
'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
MSc
integrated into processes.
HCM
Company starts to lose sight of other ideas.
Same goes for people.
They found 4 main tracks that a company/
person can follow.
14
MSc BIS
Icarus paradox
Craftsman -> tinkerer
A focus on high quality products turns into an obsession with
small unimportant details.
Builder -> Imperialist
MSc
A smart mind that knows how to HCM
expands starts expanding
without reason.
Pioneer -> Escapist
The thirst for being the first turns into blindly choosing the latest
technology.
Salesman -> Drifter
Great marketing turns into bland all the same sales pitch where
the product doesn't matter.
15
MSc BIS
Icarus paradox
The momentum a company builds comes
from a couple of sources.
MSc
HCM
1. Leadership traps
2. Current culture and skills
3. Power and politics
4. Memories
16
MSc BIS
Icarus paradox
The paradox has two sides
1. Success can lead to failure.
MSc
2. The things that can make
HCM you succeed can
also make you fail.
Can we combat the paradox?
Reflection and keep monitoring the situation.
17
MSc BIS
'The black swan: The impact of the highly improbable' ,
Nassim Taleb (2010)
The Black Swan
http://www.youtube.com/watch?v=BDbuJtAiA
BA
MSc
HCM
18
MSc BIS
The Black Swan



They are hard to predict
They have a big impact/consequence
MSc
Not able to predict beforehand
but "obvious"
HCM
after it happened.
19
MSc BIS
The Black Swan
Why is it hard to see a Black Swan coming?

We are looking for patterns and predictability

MSc (ERM)
Enterprise Risk Management
HCM

Focus on the White Swans
Blind for coincidence and let us run opportunities…
20
MSc BIS
The Spectrum of Variability
MSc
HCM
Different kind of crisises
21
MSc BIS
Coping with Black Swan events
Need to learn to be able to deal with them.
Don’t try to predict them.
MSc
HCM




Investing in resilience
Building in redundancy
Organization not operating ‘on the edge’
Focus on positive ones
Prepare for the impact
22
DisruptiveMSc
Innovation
BIS
MSc
HCM
23
MSc BIS
Disruptive Innovation

Established Companies


Traditional view
MSc
HCM
 Customer needs
Technology changes

Not radically new
24
MSc BIS
Disruptive Innovation

Technological Innovations

Sustaining


MSc
HCM
technologies
Maintain Rate of improvement
Disruptive technologies

Different package
25
MSc BIS
MSc
HCM
26
MSc BIS
Disruptive Innovation
How to spot & cultivate Disruptive Technology?

Determine Disruptive

Locate initial market


MSc
/HCM
Sustaining
Customers
Experimenting rapidly, iteratively and
inexpensively with both product & market
27
MSc BIS
Disruptive Innovation
How to spot & cultivate Disruptive Technology?
 Strategic Significance

Plotting product performance
in a graph
MSc
HCM
28
MSc BIS
Disruptive Innovation
Spot & cultivate Disruptive Technology

MSc
Responsibility for building HCM
disruptive technology

Keep disruptive organization independent
29
MSc BIS
Disruptive Innovation
Enabling Disruptive Innovation

Internal

HR

Organisation

Structure
MSc
HCM
30
MSc BIS
Disruptive Innovation
Enabling Disruptive Innovation

Context

Customer
MSc
HCM
31
MSc BIS
MSc
HCM
32