Increasing recognition and visibility of givers - http://www.chaordicsolutions.co.uk/blog/from-our-business-transformation-consultants/increasing-recognition-and-visibility-of-givers/

http://www.chaordicsolutions.co.uk/blog/from-our-business-transformation-consultants/increasing-recognition-and-visibility-of-givers/

Increasing recognition and visibility of givers: importance of employers rewarding success to givers not takers.

 

Extract from strategy+business – Adam Grant:

In the old world of work, good guys finished last. “Takers” (those in organizations who put their own interests first) were able to climb to the top of hierarchies and achieve success on the shoulders of “givers” (those who prefer to contribute more than they receive). Throughout much of the 20th century, many organizations were made up of independent silos, where takers could exploit givers without suffering substantial consequences.

But the nature of work has shifted dramatically. Today, more than half of U.S. and European companies organize employees into teams. The rise of matrix structures has required employees to coordinate with a wider range of managers and direct reports. The advent of project-based work means that employees collaborate with an expanded network of colleagues. And high-speed communication and transportation technologies connect people across the globe who would have been strangers in the past. In these collaborative situations, takers stick out. They avoid doing unpleasant tasks and responding to requests for help. Givers, in contrast, are the teammates who volunteer for unpopular projects, share their knowledge and skills, and help out by arriving early or staying late.

After studying workplace dynamics for the past decade, I’ve found that these changes have set the stage for takers to flounder and givers to flourish. In a wide range of fields that span manufacturing, service, and knowledge work, recent research has shown that employees with the highest rates of promotion to supervisory and leadership roles exhibit the characteristics of givers—helping colleagues solve problems and manage heavy workloads. Takers, who put their own agenda first, are far less likely to climb the corporate ladder.

The fall of takers and the rise of givers hinges on a third group, whom I call “matchers.” Matchers hover in the middle of the give-and-take spectrum, motivated by a deep-seated desire for fairness and reciprocity. They keep track of exchanges and trade favors back and forth to keep their balance sheet at zero, believing that what goes around ought to come around. Because of their fervent belief in an eye for an eye, matchers become the engine that sinks takers to the bottom and propels givers to the top.

Takers violate matchers’ belief in a just world. When matchers witness takers exploiting others, they aim to even the score by imposing a tax. For example, matchers spread negative reputational information to colleagues who might otherwise be vulnerable, preventing takers from getting away with self-serving actions in the future. On the flip side, most matchers can’t stand to see generous acts go unrewarded. When they see a giver putting others first, matchers go out of their way to dole out a bonus, in the form of compensation, recognition, or recommendations for promotions. Of course, these responses aren’t limited to matchers. Givers, too, are motivated to punish takers and reward fellow givers. But I’ve found that in the workplace, the majority of people are matchers, which means that they are the ones who end up dispensing the most taker taxes and giver bonuses. In an interdependent, interconnected business environment, what goes around comes around faster than it used to.

At Google, for example, an engineer named Brian received eight bonuses in the span of a single year, including three in just one month. He volunteered his time to train new hires and help members of multiple cross-functional teams learn new technologies, and his peers and managers responded like matchers, granting him additional pay and recognition. Consistent with Brian’s experience at Google, a wealth of research shows that in teams, givers earn more respect and rewards than do takers and matchers. As Stanford University sociologist Robb Willer notes, “Groups reward individual sacrifice.”

Interdependent work also means that employees will be evaluated and promoted not only on the basis of their individual results, but also in terms of their contributions to others. This reduces the incentives for takers to exploit givers, encouraging them to focus instead on advancing the group’s goals. As a result, takers engage in fewer manipulative acts—which reduces the risks to givers—yet they still contribute less than givers. This allows givers to gain a reputation for being more generous and group-oriented. And a rich body of evidence has shown that these qualities are the basis for sound leadership.

In fact, when givers become leaders, their groups are better off. Research led by Rotterdam School of Management professor Daan van Knippenberg has shown that employees work harder and more effectively for leaders who put others’ interests first. This, again, is a matching response: As van Knippenberg and Claremont Graduate University professor Michael Hogg found, “going the extra mile for the group, making personal sacrifices or taking personal risks on behalf of the group” motivates group members to give back to the leader and contribute to the group’s interests. And a thorough analysis led by Nathan Podsakoff, a professor at the University of Arizona, of more than 3,600 business units across numerous industries showed that the more frequently employees give help and share knowledge, the higher their units’ profits, productivity, customer satisfaction, and employee retention rates.

By contributing to groups, givers are also able to signal their skills. In a study led by researcher Shimul Melwani of UNC’s Kenan-Flagler Business School, members of five dozen teams working on strategic analysis projects rated one another on a range of characteristics and behaviors. At the end of the project, team members reported which of their colleagues had emerged as leaders. The single strongest predictor of leadership was the amount of compassion that members expressed toward others in need. Interestingly, compassionate people were not only viewed as caring; they were also judged as more knowledgeable and intelligent. By expressing concern for others, they sent a message that they had the resources and capabilities to help others.

Today, these signals are ever more visible: Givers are aided by the fact that the anonymity of professional life is vanishing. In the past, when we encountered a job applicant, a potential business partner, or a prospective service provider, we had to rely on references selected by that candidate. When takers burned bridges with one contact, they could eliminate that person from their reference list. But now, online social networks offer a much richer database of references. Odds are that through a quick search of our LinkedIn or Facebook networks, we can find a common connection with knowledge of that person’s reputation. By reaching out to the mutual contact to obtain an independent reference on the candidate’s past behavior, decision makers can screen out takers and favor givers. Of the billion Facebook users around the world, 92 percent are within four degrees of separation—and in most countries, the majority of people are just three degrees apart.

Such tools have made it tough for a taker to hide in the shadows. At Groupon, for example, Howard Lee was heading the South China office, and received a slew of applications for sales jobs. He searched his LinkedIn network for common connections, and located quite a number of them. When he discovered that certain candidates had a history of self-serving behavior, he quickly moved on, focusing his time and energy on candidates with track records as givers.

Taken together, these trends are changing the characteristics that we value in people. Two of the defining qualities of great leaders are the ability to make others better and the willingness to put the group’s interests first. Because givers today add increasing value in leadership roles and interdependent work, hiring processes can be modified to assess which candidates are inclined to contribute more than they receive. For development, promotion, and retention, leaders and managers should focus less on individual skills and talents, and more on the extent to which employees use their skills and talents to lift others up—rather than cutting them down. The employees with the greatest potential to excel and rise will be those whose success reverberates to benefit those around them.

Along with investing in people who are already disposed toward operating like givers, it will be of paramount importance to create practices that nudge employees in the giver direction. In many organizations, owing to their tendencies to claim credit and promote themselves, successful takers are more visible than successful givers. To make sure that employees are aware that it’s possible to be a giver and achieve success, it may be necessary to locate and recognize respected role models who embody an orientation toward others. That way, when what goes around comes around faster than it used to, it will be for the benefit of employees and their organizations.

Author: Adam Grant is Wharton’s youngest tenured professor and the author of Give and Take: A Revolutionary Approach to Success (Viking, 2013).

©2013 Booz & Company Inc. All rights reserved. “booz&co.” is a service mark of Booz & Company

More ... http://www.strategy-business.com/article/00175?pg=all

Developing more energised, empowered, and innovative workers - http://www.chaordicsolutions.co.uk/blog/from-our-business-transformation-consultants/developing-more-energised-empowered-and-innovative-workers/

http://www.chaordicsolutions.co.uk/blog/from-our-business-transformation-consultants/developing-more-energised-empowered-and-innovative-workers/

Developing more energised, empowered, and innovative workers: using power of amplification to achieve new levels.

 

Extract from HBR Blog Network – Marina Gorbis:

We live in a world in which amplified individuals — people empowered by technologies and the collective intelligence of their social networks — can do things that previously only a large organization could. Indeed, they can do some things that no organization could do before. For better and worse, this is the world in which weekend software hackers can disrupt large software firms, and rapidly orchestrated social movements can bring down governments.

Amplified individuals include artists, musicians, community organizers, and techies working alongside nontechies. For a glimpse of how their talents are “amplified,” visit, for example, BioCurious — a well equipped biology lab in the San Francisco Bay area that is actually a former garage full of apparatus bought on the cheap on eBay. Most of us think of biotech as the province of multinational pharmaceutical corporations and well-funded ventures, but the founders of BioCurious believe (as they say in their mission statement) “that innovations in biology should be accessible, affordable, and open to everyone.” The most capable synthetic biologists in the BioCurious community work not only on their own pet projects; they also help others learn to do so by offering classes in subjects like Molecular Biology, Bioinformatics, and Bioprinting. Unlike in traditional university settings, the classes are open to anyone; you don’t need to fulfill requirements or take a long list of prerequisites in order to attend. All you have to bring to the class is interest and curiosity.

To use a term I introduced in an earlier piece, people like these are engaged in “socialstructing” — that is, bypassing established institutions and processes for building new things, and instead working to create what they find missing in the world by communicating the need to their social networks, mobilizing whatever resources they have at their disposal, and pursuing solutions collaboratively. Amplified individuals are an especially formidable force because the hard work they do is work they choose for themselves, and it is the focus of the strongest of their talents.

This is the kind of amplification that plays out daily at the Tech Shop, where people are pioneering new manufacturing models. Hanging around there, you might come up with an idea for a product, then quickly prototype it at Tech Shop with advice and support from the larger community. You could get funding on Kickstarter, then manufacture it through a flexible network of small-scale producers in China and elsewhere around the world. Voila! No large-scale manufacturing facility required. A small group of individuals, amplified with connections to each other and access to resources previously available only to large organizations, can create at scales they could previously only dream of.

Given that energized innovators like these are disrupting many existing products, and the business models behind them, you can feel threatened by them. Or you can learn from them and work to turn your own organization into a collection of amplified individuals. The latter is the path we’ve chosen at the Institute for the Future (IFTF). Based on what we’ve learned so far, I can offer a few tips for other organizations hoping to amplify their workers’ talents and energy for greater innovation capacity and impact:

Change how you measure performance. The value you seek from employees, and should recognize and reward, can’t be measured only by focusing on their internal contributions. It also depends on their connections to and their standing in external communities that are important to your organization. At IFTF, several of our staff members run organizations of their own or contribute actively to other networks’ efforts. These activities contribute to our organization’s impact and increase the range of views and ideas we encounter. This is why we encourage our staff to expand and create their own external idea and knowledge networks.

Design the organization to support individual initiative, not control employees’ actions. We proudly show people our unusual organizational chart (more a constellation of project networks than a linear hierarchy) because it casts IFTF as a platform on which project teams and other work structures can self-organize, tackle issues, and solve problems. “The value of self-organizing structures is that they can act quickly, responsively, and creatively from the edges,” we explain in our vision statement. “The guiding concepts in this view of leadership are openness, self-election, continuous prototyping, robust platforms, and low coordination costs. Leadership skills focus on community building, consensus building, mediation, commitment, and humility.”

Socialize your underused assets. Under the traditional logic of management, it would make sense to jealously guard the use of any productive assets a firm has invested in. But in reality, nearly every organization has a surplus of resources of one type or another. Some have an abundance of physical space, others have equipment and tools that are rarely used, and still others have talent that is not fully engaged. A few years ago my colleagues and I decided that we could donate our surfeit of conference space to be used on weekends and some evenings by various communities whose work we want to encourage. We now regularly open this space to meetups, hack days, science bar days, and other informal gatherings of people with similar interests (science, biology, coding, 3D printing, and such). In the process we learn from these external innovators, extend our network, and engender a lot of goodwill. Think of the resources you have in abundance and how you might “socialize” them to build your organization’s social capital and enrich the flow of ideas.

Stop to consider how these few managerial changes would support and extend an individual’s initiative in your organization, and you’ll soon start to think of other tactics as well. Undoubtedly the ideas you come up with will share the common theme of loosening traditional managerial reins. But don’t let that loss of control frighten you. By recognizing the power of amplification, you will be rewarded with more energized, empowered, and innovative workers, and be able to achieve a whole new level of reach and impact.

Author: Marina Gorbis is Executive Director of The Institute for the Future, a Palo Alto, CA-based think tank. She is the author of The Nature of the Future, just out from Free Press (April 2013).

Copyright © 2013 Harvard Business School Publishing. All rights reserved.

More … http://blogs.hbr.org/cs/2013/04/the_new_kind_of_worker_every_business.html?

 

Saving species from extinction - http://www.chaordicsolutions.co.uk/blog/from-our-business-transformation-consultants/saving-species-from-extinction/

http://www.chaordicsolutions.co.uk/blog/from-our-business-transformation-consultants/saving-species-from-extinction/

Saving species from extinction: inspirational video from Aardman Animations, Stephen Fry and Alistair McGowan.

 

Extract from Recent Durrell Wildlife Conservation Trust Email:

So, what’s this all about?

Well, it’s a cartoon by Aardman Animations (of Wallace and Gromit fame) with Stephen Fry playing a frog and Alistair McGowan impersonating a dodo! You’ll probably laugh… you may cry, but we hope you’ll be left with an idea of just how important it is to join us on our mission of saving species from extinction!

Click to watch the video

So, why is this important?

‘When asked, as I frequently am, why I should concern myself so deeply with the conservation of animal life, I reply that I have been very lucky and that throughout my life the world has given me the most enormous pleasure.

But the world is as delicate and as complicated as a spider’s web. If you touch one thread you send shudders running through all the other threads. We are not just touching the web, we are tearing great holes in it.’

Gerald Durrell 1925-1995.

More … http://www.durrell.org/

Evidence of severe financial contagion risk from weaker countries - http://www.chaordicsolutions.co.uk/blog/from-our-strategy-implementation-consultants/evidence-of-severe-financial-contagion-risk-from-weaker-countries/

http://www.chaordicsolutions.co.uk/blog/from-our-strategy-implementation-consultants/evidence-of-severe-financial-contagion-risk-from-weaker-countries/

New research shows unexpected evidence of severe financial contagion risk from weaker countries in European Union.

 

Extract from University of Portsmouth Press Release – 16 April 2013:

Financial shocks coming from weak Euro zone countries are three times more likely to destabilise the region’s economies than shocks from richer Euro zone countries, according to new research.

Research by Dr Nikolaos Antonakakis, an applied Economist at Portsmouth Business School, is among the first to find compelling – and unexpected – evidence of a severe financial contagion risk from weaker countries in the European Union.

The results challenge the arguments for a single European currency and suggest a need to re-examine the single currency in the new post-economic crisis era.

Dr Antonakakis said: “The findings highlight the increased vulnerability of the Euro zone from the destabilising shocks originating from beleaguered countries in the periphery.

“This is the first study to have found evidence of a financial contagion effect where what happens in weaker Euro zone countries spills over to the rest of the region. Most people assume the effect is the other way around. It is counter-intuitive and suggests there is probably a need to reassess the effectiveness of the EU directorate economic policies.”

Dr Antonakakis studied the difference between the 10-year government bond yields  of nine euro zone countries – Austria, Belgium, France, Netherlands, Greece, Ireland, Italy, Portugal and Spain – between March 2007 and June 2012; a turbulent period encompassing both the global financial crisis and the Euro zone debt crisis.

The data from the nine states was compared with German government bond yields of the same maturity over the same period and all data was collected from Bloomberg. The results provide information on whether each country is a receiver or a transmitter of economic shocks.

Dr Antonakakis said: “These results are of great importance because, for instance, changes in government bond yield spreads in other Euro zone countries can be a good indicator of future changes and their repercussions.

“Shocks coming from the periphery have, on average, three times the destabilising force on other countries than shocks coming from the core, richer nations. This indicates a decoupling effect of countries on the periphery and those at the core that may challenge the argument for a single currency in the countries examined.”

Until now, very little was known about the interdependencies and complex links between Euro zone economies during the debt crisis and global economic downturn.

He said: “The results have important policy implications and can be used to change for the better how governments and regions manage the balance of austerity measures and growth-promoting initiatives.

“The cost of severe austerity measures is not just economic, it has human lives at its heart. If we can produce models which can be used to predict the effect of different scenarios they could be used to help stave off some of the more barbaric measures used to contain economic problems.”

Dr Antonakakis, a senior lecturer in economics and finance, has been invited to present his research alongside world leaders in the field at the SIRE Econometrics Workshop in Glasgow in May. Fellow presenters include Cambridge Professor Hashem Pesaran, editor of Journal of Applied Econometrics, one of the top five econometric journals in the world; Professor Paolo Zaffaroni, Imperial College; Professor Valentina Corradi, Warwick; and Rod McCorie, St Andrews.

More … http://www.port.ac.uk/uopnews/2013/04/16/weak-european-neighbours-have-immense-power/

World Risk Day 2013 schedule announced - http://www.chaordicsolutions.co.uk/blog/from-our-risk-management-consultants/world-risk-day-2013-schedule-announced/

http://www.chaordicsolutions.co.uk/blog/from-our-risk-management-consultants/world-risk-day-2013-schedule-announced/

World Risk Day 2013 schedule announced: free webinars with world’s leading experts on project and risk management.

 

Extract from World Risk Day 2013 Communication:

On 14 May we will hold the second World Risk Day virtual summit. This is a series of free webinars taking place at set times throughout the day, which will feature a presentation, and in many cases a live question and answer session.

As the centerpiece of World Risk Day, the Virtual Summit on May 14, 2013 will bring together the world’s leading experts on project and risk management, from the world’s largest and most complex mega projects to share their insights through ‘live’ webinars and ‘on-demand’ content.

Presentations this year include:

New concepts in understanding and managing risk in projects – David Hillson, The Risk Doctor

Making the business case for risk management – Lieutenant Barry McNally & Lieutenant Cdr Steve Lee, Royal Navy

Developing an holistic approach to risk management – Christoph Schwager, EADS

Strategies for successful collaborative risk management with contractors and the supply chain – Rob Halstead, Crossrail

Shattering the project myth – managing cost and schedule alone doesn’t = project success – Chris Bell, Active Risk

What lessons can be learned from the world’s Top 100 infrastructure projects – how can knowledge be shared? – Norman Anderson, CG/LA Infrastructure

What makes a great risk manager and how can risk and project professionals collaborate more effectively? – Michael Lopez, Booz Allen Hamilton

How to register for virtual summit sessions:

1. Click here to access the virtual summit schedule and start selecting which sessions you wish to attend

2. Complete the registration form which will give you access to the schedule

3. Click on the individual sessions, enter your contact information and receive log in details for that presentation via email

More … http://worldriskday.com/virtual-summit/

How to make organisations more adaptable - http://www.chaordicsolutions.co.uk/blog/from-our-business-transformation-consultants/how-to-make-organisations-more-adaptable/

http://www.chaordicsolutions.co.uk/blog/from-our-business-transformation-consultants/how-to-make-organisations-more-adaptable/

How to make organisations more adaptable: ways to enable HR to become true catalyst for proactive change.

 

Extract from Management Innovation eXchange Communication:

Today, the most important question for any organization is this: are we changing as fast as the world around us? For most organizations, the answer is no. And no wonder—our organizations were never built to be adaptable. Change tends to come in two varieties: the trivial or the traumatic. It’s time to change the way we change.

We believe HR can play a hugely positive role in helping companies to become adaptable at their core. HR is already a partner to business in many change management efforts, but HR’s impact would be many times greater if it played a lead role in eliminating the barriers to adaptability and in building new capabilities that facilitate proactive change.

To this end, we’ve teamed up with our friends at CIPD, the world’s largest chartered HR and development professional body with over 135,000 members around the world, to launch the Hacking HR to Build an Adaptability Advantage management hackathon. Over the next few months, we’ll be working with hundreds of progressive HR and business leaders to identify, develop, and eventually implement new ideas for making proactive change a reality in our organizations.

More … http://www.mixhackathon.org/hackathon/cipdhack/why-adaptabily-matters-now?

Top risks that threaten company’s strategy and business model - http://www.chaordicsolutions.co.uk/blog/from-our-risk-management-consultants/top-risks-that-threaten-companys-strategy-and-business-model/

http://www.chaordicsolutions.co.uk/blog/from-our-risk-management-consultants/top-risks-that-threaten-companys-strategy-and-business-model/

Top risks that threaten company’s strategy and business model: should be foundation for board’s risk oversight.

 

Extract from Corporate Compliance Insights – Jim DeLoach:

Of particular interest to executive management and the board of directors are normal and ongoing business management risks, emerging risks, and critical enterprise risks. In this column, we focus on the last category, which we define as the top five to 10 risks that can threaten the viability and/or execution of the company’s strategy and business model. These risks should be a significant focal point for executive management and the board as they provide an important foundation for the board’s risk oversight.

Paring down the company’s risks to the ones that really matter is a test of the effectiveness of enterprise risk management. If therisk assessmentprocess generates a laundry list of risks, it’s “game over” in the C-suite and boardroom. What senior management and directors want to know is information about the risks that can make or break the company. It all starts with an appropriately designed risk assessment process based on the following principles:

- Periodically evaluate changes in the business environment to determine if they affect the critical assumptions underlying the corporate strategy (regarding such matters as technological innovation, competition, economic trends, regulation, etc.) and, when one or more assumptions are rendered invalid, ensure the corporate strategy is revisited in a timely manner;

- Consider an end-to-end view of the value chain when evaluating the most significant exposures to the effectiveness or viability of the business model in creating value for customers and delivering expected financial results. Consider the velocity or speed of an event to impact, the persistence of that impact over time, and the resiliency of the company in responding to the event creating the impact, in addition to considering the severity of the impact and likelihood of occurrence. Pay attention to the uncompensated risks the company faces across the value chain, e.g., the risk of significant warranty costs and/or product recalls, or environmental, health and safety exposures;

- Ensure the risk assessment process provides insight, promotes debate and adds to the collective understanding of what is really important for the business to be successful. Focus on identifying significant changes in the enterprise’s risk profile, with emphasis on identifying emerging risks and worst-case extreme events, along with appropriate response plans to such scenarios, on a timely basis;

- Involve the board in a timely manner in decisions involving the acquisition of new businesses, entry into new markets, introductions of new products or significant alterations of the corporate strategy;

- Review the risk assessments over the last three to five years and evaluate their effectiveness against actual experience.

To illustrate, one consumer products company filters its risks down to the vital few through a risk assessment process that considers velocity and persistence of impact in addition to significance of impact and likelihood of occurrence. Also, the assessment process focuses on upstream supply chain issues and on protecting the company’s brands. The risk assessment criteria are considered by various risk sub-committees that identify potential critical risks and provide input regarding such risks to the corporate risk management committee. Meanwhile, the operating units and corporate functions report critical risks (as well as emerging risks) to the strategic planning function. Based on their respective assessments using the inputs they receive, the corporate risk management committee and strategic planning function provide input on the critical risks to executive management which, in turn, reports “The Top Risks List” to the board. The company’s chief risk officer supports the process at all points. For example, he consolidates all potential critical risks identified by the individual risk subcommittees and submits a summary to the corporate risk management committee membership prior to the next scheduled committee meeting.

While management is responsible for addressing the critical enterprise risks, the board should consider the information it needs to understand them. Both might benefit from the following reporting:

- High-level summary of the critical risks for the enterprise as a whole and its operating units and the reasons why they are critical;

- Status of risk mitigation efforts, with input from the executives responsible for managing the risks, including significant gaps in capabilities for managing the risks and status of initiatives to address those gaps;

- The effect of changes in the environment on core assumptions underlying the company’s strategy;

- Scenario analyses evaluating the effect of changes in key external variables impacting the organization;

- Changes in the overall assessment of risk over time;

- Reliability and value added of prior risk assessments.

The above information is illustrative and is not intended to be exhaustive or applicable to every organization. Reporting to executive management and the board is an iterative process and is fine-tuned over time.

Author: Jim DeLoach has more than 35 years of experience and is a member of the Protiviti Solutions Leadership Team. His market focus is on helping organizations succeed in responding to government mandates, shareholder demands and a changing business environment in a cost-effective and sustainable manner that reduces risk to an acceptable level. He also assists companies with integrating risk management with strategy setting and performance management. Jim also serves as a member of Protiviti’s Executive Council to the CEO.

More … http://www.corporatecomplianceinsights.com/these-top-risks-can-threaten-a-companys-business-model/

Companion website just launched for our Senior Partner, Robert J Toogood - http://www.chaordicsolutions.co.uk/blog/news/companion-website-just-launched-for-our-senior-partner-robert-j-toogood/

http://www.chaordicsolutions.co.uk/blog/news/companion-website-just-launched-for-our-senior-partner-robert-j-toogood/

We are pleased to annouce that a companion website has just been launched for our Senior Partner, Robert J Toogood.  Check it out now to see how he might be able to help you overcome your current challenges.

More … www.robertjtoogood.com

 

 

Ten practices used by consistently innovative companies - http://www.chaordicsolutions.co.uk/blog/from-our-business-transformation-consultants/ten-practices-used-by-consistently-innovative-companies/

http://www.chaordicsolutions.co.uk/blog/from-our-business-transformation-consultants/ten-practices-used-by-consistently-innovative-companies/

Ten practices used by consistently innovative companies: good starting point for improving creativity.

 

Extract from LDRLB Blog – David Burkus:

Innovation means more than just new products or services. It means improving the process of creating those products, or selling them, or experiencing them, or even improving the ways we manage the people who do all of the above. Perhaps my favorite definition of innovation is Scott Berkun’s: “Innovation is significant positive change.”

That change can apply to products and processes, or it can apply to people.

Recently, the Institute for Corporate Productivity published a study surveying some of the top companies and people in the fields of management and innovation. They examined some of the best people management practices at organizations known for innovation and found several ways that those companies develop and manage their human capital. In summarizing their findings, here are 10 human capital practices that drive innovation:

Use Technology to Collaborate and Share Knowledge. Collaboration drives creativity and innovation, and social media and conferencing technologies can help bring people together (or virtually together) more often for that collaboration.

Promote Innovation as an Organizational Value. The most innovative companies didn’t just luck into hiring creative people; they placed creative and even average people into creative cultures.

Include Innovation as a Leadership Development Competency. Part of building an innovative culture is having leaders who value creativity, and are creative themselves.

Tie Compensation to Innovation. The jury is still deliberating the influence of incentives on creativity, but their use in organizations sends a signal that innovation is valued. That signal is an important part of culture building.

Develop an “Idea-finding” Program. As we’ve discussed elsewhere, it’s not enough to have great ideas. Innovative companies build a system that taps into the collective knowledge of everyone and lets everyone promote good ideas.

Fund Outside Projects. It might sound counterintuitive to allow funding to develop projects that are technically outside your organization, but as market boundaries continue to blur, strategic innovation partnerships become even more important.

Train for Creativity. Creativity isn’t innate. Creative thinking skills can be developed and the most innovative companies fund training programs to develop them.

Create a Review Process for Innovative Ideas. Even the best ideas don’t come fully formed. There is a process to refining, developing and identifying the ideas with the most market potential. Creating a review process allows this to happen and signals that innovative ideas are valued.

Recruit for Creative Talent. Especially at the undergraduate and graduate levels. The war for talent is slowing shifting its focus from quantitative minds to creative ones.

Reward Innovation with Engaging Work. Research demonstrates that companies that are able to identify their most creative employees can enhance their creative ability by providing them autonomy to work on projects that are naturally interesting to them.

These ten practices might not be a prescription for how to shift a stuck culture to a creative one, but they are a good start. Consistently innovative companies are engaged in some or all of these practices. Perhaps it’s time to take a look at your own firm and see how many you’re engaged in.

Author: David Burkus is Assistant Professor of Management at Oral Roberts University. He is the founder and editor of LDRLB. He is the author of the forthcoming book Myths of Creativity to be published in Fall 2013.

More ... http://ldrlb.co/2013/04/10-practices-that-drive-innovation/

Risk management must understand global risk factor exposure - http://www.chaordicsolutions.co.uk/blog/from-our-risk-management-consultants/risk-management-must-understand-global-risk-factor-exposure/

http://www.chaordicsolutions.co.uk/blog/from-our-risk-management-consultants/risk-management-must-understand-global-risk-factor-exposure/

Risk management must understand global risk factor exposure: use of new proactive risk indicators for monitoring.

 

Extract from FERMA Blog – Mikhail A. Rogov:

The modern risk management is currently going through an ideological crisis showing the following symptoms:

- failure to understand the nature of the majority of risks, eclecticism of methods and concepts, in both technologies and standards of risk management;

- disregard of the interaction between operational risk, credit risk and market risk, lack of continuity in management processes, lack of common rating scales for the assessment of various risks;

- inadequate tools for operational risk assessment;

- the virtual absence of portfolio approach to operational risk management;

- difficulties with forecasting stress and crisis scenarios generation, difficulties with explaining the nature of chaotic market processes;

- the problem of the recently increased relevance of some previously uncommon factors, of which the following ones are thought by the author to be most important : cyber-terrorism and industrial terrorism, influence of social networks, High Frequency Trading (HFT), threat of antibiotic resistance.

Future risk management

The author believes that the next decades will see the development of the following branches of risk management: human error, transfer of operational risks including hedging and portfolio diversification, prediction markets, new concepts of key risk indicator (KRI), risk management of small and medium enterprises (SMEs) and households, crowdsourcing, including platforms like Ushahidi, Wiki, new generations of publicly available risk indices, emergence of new asset classes.

Global risk factor theory

The basis for the development of the global risk factor theory Herschel (1804), Jevons (1870), Chizhevsky (1920),the advent of modern heliobiology and its findings, findings of the sciences of human factors, human errors, findings of the sciences of risk management and financial mathematics, accumulation of statistical data (statistics of disasters, volatility, defaults, other events and indices).
The following postulates can be confirmed or refuted by explaining the causal relationships and by statistical analysis:

Risks are interrelated: there are relationships between financial risks of all types (market, credit, operational ones)

Risk interactions have an important role because of the existence of close economic, organizational and technological ties between risk owners: the occurrence of risks (operational, credit, market ones) for some persons implies the emergence of other risks for their counterparties and the subsequent chain reaction of credit and market risks propagating through exchange within the economy. In recent decades, these relations have been developing more intensively than ever before because of market globalization and technological progress. This causal relationship can be illustrated by a typical example of the domino effect in business environment: discontent of the local population (a political risk, part of operational risks) in Nigeria led to the explosion of a pipeline operated by Royal Dutch Shell on December 21, 2005. As a result, the output was cut by 180,000 barrels per day (operational risk of business interruption); the company declared ―force majeure,‖ which meant its failure to perform contract obligations (credit risks for the counterparties), and the oil price went up by 48 cents per barrel (commodity market risk). The mechanism of risk factor influence on the emergence of credit and market risks can be illustrated using the well-known Merton approach, the basis of the Expected Default Frequency (EDF) methodology: distance to default of a firm (i.e. credit risks of its counterparties) is determined by risks associated with the firm’s operations and expressed by the volatility of the market value of the firm’s assets exposed to various types of risk: operational, market, credit ones. The assets volatility determines the volatility of the market capitalization (market risks of investors). Statistical analysis of relationships
Correlation and cointegration of market and credit risks are well known and can be explained by changes of risk premium; however, relationships of these risks with various operational risks cannot be adequately explained without identifying a common factor.

Let us define the global risk factor as a global-scale correlator of risk factor volatilities.

Risks are anthropic: human error is the global risk factor

Human error is not the only risk factor, but it has acquired a global nature. The principal cause of the global influence of the human factor is that it often and strongly affects the sensitivity of assets performance to the majority of other risk factors, no matter what their own nature. In the past decades, the influence of the human factor has been growing due to the increasing operator’s role in business processes and globalization. This is reflected by the increasing correlation of different types of risks.
Investigations of the occurrences of technological operational risk in almost all sectors and regions show that most of such events in the last half-century were initially caused by human error rather than technical failure. And moreover, when caused by technical failure, risk events were mostly the result of accumulated hidden defects due to accumulated maintenance errors caused by organizational errors and again the human factor. This can be confirmed by many examples, some of which are given below. The human factor is the main trigger behind the vast majority of transport accidents and disasters. Human errors are responsible for 90 percent of all motor vehicle accidents. National statistics of individual countries do not differ much from the world average figures. The human factor accounts for 70 to 80 percent of accidents in air and water transport, and for about 50 percent of accidents in railway transport. The human factor is also the dominant cause of industrial accidents and injuries. For instance, about 85 percent of lifting crane accidents are associated with violations of labor or technical discipline. There are about 200 best-known techniques for human factors analysis and assessment. For example, the Human Factors Analysis and Classification System (HFACS) is based on ― the Swiss Cheese model (J. Reason, 2000). The model illustrates errors passing through ―holes‖ (weaknesses) in business processes. According to this theory, there are unsafe acts (errors), preconditions for unsafe acts, including the operator’s psychic factors, unsafe supervision and organizational influences.

Risks are heliogeotropic: human errors and failures (the human factor) depend substantially on preconditions such as the effects of heliogeophysical factors (geomagnetic disturbances, etc.)

Geomagnetic activity depends on solar activity. According to the Svalgaard–Mansurov effect, the variations of the Earth’s magnetic field are influenced by the sector structure of the interplanetary magnetic field (IMF). These two major factors can disturb the heart rate and cause human errors, which in their turn, trigger chain reactions resulting in the occurrence of all types of financial risks (market, credit, operational ones) all over the world, depending on the assets sensitivity to the risk factors. Besides, human intuition and emotions enhance in the periods of geomagnetic disturbances, and this enhancement influences market expectations. As concerns operational risks caused by risk factors non-correlating with heliogeophysical conditions, their impact depends on the asset sensitivity to these risk factors, while the asset sensitivity itself is heliogeotropic due to the human factor influence. For a considerable part of risks, the dynamics of risk events can be explained by that of human errors under changing space weather that has a planetary effect. This risk source was termed ―the global risk factor. Astrophysicists have shown the chaotic nature of solar and geomagnetic activity, and this can explain (based on the global risk factor theory) the nature of the observed widely discussed chaotic processes in the markets.

Global risk factor indices

There are a lot of indices of solar and geomagnetic activity, and the objective was to choose the best indicator for adequate description of the global risk factor or to develop a new one. In the author’s opinion, the best global risk factor index should meet the following requirements: most fully explain the behavior of market, credit and operational risks, allow for possible regularities discovered in heliobiology (the Mansurov effect), be based on uniquely determinable or measurable values (heliogeophysical data), allow real-time updating. The indices of solar activity are not suitable for describing the global risk factor. This is the very reason of the skepticism of modern science towards the ideas of prominent scholars of the past, particularly (Jevons, 1878) and (Chizhevsky, 1936). The failure to find correlations with solar activity (the Wolf number, also known as the sunspot number) has led to the substitution of this idea in modern science with the general idea of accounting for random factors in economics. Economists rebranded the term ―sunspots‖ by completely stripping it of the implication of Sun-Earth relationships and using it to denote an external non-fundamental variable that influences human behavior. The RogovIndex© family of indices was developed for adequate description of the global risk factor; these indices satisfy the above requirements and are based on the widely accepted index of geomagnetic field variation averaged over several stations (storm-time variation Dst). The conclusion that the effect of heliogeophysical factors on risk is best described by storm-time variation than by any other of the great variety of indices is consistent by the findings of heliobiological research. The author is planning to create a market of space weather index derivatives.

Industry and geographical specifics of global risk factor exposure

The industry specifics of preconditions for error proliferation includes, among other things, the scope of error impact on business processes (with a higher labor productivity, an error of one operator would affect more performance indicators and, generally, more business processes), the scope of business process regulation (including operator qualification requirements and other industry-specific barriers), relative attractiveness of the industry pay rate against the average pay in the region’s economy, the conflict intensity in the industry (the number of strikes). Industry specifics result in different global risk factor exposures that should be taken into account by risk managers. For instance, diversified portfolios may be created using the correlation matrix or cointegrating vector approaches that take account of the global risk factor exposures of various assets and consider credit risks in accordance with the industry specifics. A detector of those risks that cannot be explained by the global risk factor behavior allows planning most topical areas of risk audit for identification of operational risks. The geographical specifics of global risk factor exposure is related to the distance of the region, where the main business process or asset (if appropriate) is located, from the Magnetic Poles constantly drifting relative to fixed geographic coordinates.

Conclusion

The proposed global risk factor theory (Rogov 2002-2013) describes the frequently observed interaction of different types of risks (market, credit, operational) at different assets and in different business processes. The theory opens prospects for risk benchmarking, analysis, detection of anomalies and hidden risks, classification of risks, particularly based on hierarchical clustering of time series. This allows creating new proactive risk indicators for monitoring, as well as applying the market mechanisms of operational risk optimization through diversification and hedging with the use of index derivatives.

Author: Mikhail A. Rogov – http://www.ferma.eu/author/mikhail-rogov/

More … http://www.ferma.eu/2013/04/future-of-risk-management-and-the-global-risk-factor-theory-possible-perspectives/

IRM GRC SIG event on 25 April has OCEG focus - http://www.chaordicsolutions.co.uk/blog/irm-grc-special-interest-group/irm-grc-sig-event-on-25-april-has-oceg-focus/

http://www.chaordicsolutions.co.uk/blog/irm-grc-special-interest-group/irm-grc-sig-event-on-25-april-has-oceg-focus/

I am pleased to announce that you can now book your place for the next IRM GRC SIG event on 25 April at http://irmgrcsigapril13.eventbrite.co.uk

The main focus of this session is to hear “real-life” stories from users/businesses that have previously implemented or are currently implementing an OCEG “Principled Performance” and/or Capability Model based approach to Governance, Risk Management and Compliance.…. and the agenda is currently looking like this:

1. Welcome, Housekeeping and Session Guidelines

2. General Update/News

3. Case Study: GRC at Shell

4. Introduction: OCEG, Principled Performance and GRC Capability Model

5. Case Study: OCEG at Heineken International BV

6. Break

7. Case Study: OCEG at Raytheon

8. Review and Conclusions

9. AOB

10. Next Session

11. Close

IMPORTANT: as this session is being kindly hosted in the new Canary Wharf offices of Shell, it is essential for security reasons that if you intend to attend the event in person that you book your place by no later than 17:00 UK time on Tuesday, 22 April: http://irmgrcsigapril13.eventbrite.co.uk

I sincerely hope you can participate in the session, either in person or virtually. In the meantime, if you have any queries or questions about this event or any other aspect of our SIG activities then do not hesitate to contact me.

Best Wishes, Robert
Chair, IRM GRC SIG

Email: robert_toogood@chaordicsolutions.co.uk

Growth limited by creative way strengths used - http://www.chaordicsolutions.co.uk/blog/from-our-strategy-implementation-consultants/growth-limited-by-creative-way-strengths-used/

http://www.chaordicsolutions.co.uk/blog/from-our-strategy-implementation-consultants/growth-limited-by-creative-way-strengths-used/

Growth limited by creative way strengths used: understanding what you are great at in more flexible, holistic way.

 

Extract from LDRLB – Max McKeown:

Google grows when it does what it’s good at. And its official strategy makes that clear. It seeks to ‘organize the world‘s information and make it universally accessible and useful’ and it’s great at doing exactly that. It has successfully revolutionised search. Not just search for text but search for video, images, audio, books, and news. But when Google strays into what it does not understand it stalls. Its money wasted if they don’t become better. Its money wisely invested only if Google becomes the best in those new markets.

Toyota decided to compete with Mercedes. But instead of copying the way how Mercedes made luxury cars, they used their own unique production system. They knew what they were good at and used these capabilities as a strategy to compete. Ideally you find something customers value but competitors don’t understand. Something beautifully non-obvious (to them) and wonderfully obvious (to you).

Strategy is not just about actions and opportunities. It is about figuring out how opportunities relate to your strengths and weaknesses. If you can’t do something that is necessary to the success of your plan, then your plan will not succeed unless you can fill the gap. Alternatively you can stay with plans that depend on strengths that you already have. This is particularly powerful when your strengths are relative to others in the same competitive space. It is even more powerful if you create strategy from an overlap between strengths and opportunity or can stretch from where you are to where you want to be.

How can you build from where you are to where you want to be? Some people give up because they don’t have what their plan needs. This kind of strategic stretch can be very attractivebut is only likely to be successful if the gap is understood. More specifically, it is more likely to be understood, if the strategic stretch can be made more or less naturally from one position of strength to an extended position of strength. Some gap filling can come from learning. Other weaknesses can be addressed by recruiting people with the experience and skills you think you need.  The key to success is a flexible, clear understanding of the strengths of your organization – what you do best – and how they relate to the strategic opportunities that are available to you.

Don’t worry if this all seems difficult, the difficulty is what makes the effort worthwhile. It is the creativity with which you use those fundamental strengths that will enable or limit your growth. Understanding what you are best at is not meant to stop you learning. The search for what you are best at is not about mindless repetition. The aim is to understand what you are great at in a more flexible, holistic way.

Author: Max McKeown is an English writer, consultant, guru and researcher specialising in innovation, strategy, leadership, and culture. He is the author of six books, including The Strategy Book and Adaptability.

More … http://ldrlb.co/2013/04/how-to-transform-a-strategic-gap-into-a-strategic-stretch/

Using corporate centre profitability to assess effectiveness - http://www.chaordicsolutions.co.uk/blog/from-our-business-transformation-consultants/using-corporate-center-profitability-to-assess-effectiveness/

http://www.chaordicsolutions.co.uk/blog/from-our-business-transformation-consultants/using-corporate-center-profitability-to-assess-effectiveness/

Using corporate centre profitability to assess effectiveness: whether adding value in excess of its costs.

 

Extract from strategy+business – Ken Favaro:

Senior executives seeking to gauge the effectiveness of their company’s corporate strategy might look at any number of factors: the company’s shareholder returns, its growth rate, its market share, or its price-to-earnings multiple. Yet none of these markers would tell the whole story. In fact, they might lead executives to precisely the wrong conclusions.

The one true measure of a corporate strategy is the profitability of its head office. Yes, that’s right, we’re talking about “corporate,” that “dead weight” of administrative functionaries most business unit leaders love to loathe as nothing more than an oppressive cost center that taxes the “real” parts of the business with onerous compliance requirements, excessive monitoring, redundant reporting, countless initiatives, endless meetings, and intrusive staff. Of course, in strict accounting terms, corporate headquarters is a cost center because it has no revenues. But it can and should be profitable. In fact, a profitable corporate center is both literally and figuratively at the center of corporate profit itself.

Continued … http://www.strategy-business.com/article/00173?

Author: Ken Favaro is a senior partner with Booz & Company based in New York and global head of the firm’s enterprise strategy practice.

©2013 Booz & Company Inc. All rights reserved. “booz&co.” is a service mark of Booz & Company.

More … http://www.strategy-business.com/article/00173?

Possible ways to measure "tone at top" - http://www.chaordicsolutions.co.uk/blog/from-our-compliance-consultants/possible-ways-to-measure-tone-at-top/

http://www.chaordicsolutions.co.uk/blog/from-our-compliance-consultants/possible-ways-to-measure-tone-at-top/

Possible ways to measure “tone at top”: worthwhile exercise to improve effectiveness of compliance activities.

 

Extract from Corruption, Crime and Compliance – Michael Volkov:

Compliance professionals have a lot of demands on their time. By definition, they are spread thin across a number of competing demands.  As a result, companies do not spend much time on “tone-at-the-top.”

In reality, compliance officers are relieved when they get the support of the CEO, and the ability to cite the CEO’s commitment to compliance.  Often the CEO’s support translates into resources and a compliance priority in the organization.

The importance of tone-at-the-top is significant.  A 2009 research report conducted by the National Business Ethics Survey found that in strong ethical cultures, the pressure to commit misconduct was reduced from 16 percent to 4 percent; rates of misconduct were reduced from 77 percent to 40 percent; failure to report misconduct was reduced from 44 to 27 percent.

The question then is how do you measure the internal perception of your company’s tone at the top?

There are a number of possible measurements:

Internal auditor survey.  Internal auditors are starting to measure the perception of tone at the top.  Companies that measure their own tone at the top, and report the results tend to have higher perceptions of ethical conduct at the higher levels of corporate management.

Anonymous reporting.  Companies should examine the percentage of complaints which are made by anonymous employees.  The higher the percentage of anonymous complaints could reflect a lower perception of the importance of compliance.

Benchmarking.  Companies can examine the rates of misconduct against companies of comparable size.  If the benchmarking data shows the company is under or over the benchmarking rate, this may reflect a positive or negative perception of the tone at the top.

Employee surveys.  Many companies conduct annual surveys of employees, which reveal employee perceptions of senior management and their commitment to compliance.

Review of senior management communications. Reading communications by senior management to employees on compliance issues can provide insight into compliance commitment and attitudes.

Interviews and focus groups.  Compliance officers have used employee interviews and focus groups to unearth perceptions of senior management’s compliance commitment.

Employee exit interviews.  Compliance officers and human resource officers can coordinate exit interviews with departing employees to inquire on perception of tone at the top.

Management’s commitment to compliance is a critical factor in a company’s internal controls and corporate governance.  It is important to measure the perception of a company’s commitment to compliance.  It permeates every aspect of a corporate compliance program.

While the measurement of tone at the top is subject to “soft” measurements, it is still a worthwhile exercise which can uncover important information which can be used by compliance professionals to improve the company’s compliance program.

Author: Michael Volkov

© 2011 – 2013 · Corruption, Crime & Compliance, All Rights Reserved.

More … http://corruptioncrimecompliance.com/2013/04/measuring-tone-at-the-top/

Taking GRC beyond the conventional enterprise - http://www.chaordicsolutions.co.uk/blog/from-our-grc-consultants/taking-grc-beyond-the-conventional-enterprise/

http://www.chaordicsolutions.co.uk/blog/from-our-grc-consultants/taking-grc-beyond-the-conventional-enterprise/

Taking GRC beyond the conventional enterprise: entire regulatory system in desperate need for disruptive innovation.

 

Extract from Business Finance Magazine – Eric Krell:

Is anybody happy with our current approach to business regulation and regulatory compliance?

My anecdotal research suggests not. On a recent vacation, I met many folks working in a wide range of professions. When I responded to their “what do you do?” question by explaining that I write about business ethics, risk management, governance and compliance, half of them groaned something along the lines of “Does business have any ethics?” or “Why bother?” The other 50 percent of my questioners seemed to work in private industry, and they also groaned – about the sorry state of business regulations – when they heard what I write about.

Both views over-simplify, and both views are correct (or, at the very least, understandable).

As a semi-retired management consultant recently confided to me: “Our whole system of business regulation is basically a big pile of [garbage].” His argument is that our current regulatory “system” (“pile of rules” is more accurate) represents the accumulation of many, many small victories: some by corporate interests and their lobbyists, and some by those who seek to rein in indecent corporate behavior.

Despite the rules, the misbehavior continues, spurring new rules — and adding burdensome compliance costs and work. These costs are borne by all companies, including those who have demonstrated honorable behavior for decades. Worse, many people outside the business realm group these honorable companies with the irresponsible enterprises. My vacation reading helps explain why.

One of the juiciest Spring Break reads in the April issue of Vanity Fair is Willam Cohan’s feature on a battle of hedge fund managers over the fate of Herbalife and its own corporate character. The article is populated with several villains (truly, none of the main characters come across as remotely likeable or even altogether human) and not one hero.

For GRC enthusiasts, this article contains prime examples of practices used to exploit the gray areas surrounding rules. One technique involves “talking your book,” the practice of broadcasting a hedge fund’s positions (long or short on a particular company) after the positions have been purchased in an effort to move the market (the stock prices of the company) in a way that is favorable to the position. “Talking your book, as it’s known on Wall Street, is not exactly kosher, but it’s done all the time,” notes Cohan.

Changing risk models to shrink losses, exceeding risk limits and hiding trading losses from risk managers are not exactly kosher practices, but they took place frequently enough within JP Morgan Chase to enable the $6 billion-plus London Whale loss to occur. (The U.S. Senate’s recent tome on the loss is getting all the news right now, but JP Morgan’s own reports — two of them — on the incident are equally enlightening.)

This is a familiar string of events:
– Bad corporate behavior (more specifically, bad behavior by employees within a company);
– Major losses (including some that require taxpayer help);
– CSI-esque investigative reports into how the bad behavior occurred (usually concluding that there was a *gasp* “risk management failure”);
– Congressional scolding; and
– New regulations (including some that cost companies exhibiting excellent behavior millions).

The retired management consultant I spoke with argues that this system – the entire regulatory system (including lobbying) — screams out for disruptive innovation.

For example, what if companies in certain highly regulated industries invited regulators, customers and other key stakeholders into the product development process earlier to get a green light or red light on a new idea well before investing years and tens of millions of dollars in its development? In other words, what if GRC extended beyond the four walls of the enterprise (via collaborations beyond traditional lobbying efforts)?

There would no doubt be numerous and significant obstacles to contend with. But solving those problems seems much more enticing and more cost-efficient than continuing to cope with a growing pile of rules that continues to make all stakeholders wrinkle their noses.

More … http://businessfinancemag.com/article/grc-desperate-disruptive-innovation-0319