We can all shape the world now…

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Another year, another Davos conference where the global super-elite gather to meet to discuss the worlds’ problems. Or at least do some great networking…  Because how much innovation truly originates from those at the top?

In the UK, a controversially-titled TV show is dominating local headlines – Benefits Street – examining the lives of residents living on one street in Birmingham, the majority of which are dependent on benefits.

Paul Taylor has an excellent article – 3 lessons we should all learn from Benefits Street – highlighting the more positive aspects of the programme. Like Paul, I watched an episode out of curiosity given the news coverage and agree with his perspective. The show shines a spotlight on just how difficult it is to get out of the trap once you fall into it. And Paul highlights the flaw in much of our government systems focused on welfare (emphasis his):

One of the problems across the social sector is there’s too much top down innovation and an over reliance on tech based solutions.

We need to listen to communities , seed fund some grass roots projects and get out of the way.

Time and again, systems that grow bottom-up out perform those that are designed top-down. Top-down priorities are beneficial when you are looking to scale out a successful solution. But finding a solution in the first place is demonstrably easier when starting small: experiment, fail fast, learn and try again. You can’t do that when investing billions on a single enterprise-scale scheme.

Davos may be a great deal of fun and intellectual exercise for the global super-elite. But the mindset invariably focuses on top-down solutions. Attendance is mostly limited to those benefitting from the current systems in the world. Cue Machiavelli:

There is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success, than to take the lead in the introduction of a new order of things. Because the innovator has for enemies all those who have done well under the old conditions, and lukewarm defenders in those who may do well under the new.

To shape the world in a different way is more likely to happen by the actions of those least likely to attend events like Davos. And in this new globally connected age, the balance of power is shifting. Whilst there have always been people across the generations who would rather see a fairer world, the Internet has connected those voices on a far bigger scale in recent years. More and more individuals talk about their desire for meaning and purpose over wealth. For a more collaborative networked culture over one dominated by command-and-control hierarchies.

The following is just one presentation (but a rather good one by Joyce Hostyn) demonstrating this shift:

The theme at the World Economic Forum in Davos this year was ‘Shaping the world’. That’s something we can all now participate in. The smartest people will never all be in one room.

References

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Flickr image – Peter Brabeck-Letmathe and Michael S. Dell at WEF 2009, Davos – shared by the World Economic Forum

Beware the tuna sandwich

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I went into the boardroom. The chairman was sitting on one side of the table and in front of him was a great platter of sushi which is my favourite food. On my side of the table was a tuna sandwich. That was to tell me that, because I had pushed and insisted upon this meeting, I [the president of the company] was the tuna sandwich in the food chain.

A great 30-minute podcast recently hosted by Evan Davis for BBC Radio 4 looked at examples of managing in a crisis. Each case was completely different but all shared a common theme – the role of emotion (and cultural norms) in decisions, actions and consequences.

The first example was a story recounted by Michael Woodford, former president of Olympus. Mr Woodford had worked for Olympus for 30 years and risen through the ranks to become president of the corporation. His mentor Tsuyoshi Kikukawa – ‘who was like my favourite uncle’ – was the chairman.

Not long after becoming president, Mr Woodford became aware of allegations that Olympus had bought three companies with almost no turnover for over $1 billion. A close business friend translated articles that substantiated the allegations and made them irrefutable. When Mr Woodford spoke to a colleague, he discovered that the chairman was aware of the allegations and had told the entire executive floor to not discuss the article with the president.

The next day, he asked for a meeting with the chairman and it was set for lunchtime, the only available slot. And so he was faced with the tuna sandwich:

And it was a manky tuna sandwich at that, there was no lettuce or crisps around it. A British Rail buffet carriage in the 1980s would not have been proud of this sandwich.

After the meeting, he proceeded with investigating the matter with the accountants. Six letters were written going through the formal process:

It culminated in letter number six when I asked for the resignation of the chairman and the vice president. I knew if they were going to go quietly, which would have been in their interests and for the benefit of the company, that I would have been called to a small meeting. Instead, an extraordinary board meeting was scheduled and I knew there and then I was going to be fired.

The culture of the organisation was to protect the most senior members of the ‘club’. No matter who or what was right or wrong. Within a month, Olympus shares had fallen in value by $7billion wiping 8o% off the value of the company.

Looking back on the experience, Mr Woodford commented:

Organisations have this instinct to protect themselves. Which can be the worst thing. A bad situation can be made ten times worse because of what the organisation chooses to do.  …The day I was fired, people ran with the pack, the new order. That still haunts me today… To become a persona non gratis is very hard to describe. It’s a horrible thing to go through.

Given recent news headlines involving various governments around the world, that is a very astute observation.

The second example offers a fascinating insight into a brand that decided to make a stand in a crisis that risked its reputation in every possible way.

In the late 1980s, the UK was embroiled in the BSE crisis – ‘mad cow disease’. Questions were being asked about whether or not there was a link between BSE in cattle and CJD in humans and whether or not it was safe to consume beef. The scientific facts were inconclusive and scientists were at odds with one another. There was a lot of emotional reporting in the media about the risks, creating growing concerns amongst consumers, particularly families.

At the time, over 80% of the menu in McDonalds restaurants comprised of beef-based products.

With no clear guidance coming from within the food industry, McDonald’s held a scenario planning day to consider how bad the situation was. What was the very worst case scenario and what would be the consequences for the company? It was not a pretty picture.  McDonald’s decided there and then that they would stop selling British beef. All stock would be moved out of all of the stores and somehow they would replace it with alternative supplies. It took 48 hours and was one of the biggest logistical exercises the company had ever undertaken.

For two days, there was little produce left in the stores. And sales barely dropped. People still came into the stores and bought chicken or extra fries instead. McDonald’s felt that it was testament to the power of the brand that people still trusted them and bought whatever food was available. However, it was also made clear that the rest of the industry and the UK government were not best pleased with the decision. A lot of bridge-building was required in the aftermath.

Looking back when asked if McDonald’s had panicked in the crisis, the comment was made:

Crisis management is about being able to make good decisions and being seen to be implementing them. It was the right decision at the right time.

And closing out the interviews, the following observation was given:

You don’t want to manage a successful business as though it is a burning platform. It’s great to be able to respond to a crisis properly but it is better to manage a business in a thoughtful way rather than always be in a fire-fighting situation.

Nokia came to mind with that quote… An excellent podcast (it’s a rather good series in general) and well worth listening to if you can access the recording.

References

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Flickr image: 吞拿魚(金槍魚)壽司 – Tuna sushi kindly shared by Thomas Lok

Utterly unrelated side note: The only dose of food poisoning I have experienced to date was from a dodgy tuna sandwich…