Surfing the Edge of Chaos

By Harry JoostenOntario CUMA ConferenceMonday, 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 plan for success …

no matter what happens

Stimulate thinking, reading, talking, debating, …

Sniff the wind & catch the waves … or stay on

the beach

Classic stance Arms out Knees bent

Eyes front

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

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

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

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]

“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

“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

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”

Systems Thinking

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

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

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

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]

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

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?

The Double-Naughts Decade

2001 – 2009/2010 Not Utopia, Valhalla or Eden Not Armageddon or Apocalypse

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? …

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?

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

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

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

Whoa! STOP … uhh, Harry …

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

Is there a consistent theme here?

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

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

Three Questions # 1

From which galaxy does Harry originate and what has he been smoking since he got here?

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?

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?

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?

Innovative, Creative

$ Profitable, Stable, Compliant

Trustworthy, Honest

Passion, Compassion

Sustainable Growth

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]

Empathy

Self-Improvement

Proactivity

$ Standards

Integrity

The End

Copies of reading list available