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MACE Nov 2012 v3
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Carl FrancisCEO envisian
advisers in critical situations
Ethics in Critical Situations Beyond the Code of Conduct
1 Do you have responsibilities to clients beyond accounting?
2 What are Critical Situations?
3 Warning Signs for Advisers
4 As an Adviser – What Should You Do?
5 Getting the Right Outcomes
6 Group Exercise (s)
7 Payoffs from Critical Situations
8 Wrap up | Takeaways
1 Do you have responsibilities beyond the Code of Conduct?
1 Do you have responsibilities to clients beyond the normal Code of Conduct?
REALITY Your ability to see problems far away, to be objective and to know what needsto be done… gives you that responsibility
2 What are Critical Situations?
2 What are Critical Situations?
Very serious problems.
2 What are Critical Situations?
Not yet a crisis…
2 What are Critical Situations?
Can be positive or negative. Or BOTH.
2 What are Critical Situations?
Unique set of characteristics.
2 What are Critical Situations?
One characteristic makes them CRITICAL.
2 Critical Situations – Business Problems
Everyday and Recurring
Critical Situations
Crisis
Examples
2 Critical Situations – Business Problems
Everyday and Recurring
Critical Situations
Crisis
Examples
REALITY Executives deal with problems every day.The best ones get very good at it.
2 Critical Situations – Business Problems
Everyday and Recurring
Critical Situations
Crisis
Examples
REALITY Organizations may face manyCritical Situations over the yearsbut never have a crisis.
2 Critical Situations – Business Problems
Everyday and Recurring
Critical Situations
Crisis
Examples
REALITY Leaders and Boards cannot be experts at dealing with every kind of problem – especially problems they have never encountered.
Threat
Decision
2 Critical Situations – Types
Planning
LeadershipTransition
Transition
Change
TroubleDisaster
AccidentsMistakes
ChallengeCampaignsInitiatives
MergersAlliances Future
Warning signs
CapitalLiquidityCompliance
Bad News
3 Critical Situations – Warning Signs
Getting Nowhere
Importance
1 x 1 > Time
Risk
New
TimeDisagree-ment
Stake-holders SkillsCrosses
Lines
Potential
Time
Importance
Potential
Risk
New | Unfamiliar
Skills
Cross Lines
Stakeholders | Multiple
Disagreement
Getting Nowhere
3 Why do Critical Situations matter?
One characteristic makes some situations and transitions
critical
Game…
3 Why do Critical Situations matter?
They are game-changers – for better or worse
Reality
3 Why do Critical Situations matter?
They are game-changers – for better or worse
Reality
REALITY Handled well – excellent upside potential Handled poorly – expensive and damaging
3 Why do Critical Situations matter?
They are game-changers – for better or worse
Questions
REALITY Critical Situations can make or break your client’s future.
3 Critical Situations – Questions
Been through a Critical Situation? What typically happens? What are the problems in dealing
with situations like these? What are the constraints – real or
perceived – in resolving them?
Constraints
3 Critical Situations – Constraints
Ethical constraints Job and time constraints Political realities Skills and experience Trust and judgment Other priorities and distractions
As an Adviser
4 As an Adviser, what should you do?
4 As an Adviser, what should you do?
FOUR QUESTIONS FOR ADVISERS TO ASK YOUR CLIENT
1. Do you see (this situation) as a problem that needs attention?
2. Do you see this getting worse? In what time frame? Alt: If nothing is done, will this improve or get worse?
3. How much worse could it get? Will it be harder to solve?
4. Would you like me to help?
4 As an Adviser, what should you do?
IF OPEN > FOUR STEPS TO TAKE
1. Ask what they have considered or done so far
2. Ask if they have ever dealt with this kind of issue before
3. Ask if they are open to outside help
4. Outline the options and agree on oneDo nothing / waitUse internal resources (till when?)Go outside
4 As an Adviser, what should you do?
If you need help, get it early
4 As an Adviser, what should you do?
Don’t squander time(time determines ability to control situation)
4 As an Adviser, what should you do?
Avoid overconfidence(always balance potential against risk)
4 As an Adviser, what should you do?
Stay ahead of stakeholders(figure out what they need and want)
4 As an Adviser, what should you do?
Anticipate(everything, then do it again)
4 As an Adviser, what should you do?
Focus on outcomes (not just getting it over with)
5 Outcomes
Two kinds of outcomes
5 Outcomes
Two kinds of outcomes
WantDon’t want
6 Outcomes
Outcomes Map
Don’t want Want
5 Outcomes
Outcomes Map
Don’t want WantBad pressLose key peopleBe embarrassedDamage reputationLose donors or partnersCreate air of suspicion
Keep it quietReflect well; add to statureKeep costs lowManage stakeholdersControlSituation to resolve
5 Outcomes – Predictor
3 - 4 Poor
5 – 6 Fair
9 - 10 High
7 – 8 Good
Strong at homeworkThorough at planningSolid funding w contingenciesStrong leadershipStrong teamGood track record w initiativesExcellent accountability, incentivesFew unknowns, good anticipation, paying attentionFewer risks, threats; better preparation
0 – 2 None
How LikelyAre WeTo Succeed?
Exercises
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6 Exercises – Ethics in Critical Situations
6 Exercises – Ethics in Critical Situations
AThe leader (your client) abruptly resigns leaving a trail of questions about financial management.
The organization doesn’t know what to say and employees believe the departure was not voluntary. But she is totally unavailable anyway.
Board was taken by surprise. Audits (and advisers) are being called into question.
Should you have seen this coming?How do you advise your client?How do you protect your client?How do you protect yourself?
6 Exercises – Ethics in Critical Situations
BYour client receives an offer to merge with another similar organization.Neither party has ever been through a merger.
The problem is that everyone knows. There is no chance for quiet due diligence.
Your client is bigger. Concern by other party is being swallowed up.
How do you advise your client?How do you protect your client?What do you do first/right away?
7 Payoffs from Critical Situations
7 Payoffs from Critical Situations
If you deal successfully with a Critical Situation,
what do you get?
7 Payoffs from Critical Situations
Resolution Positive change
Trust and confidence Perceptions change
Buy time Control Progress
ROI
8 Wrap up – Questions?
8 Wrap up – Takeaways?
One thing you know now that you didn’t know before?
8 Wrap up – Closing
Thank you
advisers in critical situations™
Entire presentation © Copyright 2012 Envisian Inc. All rights reserved.
advisers in critical situations™
Entire presentation © Copyright 2012 Envisian Inc. All rights reserved.
Photography Credits
Animal photographs courtesy National Geographic Society, 2002-2012
Disaster photos
Ship photo
Gallery of slide formats
3 Outcomes
Two kinds of outcomes
WantDon’t want
3 Outcomes
Outcomes Map
Don’t want Want
3 Outcomes
Outcomes Map
Don’t want WantBad pressLose key peopleEmbarrassedStock price to drop
Keep it quietHelp recruitingDeal to work outNo lawsuits
3 Outcomes – Predictor
5 possible outcomes
ExcellentStrongFairWeakZero