1120 Lecture 10

7/23/2019 1120 Lecture 10

http://slidepdf.com/reader/full/1120-lecture-10 1/96

MGMT1120: Lecture 10Integrity, trust (III) & sustainability/future scenario planni

ng

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tructure

• !art 1 – "ecap, !"

– #rief lecture on $%at 'onfucian sian lea*ers%ip +ig%t +ean especially i+portance of trust to integrity

– cenario planning I

• #"-

• !art 2 – '%aris+a pitc%es

– cenario planning II, inclu*ing lecture on sustainability an* .ision

• #y t%e en* of class: irst *raft of your scenario planning eercise (tobe %one* by/for session 11)

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"ecap

• LM

– T # I3'L455 #" 'L 3 T64"57/M357

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Re-cap: Summary of survey results

• a note on t%e sur.eys8

• L1: Inspiring (9;)< for$ar*loo=ing (>9;)< 5eter+ine* (>0;)< Intelligent (??;) @ 6onest $as 9 t% at 1;

• L2: Inspiring (92;)< 5eter+ine* (>0;)< upporti.e (?A;) @6onest $as 11t% at B0;

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Compared with previous years

• FT 2015 class – L1:

• 1) 2) or$ar*loo=ing & supporti.e (>C;)< B) Inspiring & intelligent (??;)

– L2:• 1) Inspiring (>?;)< 2) upporti.e (?A;)< B) 6onest (?>)

• !T 201? class – L1:

• 1) or$ar*loo=ing (?>DC;)< 2) Intelligent (??;)< B) 'o+petent (?B;) ) *eter+ine* (?0;)

– L2:• 1) 'o+petent (>AD;)< 2) Inspiring (>DC;)< B) upporti.e (?9DC;)< ) 6onest (?

;)<

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Last session

Lea*ers%ip *ile++as in +i* siEe* $estern financial institutionF

an* t%e e.ening session also reflecte* so+e$%at on organisations across sia

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"e+in*er: 'ulture co+es into t%is8

• 1CC +o*el of .alue *ile++as t%at *ri.es features of national culture

– 1D obser.ation of rules (strict .s fleible)

– 2D in*i.i*ual or co++unal society – BD internal or eternal focus of t%e population

– D perspecti.e on ti+e

– ?D status (age, e*ucation, class, race or on +erit)

– >D e+p%asis on %ierarc%y .s euality

– 9D 5e+onstration of e+otion

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u++ary of 'onfucian sian .ie$s fro+four sources

• H M#< '%inese professors< literature< T M# stu*ents

• e +entione* t%is to so+e etent in t%e t%ir* session

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1D Juestioning t%e estern approac% to et%ics

– !ercei.e* lac= of respect of aut%ority – 5itto @ fa+ily relations

– 5i.orce rate & teenage pregnancy rate etcDD

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2D -ey traits/buEE$or*s t%at go into an %olistic .ie$ of $%at is rig%t/$rong

– !ersonal relations (especially fa+ily)

• Trust fa+ily (an* fa+iliarity) o.er strangers

• a+ily responsibilities ($arning: c%ange* $it% onec%il* policy8)

– "espect for aut%ority ($arning: t%is %as been un*er+ine* in li.ing +e+

ory8) – 6ar+ony (be lenient an* tolerant)

– Tra*ition

– "ituals

• '%il*ren learn %o$ to greet, +a=e an* ans$er reuests in a respectf

ul +anner

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2D 'ontinue*

• trust, cre*ibility (=eeping pro+ises are i+portant)

• be +o*erate (not to go to etre+es)

• collecti.e interest ,group benefits

• =in* of Kco+pany politicsK, %a.e to oin in group an* ta=e si*e,

not staying in*epen*ent• businesses are Krelations%ip*ri.enK (buil*ing relations are i+p

ortant for $inning business), especially buil* relations $it% go.ern+ents, follo$ t%e co++unist opinions

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Credibility

Circle 7 ost !o"est

#an=ers 3urses

!ro.incial Go.ernors/politician ournalists

La$yers !syc%ologists

#usiness ecuti.es "eligious Lea*ers *.ertising !rofessors

ports stars 5entists

toc= #ro=ers ngineers

'ar ales+en !olice+en

5octors !%ar+acists

Insurance !rostitutes

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Lecture trust

• uni.ersally i+portant lea*ers%ip trait8

• I+portant to lea*ers in t$o $ays

– s an effecti.e lea*ers%ip trait @ to be truste*

– 4n*erstan*ing t%e le.els of trust t%at a lea*ers follo$ers %a.e• it%out trust %u+an relations @ a =ey ele+ent to effecti.e or

ganisations @ brea=s *o$n

• ee appen*i sli*es for +ore *etail inclu*ing tip on $ays to buil* trust #importa"t for the e"d of course $ui%&

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'(T) *aster" approaches "ot al

ways so differe"t+

• s note* in t%e t%ir* session

1D Many of t%e $estern concepts of et%ics foun* %istorically in astern p%ilosop%y

–

a+ple are $or*s li an* ren an* *ao*e2D (lin=e* to 1) %at is consi*ere* to be i+portant +orally/et%icallynot al$ays *ifferent

– (foo* safety, pollution, e+ployee rig%ts, gen*er uality, briber y etcD)

BD esternisation of astern culture – posure to estern culture responsible for less tra*ition, c%

anging +orals (suc% as in*i.i*ualis+ an* %e*onis+)8

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D Narying approac%es to et%ics base* on t%e in*ustry an* regionaliEation (try to a.oi* stereotyping)

– +ployees in s & foreign in.est+ent fun*s .ie$e* as $orst offen*ers of so+e types of unet%ical & la$brea=ing be%

a.ior ?D I+pact of +o*erniEation/in*ustrialiEation8

– a+e *ebates on t%e lac= of +orals, etent of pollution $as(an* still is) ta=ing place in estern societies *uring in*ustrialiEation

>D uspicion t%at %i*ing be%in* respect for p%ilosop%ers li=e 'onfucius to eplain t%at unet%ical be%a.ior is et%ical8

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BD 5isagree+ents a+ongst +aor '%inese p%ilosop%ers

• (ust li=e as in estern p%ilosop%y)

– 5ebate on legal enforce+ent .s .oluntary et%ics

• %a+e .s eternal punis%+ent

• MoEi .s 'onfucius:

– "itual is a $asteful epen*iture of resources

– uspicion of strangers is ba*: !artiality to$ar* t%e self causes t%e strong to rob t%e $ea= (tanfor* ncyclope*ia of !%ilosop%y)

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5ebating point: Is t%ere an after A0s p%eno+enon in '%ina8

•

,pe" a"d straihtforward• !assionate an* pti+istic

• "ealistic

• 'reati.e, but lea= of perse.erance

• elfcontra*ict: ree*o+ & Loneliness, penness & in*i.i*ualD

• They care a.out future an* personal *e.elop+ent opportunities

• T%ey are eager to +a=e frien*s an* %a.e strong affiliation +oti.ation

• T%ey care about t%e uality of life an* $or=life balance, but so+eti+es, lac/i" of dedicatio" to ora"i%atio"s

• They are more self ce"tered compared with the older e"eratio"s• t $or=, t%ey are fa.orable of institutionaliEe* +anage+ent an* less political en.iron+entD

• 'ehavior at wor/

– T%ey .alue *i.ersifie* an* $ant to $or= on $%at t%ey are intereste*D

– fter A0s %a.e %ig% turno.er rateD Many of t%e+ *o not %a.e a clear career planD T%ey are not satisfie* $it% current ob for *ifferent eternal reasons an* $ant to fin* a better ob $%en t%ey %a.e a c%anceD

– T%ey .alue ob base* on salaryD Most fter A0s are facing financial pressuresD T%ey %a.e to support t%eir fa+ilyD T%e situation is getting $orse *ue to li.ing cost =eeping rising in '%inaD

– fter A0s fa.or rela an* %ar+onious $or=ing en.iron+entD Most of t%e+ $ant to $or= in organiEations $it%euality an* *e+ocracyD They do"t li/e strict hierarchy a"d comple i"terperso"al relatio"s 'o+pare* $it% t%e ol*er generations, t%ey *ont $ant to spen* ti+e on struggle for po$er an* aut%orityD

– T%ey are $illing to ta=e ne$ c%anges an* c%allengesD T%ey are gro$ing in a rapi* gro$t% en.iron+ent an*$ant to eperience fair co+petitionD If possible, t%ey %ope to brea= out rules an* tra*itionsD

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!art 2: c%anging *irection

• cenario planning @ future t%in=ingF

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!" uestion

• %at is t%e +ost i+portant en.iron+entalissue to you8

• !" on t%isF

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ocus before t%e brea=: planning to +eetfuture c%allenges

• 5e+arcates lea*ers fro+ +anagers8

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%at is scenario planning an* %o$ etensi.ely is it use*8

• 6o$ +any %ere %a.e alrea*y un*erta=en 3or heard of4 scenario planning eercises8

• efi"itio": – n eercise to $or= out plausible future situations an* to t%in= about %o

$ your business +ig%t nee* to react to t%at c%ange @ an* +a=e a c%allenge into an opportunity

– it is usual to *e.elop four possible scenarios an* %a.e potential contingency plans for t%ose

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nergy futuresF

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%y use t%e+8

• Cha"e is happe"i" at a fast rate tha" ever .efore: T%e scale an* spee* an* co+pleity of current global econo+ic, social, en.iron+ental an* tec%nological c%ange is co+bine* $it% t%e natural inertia of lar ge corporationsD It reuires us to %a.e so+e +et%o* by $%ic% $e regula

rly assess our *irection, our strategies an* our .ie$s in t%e contet of t%ese c%anging con*itions, in conunction $it% an obecti.e t%ir* partyD

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uratio" compa"ies survive o"

S6 i"de

61 years in 1C?A

25 years in 1CA0

18 years in 2011

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#enefits

– pan* your t%in=ing

– 4nco.er ine.itable or near ine.itable futures (see net sli*e)

• 5e+ograp%y is *estiny @ an ea+ple of %ig%ly pre*ictable aspectsof t%e future yet little preparation +a*e to cope $it% t%e c%allengest%ey bring

– !rotect against groupt%in= & c%allenge con.entional t%in=ing

• encourages free flo$ of *ebate t%at is not al$ays encourage* in allbusinesses

– gauge $%et%er our strategies are genuinely OsustainableP in line $it% our s%are%ol*ers co++it+entD

• great ea+ple of responsible lea*ers%ip

–

gauge $%et%er t%ere are ne$ commercial opportunities $e coul* eploreD

– gauge $%et%er t%ere are risks t%at $e nee* to +itigate & t%erefore *etect possible +aor obstacles t%at t%reaten t%at business

• ,fte" paralysis occurs i" times of ma8or crises

l f % it % b

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a+ples of $%ere it %as been use*

•#ain G': >2; of 4 co+panies use* scenario planning in 2012

• T: $ater s%ortages is posing a gro$ing ris= for +erican co+paniesD

– %ereas co+panies percei.e* $ater before as a lo$cost input, +any co+panies suc% as 6ers%ey an* T&T are no$ ta=ing $ater sup

plies into account $%en +a=ing business *ecisions (egD $%ere to locate t%eir facilities)D sur.ey *one by an en.iron+ental researc% group an* a public affairs fir+ sai* >0; of t%e co+panies sur.eye* sai* $ater issues $oul* affect bot% business gro$t% an* profitability int%e net fi.e yearsD

• uto3ation: stoc= price appreciate* by 00; in 200C *ue to scenario planning8 – (see T%e secret of successful planning @ orbes)

'li t % i l i f

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'li+ate c%ange scenario planning fort%e global port in*ustry

Te+perature

Q Reports

Q Statistics

Q )

ea le.el

ceancurrents

tre+e$eat%er

ceanaci*ification

'li+ate

c%ange

R%at are possible effects of t%istren*8

ro.lem 3Tre"d4

prea* of *iseases<Juarantine facilities

loo*ing<

Juay $alls & cranes

Nessel spee* S =nots<Nolu+e of tra*e

Typ%oons, 5roug%ts<Nolu+e of tra*e

is% +igration<Nolu+e of tra*e

R 6o$ *oes it affect a global portoperator8

9"alysis 3mpact42

1

R %ic% =ey in*icators %elp +onitort%e effects8

Recomme"datio";

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!roble+s

1D t%ere is a fine line bet$een planning for t%e future an* +a=ing $il* an* craEy guesses

2D Too +uc% of a co+fort blan=et< so+e feel t%at once t%ey %a.e u

n*erta=en scenario planning @ a false sense of security

BD b*ication of lea*ers%ip8 %o$s sign of uncertainty t%at t%ey +ig%t not =no$ $%at t%e future %ol*s

D 'an *e.elop groupt%in= @ so+e feel t%at one of t%e four scenario t%ese eercises generate $ill %appen

5 Ca" ta/e a lo" time to complete< mo"ths a"d years)

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#est practice

1D to c%oose t$o scenarios @ one t%at appears t%e +ost plausible an* t%en one t%at is uite a long $ay fro+ t%at (futures areusually .ery unpre*ictable too)

2D !lan for aroun* >0 +ont%s a%ea*

QD More fro+: T%e use an* abuse of scenarios fro+ Mc-insey$ebsite

QD Some really i"teresti" a"d i"sihtful tips i" appe"di 2

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'lose to pre*ictable e.ents

•

trictly spea=ing, you can forecast t%e future only $%en all of its ele+ents ar e pre*eter+ine*D #y pre *eter+ine* ele+entsD I +ean those eve"ts that h

ave already occurred 3or that almost ceriai"ly will occur4 .ut whose co

"se$ue"ces have "ot yet u"folded

uppose, for ea+ple, %ea.y +onsoon rains %it t%e upper part of t%e Gange

s "i.er basinD it% little *oubt you =no$ t%at so+et%ing etraor*inary $ill %appen $it%in t$o *ays at "is%i=es% at t%e foot%ills of t%e 6i+alayas< in lla%aba*, t%ree or four *ays later< an* at #enares, t$o *ays after t%atD 7ou *eri.et%at =no$le*ge not fro+ gaEing into a crystal ball but fro+ si+ply recogniEing t%e future i+plications of a rainfall t%at %as alrea*y occurre*D

• %ttp://$$$DecobusinessDco+/ne$s/scenarioplanningforturbulent$orl*/

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•

5e.elope* largely by %ell fro+ t%e 1C90s on$ar*s – %ttp://$$$DyoutubeDco+/$atc%8.sr7%u7TM &

%ttp://$$$DyoutubeDco+/$atc%8.$*>%Jt"= &%ttp://$$$DyoutubeDco+/$atc%8.J2uI!ei7J

• T%e first an* t%ir* %ell .i*eos are goo*< t%e secon* one %ig%lig%ts t$o *ifferent scenarios t%at 74 s%oul* ot *o$n notes about

• T%e .i*eo also i+presses t%e i+portance of un*erstan*ing current affairs

• 9"d says that the importa"t traits to chose are =challe"i" a"d =plaus

i.le > so? ultimately? the two sce"arios chose" i" the e"d of challe"i" a"d plausi.le@li/ely a"d challe"i" a"d plausi.le@ "ot-so-li/ely)

*i 2 f i f

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ee appen*i 2 for +ore infor+ation

http://www.eco-business.com/news/scenario-planning-for-turbulent-world/

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or+ing groups for t%is

• Tea+ process for+ation @ ran*o+ selection no$unless groups %a.e alrea*y e+aile* +e in a*.a

nce

Gro ps t%at %a e alrea* for

http://www.youtube.com/watch?v=jQ2uIPeiEYQ

http://www.youtube.com/watch?v=jQ2uIPeiEYQ

http://www.youtube.com/watch?v=wdJ6hqQtxRk

http://www.youtube.com/watch?v=srY-hJuqYTM

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Groups t%at %a.e alrea*y for +e*•

L1

•

L2 – Uu ingyi (Iris)

– Lung ing -i (!in=y)

– '%an iu -$ong (le) 2012??09

– Ma 6o 7an 201A9>92

– '63 7u= 6ei 201201B1

–

TI %ing 7u 2011ABA – Mic%ael !%ilip ong 20BB>B0

– M33IML onali=a "e**y 202BCB?A

Aawre"ce hlleu"ac 201051B7

i""ie $lc%oaa 2010AC0

a"vela +eclui 20111C

Frederic/ ltto 2012?C?C

Christy -cc%anat 2011?922

Dosephi"e $onga* 2012B>BA

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3et $or=

•For the "et 15 mi"utes

– electe* a co+pany base* on t%e infor+ation I gi.e you no$

–

List $%at are t%e factors t%at un*erpin/influence t%at in*ustry

– %at is t%e strategy for +a=ing +oney8 In ot%er $or*s, $%at are its critical success factors @ %o$ *oes it +a=e its +oney8

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#"-

" i i % i it % t b

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"e+aining c%aris+a pitc%es to be*eli.ere*

– '643G, '%ing La+ (anice), 5I ing Ji ("ebecca), !3G, TsE !o", T3G, 6in 7an ('ary), 3G, Mic%ael !%ilip (L1)

– '63G, -$ing 6ei !ector , L4-, -a 7ui (Sweetie4, 3G,-e 7uan alto", 3G Dosephi"e, 7I3G, e" Se"

(L2)

cenario planning: **ing .isi

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cenario planning: **ing .ision to t%is eercise

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5efinition of .ision

• Lea*ers *e.elop clear@compelli" picture of the future a"d a path@

structure o" how to follow that (+ost i+portant function8) @ $e *ofuture scenario planning for al+ost all of $ee= C lecture

– 1D suggests future orientation

–

2D i+plies stan*ar* of ecellence – BD uality of uniueness

– R**'*R T!*S* T!R** F,R E,(R R,( ,RG A9T*

R)

• Nision can be use* for s+all proects or lea* large organisations/ca+paigns

• Nision reuires ot%er ele+ents to succee*F see table D1

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Table D1

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a+ples

• %o sai*8 I $ill buil* a +otor car for t%e great +ultitu*eF constructe* of t%e best +aterials, by t%e best+en to be %ire*, after t%e si+plest *esigns t%at +o*ern engineering can *e.iseF so lo$ in price t%at no

+an +a=ing a goo* salary $ill be unable to o$n oneF

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our *ifferent types

•Hua"titativeQ #eco+e a V12? billion co+pany by t%e year 2000D @ alMart, 1CC0Q co+puter on e.ery *es= an* in e.ery %o+e< all running Microsoft soft$areD @ Microsoft, 1CC0sQ e $ill put a +an on t%e +oon an* return %i+ safely $it%in t%e *eca*eD @ -, early 1C>0s

• avid-versus-oliath

Q 'rus% *i*as @ 3i=e, 1C>0sQ 7a+a%a $o tsubusuW e $ill *estroy 7a+a%aW @ 6on*a,1C90s

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our *ifferent types

• Role-odelQ #eco+e t%e 6ar.ar* of t%e est @ tanfor* 4ni.ersity, 1C0sQ #eco+e t%e 3i=e of t%e cycling in*ustry @ Giro port 5esign,1CA>

• "ter"al Tra"sformatio"s

Q #eco+e nu+ber one or t$o in e.ery +ar=et $e ser.e an* re.olutioniEe t%is co+pany to %a.e t%e strengt%s of a big co+panyco+bine* $it% t%e leanness an* agility of a s+all co+panyD X

G, 1CA0sQ Transfor+ t%is co+pany fro+ a *efense contractor into t%e best*i.ersifie* %ig%tec% co+pany in t%e $orl*D X "oc=$ell, 1CC?Q #eco+e t%e co+pany +ost =no$n for c%anging t%e $orl*$i*e

pooruality i+age of apanese pro*uctsD X ony, 1C?0s

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Nision principles

• 1D state+ent of purpose/+ission state+ent @ $%y *o $e eist8

• 2D %o$ to ac%ie.e t%is8

• ; Core values to measure riht@wro" 3values such as trut

h? trust? respect4• D %o$ .ision affects sta=e%ol*ers

• ?D con*uct a T analysis $it% .ision/strategy in +in*

• >D critical success factors to ac%ie.e s%ort, +e*iu+ an* long ter

+ goals• 9D tactical plans to a**ress critical success factors

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Nision principles

•CD i+portance of (re)align+ent an* prioritiEation – "ay 'roc @ Mc5onal*s uality, ser.ice, cleanline

ss an* .alue

– re* +it% @ 56L< *eli.er t%e pac=age on ti+e

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Criticisms of the .elief i" visio"

• Too generic• Meaningless

• 3ot belie.able

•

3ot plausible• 3ot possible

• 3ot rele.ant

• %ttp://$$$Dlin=e*inDco+/to*ay/post/article/201B0

>2>0?B1>A9?>>$%att%e%ellis$rong$it%+issionan*.isionstate+ents

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ee appen*i sli*es

• or practical tips on *e.eloping better .ision

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cenario planning: tage 2

•

or t%e net 1? +inutes

– #rief researc%/assess+ent of t%e .ision for your co+pany

http://www.linkedin.com/today/post/article/20130626044531-64875646-what-the-hell-is-wrong-with-mission-and-vision-statements



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rese"ti" what you have fou"d

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tage of scenario planning

• Mo.ing to sustainability

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ustainability, .ision, strategy

•

%uge s%ift in t%e inclusion of t%e future/future generations/sustainability in .ision state+ents – Our company’s foundation is built on our values, which distinguish us and g

uide our actions. We conduct our business in a socially responsible and et

hical manner. We respect the law, support universal human rights, protect t

he environment and benefit the communities where we work.

– We are a global organisation that is socially and environmentally respon

sible, that embraces creativity and diversity and is financially rewarding fo

r our employees and shareholders.

– Our Reason for Being: Build the best product, cause no unnecessary har

m, use business to inspire and implement solutions to the environmen

tal crisis.

– tarbucks! hared "lanet! is our commitment to do business in ways

that are good for people and the planet.

4sing sustainability as one futu

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4sing sustainability as one future scenario *i+ension

• 5efinition: – ustainability is a ter+ t%at refers to meeti" the "eeds of the

prese"t, without compromisi" t%e ability of future e"eratio

"s to +eet t%eir o$n nee*s

T%e planet: current an* future proble+s for b

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T%e planet: current an* future proble+s for business to $orry about8

• 1 billion Y still li.e in absolute po.erty

• !opulation to gro$ fro+ 9 to C billion by 200

• #y 20B0: –

?0; +ore foo* – ?; +ore energy

– B0; +ore $ater

• 3ot li.ing in sustainable ti+es8 – 'M!, 2>t% ebruary @ +og coul* spell *isaster for far+ers

–

9 +illion *ie* of pollution in 2012

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n.iron+ental Nariables8

•

actors to consi*er coul* be: – !ollution/conta+ination

– 5eforestation

– Loss of natural %abitats

– 'li+ate c%ange i+pact

–

5epletion of natural resources – Labour issues

– 'ad practices catchi" up with you

– Cha"e i" reulatio" 3complia"ce4

– or=ing con*itions

–

'o++unity issues – prea* of *isease

– '%ange in go.ern+ent policy/re.olution

ut of B AA> global *isasters

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ut of B,AA> global *isasterso.er t%e perio* 1CA02012,

I5J were i" the 9sia-acific

reio"? ma/i" it the reio"with the larest i"crease i"

disasters over the past

decade

Pace of climatechange

M -i %

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Mc-insey researc%

•

cono+ic syste+ %as, an* is, base* on c%eap resources• 6o$e.er, in past 10 years resource price* %a.e seen +uc% .olatilit

y (unprece*ente* in %istory) an* triple* on a.erageF

• T%e lo$ering of resource prices %as allo$e* business tra*e to +ultiple 20 ti+es an* population ti+esD

•!roble+ is not so +uc% in population gro$t% but gro$t% in t%at section of society $%o $ill be ne$ consu+ersF

• !ace of *e.elop+ent is uniue< it too= 4- 1? years to *ouble G5!< 4 @ ?B years< '%ina ust 12 years an* In*ia 1>D

• T%ere $ill be a 0; gap bet$een supply an* *e+an* by 20B0

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7/23/2019 1120 Lecture 10


Tre"ds i" corporate sustai"a.ility

• 1D corporate ris= response not $ell prepare* to *eal $it% potential i++ensity of t%e c%allenges a%ea*8

• 2D #ig increase in enuiries fro+ in.estors/s%are%ol*ers

•

BD International regulation is $ea=• D T%ere are also co+panies t%at tie B0; to 0; of a '

Zs annual bonus to sustainability targetsD

G l i f b i

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General .ie$s fro+ business

•

Four disti"ctive +in*sets of eecuti.es $%en it co+es to sustainability: – e"iers 3e *o"+4

• for+er %ea* of on Lee "ay+on*: cli+ate c%ange scientists are Zresistant to reasonable criticis+ an* *issent an* prone to su++ary conclusionst%at are poorly supporte* by t%e analytical $or=Z an* t%ere nee*s to be +ore $or= t%at Zt%oug%tfully eplore t%e li+itations of cli+ate +o*el outputs

•FT? 1Kth Du"e: =9 climate fi would rui" i"vestors

– 9voiders (so+e priorities are +ore i+portant< tec%nology $ill sol.e e.eryt%ing)

–

Camouflaers 3e > e"eral otors+4

– Tra"sformers

%y so+e of t%e first t%ree groups are a**

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%y so+e of t%e first t%ree groups are a**ressing sustainability in lea*ers%ip

1D 'o+pliance – a+ple: all co++ercial buil*ings in 6ong -ong built since 1CA

9 are legally reuire* to con*uct an energy au*it un*er t%e ne$#uil*ings nergy fficiency r*inance by 20 epte+ber 201

2D "is= +anage+ent

BD o+e sustainability +easures %elp re*uce cost – a+ple of nergenE: %ttp://

$$$DenergenEDco+D%=/oursolutions/strategy

D "eputation/!"

t iti

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opportunities

•

Municipal $ater lea=age ?0; in so+e parts of t%e 4 an* 20; in 4-

• +pire state buil*ing @ sa.e B; of energy costs an* e+issions by retrofit

• More resource efficient co+panies %a.e outperfor+e* ot%erssince 200C

• Mc-insey: re*uce/create< substitute< circularity< opti+ise, .irtualise – pti+ise @ #ir* N for+ation (sa.es 4 air force 20; of costs)

transfor+ers8 ustainability a$ar* $inner

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transfor+ers8 ustainability a$ar* $inner s

•

ee also: #est practices in sustainability: or*, tarbuc=s an* +ore

• 4nile.er:

– ustainable Li.ing !lan @ %alf its current en.iron+ental footprint by2020 (across $%ole supply c%ain)

• ir+enic% ($iss fragrance co+pany)

– 1?; $ater re*uction by 201?

– $itc% to best rene$able energy in C0; of its facilities

• -ingfis%er (largest uropean %o+e i+pro.e+ent c%ain)

– 'o++ercialisation of sustainable pro*ucts (11; of sales are eco pr o*ucts)

3et stage: !reparing your scenario +

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3et stage: !reparing your scenario +atri

• '%oose t$o aes t%at are fairly broa* @ one +ust be relate* to sustainability

• 5e.elop your o$n four scenarios ($%at *oes t%e $orl* loo=li=e in eac%)

• Compare your efforts with the two ha"d-outs writte" .

y eperts o" this

Lisualisi" what previous teams have

http://www.energenz.com.hk/our-solutions/strategy




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sua s at p e ous tea s a e

do"e

• ee alsoF t%e %an*out gi.en no$

• n* note: t%ere are four +ore scenarios t%at %a.e been spelt out t%at you can use @see LM *ocu+ent in session 10 fol*er

7/23/2019 1120 Lecture 10


7/23/2019 1120 Lecture 10


7/23/2019 1120 Lecture 10


To start no$ an* co+plete ne

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pt $ee=

•

To be co+plete* net $ee=

• elect t$o separate scenarios (one fairly li=ely an* one unli=ely) an* $or= out: – %at are t%e disti"ct proble+s your co+pany +ig%t face in t%is sce

nario of t%e future8

– %at solutions +ig%t be possible to a**ress t%ese proble+s8

– 6o$ +ig%t strategy c%ange to a*apt8

– I+portant notes:• a/e sure that the issues that your compa"y face are differe"t .etwee" the

two sce"arios that you choose

• o "ot say that resources will .e co"8ured@fou"d from somewhere as far as

your solutio"s are co"cer"ed

!resentation

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!resentation

•

1D $%at is t%e current co+pany strategy/critical success factors• 2D t$o scenarios you %a.e c%osen

• BD %o$ co+pany strategies & operational factors +ig%t nee* to c%ange to a**ress t%e potential futures

• D T%e 2 an* rule

–

i+ for 2 c%allenges an* say solutions (inclu*ing operational an*o.erall strategy)

• 9dvice from 8udes of previous fi"al day classes

•

.oi* saying: – 7ou nee* to fine a ne$ set of resources out of t%in air

– T%at you nee* to lobby go.ern+ent to c%ange regulation/policy

– nsure t%ere is a lot of *i.ergence in your proble+s/solutions bet$een t%e t$o scenarios you c%oose/*e.elop

or= on t%is until ? ?

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or= on t%is until ?D?

u++ary

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u++ary

•

'o.ere* a lot of groun* to*ay

• Integrity, trust, .ision, sustainability

•

!reparing you for t%e eercise net $ee= – In class you $ill select one co+pany per tea+ to loo= at an* t%e

n t%in= about %o$ t%e $orl* is li=ely to loo= in ?10 years ti+e an* c%ose t$o plausible scenarios & t%in= about %o$ t%at co+panystrategy $ill %a.e to c%ange to +eet t%e c%allenges of t%ose sce

nariosD

!reparing for net $ee=

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!reparing for net $ee=

•

!ic= up on t%e etra rea*ing for t%is $ee=, especially in t%e appen*i

• LM post

• !repare for scenario planning eercise net $ee= – 'arry on your researc%

– "ea* t%e bios of t%e u*ges

ppen*i: Trust

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ppen*i: Trust

•Inclu*ing tip on %o$ to buil* trust

Le.els of trust in follo$ers

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Le.els of trust in follo$ers

•

5iffers accor*ing to personality an* culture8 – Trust easier in societies $%ere respect for aut%ority eists

8

– #rea=*o$n in trust in t%e 4 $or=force8

•

#rea=*o$n of fa+ily structure8• 5ecline in social institutions an* respect for so+e of t%

e+ (sc%ools, c%urc%es)

• I+portance of +aterialis+, %e*onis+, in*i.i*ualis+

• Me*ia eposure $%ere abuse of trust %as occurre* (a lot)

6o$ to buil* trust8

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6o$ to buil* trust8

• 1D 5eal openly $it% e.eryone

• 2D 'onsi*er all points of .ie$

• BD -eep pro+ises

• D Gi.e responsibility to follo$ers

• ?D Listen (to be able to un*erstan*) @ *o not al$ays be suspicious or fear t%e $or=

• >D -no$ your follo$ers @ t%at *e.elops care

ppen*i 2: More infor+ation

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on scenario planning

Intereste*8

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Intereste*8

•

T%en ot%er sources of infor+ation: – co business: cenario planning for a turbulent $orl* (eplains t%e crea

tion of for* cenarios !rogra++e @ part of eecuti.e e*ucation a ai* #usiness c%ool)

– Mc-insey & orl* cono+ic oru+: Mining & Metals cenarios to 20B0

– 6ar.ar* #usiness "e.ie$:• Li.ing in t%e futures

• cenarios: %ooting t%e rapi*s

ro+ pre.ious posts

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ro+ pre.ious posts

• I fin* t%e scenario planning .ery usefulD ince +y co+pany %as a ne$ proect launc%e* rec

ently, I *i* apply t%is concept an* create* a scenario planning for t%e ne$ proectD It %elpe*+e better un*erstan* t%e c%allenges $e face* an* t%oug%t of *ifferent solutions +ore t%or oug%lyD e e.entually ca+e up $it% t$o uniue co+petencies an* $e %a.e been .ery co++itte* to t%e+D .en t%oug% $e still %a.enZt ac%ie.e* a lot, I still belie.e t%at if $e carry on,$e $ill be successful soonD

•

It is t%erefore reco++en*e* to a*opt a +ulti*isciplinary approac% of scenario planning, in.ol.ing business partners, suppliers, custo+ers an* analysts to collect a $i*e range of .ie$points an* perspecti.esD It is also beneficial to in.ol.e people $%o are not connecte* $it% t%e in*ustry to solicit t%eir *ifferent eperiences $%ic% +ay be rele.ant to a co+panys business operationD cenario planning is not only an interesting intellectual eerciseD T%e outco+e of scenario planning s%oul* %a.e a practical i+pact on %o$ a co+pany can +ap t%eireisting co+petencies against eac% scenario, iDeD scenario planning is for strategic planningD %en a particular co+petency s%o$s up in +ultiple scenarios, t%e co+pany s%oul* be f ully co++itte* to t%is co+petencyD

•

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• Reflectio" .y wi""i" team > '9SF 3T '9? 20154

• # is t%e largest c%e+ical co+pany, an* its strategy is .ertical integrationD T%ey play $%en.erc%e+icals %a.e a role, an* t%ey go up$ar* to secure t%e supply: ilD

T%e t$o scenario $e co.ere* $ere 6icon/Loil an* Locon/6iilD

or 6icon/Loil, $e belie.e it is a fficiency irst $orl*D Material cost goes up, profit *ecrease,stricter regulations, an* t%ereZll be *e+an* for ne$ +aterialsD Intuition suggeste* t%at $e s%oul* f

ollo$ $%at t%e consu+er nee*, focus on price, start to *o "&5 on ne$ +aterialsD #ut soon $e realiEe t%at it is not goo* enoug%D %at if "&5 faile*, $%at if so+et%ing *isrupti.e co+ing out8 o$e co+e up $it% t%e i*ea buil*ing $ar c%estD -eeping so+e cas% to M& any pro+ising ne$ pro*ucts / tec%nologyD T%at %elps # +aintain t%e control in t%is uncertain $orl*D

or Locon/6iil, $e t%in= it is uite si+ilar to t%e "ebase* Gloablis+ $orl*D 'onsu+ption *o$n, co+petition up, less nu+ber of +ar=ets, a goo* ti+ing to *e.elop ne$ pro*uct for t%e future,especially nonoil base* pro*uct to +a=e sure # can =eep lea*ingD #ut fro+ a %ig%er perspe

cti.e, t%ese all are not guarantee*: $%at if t%e econ getting e.en $orse8

o $e re.isit #Zs strengt%: increase *e+an* by creating fro+ t%e *o$nstrea+D ro+ t%e +icr o perspecti.e, -at%rine =ne$ t%at griculture is one of t%e ? %ig%est re.enue business # in, 1/B re.enue of c%e+icals an* score* a 20 for #IT/"N, attracti.e business $it% %uge potentialD Macro $ise, illia+ ca+e up $it% a lot of $orl* *e.elop+ent tren*, suc% as increase of population,*ecrease in cuti.atable lan* per capita, nee* of e+erging +ar=ets, etcD T%ese .ie$s +a*e +o.in

g t%e focus to a ne$ in*ustry a pro+ising in.est+entD

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• I t%in= %a.ing t%e cenario !lanning as a $rap up is brilliantD 5uring all t%e group *iscussions, it $as inter

esting to see t%at $e really learnt an* internalise* t%e =no$le*ge fro+ all t%e years of classes, $%et%er itZs on +icro/ +acro econ or lea*ers%ip B>0, strategy, operations +gt, IT +gt, etcD T%is eerciseZ result +ay see+s to be si+plifying t%e N4' $orl* a little bit too +uc%D #ut I see t%e .alue of it is to %elp us be +or e t%oug%tful on t%e blac= s$an an* not to be %an*icappe* $%en any $orl*s%a=ing e.ents %appene* all in a su**en an* not able to respon* in t%e best $ayD T%us, I t%in= t%is eercise s%oul* be a*opte* by +oreco+panies to %elp upgra*ing t%e +anage+ent tea+sD

• 6ere is t%e uote fro+ rie *e Geus, $%o $as t%e %ea* of %ell il 'o+panyZs trategic !lanning Group

($%ere !ierre ac= $as a =ey +e+ber) fro+ %is boo= KT%e Li.ing 'o+panyK:

• cenarios are storiesD T%ey are $or=s of art, rat%er t%an scientific analysesD T%e reliability (of t%eir content) is less i+portant t%an t%e types of con.ersations an* *ecisions t%ey spar=PD

• not%er popular uote of %is: OT%e ability to learn faster t%an your co+petitors +ay be t%e only sustainable co+petiti.e a*.antageP

• T%us, t%e i*eas t%at people co+e up $it% *uring t%e scenario planning are t%e +ental +apsD T%ey are suppose* to spar= t%e i+agination an* proect .arious %ypot%eses into t%e possible futureD T%ey are suppose* to =eep people on t%eir toes $%ene.er t%e critical business *ecision (be it in.esting into specific capability or acuiring specific asset etc) +ust be ta=enD T%e uestion $%at if +ust be pose* an* +anagers s%oul* loo= into all possible scenarios an* proect $%at c%allenges an* opportunities t%eir co+pany $oul* f ace $it% t%at *ecision operating un*er eac% scenario an* $eat%er it $oul* +a=e t%e+ +ore co+petiti.eD It%in= itZs also .ery critical to be able to i*entify t%e *ri.ing forces of c%ange outsi*e t%e organiEation t%at ar

e s%aping t%e *yna+ics in pre*ictable or unpre*ictable $ays at t%at ti+eD

7/23/2019 1120 Lecture 10


• I ca+e across t%is .ery curious article fro+ '33 Money *ate* eb 200> $%ere top eperts %elpe

* to plot scenarios t%at s%o$ $%ere t%e co+panyZs geniuses +ay be lea*ing it:• %ttp://+oneyDcnnDco+/+agaEines/business2/business2[arc%i.e/200>/01/01/AB>A12?/

– Sce"ario 1 3Circa 20254: oole s The edia

– Sce"ario 2 3Circa 20154: oole is the "ter"et

– Sce"ario ; 3Circa 20204: oole is ead

– Sce"ario I 3Circa 21054: oole is od

• T%at soun*e* uite futuristic at t%at ti+e, but u*ge for yourself %o$ not so far fro+ t%e trut% t%eylan*e* in t%e scenario for 201? F

• I foun* an interesting article about corporate scenario planning:%ttps://%brDorg/201B/0?/li.ingint%efutures

7/23/2019 1120 Lecture 10


• To su++ariEe t%e =ey of scenario planning is to

1) create .alue $it%in an organiEation2) *e.elop %ig% connecte*ness bet$een t%e *ifferent units in an organiEation (eg, connecting cor porate stragegy/ris= +anage+ent $it% +ar=eting/public affairs etcD)

9 gol*en rules:

Ma=e it plausible not probable

tri=e a balance bet$een rele.ant an* c%allenging Tell stories t%at are +e+orable yet *isposable ** nu+bers to t%e narrati.e cenarios open *oors Manage *isagree+ent as an asset it into a broa*er strategic +anage+ent syste+

orl* cono+ic oru+

7/23/2019 1120 Lecture 10


orl* cono+ic oru+

• 3e$ scenario +aterial being scanne* to go in %ere

7/23/2019 1120 Lecture 10


a+ples of infor+ation t%at a

https://en.wikipedia.org/wiki/Shell_Oil_Company

7/23/2019 1120 Lecture 10


**s *ept% to your analysis

• ee t%e scenario planning fol*er for $ee= B @ of $ay t%e $orl* +ig%t bec%anging

http://money.cnn.com/magazines/business2/business2_archive/2006/01/01/8368125/

https://hbr.org/2013/05/living-in-the-futures



7/23/2019 1120 Lecture 10


7/23/2019 1120 Lecture 10


7/23/2019 1120 Lecture 10


7/23/2019 1120 Lecture 10


ppen*i B: lin=e* to strateg

7/23/2019 1120 Lecture 10


y

I+portance of .ision

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I+portance of .ision

1D NII3 gi.es gui*ance for +a=ing *ecisions about ti+ean* resources

2D Gi.es passion/aut%ority to lea*ers8

BD Gi.es inspiration to follo$ers8

D 'o+panies $it% goo* .ision< perfor+ eig%t ti+es bettert%an t%eir counterparts8

?D !oor .ision @ a =ey to ineffecti.e lea*ers%ip & *e+ise ofso+e organisations8

>D it%out .ision: follo$ers follo$ t%eir o$n specialty rat%er t%an contribute to t%e co++on tas=

!ractical lea*ers%ip a*.ice

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!ractical lea*ers%ip a*.ice

• 1D Nision nee*s to be lea* fro+ t%e top (or sanctione* fro+ t%e top)D2D Nision nee*s to engage an* appeal to t%e +ain b

o*y of e+ployees in t%e co+panyDBD \1 nee*s to un*erstan* \2 before putting for$ar * a state+ent of .ision, ot%er$ise it $ill be stillbornDD To un*erstan* \2, t%en \1 can +a=e use of oneonone +eetings $it% =ey staff (senior +anagers an* a ran*o+ selection of e+ployees),

In t%ose +eetingsF

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In t%ose +eetingsF

• t%en as= uestions

$%ere *o you see our co+pany in ?10 years ti+e8 $%ere $oul* you say t%at $e are no$ relati.ely to picture of ?10 yrs ti+e8

$%at are t%e =ey t%ings t%at $e nee* to *o to be able to ac%ie.e t%e picture of?10 yrs ti+e8 (practical action steps fro+ *ifferent areas of t%e co+pany) finally, $%at can I *o as a lea*er to %elp you be +ore successful in *oing $%atyou nee* to *o to ac%ie.e t%is picture of ?10 yrs ti+e8 (personal actions)

• T%e effect of t%ese con.ersations is incre*ibly po$erfulD T%e person as=ing t%ese uestions (if in a position of aut%ority) creates a onetoone bon* $it% =ey sta=e%ol*ers aroun* =ey actions reuire*D

'ontinue*F

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'ontinue*F

• ?D 3et step is to +eet as a s+all lea*ers%ip group to tal= t%roug% t%e sa+e uestions in \ as a groupD T%is is nor+ati.eD 7ou (as lea*er) =no$s $%at e.eryone t%in=s in*i.i*ually, but you $ant to tal= t%roug% it as a tea+ an* arri.e at a co++on plan as a tea+D ngage+ent is =eyD T%is is +ost effecti.ely *one as an offsite +aybe for 1 *ayD

• >D u++ary of plan fro+ \? can beco+e a $ritten *ocu+entD In t%e past, I %a.e so+eti+es use* a $%iteboar* to su++arise our

plan at t%e en* of a *ay, t%en ta=e a p%oto as Z+eeting +inutesZD

#utF

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#utF

•

T%e abo.e process is uite robustD #ut t%ere are al$aysobstacles often t%ere $ill be people $%o $ill c%allengeaut%ority (c%allenge t%ose trying to lea* t%e process)D I %a.e seen all sorts of be%a.iour o.er t%e yearsD 5eep *o$n, it is a political fig%t: often t%e people $it% t%e legiti+a

te aut%ority (besto$e* fro+ abo.e) +ay not be t%e people $it% real po$erD !o$er co+es fro+ trust, respect, functional =no$le*ge, c%aris+a etc etcD

Documents

1120 Lecture 10