Countries, Industries and Organisations are operating in an increasingly complex word where interdependencies abound. Under these conditions Leadership faces enormous challenges and strategising has to be done on the edgfe of chaos.
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� Since the time of Newton, Bacon and Descartes, scientists have tended to understand the natural world in terms of machine-like regularity in which
given inputs are translated through absolutely fixed laws into given outputs
� Cause and effect are related in straightforward linear ways
� According to this Newtonian view of the world, humans will ultimately be able to dominate nature� This whole view of reasoning and understanding was imported into economics, social sciences and
psychology (Source: Based on Stacey, Ralph D. Strategic Management & Organisational Dynamics. The
�Rules are then necessary to explain how each of the sets of interrelated measurements, at each
measurement point in the atmosphere, move over time� This requires massive numbers of computations� When these computations are carried out they reveal that the weather follows what is called a
strange attractor, another name for a chaotic pattern. What this shape means is that the weather
follows recognisably similar patterns, but those
patterns are never ever exactly the same as at
any previous point in time (Source: Stacey, Ralph D. Strategic Management & Organisational Dynamics. The challenge of Complexity: 2000: 259)
“ The unwieldy corporate cultures of the Industrial Economy are rapidly being replaced by a kind of team spirit especially suitable to the new eCommerce organisations of today -
swift, nimble and driven by almost religious visions of the future - “Don’t look for profits
THE INDUSTRIAL ECONOMY HAS BEEN WITH US FOR HUNDREDS OF YEARS.OUR FOREFATHERS COULD BE BORN INTO THIS ECONOMY, THRIVE IN IT AND
RETIRE IN IT WITHOUT EXPERIENCING SUBSTANTIAL CHANGE.
THE NEW INFORMATION ECONOMY, DRIVEN BY COMMUNICATIONS AND COMPUTER TECHNOLOGIES, HAS BROUGHT MORE ECONOMIC TRANSFORMATIONIN THE PAST DECADES THAN THE INDUSTRIAL ECONOMY BROUGHT IN THE PAST
CENTURIES. THE INFORMATION ECONOMY WAS BUILT ON THE SUCCESSES OF THE INDUSTRIAL ECONOMY, AND THEN LEAP-FROGGED THE ECONOMIC IMPACT.
No one wants to die. Even people who want to go to heaven don’t want to die to No one wants to die. Even people who want to go to heaven don’t want to die to No one wants to die. Even people who want to go to heaven don’t want to die to No one wants to die. Even people who want to go to heaven don’t want to die to get there. And yet death is the destination we all share. No one has ever escaped it. get there. And yet death is the destination we all share. No one has ever escaped it. get there. And yet death is the destination we all share. No one has ever escaped it. get there. And yet death is the destination we all share. No one has ever escaped it. And that is as it should be, becauseAnd that is as it should be, becauseAnd that is as it should be, becauseAnd that is as it should be, because death is very likely the single best death is very likely the single best death is very likely the single best death is very likely the single best invention of life. It is life’s change agent. It clears out the old to invention of life. It is life’s change agent. It clears out the old to invention of life. It is life’s change agent. It clears out the old to invention of life. It is life’s change agent. It clears out the old to make way for the new.make way for the new.make way for the new.make way for the new. Right now the new is you, but someday not too long Right now the new is you, but someday not too long Right now the new is you, but someday not too long Right now the new is you, but someday not too long
from now, you will gradually become the old and be cleared away. from now, you will gradually become the old and be cleared away. from now, you will gradually become the old and be cleared away. from now, you will gradually become the old and be cleared away. Your time is limited, so don’t waste it living someone else’s life. Don’t be trapped by Your time is limited, so don’t waste it living someone else’s life. Don’t be trapped by Your time is limited, so don’t waste it living someone else’s life. Don’t be trapped by Your time is limited, so don’t waste it living someone else’s life. Don’t be trapped by
dogma dogma dogma dogma ———— which is living with the results of other people’s thinking.which is living with the results of other people’s thinking.which is living with the results of other people’s thinking.which is living with the results of other people’s thinking. Don’t let the Don’t let the Don’t let the Don’t let the noise of other’s opinions drown out your own inner voice. And most important,noise of other’s opinions drown out your own inner voice. And most important,noise of other’s opinions drown out your own inner voice. And most important,noise of other’s opinions drown out your own inner voice. And most important, have have have have
the courage to follow your heart and intuition.the courage to follow your heart and intuition.the courage to follow your heart and intuition.the courage to follow your heart and intuition. They somehow already know what They somehow already know what They somehow already know what They somehow already know what you truly want to become. Everything else is secondary.you truly want to become. Everything else is secondary.you truly want to become. Everything else is secondary.you truly want to become. Everything else is secondary.(Steve Jobs, graduation address at Stanford University : 2005)
� In one of the earliest models developed by complexity theorists, Craig Reynolds discovered that the complex behaviour of such a flock of geese emerges from a few
� The simulation begins with the boids placed randomly in space, but very quickly the individuals form themselves into a flock that behaves just like real birds, wheeling and
turning together and avoiding obstacles in their path.
� The point is that the complex behaviour of the system as a whole - the coordinated motion of the flock - emerges from a few simple rules of interaction among individuals,
not from a single leader.
� This has been called “distributed control”, in contrast with central control, which is what many CEO’s usually try
to achieve when they follow a mechanistic model of management.
TOKYO — Sony named the British-born head of its US operations, Howard Stringer, as its new chairman and CE, handing the reins of the struggling Japanese electronics
maker to a foreigner for the first time.
“The world is simply not the same place it was a few years ago. The needs and expectations of our customers have
� Decreasing dependence on command-and-control type of leadership
� A breakdown of hierarchies� An increasing commitment to virtual technologies
� The embracing of teamwork� Greater flexibility
� Knowledge centres interacting largely through mutual interest and electronic - rather than authority systems� Emergence of new organisational forms, including
virtual enterprises - defined as small, core organisations that outsource major business functions - imaginary
corporations, dynamic networks and flexible work teams.
As the information revolution begins to affect the nature and organisation of work as fundamentally as the industrial revolution did,
there will be more pressures to redesign the actual physical surroundings. Robert Ayling, Chief Executive, British Airways.
There are no lifts from the underground car-parks so that everyone has to pass through the street on the way to their work place; meeting people on the way. First names are the norm and no one stands on ceremony - you can’t in a village street.
The street is a real street with a café, a bank and a branch of Waitrose where you can place your order via computer and pick it up in the car park on the way home. There are trees, a piazza and a small stream, all under a high glass canopy.
Organisations work best if they are designed as villages.
In a village you don’t learn what is going on by reading memos, you go down the street and pick up the news by bumping
into people.Randomness and accidental meeting, encourages serendipity, removes the impression of hierarchy, and fosters a sense of comradeship and belonging.
The context in which we work has changed fundamentally as technology joins up the world and globalisation opens up new markets for capital, talent, products and services.
Many companies are beginning to approach the
apex of the first curve, when simply doing more of the same is not increasing the value of their companay.
To do so they will have to abandon some of the old rules, and begin to build competence and energy
around the new rules of the second curve.
Those that fail to do so will see a gradual but consistent decline in the capacity to
create value.
At the heart of the second curve are the rules of Hot Spots – the
idea that energy can be ignited, that relationships and
networks are crucial, that commitments and
conversations can replace rules and directives.
This is no easy challenge. As leaders and members of
organisations, we often find ourselves at points of inflection.
What worked in the past is not working so well anymore.
Points of inflection in organisations: shifting from old rules to new(Gratton: 2007: 145)
The context in which we work has changed fundamentally as technology joins up the world and globalisation opens up new markets for capital, talent, products and services.
The context in which we work has changed fundamentally as technology joins up the world and globalisation opens up new markets for capital, talent, products and services.
Many companies are beginning to approach the
apex of the first curve, when simply doing more of the same is not increasing the value of their companay.
To do so they will have to abandon some of the old rules, and begin to build competence and energy
around the new rules of the second curve.
Those that fail to do so will see a gradual but consistent decline in the capacity to
create value.
At the heart of the second curve are the rules of Hot Spots – the
idea that energy can be ignited, that relationships and
networks are crucial, that commitments and
conversations can replace rules and directives.
This is no easy challenge. As leaders and members of
organisations, we often find ourselves at points of inflection.
What worked in the past is not working so well anymore.
Points of inflection in organisations: shifting from old rules to new(Gratton: 2007: 145)
The context in which we work has changed fundamentally as technology joins up the world and globalisation opens up new markets for capital, talent, products and services.
INDUSTRY AND COMPLEXITYReal progress demands a revolution. You can’t shuffle your way onto the next S Curve. You have to leap. You have to
vault over your preconceived notions, over everyone’s best practices, over the advice of all the experts, and over your own doubts.
New order can emerge from chaos. Complexity theory argues that nothing innovative can emerge from systems with a high degree of order and stability (egregulated industries);similarly, completely chaotic systems (eg riots) are incapable of functioning or creating anything.Somewhere on the boundary between order and disorder, control and chaos, sits creativity, innovation, self-renewal and growth. Pascale (1999) calls this point “the edge of chaos”. (OUBS, Strategy: Unit 8: 28)
� Competing on the edge rests on the assumption that the marketplace is in constant flux. � The assumption of static equilibrium no longer applies. � Rather the view is that competitors come and go. Markets emerge, close, shrink, split, collide and grow. � Today’s collaborators are tomorrow’s competitors . . . or both. � Technology is constantly shifting. Getting to the market early matters. � In complexity parlance, the marketplace is a continuously deforming landscape. � The image of this kind of landscape is of a terrain richly contoured by peaks and valleys. � And it is continuously reshaped by warp-speed change.
� The second assumption is that firms are composed of numerous parts or agents, or businesses. � When these parts are linked together at the edge of chaos and time, they form complex adaptive systems. � These systems are complex not because they are complicated. They are actually fairly simple. � Rather, “complex” describes the complicated, innovative and self-organised behaviour that emerges from them. � They are adaptive because they can change effectively.
� The key assertion is that successful firms in fiercely competitive and unpredictably shifting industries pursue a competing on the edge strategy.� The goal of this strategy is not efficiency or optimality in the usual sense. � Rather, the goal is flexibility – that is adaptation to current change and evolution over time, resilience in the face of setbacks, and the ability to locate the constantly changing sources of advantage.
� Ultimately it means engaging in continual reinvention.
• “By far the majority of homeowners have built up a considerable value cushion which can absorb a
reduction in house prices.”
• “The increase in the buying and selling of second homes indicates that speculation has played a larger role in the recent house price increases than before.”
• “Some 80% of the increase in mortgage advances are people that have borrowed on the value of their
The IMF finds that, even though housing is not traded internationally, house prices are highly
synchronized across industrial countries.
An important implication of these findings is that, just as the current upswing in
house prices has been a global phenomenon, any downturn is also likely to be highly synchronized across countries, with corresponding implications for the world economy.
One possible factor triggering a house price downturn is the tightening of monetary policy across industrial
countries as inflationary pressures emerge.
(World Economic Outlook, Washington DC, 15 September 2004)
PARADIGMS AND THE CULTURAL WEBPARADIGMS AND THE CULTURAL WEBPARADIGMS AND THE CULTURAL WEBPARADIGMS AND THE CULTURAL WEB
Together The “soft” and “hard” Together The “soft” and “hard” Together The “soft” and “hard” Together The “soft” and “hard” elements of the cultural web elements of the cultural web elements of the cultural web elements of the cultural web
capture life in any organisation.capture life in any organisation.capture life in any organisation.capture life in any organisation.
The three ‘soft’ (i.e. intangible) The three ‘soft’ (i.e. intangible) The three ‘soft’ (i.e. intangible) The three ‘soft’ (i.e. intangible) elements of the cultural web are elements of the cultural web are elements of the cultural web are elements of the cultural web are ––––
symbols, stories, rituals and symbols, stories, rituals and symbols, stories, rituals and symbols, stories, rituals and routinesroutinesroutinesroutines
The three ‘hard’ (i.e. tangible) elements The three ‘hard’ (i.e. tangible) elements The three ‘hard’ (i.e. tangible) elements The three ‘hard’ (i.e. tangible) elements of the cultural web are power of the cultural web are power of the cultural web are power of the cultural web are power
structure, organisation structure and structure, organisation structure and structure, organisation structure and structure, organisation structure and control systems. control systems. control systems. control systems.
PARADIGMS AND THE CULTURAL WEBPARADIGMS AND THE CULTURAL WEBPARADIGMS AND THE CULTURAL WEBPARADIGMS AND THE CULTURAL WEBThe organisation’s paradigm refers to
the “deeper level of basic assumptions and beliefs that are
commonly shared by members of an organisation and defines the
member’s view of the organisation and its environment.” (Boojihawon,
2006: 67)
“The cultural web can be used to enable managers to surface
and explore the core assumptions underpinning their
paradigms, and therefore, facilitate the implementation of change.” (Boojihawon, 2006:
Trends in the Property Market are inextricably responsive to, and influenced by INVESTMENT CLIMATE,
INVESTOR CONFIDENCE and PROPERTY DELIVERY.
Investo
r C
on
fid
en
ce
Investment Climate
Closed System Open SystemParadigm Regression Paradigm Paralysis Paradigm Shift Paradigm ReinventionProperty a Poor Investment Average Good Property a Preferred Investment
MIAMI SCENARIOHIGH ROAD
Planned development
Property the preferred investment
High affordability
High confidence
Profitable industry
IPANEMA SCENARIOUPPER MIDDLE ROAD
Mixed development
Property a good investment
Average affordability
Average confidence
Average performing industry
ALGARVE SCENARIOLOWER MIDDLE ROADHaphazard development
Trends in the Property Market are inextricably responsive to, and influenced by INVESTMENT CLIMATE,
INVESTOR CONFIDENCE and PROPERTY DELIVERY.
Investo
r C
on
fid
en
ce
Investment Climate
Closed System Open SystemParadigm Regression Paradigm Paralysis Paradigm Shift Paradigm ReinventionProperty a Poor Investment Average Good Property a Preferred Investment
MIAMI SCENARIOHIGH ROAD
Planned development
Property the preferred investment
High affordability
High confidence
Profitable industry
IPANEMA SCENARIOUPPER MIDDLE ROAD
Mixed development
Property a good investment
Average affordability
Average confidence
Average performing industry
ALGARVE SCENARIOLOWER MIDDLE ROADHaphazard development
High Road Miami Scenario (5,72) Low Road Mombasa Scenario (3,14)
Assigning values to the QUALITATIVE generic variables influencing change allows for quantifcation and positioning of the CURRENT REALITIY relative to the IDEALISED SCENARIOS. It also shows where performance is good and where intervention is required.
High Road Miami Scenario (5,72) Low Road Mombasa Scenario (3,14)
Current Reality (3,92) indicates that Residential Property is between the Low Road (3,14) (Mombasa) and the Lower Middle Road (4,00) (Ipanema) scenarios.