2. Bath University – School of Management – EMBA Class of 2011 & Risk Management Option 2010.03.25
MBA 2011 & Risk Management Module
(Prof. Emmanuel Fragnière)
Identifying, structuring and piloting disruptive situations
using agile type of methodologies
Approaches and case studies
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3. Bath University – School of Management – EMBA Class of 2011 & Risk Management Option 2010.03.25
Synopsis :
Agenda
About us
Managing disruptive situations
Case study : Disruption in the luxury Hotel
Industry
Wrap-up & Good-luck
March 25, 2011
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4. Bath University – School of Management – EMBA Class of 2011 & Risk Management Option 2010.03.25
Time table
Friday March 25, 2011
Concepts + Methodologies
Training using a case
Luxury Hotel Part A
- Working Group preparation
- Group presentations
- Plenum discussion
Luxury Hotel Part B
- Working Group preparation
- Group presentations
- Wrap-up
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5. Bath University – School of Management – EMBA Class of 2011 & Risk Management Option 2010.03.25
Synopsis
Agenda
About us
Managing disruptive situations
Case study : Disruption in the luxury Hotel
Industry
Wrap-up & Good-luck
March 25, 2011
5
6. Bath University – School of Management – EMBA Class of 2011 & Risk Management Option 2010.03.25
About us
Patrick Bays Philippe Steinmann
Lic. Econometrics, MBA IMD Expert Auditor
15 years of international 20 years of international
exposure in exposure in :
o the prototyping and the o the management of
implementation of disrutptive special projects
innovation o Supporting organizations
o change management within facing volatile situations
several industries (high growth rate,
turnaround)
PwC, Tetra Pak, Swisscom, KPMG, Ilta Holding,
UCB Pharma, Wake Asset Euroterminal
Management
English, German, French English, French
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7. Bath University – School of Management – EMBA Class of 2011 & Risk Management Option 2010.03.25
Synopsis :
Agenda
About us
Managing disruptive situations
A : Positioning
B : Methodologies
C : Training
Case study : Disruption in the luxury Hotel
Industry
Wrap-up & Good-luck
March 25, 2011
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8. Bath University – School of Management – EMBA Class of 2011 & Risk Management Option 2010.03.25
Risk awareness changes perspectives…
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9. Bath University – School of Management – EMBA Class of 2011 & Risk Management Option 2010.03.25
Basic reminders: the Board of Directors sets the risk appetite
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10. Bath University – School of Management – EMBA Class of 2011 & Risk Management Option 2010.03.25
Set the stage and quickly agree upon a common language
Step 1 Step 2 Step 3 Step 4 Step 5
E
Crisis management
Vulnerability
Anticipate Prevent Apply Restore
analysis
Manage the information
Event
Threats Measures Norms and Standards of
protocols engagement
Risk Management Contingency Planning Recovery
Management
Business Continuity Planning
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11. Bath University – School of Management – EMBA Class of 2011 & Risk Management Option 2010.03.25
These situations have something in common …
Toyota suspends sales January 2010, recall list
… no one anticipated their disruptive character
and the storm that followed.
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12. Bath University – School of Management – EMBA Class of 2011 & Risk Management Option 2010.03.25
A situation of disruption occurs when ...
for a given organizational system….
Period of high
vollatility A new
Equilibrium equilibrium
Correctives
E
measures
A particular event causes a disruption of
this balance which threatens the
sustainability of this system
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13. Bath University – School of Management – EMBA Class of 2011 & Risk Management Option 2010.03.25
Afterwards, most actors agree they were unable to grasp the
severity of the situation …
Symptoms
• No abrupt change but soft slips Crisis Managing the
High
Potential impact
Management unexpected
causing discomfort and doubts
• Lack of response and lack of
anticipation leading from the start to
to become chronic victims of events
• Lack of internal coordination and
Low
Operational Fault
consultation Management Management
• Chaotic and contraductory internal so
as external communication
Yes No
Anticipated event
…due to a slowly increasing
disturbing feeling invading and panicking them
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14. Bath University – School of Management – EMBA Class of 2011 & Risk Management Option 2010.03.25
The management of such a disruption is fundamentally different
if the triggering event could be anticipated in advance ...
Step 1 Step 2 Step 3 Step 4 Step 5
E
Crisis management
Vulnerability
Anticipate Prevent Apply Restore
analysis
React Restore
Managing the unexpected
Event 14
15. Bath University – School of Management – EMBA Class of 2011 & Risk Management Option 2010.03.25
The observation of extreme behaviors in emergency situations
has helped us to define our methodology in business occasions
Crisis situation Emergency doctors
3 minutes
Quality of the information available
Precise, calibrated
ED
SStart SEnd t
Standard behaviors and normed protocols
Mgr
Military forces
Médiocre
…
MiF
SStart SInt.1 SInt.2 SInt.n t
Normed Estimated
Time management emergency situations Method of dynamic resolution
by successive iterations
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16. Bath University – School of Management – EMBA Class of 2011 & Risk Management Option 2010.03.25
The military method of dynamic resolution by successive iterations
Analyzing and Planning Iterations
Developing the
engagement plan
Shaping decision
Assessment of the situation
Draft backplanning
Triggering emergency
measures
Identification of the problem
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17. Bath University – School of Management – EMBA Class of 2011 & Risk Management Option 2010.03.25
The economic drama seems never ending…
2008 : Financial Crisis
2009 : Economic Crisis
2010 : Social Crisis
2011 : - Currency Crisis ?
- Government Debt Crisis ?
… Companies have managed to
survive this turmoil by becoming more agile and flexible
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18. Bath University – School of Management – EMBA Class of 2011 & Risk Management Option 2010.03.25
The Cougars in a nutshell :
Agenda
About us
Managing disruptive situations
A : Positioning
B : Methodologies
C : Training
Case study : Disruption in the luxury Hotel
Industry
Wrap-up & Good-luck
March 25, 2011
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19. Bath University – School of Management – EMBA Class of 2011 & Risk Management Option 2010.03.25
Our approach combines the strengths of two frameworks using
cross functional teams to quickly generate an impact
Deep Dive Scrum
• A technique to rapidly immerse a team • An agile and lean methodology used for
into a situation for problem solving in : software development:
o Product development o Designed to adapt to changing
o Process improvement requirements during the development
process at short regular intervalles
o Customer service strategy
o Allows teams to priorize customers
requirements and adopt work produced
in real time to customer needs
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20. Bath University – School of Management – EMBA Class of 2011 & Risk Management Option 2010.03.25
Deep Dive: step by step http://www.youtube.com/watch?v=M66ZU2PCIcM
Inspiration Ideation Implementation
Observe and inquire
Tell stories
Synthesize
Visualize Realize
Refine Evaluate
Execute
Spread
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21. Bath University – School of Management – EMBA Class of 2011 & Risk Management Option 2010.03.25
http://www.youtube.com/watch?v=vmGMpME_phg
Scrum in a nutshell http://www.youtube.com/watch?v=Q5k7a9YEoUI
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22. Bath University – School of Management – EMBA Class of 2011 & Risk Management Option 2010.03.25
But the IDEO Frameworks reaches some limits as soon as the
requirements need to be re-priorized permanently
Scrum
Scrum methodology
mainly used for software
development provides a
strong framework to
address this topic
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23. Bath University – School of Management – EMBA Class of 2011 & Risk Management Option 2010.03.25
An high level illustration of our Agile Development Methods
A dynamic approach under dynamic environmental monitoring
Observe and ask
Develop a Storyline
Priorize
Co-Create
Inspiration Ideation Implémentation
Deep Dive Scrum
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24. Bath University – School of Management – EMBA Class of 2011 & Risk Management Option 2010.03.25
In practice, a situation of high volatility is resolved step by step
Step 1 Step 2 Step 3 Step 4 Step 5
Project Management & Communication
Urgency measures
Process
Storyline
Implementation,
Agile controls and
Scoping Clarification Gain support
Prototyping adjustements
Planing
Decision Decision Decision Decision Decision
Tool-Box
Change
management &
Implementation
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25. Bath University – School of Management – EMBA Class of 2011 & Risk Management Option 2010.03.25
The Cougars in a nutshell :
Admin stuff
About us
Managing disruptive situations
A : Positioning
B : Methodologies
C : Training : the Ukrain’s case
Case study : Disruption in the luxury Hotel
Industry
Wrap-up & Good-luck
March 25, 2011
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26. Bath University – School of Management – EMBA Class of 2011 & Risk Management Option 2010.03.25
The Ukrainian case : 1998 & 2010, bis repetita
General situation: the Ukrainian environment End of the 90’
Ecosystem was reaching an equilibrium :
• Liberal government, development of an economy oriented
• Facilities for foreign company to develop business in provinces
• Stability of the system (social and economic) & the regulation
• Average monthly salary : 250 - 400 US$
• Compliance review of all contract by local government 3-6 months later
Particular situation : the Group structure, activities and
Group structure & Activities
• Trading Co , Crushing plants (250K MT), Distribution’s company
• Purchase of sunflower seeds in regions for both crushing and selling abroad. Crude oil
produced & sold around the world.
• Approx. 400 contracts signed and performed per year (seeds, oil, meal)
• 1 lawyer and 2 assistants employed by the group to review the contracts (standard)
Salient factors to be determined
Activity risk, delivery risk, payment risk, contractual risk (review by the government)
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27. Bath University – School of Management – EMBA Class of 2011 & Risk Management Option 2010.03.25
Part A : What are the major salient factors of operating this business
in Ukraine (at an equilibrium state of its ecosystem) ?
1
•
•
2
•
•
3
•
•
4
•
•
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28. Bath University – School of Management – EMBA Class of 2011 & Risk Management Option 2010.03.25
Part A : Hierarchy of salient factors in a balanced ecosystem:
1 Risk matrix Eisenhower matrix
High
2 High
Likelihood
Urgency
3
Low
Low
4
Low High Low High
Impact Importance
1 2 3 4 1 2 3 4
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29. Bath University – School of Management – EMBA Class of 2011 & Risk Management Option 2010.03.25
Part B : Disruption :
Majority Change at the parliament : the communist Party takes over
power on Liberals :
The Parliament will be formed in one week after the election :
• its objective will be to reduce the margin of private firms for public
companies and increasing taxes, fines and penalties.
• It will seat from 09:00 to 23:00, 6 of 7 days, toughening laws
strictly and adding a multitude of fines and penalties for any non-
compliance with contract law or in changing contractual terms
(delivery date, quantity & quality treated…).
Changing laws will be treated anarchic and could be amended or
changed every day.
• Chancery will publish new laws every day at midnight for an
immediate application.
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30. Bath University – School of Management – EMBA Class of 2011 & Risk Management Option 2010.03.25
Part B : What are the major salient factors of operating this
business in Ukraine after disruption ?
Other ?
…
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31. Bath University – School of Management – EMBA Class of 2011 & Risk Management Option 2010.03.25
Part B : Hierarchy of salient factors after disruption :
1 Risk matrix Eisenhower matrix
High
2 High
Likelihood
Urgency
3
Low
Low
4
Low High Low High
Impact Importance
1 2 3 4 1 2 3 4
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32. Bath University – School of Management – EMBA Class of 2011 & Risk Management Option 2010.03.25
Part B : Prototyping an embryonic solution : the best you can do to
be ready in only one week
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33. Bath University – School of Management – EMBA Class of 2011 & Risk Management Option 2010.03.25
The Cougars in a nutshell :
Agenda
About us
Managing disruptive situations
Case study : Disruption in the luxury Hotel
Industry
Part A : At an Equilibrium state
Part B : Managing disruption
Wrap-up & Good-luck
March 25, 2011
33
34. Bath University – School of Management – EMBA Class of 2011 & Risk Management Option 2010.03.25
The Cougars in a nutshell :
Agenda
About us
Managing disruptive situations
Case study : Disruption in the luxury Hotel
Industry
Part A : At an Equilibrium state
Part B : Managing disruption
Wrap-up & Good-luck
March 25, 2011
34
35. Bath University – School of Management – EMBA Class of 2011 & Risk Management Option 2010.03.25
The Cougars in a nutshell :
Agenda
About us
Managing disruptive situations
Case study : Disruption in the luxury Hotel
Industry
Part A : Diagnosis, Scoping and Clarification
Part B : Prototyping & implementation
Wrap-up
March 25, 2011
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36. Bath University – School of Management – EMBA Class of 2011 & Risk Management Option 2010.03.25
The Cougars in a nutshell :
Agenda
About us
Managing disruptive situations in crisis
times using agile type of methodologies
Case study : Disruption in the luxury Hotel
Industry
Wrap-up
March 25, 2011
36
37. Bath University – School of Management – EMBA Class of 2011 & Risk Management Option 2010.03.25
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