By Chaotics in Chaotic Strategies, Globalization at March 31st, 2009
The Financial Times recently wrote ‘Robust and stable’ system is goal of US, paraphrasing US Treasury Secretary Tim Geithner. In this new Age of Uncertainty, it is absolutely necessary to prepare for a future that will be very different from today with new risks and challenges. Governments need to follow similar Chaotics strategies as companies in developing contingency plans in preparing for future turbulence.
Mr. Geithner: “I am sceptical about the ability of central banks and regulators to provide early warnings of crises. We need to build a system that is safe against uncertainty, against ignorance, against the failure to identify the future source of crisis.”
The Treasury Department’s “Robust and Stable” is very similar to the “3 R’s” of Chaotics: Responsive, Robust and Resilient. Suppose in a live interview today on CNBC today, your biggest competitor’s president makes a new product announcement with new industry-shattering breakthrough technology that the industry has been dreaming about for the last five years that all but makes obsolete your most profitable and biggest product line. The question is: How did you miss seeing how close your company’s biggest competitor—or any competitor for that matter—was to reaching such game-changing success in your industry?
Turbulence may alternatively open up new opportunities for your business that can be exploited with your present business model or with a revised model. Suddenly you get an urgent call from your CFO who’s attending a credit-swap and derivative symposium in Chicago informing you that he just learned that your biggest competitor is planning to file for bankruptcy protection later that day. The competitor’s main plant burned down and the competitor lacked insurance coverage. Bankers are demanding the competitor repay pending defaulting senior debt. Your CFO tells you that the competitor’s CEO is holding for you on the other telephone line, prepared to offer you the deal of a lifetime. And you never saw it coming. You must prepare for both the best and worse case scenarios.
Again, Mr Geithner: “[The] US has a huge interest in acting quickly and comprehensively to use this opportunity to develop an international consensus on how to make the system more robust and stable”.
Chaotic situations like this will occur time and again, creating opportunities and/or crises. Organizations will have to learn how to seize the extraordinary opportunities that arise during periods of immense uncertainty. Business leaders must now begin to evaluate a broad set of macroeconomic outcomes, construct an equally broad set of scenarios with appropriate strategic responses, and then take actions to make their companies more responsive, robust and resilient.
By Chaotics in Events at March 25th, 2009
John Caslione will be speaking on Chaotics: The Business of Managing and Marketing in The Age of Turbulence in the US in April, presenting strategies for conducting successful international business in today’s Age of Uncertainty.
7th April 2009 - Dallas, TX USA
20th April 2009 - Chicago, IL USA
For more information, please email contact [at] chaoticsstrategies.com.
By Chaotics in Chaotic Strategies at March 19th, 2009
Recent posts have covered The New Normality and the radically different environment facing businesses. More to come soon on The Age of Turbulence!
This is certainly a new period and we’re all facing it together. We come here to learn from each other so we’d like to hear what you’re doing in the new environment. How has your business changed and what experiences have you had (both positive and negative) in dealing with The New Normality?
Please visit the “Chaotic Strategies” tab at the top of the page to contribute your own stories. All will be reviewed and the most insightful will be posted online. We’re all learners and hope to share for mutual benefit.
By Chaotics in Business in Society, Recommendations, Turbulence at March 19th, 2009
In a recent review of the book House of Cards by William D. Cohen, the International Herald Tribune writes:
“In March 2008, when the 85-year-old firm Bear Stearns — the United States’ fifth-largest investment bank, which had survived every crisis of the 20th century, from the Great Depression to the market dive of 1987 without a single losing quarter — crashed and burned in little over a week, it became a harbinger of the credit crisis that snowballed later in the year and led to the current global financial meltdown. As William D. Cohan makes clear in his engrossing new book, “House of Cards,” Bear Stearns is also a kind of microcosm of what went wrong on Wall Street — from bad business decisions to a lack of oversight to greedy, arrogant CEOs — and a parable about how the second Gilded Age came slamming to a fast and furious end.”
We’re recommending this book due to its insightful look into the new era we’ve entered, The Age of Turbulence. From the LA Times book review:
“It seems almost achingly quaint to recall those warm and hazy days when “banker” was a synonym for sobriety and propriety — a time when those who worked in finance, as well as those who reported on it, believed that a pinstriped suit connoted one thing and a chalk stripe something else entirely.
Anyone who still retains such antique illusions will lose them in fewer than 10 pages into “House of Cards: A Tale of Hubris and Wretched Excess on Wall Street,” William D. Cohan’s masterfully reported account of the collapse of Bear Stearns, the investment banking house whose implosion a year ago this month signaled the beginning of the worst global financial crisis since the Great Depression.”
Check it out: House of Cards by William D. Cohen.
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