Category Archives: economics

VUCA: How companies can reap the rewards

VUCA

Rediscovering VUCA

VUCA is an acronym that most in the business world have become familiar with. It is the result of an ever-increasing flow of data and information in conjunction with increasing distrust of data and information.  This duality not only impacts economies and politics. It fundamentally affects how we interact and treat each other. I recently learned of the VUCA acronym at a presentation by Google’s Country Manager Adriatic Region, Joško Mrndže.  Here is the irony. The acronym was unfamiliar to me, however, as Mrndže continued talking about VUCA, the hairs on my arms straightened. As he spoke I was transported back to the almost two decades I had dedicated transforming extreme manifestations of VUCA.

Clarifying VUCA

vuca
(source: knowledgehut.com)

Volatility – the quality or state of being like to change suddenly, especially by becoming worse.

Uncertainty – a situation in which something is not known, or something that is not known or certain.

Complexity – the state of having many parts and being difficult to understand or find an answer to.

Ambiguity – the quality of being open to more than one interpretation; inexactness.

What the VUCA is going on

Left unchecked VUCA can wreak havoc on any community, organization, team, or individual. For most of my years in social work, I was responsible for managing volatility, uncertainty, complexity, and ambiguity in the lives of hundreds of young men in conflict with the law. Our job was to transform VUCA into positive energy and outcomes. We were tasked with ensuring that its devastating impact did not harm anyone, overrun the program’s culture, or spill into the neighboring community. One can imagine how the life of a young person coming from a home of domestic violence, abuse, and/or neglect can result in VUCA. Add to that any of the following pre-existing conditions: trauma, alcohol/drug addiction, gangs, learning disabilities, truancy, emotional dysregulation, poverty, and psychiatric illness.

Psychological safety transforms VUCA

Mrndže continued to highlight the importance of psychological safety in companies as a coping mechanism for VUCA. This is a top priority for leaders.  Work environments are psychologically safe when:

A code of conduct exists and is practiced
Physical/Environmental safety is assured
Employees are entrusted to do their job
Systems and procedures  promote fair treatment
A mentoring culture exists
Employees are supported in times of need
Good work is recognized
An open feedback culture exists
Personal and professional development is encouraged
Employees feel a sense of belonging

As the director of a group home, I could not control what was happening outside the walls of my program. My energy went to influencing the staff and residents inside by fostering a trusting and caring environment. A safe haven in a sea of uncertainty allows people to harness VUCA’s creative and innovative potential.

Living la Vida VUCA

Vulnerability, uncertainty, complexity, and ambiguity are not always unwanted conditions. Moreover, they can never be fully eradicated. When a safe haven to deal with such incalculable conditions exists, VUCA promotes creativity and innovation. Some of the most out of the box thinkers I have met were the young men under my care.  Living a VUCA life creates an agile mind. People comfortable with instability are flexible and adaptable. As VUCA increases in a digital world so does the need for societies and organizations to create conditions for humans to effectively and efficiently deal with it. Ensuring psychological safety permits people to have the peace of mind to learn and grow from incalculable and unknown variables.

About the author

Jean-Pierre Kallanian is a Process Facilitator and Human Systems Specialist. He accompanies organizations in fully integrating their human resource potential by facilitating group processes that foster authenticity, intention, and collective wisdom. All stakeholders benefit in a culture that supports exploration, play, inspiration, and connection. He is also the author of What You Can Learn from Your Teenager: Lessons in Parenting and Personal Growth.

Intergenerational learning ensures viability & innovation

Intergenerational Learning
Intergenerational learning is optimized when all generations are acknowledged and valued for their contribution.

Intergenerational learning is a top priority

Intergenerational learning is needed more now than ever before. Labor markets are struggling to meet rising human resource demands and simultaneously remain innovative. In a blog titled, Leveraging Europe’s Ageing Workforce, the author reports on how a declining pool of potential EU workers in a growing job market is resulting in the frenetic search for qualified and engaged young workers. In the US, the economic situation does not fair better.

A perfect storm is brewing. The combination of a decreasing labor force participation rate, baby boomers retiring, an expanding wage gap between high school and college graduates, and the skyrocketing costs of higher education are well documented. This harsh reality is set against the backdrop of a spiraling national debt that has surpassed $21,000,000,000,000. Let us not forget the ominous and bitter consequences of the 2008 global financial crisis. A corrective course of action is needed to avert a similar or worse fate.

What can we learn from older generations?

Companies need older workers! That is potentially good news for older workers seeking employment, as long as employers see the value in hiring them. By 2024, one in four U.S. workers will be 55 or older, according to the U.S. Department of Labor. How should older workers be regarded in a digital age? How can the labor market incorporate their experience and wisdom? Older employees are typically seen as expensive and replaceable by younger and less expensive counterparts. But is this entirely true? 

Older employees have established networks. They have experience overcoming organizational challenges and achieving lofty goals. Their know-how and connections optimally position them to offer guidance and support. Their trained soft skills can help younger colleagues refine theirs. By sharing their stories and listening to younger generations, senior employees are a source of inspiration. Solely viewing them as a financial burden is not only short-sited but also detrimental to an organization’s future in today’s market. Regarding them as a vital asset inspires new purpose and fresh meaning in their work life, boosting their morale and productivity.

What can we learn from younger generations?

“Age shows wisdom, but wisdom shows no age” – Unknown author

As born digital natives, young employees today may lack in work experience and social competencies, but their ability to navigate in a digital world is unprecedented. In my parenting book What You Can Learn from Your Teenager: Lessons in Parenting and Personal Growth, I outline the EPIC Model, a learning framework embodied by those most adept at learning: young people. The Model consists of four components: exploration, play, inspiration, and connection. Using this framework optimizes intergenerational learning.

Regardless of age, we all have the capacity to learn. Young people can help older ones reignite the innate ability to explore, play, inspire, and connect. Subscribing to such a philosophy allows one to remain open to new possibilities. Organizations adopting such a philosophy remain viable and innovative. Creating an open learning culture improves both employee and organizational performance.

Generational labels impede intergenerational learning

Once GenX, GenY, and GenZ are mentioned, a debate ensues to determine the beginning and end years of each. As if a birth year reveals everything you need to know about a person. A heated discussion then follows to agree upon several descriptors applicable to hundreds of millions of people. Anyone who can memorize some random dates and a few adjectives becomes an immediate generation expert. If it were only so simple!

Labeling people usually leads to stereotypes. Stereotypes usually lead to some form of discrimination. Here are some warning signs of age discrimination. How does this domino effect ameliorate an aging and shrinking workforce? It doesn’t. It does the opposite. It perpetuates the current situation. What happens when organizations place more emphasis on reciprocal intergenerational learning?  How would intergenerational learning impact workplace culture, productivity, and creativity in your organization?

Intergenerational learning in action

Intergenerational learning requires commitment and time. Who has time for that? Time taken now to create new possibilities, improve collaboration, and ignite productivity saves time in the long-run. Processes, where information and conversations that matter most can be discussed from all perspectives, are vital. When all stakeholders participate then all members can take ownership and responsibility for the outcome. 

For technical learning, apprenticeship programs and continuous training keep all stakeholders up-to-date with current trends. Mentoring and reverse mentoring also help young employees with on-boarding. Storytelling or various circle methods can be extremely helpful in creating space for reciprocal know-how sharing and open feedback.  Excursions and celebrations build social bonds and create a sense of achievement and belonging. A neutral facilitator may also be preferable when starting out or dealing with more serious issues.  There are numerous ways organizations can fully embrace the benefits of intergenerational learning other than simply creating multigenerational teams and hoping for the best.

About the author

Jean-Pierre is a Process Facilitator and Human Systems Specialist. He accompanies organizations in fully integrating their human resource potential by facilitating group processes that foster authenticity, intention, and collective wisdom. All stakeholders benefit in a culture that supports exploration, play, inspiration, and connection.

IoT and how it reflects interconnectedness in nature

IoT
Symbiotic relationship (Pinterest)

IoT – What is the internet of things?

The Internet of things (IoT) is a system of interconnected computing sensors able to transfer data over a network. IoT does not require direct human involvement to function. Chips implanted in devices or machinery combine operational technology (OT) with information systems (IT). Real-time data exchange through IoT allows for interoperability, enhancing efficiency and performance of a device,  product, or service.

IoT in the workplace and beyond

In 2016, the top three industries in IoT spending were manufacturing, transportation, and utilities. Global spending on IoT is projected to reach $1.3 Trillion in 2020 (IDC). According to Statista.com, a leading provider of market and consumer data,  the number of connected devices will increase six-fold from 15 billion devices in 2015 to 75 billion in 2025.

Not only will IoT be the standard in the workplace, but it will also be pervasive in our private lives, from personal belongings to inside our bodies. According to a 2018 article from Business Insider, thousands of Swedes are having microchips implanted in their bodies, no longer requiring them to carry keys or IDs. A simple wave of the hand unlocks the house door or identifies who you are.

IoLT – The interconnectedness of living things

The interconnectedness of living things is the interdependence of all organisms. For millions of years, the animal and plant kingdom has been developing and evolving a complex and intricate system of interdependency that benefits all species. Humans are becoming more cognizant of the need to care for the natural resources that all living organisms, humans included, are dependent upon.

Nature’s interconnectedness is as astonishing and complex of a system as there is. Nonetheless, it works rather effectively and efficiently through the use of six varying symbiotic relationships. Interdependence requires each stakeholder to uphold a degree of responsibility regardless of status or position. A system overcomes challenges and effectively deals with setbacks when all stakeholders fulfill their role. A breakdown at any point impacts the entire system. It is not a coincidence that the IoLT and IoT diagrams share similar patterns. What can we learn from nature as human interconnectedness and complexity increases as a result of IoT?

IoT
The interconnectedness of living things (Science Bob)

IoT
Internet of Things

The importance of IoLT

Just as industry and technology sectors see the value of the internet of things, so too are we becoming more aware of the importance of the interconnectedness of all things living. IoLT has the answers to cope with the potential threats of IoT. It is imperative we look after nature. How we care for nature will reflect how we cope with digitalization. Maintaining the quality of air, soil, and water, and minimizing our ecological footprint is more noticeable with the increase in air pollution, water contamination, deforestation, and global warming. What societal changes are we noticing from digitalization?

Nature not only ensures our survival, but it also helps us solve complex human problems. Studying photosynthesis to improve solar energy. Using snake venom to help find cures for cancer and diabetes. Kingfisher bird anatomy inspiring the design of bullet trains. These are but a few examples of biomimetics or biomimicry. Naturally occurring elements and structures greatly help us in taking the next evolutionary step. We still have more to learn.

Remaining human for the sake of posterity

As IoT results in the continued digitalization of work and home, interactions with technological devices are on the rise. Practicing pro-social skills and maintaining human connectedness will be paramount in adhering to a moral and ethical framework as digitalization becomes more predominant in everyday life. It should come to no surprise that political, economic, and social divisiveness becomes even more hazardous to our overall safety and security in a digitalized world. The use of IoT for ill intention or for the sake of taking advantage of certain stakeholders is a real and existing threat.

Empathy, compassion, listening, and understanding are all vital human traits that require continuous practice. A machine needs only to be programmed once to learn a task. In contrast, humans need to continuously train skills in order to maintain proficiency. If we don’t, we risk losing the ability to remain human in a world that becomes more capable of widespread harm with each passing day.

 Trust and transparency in a digital world

The breadth of challenges posed by IoT seems to span as wide as the potential benefits. What data is being collected? For what purpose is it being collected? Who has access to the data?  What impact does IoT have on security and personal privacy? These are just a few of the crucial and complex moral questions arising from data collection and use arising from the internet of things.

Creative cooperation and information sharing can lead to the survival and prosperity for all. IoT must be used with the common good of all in mind to reap large-scale rewards and avoid large-scale catastrophe. Similar to the delicate relationship between the plover enjoying a free meal and the crocodile a dental cleaning, trust, intention, collaboration, and transparency are paramount when dealing with complexity.  In a millisecond, a quick snap of the jaws is all that is needed to end the mutual benefits of this symbiotic relationship. The 200 million-year-old wise crocodile knows better. Do we?

IoT
The symbiotic relationship between a crocodile and plover for the benefit of both species (smallscience.hbcse.tief.res.in)

About the author

Jean-Pierre Kallanian is a Process Facilitator and Human Systems Specialist. He accompanies organizations in fully integrating their human resource potential by facilitating group processes that foster authenticity, intention, and collective wisdom. All stakeholders benefit in a culture that supports exploration, play, inspiration, and connection. Learn more at www.epiconsulting.org

A nixed economy – From a defunct mixed economy to a bionic economy

Definitions of a nixed economy, a defunct mixed economy, and a bionic economy

nix: to stop, prevent, or refuse to accept something (Source: Online Cambridge Dictionary)

nixed economy: an economic system which has been stopped, prevented, or refused to accept the consequences of its own behaviors

defunct: no longing existing, living, or working correctly (Source: Online Cambridge Dictionary)

mixed economy: an economic system in which some industries are controlled privately and some by the government (Source: Online Cambridge Dictionary)

defunct mixed economy: a mixed economy that no longer exists, lives, or is working correctly, whereby major industries are controlled by the government

bionic: using artificial materials and methods to produce activity or movement in a person or animal (Source: Online Cambridge Dictionary)

bionic economy: an economic system in which major industries are controlled by the government through the use of artificial materials and methods to produce desired activity in an otherwise defunct economy

The $700 billion bionic economy

In the 1970s television series, The Six Million Dollar Man, test pilot Colonel Steve Austin was nearly dead from a test flight crash. Deciding that “we have the technology to rebuild this man”, the government rebuilds Austin, augmenting him with cybernetic parts which gives him superhuman strength and speed. Austin becomes a secret operative, fighting injustice where it is found.

Thirty years later in 2008, the economy has crashed from profit testing gone wrong and was on the verge of collapse. Deciding that “we have money to rebuild this system”, the government decided to rebuild a defunct system and turn it into the $700 billion bionic economy. Augmenting it with taxpayer dollars, top executives of irresponsible financial institutions received $1.6 billion USD worth of super-economic strength and speed, like bonuses, home security systems, private chauffeured cars, club dues, and private financial planners–no irony there– just to name a few. The bionic economy became an overt government operative, rewarding financial injustice where it was found.

A nixed economy: The Free World not living in accordance with a mixed economy

Oil surge and Iraq War
From the mid 1980s to 2003 a barrel of oil had remained around $25 USD. The energy crisis from 2003 to 2008 culminated in a barrel selling at a record high of $147 USD in July 2008. On March 20, 2003 the United States coincidentally began its invasion of Iraq, based on false intelligence–the world’s No. 4 in oil reserves. In May 2007, as the barrel of oil was soaring, the Iraq Oil Law was proposed. The law intended to give major western oil companies long-term contracts and a safe legal framework to manage oil fields in Iraq. Due to internal conflicts this proposed law triggered, further inciting instability in the region, no law was passed.

Oil prices from Jan. '03 to Dec. '08 contributing to a bionic economy
Oil Prices from Jan. 2003 to Dec. 2008. Source: Wikipedia

Housing bubble and Subprime mortgage Crisis and Market Crash
On September 15, 2008 Lehman Brothers filed for Chapter 11 bankruptcy protection. The financial services firm had a whopping $600,000,000,000 in assets–the largest bankruptcy filling in US history. In a bid to save an ostensible global collapse of the banking and economic system–since it is unknown how a mixed economy would have handled the situation, the Bank Bailout Bill was submitted to the House of Representatives on September 21, 2008. But many in Congress felt it was forcing taxpayers to reward bad banking decisions. The House voted against it on September 29, 2008. The result: That same day the stock market crashed. The Dow fell over 770 points, the largest point drop in any single day in history and global markets plummeted.

The Senate quickly re-introduced the proposal by attaching it to a bill that was already under consideration. The Emergency Economic Stabilization Act of 2008 was approved and signed by President Bush on October 3, 2008. Less than two months later on December 30, 2008, the housing market also met its fate. On this date the Case-Shiller home price index reported its largest price drop in its history.

The subprime mortgage crisis was in full swing between 2007 to 2010. During this time period over 60 notable financial institutions world-wide–including the likes of Fannie Mae and Freddie Mac and American International Group–the two alone had a combined value of nearly $200 Billion USD–were either acquired or went bankrupt. From 2006 to 2012, half of the United States–this writer was almost a victim as well–would be affected by the credit crisis and bursting of the housing market bubble. In 2008 alone, 3.1 million Americans filed for foreclosure, which at the time was one in every 54 homes, according to RealtyTrac. The repercussions were long-lasting. By 2016, homeownership in the U.S. had dipped below 63% – a 50 year low. (Read more at Investopedia)

Auto industry bailout
It is surprising that from 2008 to 2010 the auto industry would take a turn for the worse, with the “Big Three” approaching Congress in November 2008 to request an over $80 Billion government bailout or face bankruptcy? A major tenet of Capitalism is limited government intervention whereby free markets are free from any government intervention. Unless one views the $80 Billion bailout from January 2009 to December 2013 as “limited government intervention”, then by these definitions neither the rules of capitalism nor mixed economy were followed.

Timeline of Complete Economic Failure in 2008

July ’08 – barrel of oil sold at $147 USD – Highest price in history

 September ’08 – Lehman Brothers files Chapter 11 – Largest bankruptcy filing in US history.
Emergency Economic Stabilization Act is not passed by the House and the Stock Market crashes – Historic one day 770 point drop

October ’08 – Emergency Economic Stabilization Act – Financial Institutional $700 billion USD bail out signed

November ’08 – $80 Billion bailout – Largest auto bailout

December ’08 – Largest home price index drop in Case-Shiller history

The dangers of a bionic economy

The imminent danger of having an artificial economy is that those who interfere with free or even mixed economies ultimately control the parts. When a bone breaks and heals naturally, then the body itself is in control of the healing process. When that part is artificially replaced, as was the case in 2008, then it is no longer a natural healing process. It is an unnatural intervention with predetermined goals serving the interests of those in charge of the replacement.

No one will ever know what the aftermath would have been like had the nixed economy taken its natural course. The “Great Recession of 2008” showed a complete and utter economic collapse. Was it a sign that a new system is needed?

Who benefits from a bionic economy? According a Federal Reserve Bulletin published in September 2017, as of 2016 the richest 1% of Americans owned 38.6% of the wealth. The bottom 90% owned only 22.8% of the wealth. That is nearly twice as much. The three richest Americans hold more wealth than the bottom 50% of Americans. And the wealth gap is only widening.

A bionic economy devalues money and human life

Check out the article November 2017 Market Watch article titled, Here’s all the money in the world, in one chart. The ratio of hard currency–$36.8 Trillion, compared to non-tangible wealth–$1.2 Quadrillion is mind-blowing! In other words, physical money consists of only 8% of all worth in the world. The non-physical “money” makes up 92% of all wealth.

Here is more sobering news about the bionic economy. Global debt is estimated at $215 Trillion. That means that global debt is almost six times greater than all the hard cash in the world! How would a person be treated by a financial institution if for every dollar he earned, he owed six?

Ready for another amazing bionic economy feat? $70 Trillion (33%) of that debt was accumulated in the last decade alone. However, the bionic market keeps on going. How long and on what foundation can the bionic economy perform as it has been? What value does money really have and who is benefitting from this bionic economy?

Stock Market-10 Year Graph
Stock Market 10 year graph (Source: www.macrotrends.net)

Remember the 3.1 million Americans whose dreams of homeownership were used to lure them into a financial trap? Where was their bionic compensation for being negligently counseled and loosing their home? Where was their bionic loan to bring them back to life and save them from foreclosure, bankruptcy, and emotional hardship? Interesting how the mixed economy was good enough for the millions of victims to recover naturally, but not for the perpetrators! A bionic economy not only questions the value of money, but it seems to call into question the value of human life as well.