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Welcome to 'Perspectives from the Stair,' the newsletter that shows you how to drive profit by resolving the risks hidden in your business.
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PERSPECTIVES FROM THE STAIR

VOLUME 2
Problem?
Back in Sept 2012, our founder was interviewed by the German Consultant Lydia Proschinger. Part of that interview discussed the Instagram sale to facebook:


"When the startup company Instagram was sold to behemoth facebook for a billion dollars, writers in the popular press asked why Kodak or Polaroid had not come up with Instagram. The 'iceberg' answer is that 'it was out of their field of view' which is a nearly perfect definition of residual risk!"

Toy legend Lego experienced much the same against Minecraft, now the 5th-best selling online game, with much larger, more resourceful Lego getting soundly drubbed by feisty Mojang, and Minecraft's creator, Markus Persson, now worth £40m ($64M USD). Lego's unaddressed residual risks are clearly detailed in this Forbes article. 

http://www.forbes.com/sites/lbsbusinessstrategyreview/2013/10/14/disruptive-innovation-who-stole-legos-market/

Solution? Risk Discovery with Semantic Compressionâ„¢ 

The surest path to avoid being blindsided by residual risk such as Kodak, Polaroid, Lego and others have faced is to bring Semantic Compressionâ„¢ into your organization, so that you equip your entire staff to purposefully collect unstructured data in structured environments. How does it work? Very well, thank you! Call or write to schedule your orientation to see if your firm qualifies to implement Semantic Compressionâ„¢ and bring the power of structured questions to recognize the icebergs in your midst.
To Ensure a Good Harvest, You Must First Prepare the Soil
What leaders can learn from farmers and gardeners.
This is especially true of start-ups, emerging growth firms and family-owned businesses that are outgrowing the family. The hands-off necessity of letting children make their own mistakes, take that bike tumble, or try out for the team and stumble is no less true for businesses than for families. Machiavelli says, "The first method for estimating the intelligence of a ruler is to look at the men around him." Now of course today, we recognize both men and women fill that role. While Machiavelli certainly realized that too, we seem to be intent on drowning out much of the subtleties of former eras.
 
Creating a successor, implementing a new process, or any other major "structural change" involving people must be managed even more programatically than installing a new computer system, since it's almost 100 percent “soft”ware (power-plays and relationships) and only incidentally hardware (the physical trappings of office location, arrangement, lighting, product flow, and so on).
 
When thinking about this process, picture putting into place a 'channel' through your organization. Once you excavate a trench, ensure the proper grade downstream and regulate the flow, the right quantity of water reaching your desired destination is inevitable.
 
First, excavate the trench
 
Grooming your successor (or putting into place other organizational changes involving personnel) means following through daily and weekly on dredging this channel to clear it of the debris that comes from different corners of the organization, consciously or unconsciously. Dredging the silt of repeated interference, indifference, ignorance and mistrust by fellow senior staff members uncomfortable with the prospects of genuine long-lasting change, is real work [1].
                   
Ensure the proper downstream grade
 
The key to a successful transition in a small company is to repeat, repeat, repeat, well past where you are tired of hearing it, the vision, mission and values of the organization – both privately and publicly – to each individual within the firm. 
 
Obviously, if the message is not explicitly articulated and plastered everywhere, people can’t follow something of which they’re not aware. Setting, testing for fit, shaping and refitting the mission, vision an values criteria is the dual task of the chief executive and the senior management team.
 
The chief executive officer’s (CEO’s) task is to ensure that his or her chosen successor does not get swept away by the rush of business activity, or slip and drown from the silt of political intrigue underfoot. It is in the bosses’ economically enlightened self-interest to step in and correct the things that his or her protégé does wrong – mistakes made personally, not professionally, including procrastination.
 
Regulate the flow 
 
Finally, you must regulate the flow of water running through that organizational channel to keep it from spilling over and creating a mess. You need to be alert for seasonal fluctuations, and you have to stick to your plan for increasing capacity as the business grows.
 
There are two fundamental points you to which you must agree if you want to bring your firm to or maintain it at the market position that your health and retirement deserve: 

You have all the time there is [2]
You have all the time you need [3,4] 

Those last two words make all the difference in the world. Both sentences must be lived, understood, and most of all, believed, because without believing the second, you’ll fight the truth of the first. 
--
Matthew E. Weilert, mwei@stipress.com, delivers solutions to systemic risks in our global economy. ©2013 Matthew E. Weilert. An excerpt of this article originally appeared in: For Distributors Only, Wholesale Supplier Supplement to Industrial Safety & Hygiene News. Non-commercial reprints approved with prior approval, write with details of intended use.
 
Notes: 
1. http://hbr.org/1997/11/real-work/ar/1
2. http://www.skerja.net/capmgmt/tm5cur.html
3. http://www.skerja.net/capmgmt/focus.html
4. http://www.skerja.net/capmgmt/busy.html
Fernando Lemus, STI Intern for Andean Markets
Developing an Organizational Culture of Business Intimacy
As we live in the 21st Century we have seen technology grow at an unprecedented pace. Organizations and technologies have become more complex and so has their operational risk.  This operational risk is due to a mismatch of complexity between the operators of the system and the system itself.

Often the system is too complex for the people operating it. Other times, people outgrow the system and it becomes obsolete.

The purpose of this newsletter is to explain how systems that value stories over trial and error are more reliable. These human-centered systems use business intimacy to avoid operational losses.  Systems Thinking Institute (STI) uses its Systemkeyâ„¢ platform to apply these principles.

 
In 1987, Karl Weick penned a thought-provoking piece entitled “Organizational Culture as a Source of High Reliability.” One of my intern assignments was to provide a 2013 perspective on this article.

The importance of reliability

The article talks about the importance of reliability in organizations to resolve operational risk. Reliability in complex systems its always enforced by trust, the article suggest that this trust can be enhanced or built by face-to-face communication, they suggest that the Challenger incident could have been avoid if the people that were debating to whether or not to launch the mission would have interacted face-to-face.

This argument is truly timeless and points out how our Systemkeyâ„¢ small business division, Rock Eel Digital, focuses on building trust by equipping companies to improve communication (both face-to-face and in remote work). 

STI builds trust with its clients so we can tell them what they need to hear not what they want to hear. One of the five pillars of Rock Eel Digital is face to face coaching: as the article explains, the better people are at communicating face to face, the more transparent the organization becomes. This enforces reliability and mitigates hidden risks that are caused by mis-communications.

The article then proceeds to explains how organizational culture is related to reliability. Culture coordinates action at a distance by symbolic means, the most important of these is through stories. Stories reminds people of key values they share, so that decentralized operations can operate with a shared vision. The Systemkey™ platform leverages company culture to equip members and clients with the next level of business intelligence: the “new BI” or business intimacy.

In Conclusion

Karl Weick wrote this article a quarter-century ago, yet the lessons are more timely than ever. High reliability in a complex system can only be achieved through people, not software. Organizational culture woven from stories, trust and face-to face communication delivers consistently superior results, yet the typical trial and error procedure (lack of integrated planning) remains the most common aspect of business today.

STI and our allied trade non-profit group, STETA, offers a compelling alternative to trial and error. STETA Group certifies companies to implement Systemkeyâ„¢ Risk Solutions, which blend the best of big data with human insights. Through transparent face to face communication, leveraging the power of software, the practi
ce of business intimacy delivers a structured storytelling solution to mitigate risks. 
 

Want to resolve the latent risks, hidden hazards and cloaked challenges in your organization?


In the US call +1-866-288-0530, or Internationally dial +1-847-227-3006 to get started.  You may also email us at register@stipress.com to start your qualification stream.
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