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The Third Stonemason, McKinsey Model 7S The Hard S's, THEFT, Opera…

- - - - decline in market efficiency due to reduced number of buyers and sellers
      - decline in market's ability to spread risk because there are fewer parties among whom to spread risks
      - increase in volatility of stock prices because small variations will make relatively larger differences in the smaller market
      - decline in liquidity of stocks because it is harder to find buyers and sellers for stock
      - decline in the utility gains available to traders because of the decline in available trades
- - - - It takes Courage
        
        to follow one's conscience
        
        to defy unethical and unreasonable authority
    - - Secretly blowing the whistle
        (to a responsible higher-level within or outside the organization
      - Secretly Threatening
        (threatening to blow the whistle to outside)
      - Publicly Blowing
        (Whistling inside or outside the org)
      - Publicly Threatening
      - Quietly Refraining
        (refraining from implementing
        unethical order/ policy
      - Conscientiously Objecting
      - Indicating Uncertainty About or Refusing
      - Sabotaging
    - - Individual could be wrong about the organization's actions (Depends on the system and other factors)
        
        Quality of info and Experience
        may not be sufficient
        as higher managers have more information
      - Relationships can be damaged
        
        Change forced to an individual can strain relationships
        
        But once the behavior is justified, change can strengthen relationship
      - Organizations can be hurt unnecessarily
      - Can encourage wrong culture
        
        "MIGHT MAKES RIGHT CLIMATES"
        the belief that the only way to get things done is through force.
        
        Leads to culture where power becomes the ultimate dictator of the end-decision for ethical issues
        
        If you're not controlling the culture,
        the culture is controlling you.
    - - LEADING in various cultural forms
      - LEADING an ethical change behavior
        
        Leading an ethical organizational change by working with others in the organization
      - The importance of Agility and Adaptability:
        Leaders who succeed will need to stay open to changing any aspect of their thinking that no longer works -Kepner-Tregoe (2021)
      - EFFECTIVE Leaders VS Pseudo Leaders
        
        5 Shadows of leaders:
        
        "I am what I am"
        
        This is a war - I must fight and win
        
        It all depends on me
        
        It we manage everything perfectly, we won't have to deal with chaos and pain
        
        Nothing can fail or die on my watch
      - Level 5 Leader
        
        HEROIC LEADERSHIP
        (Pillars of success)
        
        SELF-AWARENESS
        (Understands strength, weaknesses, value, and worldview
        
        Beating insecurities:
        Accepting who you are
        
        INGENUITY
        (Innovated and Adapted)
        
        Beating fear and death
        Accepting things as they are
        Accepting death as part of life
        
        LOVE
        (Engage others with positive loving attitude)
        
        Beating paradigm that the world is hostile
        and that the world is on you
        
        HEROISM
        (energized themselves and others
        through heroic ambitions
        
        Beating paradigm that everything rests on you
        Be functional atheism)
        
        HERO's JOURNEY
        
        The Call
        
        Self-doubt
        
        Commitment
        
        Struggles and Failures/
        Self-Realization
        
        Actualization/
        Touchstone/ Luz in Domino
        
        Good Morals
        
        Brave
        
        Selfless
        
        Inspires
        
        Paradox of humility and personal will
        
        Good to Great
      - The Flywheel Effect
        
        First who...
        Then what...
        
        Confronting the brutal facts
        
        Bus Concept
        (Economic Engine and
        Level 4 and 5 leaders in front)
      - Hedgehog Concept
        
        Accepting weaknesses and
        acknowledging strengths;
        Collaborating and Leading through Action.
      - Creation of Culture
        of Discipline / Loop
      - Adding technology Accelerators/
        Reinforcing the Loop
      - Give feedback/
        Energize the organization.
        Re-align regularly to have strategy adapt
    - - Ethical WIN-WIN SOLUTIONS
        are not always possible
      - GAP in Leadership Competency vs
        Creative Ethical Resolutions
      - Some organizational environment
        discourages leadership that is nonconforming
    - - Code of Conduct (Passive)
      - Ethics in Risk Management: Ethics Hotline / Website/ Integrity Helpline (Active)
    - - Places in the system where a small change could lead to a large shift in behavior/
        Points of Power
        
        Often called/ regarded as:
        The silver bullet
        The trimtab
        The miracle cure
        The secret passage
        The magic password
        The single hero who turns the tide of history
        The nearly effortless way to cut through or
        leap over huge obstacles
      - 12 LEVERAGE POINTS
        Places to intervene in a system
        
        Numbers
        
        Constants and Parameters (subsidies, taxes, and standards)
        
        Faucet Principle:
        Different hands on the faucet = Change in rate the faucet turns.
        With constant faucet, plumbing system, and method of turning,
        system behavior will not change much.
        
        Buffers
        
        Sizes of stabilizing stocks relative to their flows
        
        But becomes inflexible when buffer is too big
        
        Stock-and-Flow Structures
        
        Physical systems and nodes of intersection
        
        1. The only way to fix a system that is laid poorly
        is to rebuild it, if you can.
        
        Physical rebuilding is the slowest and most expensive kind of change to make in a system.
        Some stock-and-flow systems are plain unchangeable
        
        Delays
        
        Lengths of time relative to the rates of system changes
        
        Delays in feedback loops
        are critical determinants of system behavior
        
        Information received too quickly/ too late can cause
        overreaction, underreaction, oscillations
        
        Often better to slow down the change rate
        than let feedback delays to cause trouble in the long run
        
        Balancing Feedback Loops
        
        Strength of feedbacks relative to the impacts they are trying to correct
        
        If impact increases in strength,
        feedbacks have to be strengthened too
        
        Reinforcing Feedback Loops
        
        Strength of the gain of driving loops
        
        Balancing Feedback Loops
        is self-correcting
        
        Reinforcing Feedback Loops
        is self-reinforcing
        
        Reducing Gain--
        or Slowing the growth
        Powerful tool/ alternative to strengthening balancing loops
        
        Information Flows
        
        Structure of who does and does not have access to information
        
        Missing information flows cause system malfunction
        
        Adding/ Restoring information can be a powerful intervention,
        easier and cheaper than rebuilding physical infrastructure.
        
        Important: Missing feedback be restored to the right place and in compelling form
        
        The mass is a popular leverage point as number has power. Number permit things to happen.
        
        Rules
        
        Incentives, punishments, and constraints
        
        Rules define its scope and boundaries
        degrees of freedom
        (Constitutions, Law, Punishments, Informal Social Agreements)
        
        Pay attention to the rules and to who has power oven them
        
        Power over the rules is real power
        
        Self-Organization
        
        Power to add, change, or evolve system structure
        
        Adding, completely new physical structures,
        such as brains, wings, or computers--
        reinforcing loops, or improving or implementing new rules
        
        A SYSTEM THAT CAN EVOLVE CAN SURVIVE ALMOST
        ANY CHANGE, BY CHANGING ITSELF /
        (Adaptive)
        
        Rules of Self-Organization:
        
        Biological Evolution
        
        3 more items...
        
        Human Technology
        
        3 more items...
        
        These rules govern how, where, and what the system can
        add onto or subtract from itself under what conditions
        
        Goals
        
        Purpose or function of the system
        
        Push for control
        
        Higher Leverage Goals
        
        Competitive Market
        
        Paradigms
        
        Mindset of the organization/ system
        (Goals, structure, rules, delays, and parameters)
        
        Beliefs are unstated because it is unnecessary to state them--
        everyone already knows them.
        
        Paradigms are the sources of systems.
        Shared agreements on nature of reality, come system goals and information, feedbacks, stocks, flows, and everything else about the system
        
        People who have managed to intervene in systems at the level of paradigm have hit a leverage point that totally transforms systems
        
        Transcending Paradigms
        
        Higher than changing a paradigm
        
        Radical Empowerment
        "If no paradigm is right, you can choose whatever one will help to achieve your purpose. If you have no idea where to get a purpose, you can listen to the universe"
        -Buddha on Enlightenment
    - - 1 Create Urgency
      - 2 Create a coalition
      - 3 Develop a vision and strategy
      - 4 Communicate the vision
      - 5 Empower Action
      - 6 Get quick wins
      - 7 Leverage wins to drive change
      - 8 Embed in culture
- - - - He has a job
        
        "Transactional"
    - - He has a career
        
        "Traditional"
  - - - Identify the high and low points
        
        Connect the dots and
        Look backwards
  - - - Identify Values, Choices, and Characteristics
      - Identify Strengths and Weaknesses
      - Identify Physical and Health flags
      - Identify Family System/ Structure
- - - - Trolley Problem
        
        VUCA WORLD
        
        Volatile
        
        Environment that demands adaptability to ongoing changes that are unpredictable and out of control
        
        Uncertain
        
        Environment that requires action without certainty
        
        Complex
        
        Environment is dynamic, with many interdependencies
        
        Ambiguous
        
        Environment may be unfamiliar, outside of expertise
        
        Rational Organization
        
        Structure: Formal (hierarchical)
        
        Designed to achieve some technical or economic goal with maximum efficiency**
        
        Information rises from bottom of the organization to the top
        
        Bond by contracts (fair)
        
        Based on Basic Ethical Responsibilities
        
        Political Organization
        
        Structure: System of Power Coalition
        
        Goals are bargained for among more or less powerful coalition
        
        Messier and complex network of clustered power relationships
        
        Even criss-crossing communication channels
        
        Moral Constraints: Subjective as it depends on power and use of it
        
        Individuals forming coalitions to compete with each other for resources, benefits, and influence
- - - - Universalizability Test
        
        Step 0: borrow money without intending to pay [false promises]
        Step 1: “when I need money, I shall borrow it from someone without intending to pay it back”
        Step 2: suppose everyone were obligated to follow this maxim, as if it were a universal law: Everyone ought to borrow money without intending to pay, when they need money.
- - - - Utilitarian Calculus
        
        Step 0: identify a happiness reference unit
        Step 1: identify alternative actions or policies that are available
        Step 2: for each alternative, estimate the foreseeable benefits and costs that it will produce in the future
        Step 3: choose the alternative that produces the maximum benefits
- - - - Value/ Purpose/ Circumstances/ Job of recipient/ Accepted and Public Local Practices/ Company Policies/ Legal Prohibitions
- - - - Resources
        
        tangible
        
        ex. money, properties, machineries, etc.
        
        "examined, used, and abused"
        
        intangible
        
        ex. data and information
        
        "examined, used, copied"
        
        Example
        
        "Trade Secret"
        
        Nonpublic information
        
        concerns company's activities, technologies, future plans, policies, or records that if known by competitors would materially affect the company’s ability to compete commercially against those competitors
        
        owned and developed by the company for its private use from resources it owns or was legitimately purchased for its own use from others
        
        indicates through explicit directives, security measures, or contractual agreements with employees that it does not want anyone outside the company to have
        
        "Proprietary Information"
        
        Rights
        
        Right to use and benefit from the use of the asset
        
        even when the property consists of information and even if in using the information leaves the original copy of the information unchanged
        
        Right to decide whether and how others may use the asset
        
        Right to sell, trade, or give away the asset
        
        Right to any income or other benefits produced by the asset
        
        Right to modify or change the asset
      - Consent (Contract/ Agreement/ Authorization)
        
        Employee
        
        skills and "know-hows"
        
        almost impossible to separate the skill from the information
        
        Other negative effects: Increases cost of buying and selling stocks. Specialists will charge more for the service to cover his or her expenses, charges and risks.
        
        to use the resources and goods of the firm in the pursuit of the firm's legitimate aims.
        
        Fairness of wages
        
        Local cost of living
        
        Relation to other salaries (salary structure)
        
        Going wage in the industry and area
        
        Firm's/company's capabilities
        
        Job nature (risks, skills, requirements, and demands)
        
        Minimum wage laws
        
        Fairness of wage negotiations
      - Employer's Obligations to their employees
        
        Wages
        
        Employer: Cost of production must be kept low
        
        Employee: Means of satisfying basic economic needs
        
        Working Conditions
        
        Health and Safety
        
        Occupational Safety and Health Administrations were created to assure every employee in the nation is safe and are inhealthful working condition