Indholdsfortegnelse for Spring 2012 i Rotman Management

Wicked Problems II THE WINTER 2009 ISSUE OF Rotman Magazine introduced a new term to many of our readers: ‘wicked problems’. Those who read the issue learned that wickedness doesn’t pertain to a degree of difficulty; rather, these problems are different because traditional problem-solving processes cannot resolve them. Unlike ‘tame’ problems – which can be irrefutably solved – wicked problems are messy and reactive, and there is no single solution. Indeed, defining the parameters of the problem itself is often half the challenge. When design theorists Horst Rittel and Melvin Webber coined the term in a seminal 1973 Policy Sciences article, they could not have known how poignant it would become for 21st century leaders. We have all faced wicked problems at some point: What will we do when oil…

Climate Change: The climate is changing in ways that jeopardize human security and well being. The global warming trend we are currently experiencing differs alarmingly from past changes in the Earth’s climate. This warming is largely driven by human activities such as the burning of fossil fuels, agriculture, and clearing of forests, which release heat-trapping gases such as carbon dioxide. The effects of rising temperatures and shifting precipitation patterns are already being felt across the globe. We no longer have the luxury of treating this as a future problem: climate change is with us today and we need to tackle it from a risk management perspective. This will require aggressive actions to reduce emissions of heat-trapping gases to avoid the risks of the most severe impacts, coupled with systems-based approaches…

WHETHER BUSINESS LEADERS want to admit it or not, the Occupy movement that targeted Wall Street, Bay Street and many other world financial centres last fall was indicative of how a growing percentage of the population feels about business. In the wake of a global financial crisis that saw stock markets drop more than 50 per cent in an 18-month period, many people have been left bankrupt, homeless and without retirement savings. Young people are paying a price, too. At one time, a college graduate was pretty much guaranteed a thriving career, but today she can’t even expect to find a job easily. And there’s no end in sight. It seems like every time you turn on the news, there’s a new investing or management scandal. Many people lay the…

1. Dine Out Dine Out is Circle’s discount club for members who enjoy eating out. Those who join are entitled to discounts of up to 25% at over 20 local restaurants and more opportunities to meet fellow members. By going out to eat using a Dine Out card, not only are you getting great meals at discounted prices, you are also supporting Southwark Circle and local, independent, family-run restaurants. Here are the benefits of joining Dine Out... Discounts Text or e-mail with special offers available to Dine Out members More opportunities to go out to eat with fellow members through weekly meals, exclusive to Dine Out members. We’ll book the table. Up to 25% discount at over 20 local restaurants, cafes and pubs. 2. Be a Helper Neighbourhood Helpers are…

Master observer and renowned photographer Edward Burtynsky, whose work graces our cover for the second time, talks about his work during the Gulf Oil Spill disaster. The Gulf Oil spill was a classic example of a wicked problem: big, difficult, multiple variables, etc. What made you want to go there? In my work I don’t usually chase disasters. I focus on intentional landscapes, like mines or quarries – landscapes designed by people, not by accident. I am interested in how we incrementally create these things of vast scale as we remove the materials we need to build our urban cities. That’s mainly what my work is about. When the Gulf spill happened, I’d spent 12 years photographing the subject of oil, and in that whole time, I rarely ever actually…

While Canada emerged relatively unscathed from the financial crisis, the non-bank sponsored Asset- Backed Commercial Paper (‘ABCP’) scenario was our closest brush with it. Can you summarize what happened? The story began in the U.S. in 2006, when questions arose about the quality of some of the mortgages being issued – so called ‘subprime’ mortgages. These were included in financial instruments that were sold to various investors and resulted in serious problems as mortgage defaults increased. In Canada, our mortgages were not facing these same problems, but we did have a financial instrument that was structured around a variety of underlying assets that included some U.S. sub-prime mortgages: Asset-Backed Commercial Paper. ‘ABCP’ was constructed such that the underlying assets were long term, but the instruments used to finance the assets…

Q&A Having delved into the minutiae of the financial crisis in your book – providing the names, ranks and serial numbers of those involved – what surprised you the most about it? I would say it was the collaboration between the private sector and the regulatory framework and law makers. We’ve always known about public/private partnerships, but this one was much more significant than any before it. You had a government entity being encouraged to help promote home ownership, when they’re really a regulator and should have been more like a ‘cop on the beat’. The degree to which the regulators were co-opted from the outset by the people promoting home ownership was a pretty stunning revelation. Your book outlines both the sins of omission and the sins of commission…

Q&A In Plentitude: The New Economics of True Wealth, you explore the ways in which conventional economic thinking has lost sight of society’s best interests and is leading us down a path of diminishing well-being. What are the biggest threats to our well-being in the coming decades? The most important threat is ecological or resource overshoot. We are currently in a situation in which we are destabilizing the planet’s climate system through excessive concentrations of CO2 and other greenhouse gases. Canada recently pulled out of the Kyoto Protocol and, like the U.S., is becoming a pariah country in the world conversation about addressing climate change. Climate is the most urgent of ecological problems, but it’s not alone and it’s linked to a variety of others: the degradation of ecosystems, unsustainable…

GETTING TALENTED PEOPLE BACK ON THEIR FEET Of all the wicked problems faced by business leaders, where does ‘mental health’ rank on the list? It ranks very highly: the estimates are that 44 per cent of employees are either dealing with a mental health or addiction issue currently (12 per cent) or are indirectly affected because of a family member’s issue (32 per cent). Unfortunately, it’s a challenge that doesn’t bubble up to the surface very readily. If you have some form of cancer, your organization certainly will understand that you need to take time off and will likely be extremely supportive; the same is true if you require hip or knee surgery. As a consequence, people are very comfortable saying they need to take some time off for physical…

SUSTAINABLE ORGANIZATIONS: THE HUMAN FACTOR IN OCTOBER OF 2005, Walmart CEO H. Lee Scott Jr. made the first address in the company’s history to be broadcast to all of its associates and its 60,000 suppliers. In the speech, titled “21st Century Leadership”, he committed his company to using 100 per cent renewable energy, creating zero waste, and selling products that sustain resources and the environment. At the time, Walmart paid its employees almost 15 per cent less than other large retailers and 46 per cent of employees’ children were either uninsured or on Medicaid, a state program to provide medical care to low-income people. Clearly, environmental sustainability must be a priority for every modern organization. Nonetheless, Walmart’s emphasis on the natural environment raises an interesting question: why are polar bears,…

IN THE MID-2000s, Walmart faced a particularly wicked problem. Its reputation with consumers was eroding, as activists effectively painted the company as an enemy to the environment. As the largest retailer in the world – and one with a massive global supply chain, Walmart did indeed have a significant carbon footprint: according to a 2007 Stanford Business School case on the company, it was “the biggest private user of electricity in the United States and emitted more than 19.1 million metric tons of carbon dioxide annually – an amount equal to the pollution created by roughly 2.8 million households.” And that doesn’t even include the impact of its suppliers. So the activists had a point, and Walmart had a tough decision to make. While there were myriad approaches it could…

What we mean by global threats Global threats have the potential to kill or debilitate very large numbers of people or cause significant economic or social dislocation or paralysis throughout the world. These threats cannot be solved by any one country; they require some sort of a collective response. Global threats are often non-linear, and are likely to become exponentially more difficult to manage if we don’t begin making serious strides in the right direction in the next 5-10 years. Cross-cutting focus We believe global threats share causes, challenges and potentially, cures. We primarily seek to identify and address complex challenges common to multiple global threats. Cross-cutting areas that we believe could help society manage these threats include: • Communication: Promote better understanding of uncertainty and risk at every level…

Rotman I-Think Initiative director Ellie Avishai explains why it’s never too early to start questioning your view of the world. Of all the wicked problems we face, where does ‘preparing young people to solve the world’s problems’ rank on the list? In my view, it’s at the very top of the list. Education is extremely powerful because not only does it create personal benefits, it creates public benefits. There is a powerful multiplier effect that doesn’t exist with other solutions. Given the nature of the problems we face, we can’t just train a bunch of specialists and expect them to go out and work together. One of the most critical skills today is collaboration – the ability to look beyond your own viewpoint – and that must be addressed. For…

What memories does coming to Canada and to Toronto bring back to you? Li Ka-shing: The most recent memory is a sad one. I was here a few months ago when my good friend Don Fullerton, a director of the Li Ka-shing (Canada) Foundation, passed away. But Canada brings back many other memories as well. I first came here in 1967. My first stop was Vancouver. I arrived in the morning and by the end of the afternoon I had bought a shopping mall. Over the next 40 years, the Canadian Imperial Bank of Commerce (CIBC) has been our partner in many projects, and every one of the Bank’s Chairmen and CEO’s has been a good friend. Canada is a rich country, rich in resources and most importantly, rich in…

ANYONE WHO KEEPS UP WITH TODAY’S NEWS knows that governance failures abound and that Enron was just the tip of the iceberg. Like so many that followed in its wake, it had an admirable collection of talent around its board table, but the sum of the individual skills did not prevent a dramatic corporate implosion. Examples span the last decade and the globe. In Australia, HIH, the giant insurer, collapsed because its board was totally ineffective; in Europe, it seems the board of Italian food processing giant Parmalat had no idea what their CEO, Enrico Tanzi, was up to; and in the recent financial crisis, there were many examples of failed bank boards that collectively wrote off hundreds of billions of dollars of shareholder value. In each of these cases,…

WHILE PROBLEMS OF ALL SHAPES AND SIZES can benefit from creativity, it has become an article of faith that ‘wicked problems’, in particular, require highly creative solutions that span boundaries and organizations. And as more of the critical issues facing our society – from sustainability to chronic disease – are being classified as wicked (or at least extremely stubborn), the prominence of design thinking continues to grow in the public sphere, expanding into areas heretofore unexplored by designers. I have watched this unfold first-hand in my work at frog, where we have seen a rapid expansion of interest from organizations such as the United States Agency for International Development and the State Department, both of which have embarked on initiatives to integrate design thinking into their programming. As a result…

Q&A You have said that the legacy of the global financial crisis is not bonuses or bailouts, but ‘cornerstones’. Please explain. What happened was much more than a banking crisis. In my mind, it represents a turning point for the global economy, because it indicates that we have a set of ‘cornerstones’ in place that are fundamentally out of sync with the 21st century. The cornerstones of an economy are all of the institutions and practices that define, measure, monitor and manage human achievement and the value it creates, and ours were built for a very different era. A simple example is the widely-accepted idea of accounting, double-entry bookkeeping. This particular cornerstone was codified by a Franciscan monk in the year 1494, and was widely used until 1997, when sustainability…

Q&A Internet use and social networking have exploded in recent years, bringing a wide array of new tools to the masses. Has human behaviour changed as a result? Not as much as you might think. The things people care about are remarkably consistent over time, and they change far less quickly than technology changes. They include things like having a sense of purpose and a sense of place, a feeling that there is a community of people with whom we have relationships – including family and people who share our interests. As human beings, we’re also fundamentally interested in finding good stories. The abundance of social media and new technologies have changed some of the ways we express these things, but I don’t think they’ve created new desires in us…

ARE YOUR INSIGHTS BIG ENOUGH? CORPORATE AMERICA HAS BEEN SITTING on record levels of cash and liquid assets. At press time, the non-financial companies in the S&P 500 had, by one estimate, about $1.1 trillion on their balance sheets. Microsoft alone had $53 billion. What’s behind the apparent reluctance to invest in expansion and potential new ventures? The list of purported reasons is long and varied: pessimism towards the leadership in Washington, especially given the gridlock surrounding the federal debt; anemic consumer confidence, exacerbated by a stubbornly-high unemployment rate; the mounting economic problems in Europe; the possibility of a global liquidity crisis; fears of a double-dip recession; and so on. Hesitation to spend in the face of these challenges is understandable. Yet the cash on companies balance sheets may also…

Complete details are available at rotman.utoronto.ca/events May 1, 5:00-6:00pm, Toronto Initiative for Women in Business @ Rotman Leadership Experts Speaker Series Speaker: Binna Kandola, Visiting Professor, Leeds University Business School, Senior Partner, Head of Well-Being, Diversity, Assessment & Development Specialist, Pearn Kandola Topic: Unconscious Bias: why it occurs and what can be done to limit its impact May 2, 5:00-6:00pm, Toronto Personal Health Experts Speaker Series Speaker: Thomas Goertz, Executive Editor, WIRED magazine; Author, The Decision Tree: Taking Control of Your Health in the New Era of Personalized Medicine (Rodale Press, 2010) Topic: Taking Control of Your Health May 3, 6:00-8:00pm, Toronto Design Thinking Experts Speaker Series Speakers: Heather Fraser, Co-Founder and Director, Rotman DesignWorks Strategy Innovation Lab; Adjunct Professor, Rotman School of Management, U of Toronto; Author, Design Works:…

While at university, you attended a presentation by Dr. Martin Luther King Jr. that ‘changed you forever’. How so? I was a sophomore at the University of Michigan at the time, and I was extremely depressed. My father had died a few weeks before, and five days later my grandfather died. I went back to college and locked myself in my room, refusing to go out. Then I saw an article in the Michigan Daily that Martin Luther King Jr. was coming to our campus. This was 1962, so nobody really knew who he was yet; but for some reason, I decided to go. On the day of the presentation there was a major snowstorm – the sort of day when nobody in their right mind goes out; but I…

LIKE MOST DESIGNERS, I am quite comfortable with the notion of designing simple things. I can pick up just about any object and tell you how it was made, and I could probably have a reasonable crack at designing an equivalent of it, even though I’m not a particularly technical person. That’s because it is possible to definitively know everything important about a simple object: we can know its form, the market for it, and the best method of manufacturing it. We might even know what to do with it when people are finished using it. The traditional design process entails figuring all of this out beforehand and ‘making it so’ in the world. Unfortunately, as the world’s problems have become more complex, the traditional design process has been challenged.…

WHILE THE BIG GLOBAL ISSUES of our time each present unique challenges, they have one thing in common: they require mass participation. Finding solutions to climate change, demographic shifts, the prevention and management of chronic disease, the provision of safe water supplies and food security – to name but a few – requires the pooling of diverse types of knowledge and resources and harnessing the motivation of billions of individuals and their communities. Take the issue of climate change. Governments working alone can commission nuclear power stations, but they cannot force citizens to turn down their thermostats or to fly less. Solutions cannot be pushed at people from above; they need to be pulled from below, and our existing institutional architecture is not up to the task. If change is…

THE IMPOVERISHED ECONOMY in rural northern Nigeria is based on subsistence farming. The large population inhabiting the many isolated communities survives by growing, consuming and selling fruits and vegetables nourished by the many streams and rivers that flow into Lake Chad. However, the arid heat of the semi-desert geography presents a significant problem: rapid food decay. Perishables last no more than a few days before spoiling. The solution would seem easy enough: refrigeration. But the problem is far more complex than simply being too poor to afford a refrigerator. For starters, there is no electricity. Mohammed Bah Abba, a Nigerian-born adviser to the United Nations Development Program in Jigawa, knew that this problem was even more far-reaching. The women of this predominantly polygamist society are segregated from the men and…

IN TODAY’S ENVIRONMENT, examples of work that is both complex and risky abound: delivering a large engineering and construction project; managing the response to a high-impact disaster; and providing medical care in the battlefield are but a few examples. This type of work requires multiple areas of expertise and often involves multiple organizations. The various teams that engage in it face high stakes – in financial, legal and reputational terms – and as a result, the role of trust in such contexts is critical. Surprisingly, how teams from different organizations learn to trust each other remains relatively understudied. In this article we will focus on the particular challenges posed by risky trust, which we define as ‘interpersonal and/or inter-organizational trust that exists between parties vulnerable to high economic, legal or…

“THESE PROBLEMS ARE TOO BIG FOR US TO SOLVE ALONE. We need to collaborate like we never have before.” The person responsible for these words might surprise you: Beth Comstock is the chief marketing officer at General Electric – a company that no one would accuse of having a freewheeling or laissez-faire culture. Yet Comstock, along with GE chairman Jeffrey Immelt and fellow senior executives, have embraced the fact that the challenges they face – in areas from healthcare to energy to transportation – are too ‘wicked’ to be solved by GE alone. Instead, they have learned to seek help from many different places, and to apply the disparate insights collected from myriad sources to try to jointly solve the complex problems they – and the world – are facing.…

PENSION FUNDS: SHAPING THE FUTURE OF CAPITALISM CAPITALISM HAS COME UNDER FIRE lately, and for good reason. It is time to revisit some of its basic tenets. Let’s start by zooming back to its very beginnings. I looked around recently, and the broadest definition of capitalism I could find was this: “Capitalism is an economic system in which the means of production are privately owned and operated for profit, usually in competitive markets.” Many consider the Dutch East Indies Company founded in 1602 as the prototype of the first modern corporation, complete with key features such as limited liability for shareowners and the ability for them to buy or sell their shares on the stock exchange. However, it was the 19th century Industrial Revolution that transformed capitalism into the dominant…

IN THE MOVIE THE CHESS PLAYERS, two noblemen in 1850s India obsess over a long game of chess, while their kingdom slips into the hands of the British East India Company. When they finally wake up to the new political reality around them, they grumble: “The Indians invented the game, but the British have changed the rules!” The noblemens’ perception is similar to today’s leaders when faced with unforeseen disruptions to their core business. In reality, it’s not that the rules have changed; it’s that an altogether different game is underway. Many leaders are finding that their plans for the future look great within the neat boxes of Powerpoint and Excel, but are often toothless in the face of unpredictable forces in the real world outside. The problem is, the…

TACKLING WICKED PROBLEMS THROUGH OPEN CRITICAL INQUIRY OVER TIME, MAJOR SOCIAL CHANGE spurred by technological change has led to unprecedented flows of people, information and resources impacting on global ecological systems. Unfortunately for all of us, these flows have produced a new class of socio-environmental problem that challenges the very existence of the society that produced it. Wicked problems that have arisen from the impacts of social-environmental change include community responses to environmental disaster and the clash between the social and biophysical sciences. In each of these examples, the source of the problem is also the basis for its resolution – an underlying paradox. Traditional inquiries seek to eliminate a paradox by narrowing the definition of an issue, restating the problem, or hoping it will go away. Conversely, in an…