Project – Dealing with extreme exposures
PROJECT DESCRIPTION
Dealing with extreme challenges
Society and businesses are exposed to many unexpected extreme events that challenge global business activities
based on international agreements and institutions that can increasingly be called into question.
We see derivative effects of pandemic, military and geopolitical conflict as well as extreme weather phenomena
due to climate change where international cooperation is needed. Both private companies and public institutions
are affected by these challenges and must therefore develop coordinated sustainable strategies.
based on international agreements and institutions that can increasingly be called into question.
We see derivative effects of pandemic, military and geopolitical conflict as well as extreme weather phenomena
due to climate change where international cooperation is needed. Both private companies and public institutions
are affected by these challenges and must therefore develop coordinated sustainable strategies.
Against this background, the project will support the development of adaptable organizations that can create
long-term solutions under uncertainty. Adaptive organizations can use a dynamic interactive learning system
based on 'fast' experiences of frontline employees and 'slow' analytical reasoning in the center (see Appendix).
long-term solutions under uncertainty. Adaptive organizations can use a dynamic interactive learning system
based on 'fast' experiences of frontline employees and 'slow' analytical reasoning in the center (see Appendix).
The project will mobilize broad professional knowledge to shed light on various aspects of the global political,
economic and business analytical conditions. International research will be involved in order to identify important
global trends and further develop the models for organizational adaptability under complex conditions.
economic and business analytical conditions. International research will be involved in order to identify important
global trends and further develop the models for organizational adaptability under complex conditions.
Activities:
1. Identify relevant national and international stakeholders
2. Contact potential stakeholders and seek possible involvement
3. Collect research contributions that shed light on various problem angles
4. Exchange insights and experiences in relation to the overall purpose
5. Actively develop and refine selected research contributions
6. Communicate results
Dissemination:
o Website for interactive communication and engagement
o Case studies that illustrate problems and possible solutions
o Anthology of international articles, e.g. World Scientific Publishing, etc.
The project is supported by Brødrene Hartmanns Foundation and also Torben & Alice Frimodts Foundation
Appendix
Interactive decision-making processes for better adaptability
Concept
An adaptive organization uses a dynamic collaborative learning system that combines 'fast' experiences
and insights from operational staff in the frontline with 'slow' analytical reasoning among key managers
mapping the best way forward.
and insights from operational staff in the frontline with 'slow' analytical reasoning among key managers
mapping the best way forward.
Summary
Organizations operating in today's turbulent environment must respond quickly to ongoing changes in
their markets to maintain competitive advantages.
Frontline employees are in the best position to interpret
and respond to ongoing developments. Through daily actions supported by a decentralized
decision-making structure, they have the opportunity to act without central approval, so they quickly learn
what works and what doesn't under changing conditions.
their markets to maintain competitive advantages.
Frontline employees are in the best position to interpret
and respond to ongoing developments. Through daily actions supported by a decentralized
decision-making structure, they have the opportunity to act without central approval, so they quickly learn
what works and what doesn't under changing conditions.
The challenge for many organizations is that their strategic planning processes are located in corporate
headquarters, where they are physically and mentally isolated from the operational front lines.
The central managers acquire information from colleagues, industry experts and consultants with a focus on
political, economic and technological trends, but often far from the ongoing experience-based learning that
takes place around the organization's operational and customer-facing functions.
headquarters, where they are physically and mentally isolated from the operational front lines.
The central managers acquire information from colleagues, industry experts and consultants with a focus on
political, economic and technological trends, but often far from the ongoing experience-based learning that
takes place around the organization's operational and customer-facing functions.
In contrast to fast decision-making processes in the operational units, where one reacts as things develop,
central planning often follows a slow and analytically heavy process, which sometimes occurs only in
one annual recurring budgeting cycle.
central planning often follows a slow and analytically heavy process, which sometimes occurs only in
one annual recurring budgeting cycle.
The central analytical reasoning is beneficial and necessary, but if the experiential learning from the front
lines is not part of the process, the organization's strategic decisions are based on outdated, incomplete,
or not fully current information.
It is well known that gathering information from formal reports and middle managers can cause complications
for several reasons. In part, the internal management reports are structured so they give the decision-makers
the information they want, which is not necessarily the right information when things change quickly.
In part, the internal information is filtered when it moves through the organization and can be affected
by various types of confirmation bias.
Finally, there is an unconscious psychological barrier at play when managers receive information from less
powerful entities, so important information can be discarded or ignored.
lines is not part of the process, the organization's strategic decisions are based on outdated, incomplete,
or not fully current information.
It is well known that gathering information from formal reports and middle managers can cause complications
for several reasons. In part, the internal management reports are structured so they give the decision-makers
the information they want, which is not necessarily the right information when things change quickly.
In part, the internal information is filtered when it moves through the organization and can be affected
by various types of confirmation bias.
Finally, there is an unconscious psychological barrier at play when managers receive information from less
powerful entities, so important information can be discarded or ignored.
How should we reconcile the 'fast' operational decision-making processes with the 'slow' strategic planning
processes so the organization adapts in the most effective way?
processes so the organization adapts in the most effective way?
The answer is expected to be a series of mediating processes that communicate the ongoing experience-based
insight from employees in the organization's operational units, and use this updated knowledge to inform the
strategic analyzes that set the course for further progress.
In some organizations this happens quite informally, with managers communicating openly with committed
employees in frequent discussions.
The informal processes are not always sufficiently robust to ensure that all important information is passed on
and considered in the strategic probes.
More formal collaborative learning processes can be established to systematically collect and forward ongoing
insights from operational units in the periphery to central strategic decision-makers.
insight from employees in the organization's operational units, and use this updated knowledge to inform the
strategic analyzes that set the course for further progress.
In some organizations this happens quite informally, with managers communicating openly with committed
employees in frequent discussions.
The informal processes are not always sufficiently robust to ensure that all important information is passed on
and considered in the strategic probes.
More formal collaborative learning processes can be established to systematically collect and forward ongoing
insights from operational units in the periphery to central strategic decision-makers.
The adaptive organization will ideally have three process levels.
They consist of immediate reactions at the operational level that create fast insights, slow strategic analysis
and reasoning at top management level, and collaborative learning processes that connect these fast and slow
information processes in a dynamic adaptive system.
They consist of immediate reactions at the operational level that create fast insights, slow strategic analysis
and reasoning at top management level, and collaborative learning processes that connect these fast and slow
information processes in a dynamic adaptive system.
Application
As described, the organization should systematically collect ongoing experiential insight from frontline employees
and make this information available to top management.
and make this information available to top management.
They should introduce fora and processes that enable employees in different operational functions and key
managers to share their insights and experiences to create better understanding and achieve more creative
solutions to the challenges of a turbulent environment.
managers to share their insights and experiences to create better understanding and achieve more creative
solutions to the challenges of a turbulent environment.
The organization should decentralize operational decisions so frontline employees can take immediate action
in response to changes in their environment.
Effective communication and information systems must be established so knowledge and experience can be
exchanged across horizontal functions, and updated information and insight can be exchanged openly through
vertical channels between managers and employees.
in response to changes in their environment.
Effective communication and information systems must be established so knowledge and experience can be
exchanged across horizontal functions, and updated information and insight can be exchanged openly through
vertical channels between managers and employees.
The interacting fast and slow decision-making processes function as an effective dynamic system if both
employees and managers are empowered and committed within their respective areas of responsibility.
In addition to establishing a decentralized decision-making structure with horizontal and vertical communication
systems, management must create an organizational culture that encourages commitment, initiative, and reflection.
The right structures, systems and values engage employees so their updated knowledge can be used in
collaborative learning processes, whereby top management can create better strategic solutions for the future.
employees and managers are empowered and committed within their respective areas of responsibility.
In addition to establishing a decentralized decision-making structure with horizontal and vertical communication
systems, management must create an organizational culture that encourages commitment, initiative, and reflection.
The right structures, systems and values engage employees so their updated knowledge can be used in
collaborative learning processes, whereby top management can create better strategic solutions for the future.
The page was last edited by: Department of International Economics, Government and Business // 06/21/2023