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This is a webinar that was presented by Project Insight on February 12th, 2014.

1. Introduction—PM Fundamentals Series
Project Insight is bringing a series of webinars on various topics of interest to project managers. The goal of this PM Fundamentals series is to:
• Deepen your understanding of fundamental project management concepts
• Identify tools and techniques that can be implemented in order to manage projects more effectively
• Discover practical applications for the concepts presented in the series
The series is introduced by Janelle Abaoag from Project Insight. She presents some of the webinars in the series, but today’s presentation was presented by Dr. Patty Malone, Ph.D. For more information about Project Insight, contact Janelle at Janelle.Abaoag@projectinsight.net. For information about Dr. Patty Malone, go to her website at http://www.drpattymalone.com.

2. Obstacles in Creating Effective Virtual Meetings
The biggest obstacle to creating virtual teams is failing to build team relationships. Some of the symptoms of the lack of team-building that show up in virtual meetings are the following.
• Participants are multi-tasking or zoning out
• Topics discussed are not on the agenda
• Different cultures and languages create misunderstandings
• Attendees don’t understand why they are attending
Regarding the last point, this is a fundamental problem. Does everyone need to be there? People often complain that there are so many meetings, and they are so long, that they can’t get any of their regular work done. Could the entire meeting, or portions of it, be replaced with an e-mail. Rather than having a round-robin, “tell me about the status of your work on the project” type of meeting, couldn’t this be circulated before the meeting, so that the meeting can focus instead on solving problems? Every time person A tells about their status, it DOESN’T INVOLVE ANYBODY ELSE. The others have to just sit there and listen, which is why people get bored and start checking their e-mail, sports scores, etc. However, with the focus on solving problems and getting everyone’s input towards the solution, EVERYONE is involved.

3. Effective Meetings
What are the elements of an effective face-to-face meeting in general?
• Develop ground rules or guidelines (post them on website for company). During a meeting, make sure cellphone is off, return messages afterwards, not during meeting
• Clear agenda—this keeps the meeting on topic and on time
• Outcome driven—should be stated at the outset of the meeting
• Use good interpersonal communication skills to bring the meeting back on topic or to table discussion if it off topic
• Address issues, not personalities
• Don’t bring conflict into a meeting; deal with personality issues OUTSIDE of meeting
• Watch out for non-verbals (e.g., rolling eyes, arms crossed over chest)
• Don’t get defensive—if someone says something criticizing your idea, don’t give in to the first impulse be to be defensive—listen to the other side thoroughly first
• Praise participants: recognize contributions since last meeting
• End meeting on a summary and a high note
• Review meeting afterwards: what worked well, what didn’t (create both “lessons learned” and “best practices” list)

4. Problems with Virtual Meetings …
Many of the same rules for effective meetings listed in paragraph 3 above also apply to Virtual Meetings. However, Virtual Meetings create their own problems.
Basically, any problems in communication that you might have with face-to-face (F2F) meetings are magnified in virtual meetings. Communication skills become more important, because there are increased chances for misinterpretation or misunderstanding.
Part of the problem with virtual meetings, is that there is lack of social infrastructure, the glue that holds the team together. Since virtual teams don’t get a chance to know each other, chances are increased that misunderstandings will occur during meetings.
Multi-tasking is another problem during virtual meetings. Here’s what people are doing:
• Side-conversations: 72%
• Checking e-mail: 64%
• Zoning-out: 54%
• Checking sports scores: 51%
• Leaving room (for remote members who are working from home): 41%

5. … and How to Solve Them!
How to increase engagement in meetings to prevent such multi-tasking? First of all, remember that attention span is 10 minutes AT MAXIMUM during virtual meetings. Break up any information dissemination or discussion into segments of 10 minutes. Have questions, brainstorming, polling, or other mini-activities that encourage collaboration and group participation. .
Ask for individual input from all members of a group may seem time-consuming, but it has good ROI, because it gives trust and buy-in from all members. Even if the group decides against their suggestion, at least their suggestion was heard and considered by the group.
NOTE: If you have training, a combined F2F and virtual TRAINING environment does not work out well, it’s best to split it into a completely virtual and a complete F2F environment.
Label emotions, say you are excited, puzzled, etc., so people can know what your reaction is without the benefit of seeing your face to read the emotions from your expression.
Explain pauses so people don’t think there is a technological problem: “so-and-so is pulling up the numbers, etc.”.
Acknowledge & show appreciation to those who participate.
Listening is more important than ever, and SHOWING you are listening by answering questions or repeating something for clarification is important, rather than just saying, “uh-huh” and nodding your head.
Be aware of dangers of misperceptions and miscommunication. Using slang expressions or telling jokes that depend on word play in a multicultural or multilingual setting can create misunderstandings.
Be responsible for your own engagement. If you are only virtually connected to people from main office, you take the initiative to get involved.

6. Building Virtual Relationships: A Matter of Trust
With telephones and computers as substitute for F2F, what is the driver for success in having virtual teams? One word: TRUST. It’s harder to BUILD trust with Virtual team members, and easier to BREAK.
What are behaviors associated with building trust and breaking virtual teams?
• Not following through—not completing by deadline or not completing at all
• Betraying confidence.
• Not responding to e-mails
• Not sharing enough information: a “need-to-know” policy does not build trust.
It starts with you as leader: GIVE TRUST TO GET TRUST. First, you need to give trust to your team members, by not being a micro-manager, and trust that people will get things done. Start by trusting YOURSELF, then trust your team members.
Lack of communication and interaction erodes trust. Keep people in the loop, having people get enough information as possible.
Be accessible and responsive. With virtual team members, it is important to respond quickly. Get back to virtual team members as soon as possible.
Replicate F2F communication as close as you can.
A lot of companies are using Skype or WebEx, or you can meet people one-on-one before the meeting.
NOTE: this system is called “nemawashi” in Japan and is very effective.
Eliminate blaming: give others benefit of doubt (somebody may be having a bad day)
Give credit & promote your team to others
Be honest & admit mistakes.
Follow through: do what you say, WHEN you say you are going to do it
Ask for team member’s opinions and incorporate them in decision-making process.
Even if you don’t think something is a good idea, express appreciation for the person expressing that, if you disagree, explain why.

7. Developing Leadership
Lead by example & be consistent, inconsistent communication is the biggest problem, when not everybody is involved and the leader is doing all of the communication.
Watch alienating language, people in home office saying “those people” or “the remotes”. Open information sharing, as much as possible to include everybody.
NOTE: When I was working in a Japanese company, the standard joke among American staff was that Japanese give information to the American staff on a “need-to-know” basis, meaning that if you’re an American, you don’t need to know.
Develop shared accountability system!! Who is accountable for each action item, and when is it due. This should be clarified in the meeting and memorialized, and circulated to all meeting participants.
Rotate leadership of meeting. This helps build camaraderie between leader and team members, and between team members. Have team members work together on little projects.
Hold regular one-on-one meetings with each team members. Determine preferences each person has for methods of communication. Some people prefer face-to-face, Skype, etc. create matrix for preferences.

8. Q&A
How do you get silent people to participate?
Call on them by name, ask them FIRST, ask them for information, not “YES/NO.” Have them give their opinion FIRST before the others. Likewise, if you have someone who overshares and loves the sound of their own voice, call on them LAST.

What are some ways of building virtual relationships outside of meetings?
There is a handout on Dr. Malone’s website on ideas for building virtual relationships–check it out on the website http://www.drpattymalone.com.
Some of these ideas are:
Virtual coffee hours, happy hours, parties. Fun activities, such as having people take picture of the work space and guess whose it is.

How to handle sidebar conversations?
Create “best practices” list for meetings. Make this one ground rule that facilitator will stop the meeting to stop sidebar conversations if necessary. No one wants to be the one to keep the meeting longer than it has to be.

What if virtual team members do not know each other?
Invest time to develop personal relationships. Build in time in meetings at beginning or end for things that build camaraderie. Have a happy hour or social virtual meetings once and a while, like the 5th Friday (happens 4 times a year). Use this to award cash prize for best idea, or contribution of the week/month. Create a virtual birthday party .
Develop a team website, with bios, personal information. Use social media S=such as Yammer. Use time for acknowledgements of team members.
What about language barriers on virtual teams?

You may need a translator, but ask people to repeat questions, speak slowly, and not use slang expressions.
NOTE: Give incentives to those who want to learn foreign languages or other participants through Rosetta Stone, etc.

How do you combat dealing with negative person on a virtual team?
One good approach is to have team member to have leader discuss the behavior outside of the meeting.
9. SUMMARY
Successful virtual teams do the following:
–Focus on building relationships and community
–Create climate of trust
–Communicate clearly and meaningfully with each other
–Internalize team/company mission
–Recognize interdependence to achieve objectives
–Create positive work environment
Just remember: Teamwork is the fuel which allows common people to achieve uncommon results!

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1.  Introduction

1. Introduction

After the general discussion of global risks, including their ranking based on probability, potential impact, and a combination of these two factors, the Global Risk Report 2014 discussed how the most interconnected of all 31 global risks is that of Global Governance Failure.

It then went into a discussion of how this “central risk” of Global Governance Failure is related to the following three sets of risks:

• Geopolitical and Societal Risks (Instability in a Multipolar World)
• Economic Risks (The Digital Natives Are Restless)
• Technological Risks (Digital Disintegration)

However, the one category of risks that were not discussed in relation to the central global risk of Global Governance Failure was the category of environmental risks, in particular the risks of failure of climate change mitigation and the greater incidence of extreme weather events.  

2.  Environmental and Economic Crises

One observation of the list of the top risks that were created by the analysis was that many of the lists were linked.    Look at the top six risks in the list of risks of greatest concern, which is found on page 16 of the Global Risk Report 2014.

Note that risks #1, #2, and #4 are linked, and the fact that risks #3, #5, and #6 are linked.    This shows that both economic and environmental risks are considered to be of the highest concern.   This is why I think more attention needs to be placed on the effect of global governance failure on environmental risks.   The problem is that economic risks are also paramount, and governments are trying to focus on what they perceive as the most urgent or pressing concerns, which are economic risks.   Because economic resources are constrained, environmental risks, albeit important, are considered to be longer-term risks and therefore are not receiving as high priority.

As example is the approval of the Keystone XL pipeline in the US, which would take crude oil from the tar sands in Canada and ship it through the pipeline to refineries along the Gulf of Mexico in the southern states from Texas through Louisiana.   The argument for the pipeline is that it would be a boost to the US economy, thereby lowering the economic risk of a fiscal crisis.  However, the argument against such a pipeline is that would heighten the risk, not just to the US, but to the world, of an environmental risk due to the heightened emission of greenhouse gases, leading to a heightened risk of extreme weather events. 

The problem about putting these risks against each other is that it is a false dichotomy.   ALL risks can be equated quantitatively through the quantitative analysis known as expected monetary value.    For example, what are the costs associated with extreme weather events?    Would reducing the frequency and severity of these events reduce their cost?   If so, would these cost savings exceed the opportunity cost of foregoing the additional revenue due to the construction of the Keystone XL pipeline?   Would the cost savings go to a greater number of people in the economy than the revenue due to the construction of the Keystone XL pipeline?   I don’t know the answer to these questions, but do I know that answering them would go a long way towards putting these risks at least on equal footing so that they can be compared.

3.  International Collaboration

If you look at the list of global risks of highest concern in section 2 above, the list goes to #6.   The global risk at #7 on that list would be global governance failure, and one of the reasons why is that any effective measure to reduce the emission of greenhouses gases would have to be done using international collaboration.   As it says on p. 20 of the report, “the year 2014 is likely to be crucial for addressing climate risks, a point made by United Nations (UN) climate chief Christiana Figueres at the Warsaw Climate Change Conference. Countries made only limited progress on issues such as emissions reduction, loss and damage compensation, and adaptation. Greater progress is urgently needed to create incentives and mechanisms to finance action against climate change while efforts are made to keep temperature rise below 2 degrees Celsius.”

Unfortunately, the so-called Kyoto Accord should be renamed the Kyoto Discord.   Perhaps the more frequent occurrence of the extreme weather events in 2014 will create enough pressure on national governments through their populace to overcome the recent deadlocked negotiations and create an accord in 2015.   It looks as if 2015 will be a year that coincides with an El Niño weather event, exacerbating any upward trend that already exists with regards to the average global temperature.   We’ll see if that translates into enough political heat for some international accord to be finally achieved.

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“As the Americans learned so painfully in Earth’s final century, free flow of information is the only safeguard against tyranny. The once-chained people whose leaders at last lose their grip on information flow will soon burst with freedom and vitality, but the free nation gradually constricting its grip on public discourse has begun its rapid slide into despotism. Beware of he who would deny you access to information, for in his heart he dreams himself your master.” —from Sid Meier’s science fiction strategy game Alpha Centauri

1. Introduction

After the general discussion of global risks, including their ranking based on probability, potential impact, and a combination of these two factors, the Global Risk Report 2014 discussed how the most interconnected of all 31 global risks is that of Global Governance Failure.

It then went into a discussion of how this “central risk” of Global Governance Failure is related to the following three sets of risks:
•Geopolitical and Societal Risks (Instability in a Multipolar World)
•Economic Risks (The Digital Natives Are Restless)
•Technological Risks (Digital Disintegration)

This particular post goes into the third nexus listed above, the link between Global Governance Failure and Technological Risks, in particular, the risks posed by cyber attacks, data fraud/theft, and critical information infrastructure breakdown.

2.  Cyber attacks

The decentralized structure of the Internet creates a dynamic that makes the system vulnerable to cyber attacks.   As it says on page p. 39 of the report, “an attacker needs only to find a single way through defences at a single point in time, while the defender must defend all vulnerable points forever.”

Since more and more of the infrastructure of society is hooked up to the digital infrastructure of the Internet, the vulnerability of the system to cyber attacks creates an ever increasing potential impact.   The Smart Grid, is the online connection of electrical power generation and transmission, increases the potential of cyber attacks to affect power infrastructure.

3.  Cyber attacks–something to CHEW on

An acronym used to summarize the types of cyber attacks is CHEW which stands for Crime, Hacktivists, Espionage, and War.   Here’s a chart which contain some relatively well-known examples of each type of cyber attack:

3.   Other risks to the Internet

Besides cyber attacks, there are risks to the Internet in the form of other disruptions of critical information structure breakdown. Here are some examples of possible sources of this kind of risk.

• Earthquake in San Andreas fault in California (home of world’s technical center in Silicon Valley)
• Solar flare (disruption of Global Navigation Satellite Systems or GNSS)

4.  National Security Organizations

The decentralized structure of the Internet also spreads the risk of attack  to all countries that are connected to it, as mentioned in paragraph 2 above.   National Security Organizations are in charge of defending their countries from cyber attacks.   However, their use of the Internet as a platform to launch cyber espionage on rival countries complicates the matter, by making the entire system more vulnerable.

5.  From Digital Democracy to Digital Feudalism

The danger of attacks of increasing frequency and severity is that users will be scared away from reliance on the Internet.   The other danger to the Internet is that the current equilibrium state of “Net Neutrality” may dissolve, changing the access to the Internet from its current democratic structure, to a several-tiered system where your access to money dictates how much access to information you have.

If this occurs, the danger is that the world will go from a digital democracy to a series of feudal fiefdoms, with information asymmetry exacerbating the already existing trend towards economic inequality.

6.  Conclusion

Global governance failure is a problem associated with technological risks because the stakeholders that benefit from the information infrastructure (national governments, businesses) are not only defending against those forces that want to attack the system, but are using that system to attack other stakeholders.   This is a short-sighted strategy that may enrich some of those in the temple, with the long-term risk that their activities may end up pulling down the temple over everyone’s heads.

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1. Introduction

After the general discussion of global risks, including their ranking based on probability, potential impact, and a combination of these two factors, the Global Risk Report 2014 discussed how the most interconnected of all 31 global risks is that of Global Governance Failure.

It then went into a discussion of how this “central risk” of Global Governance Failure is related to the following three sets of risks:
•Geopolitical and Societal Risks (Instability in a Multipolar World)
•Economic Risks (Generation Lost?)
•Technological Risks (Digital Disintegration)

This particular post goes into the second nexus listed above, the link between Global Governance Failure and Economic Risks.

2.  Economic Risks

The economic risks related to Global Governance Failure are fiscal crises and unemployment/underemployment, which in turn can lead to the societal risks of income disparity and political and social instability.

In the United States, in the run-up to the election in November 2013, there was a failure of governance in terms of maintaining measures that would decrease structural unemployment/underemployment.  According to Jared Bernstein, senior fellow at the Center on Budget and Policy Priorities in Washington wrote in the New York Times on 11/01/2013, “the initial government response, both in terms of stimulus and credit market interventions, was actually strong and effective, though I well know and appreciate all the arguments about their shortcomings.  But though Keynesian stimulus was the most important antidote to the vast demand contraction in terms of helping innocent victims, government, by accepting the austerity doctrine, failed to keep it going long enough.”

3.  The Digital Natives …

Although the structural unemployment/underemployment issue effects all ages, the Global Risk Report talks about its effect on young people who came of are coming of age in the 2010s.   Rather than labeling them with the generic label of Generation fill-in-the-blank, I like the term “digital natives”, because it shows the relationship of the generation not to the generations before it, but to technology, particularly communication technology.

The digital natives have the positive qualities of being realistic, adaptive, and versatile, qualities they have developed by the virtue of necessity by having grown up in the shadow of the Great Recession after the financial crisis of 2008-2009.    The starkest reality they are facing is that of structural unemployment/underemployment, which is about twice as high in the developed economies as it is in emerging economies.    For those that are fortunate enough to find work, they often find the only opportunities open to them are unstable, low-paid and low-productivity jobs.

The best way to mitigate this structural unemployment/underemployment depends on the demographic you are focusing on:   for young people, education has traditionally considered the best way to ensure that you get a job.

4.  … are Restless

However, public financing for education has been cut back severely as a result of the fiscal crises affecting national, state and local governments.   This leaves two main routes for financing one’s education:   reliance on family, or reliance on credit.    Reliance on family has the consequence that economic inequality will perpetuate into the next generation.    Reliance on credit has the consequence that an entire generation will enter a condition of indentured servitude, and their depressed savings rate will have an adverse affect on future social safety net programs.

5.  How to Redirect the Coming Insurrection

One of the things I like about the Global Risk Report 2014 is it discussion of possible solutions or risk responses to the various risks that it reports about.   In response to the problem of structural unemployment/underemployment for the digital natives, the young people coming of age in the 2010s, here are some suggestions discussed in the report:

• High-speed Internet is opening up access to free or inexpensive quality online courses, allowing young people to update their skills
• Educational institutions and businesses need to work together to ease the school-to-work transition, preferably along the lines of the dual education system in Germany and Switzerland, which offers professional and vocational education in parallel, with internships and apprentice programs to place young people in potential jobs.
• Have those in positions of traditional governance engage young people through mechanisms opened up through the digital revolution.   The price of this engagement will be putting priority on the needs of young people in the current political agenda.

One example of the latter is Sen. Elizabeth Warren of Massachusetts, who is trying to devise solutions to the problem of the debt crisis among young people in the United States who cannot afford to repay their college loans due to no fault of their own, but their inability to obtain employment combined with the predatory nature of these loans.

For those who feel we cannot afford to pay for programs which reduce unemployment/underemployment, ask yourself the cost of social inequality in the form of riots and extremist movements that are populated largely by those that consider themselves as a “lost generation”.

The next post will discuss the technological risks related to the lack of global governance.

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1.  Introduction

After the general discussion of global risks, including their ranking based on probability, potential impact, and a combination of these two factors, the Global Risk Report 2014 discussed how the most interconnected of all 31 global risks is that of Global Governance Failure.

It then goes into a discussion of how this “central risk” is related to the others in three in-depth discussions.    The discussion is how Global Governance Failure is related to

• Geopolitical and Societal Risks (Instability in a Multipolar World)
• Economic Risks (Generation Lost?)
• Technological Risks (Digital Disintegration)

The one area I think they should have explored as well is the link between Global Governance Failure and Environmental Risks, and I may do this myself as a separate post.

This particular post goes into the first nexus listed above, the link between Global Governance Failure and Geopolitical and Societal Risks.

2.  An Increasingly Multipolar World

In the decades after World War II, the geopolitical landscape formed into competing blocs of power surrounding the United States of America and the Soviet Union.   There were countries that tried to maintain independence from either side, the non-aligned countries such as Brazil, India and China, but most of the emerging economies of the world ended up falling under the political and economic influence of one superpower bloc or the other.  That bipolar framework surrounding the “Cold War” between these two superpowers started to dissolve in 1991 when the Soviet Union collapsed.

Although neoliberals in Washington, D.C. dreamed for two decades of extending the influence of the United States in a “one-world framework”, the politics in the United States are currently in a condition of paralysis that is gradually reducing the influence of that country on the world stage at the same time that the economic and concomitant political power of the BRICs (Brazil, Russia, India, China) is rising.   The end result is an increasingly multipolar world.   The challenges to this multipolar world are that

• Emerging market uncertainties
• Economic and geopolitical friction between nations
• Proliferation of low-level conflict (asymmetrical warfare)
• Slowing progress on global challenges

3.  Emerging market uncertainties

Although the growth rate in the four BRIC nations has outpaced that of the nations in the developed economies, the growth model of these economies will not be able to keep up the same rate of growth.

The economic growth that has occurred in these countries has seen the rising of a middle class, which has created demand for economic and political reforms as well as the extension of welfare networks.    For example, the rising air pollution levels in China has created the demand on the central government for more regulations to control it.

4.  Economic and geopolitical friction between nations

Because of the limited success of the trade liberalization talks in the global trade framework under the World Trade Organization, there is more progress being made at the regional level, with new trade partnerships being negotiated such as the TPP (Trans-Pacific Partnership), TTIP (Transatlantic Trade and Investment Partnership), the Eurasian Union, and the African Free Trade Zone.

Whether they will be accepted by the countries that comprise these partnerships remains to be seen.   Will they be seen as truly creating opportunities for trade and innovation, or will they be seen as stifling innovation by assisting oligopolies to continue rent-seeking behavior?  Will they be seen as contributing to economic and political stability, or will they be seen as “democracy-bypass operations”, which take political power away from national governments and giving it to multinational corporations?

5.  Proliferation of low-level conflict (asymmetrical warfare)

When there is a mismatch between levels of power, asymmetrical warfare rather than conventional warfare becomes the instrument of choice for the powerless.   In practical terms, this can mean resorting to activities traditionally described as “terrorist” activities.

Technology-based aggressions (drone technology, cyber attacks) are a new form of warfare, but the only way to moderate the risks of these new forms of warfare is to create multilateral agreements that manage the low-level conflicts which give rise to them.

6.  Slowing progress on global challenges

There are many challenges which are beyond the capability of national governments to handle, such as

• Climate change
• Internet governance
• Management of the oceans (including the resources of the newly accessible Arctic Ocean)
• Cooperation on space missions
• Enhancement of human rights

The problem is that, with the global economy slowly emerging out of the slump that occurred after the financial crises of 2008-09, many national governments are focusing on the short-term risks of fiscal crises, and structural unemployment/underemployment, and are not focusing on the risks which are seen as longer-term risks (such as climate change).

This is one of the reasons why there is more persistent deadlock on negotiations regarding international agreements on greenhouse gas emissions.

7.  Conclusion

As the report says on p. 30, “the growing scale and assertiveness of leading emerging market countries will increasingly challenge the legitimacy, relevance and efficacy of incumbent global multilateral organizations or groupings.”

However, my take on it is that the phrase should be amended as follows: “the growing scale and assertiveness of leading emerging market countries will increasingly challenge the legitimacy, relevance and efficacy of existing incumbent global multilateral organizations or groupings.

In other words, global multilateral organizations will be forced to enlarge their conversation to include the emerging market countries in order to maintain their legitimacy, relevance and efficacy.   But in my mind, that is all to the good.

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1.  Introduction

In the posts last week, I discussed the methodology of the risk report, and the ranking or prioritization of risks.   This qualitative analysis of risks used the factors of highest probability and greatest potential impact.   These two factors were then combined to create the risks of overall greatest concern. 

One observation of the list of the top risks that were created by the analysis was that many of the lists were linked.    Look at the top six risks in the list of risks of greatest concern, which is found on page 16 of the Global Risk Report 2014.

Note that risks #1, #2, and #4 are linked, and the fact that risks #3, #5, and #6 are linked.    The fact that the risks are interconnected is important because those measures which mitigate one risk, such as structural unemployment, may end up having a positive spillover effect on another risk, such as fiscal crises.   As more and more people go to work, the income that they receive will get translated into higher demand for consumer goods, which will stimulate businesses, and higher tax revenue for governments, which will reduce deficits.

Which of the 31 risks is the most interconnected to other risks?

2.  Most interconnected global risks

Although global governance failure is a risk that is not among listed as having the highest probability and/or impact, it is listed by the respondents to the Global Risk Report 2014 as having the most interconnectedness to other risks.  It connects with

• economic risks:  fiscal crises, unemployment/underemployment, failures of economic institutions
• societal risks:  political and social instability, income disparity
• environmental risks:  climate change, extreme weather events, water crises, manmade environmental catastrophes
• geopolitical risks:  corruption, terrorist attacks, interstate conflicts
• technological risks:  cyber attacks

The lack of strong global governance makes it harder for the world to prevent and mitigate the consequences of these other global risks, which require an coordinated international response.

3.  Concern for 2014

One of the reasons why the fact that global governance failure is the most interconnected global risks is of concern to me is that in the United States, one of the influential factions of one of our political parties has as its goal “smaller government”, as if promoting governance failure is a virtue.

Of course, global governance can be done through other organizations than national governments, such as corporations, non-governmental organizations, and international organizations.    But the simple truth is that, if risks are linked together across the globe, people across the globe must link together to respond to them effectively.

The next posts will discuss some of the individual risks on the list of risks of highest concern.

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1.  Introduction–Design of the Integral Life Practice Book

The first three chapters deal with an introduction to the concept of Integral Life Practice and sketch some of the benefits it might provide you.  modules you can choose from, including Integral Ethics.

Chapters 4 through 7 of the Integral Life Practice book go through the Core Modules:  Shadow, Mind, Body, and Spirit; Chapter 8 goes through the optional module of Integral Ethics, and Chapters 9 and 10 go through the process of designing your own Integral Life Practice by choosing at least one practice from the four Core Modules with the option of choosing practices from the Optional Modules.

2.   What is the Shadow?

The shadow is the term used in Integral Theory to describe those aspects of our consciousness which we’ve done one or more of the following:

• rejected
• denied
• hidden from ourselves
• projected onto others
• disowned

In the language of psychotherapy, this is what is called the “unconscious.”   Why it is important to gain conscious awareness of what is in the unconscious?   Because, if you’re not careful, it can trip you up.   Look at the following lyrics taken from the song Hotel California by the Eagles,

And in their master’s chambers

They gathered for the feast

They stab it with their steely knives

But they just can’t kill the beast

Have you ever heard of a political candidate who is accusing his opponent of behavior that more accurately describes what that candidate is doing?   In the case of a political campaign, that could be just a matter of misdirection, to take the attention of the press and the public off of the candidate’s own misdeeds.   But what if the candidate is doing this kind of attack because he refuses to recognize his own behavior, and is therefore projecting that behavior on his candidate?    He may be blind to his hypocrisy, but the other candidate would easily be able to craft attack ads which would exploit this blindness.

3.   What is the benefit?

The benefit of “shadow work”, that is, the undoing of repression and the reintegration of the psyche, is that it frees up energy that would otherwise be spend fighting internally.    One of the reasons why Shakespeare represents a quantum leap in terms of drama from his historical predecessors is that drama from the time of the Greeks represented on stage the conflict between characters but Shakespeare represented the conflict within a character.

When we stop our internal conflict, we free up the energy we used to engage in it.   Psychotherapy is a form of shadow work that involves a process of dialogue with a therapist, but there are others forms of shadow work which you can engage in on your own, and these are the subject of the next sections of the chapter.

4.  The 3-2-1 Shadow Process

To understand the 3-2-1 Process, which helps undo repressed emotions, let’s start by understanding how these emotions get suppressed in the first place.

Let’s say a child is anger at his mother or father for some reason.   This anger is an authentic emotion.   But what if the child does want to admit that he or she is angry, either because of the raw intensity of the emotion or because the child is afraid of the consequences of expressing that anger.

The child then may repress that anger, which then may get projected on others, even onto the parents themselves.   Now the child feels that he or she is surrounding by angry parents, and the child now experiences fear.   That fear is the inauthentic emotion, or the emotion based on the projection onto others, not on the original emotion originally within the child.

There is a 1st-person identification, where the child originally recognizes its own emotions, in this case, the emotion of anger.    If the child is incapable of recognizing this emotion, it splits its off and projects it onto another person, in a 2nd-person identification so that the child says “you are the angry one, not me” to the parent.   And then there is a 3rd-person identification so that the child no longer recognizes its own anger, and thinks that it is coming from the parent to the extent that it is now experiencing a different emotion, that of fear, an emotion that is transmuted or inauthentic based on this process of repressio。

Okay, how do undo the repression?   There are two ways into the shadow module.

• Method one:  pick a dream image that is emotionally charged, an image that disturbs you for some reason.
• Method two:  pick someone whose behavior triggers an emotionally charged response in you, someone who disturbs you for some reason.

Let’s say the child dreams of monsters trying to attack it.

Here’s how the 3-2-1 process works.    Take a journal and do the following:

3rd person mode

Describe the person or image that disturbs you.   What does it look like?   What is it doing?

2nd person mode

Talk to the person or image that disturbs you.   Ask questions such as, “who are you?  What do you want from me? ”  Allow your imagination to take a step outside of your own awareness, and have that person or image respond back to you.

1st person mode

Now for the real leap of imagination.   See the world, including yourself, from the standpoint of that person or image.   Allow yourself to see the similarities between yourself and that person or image, and then make a statement of identification:  “I really am you”.    Feel the emotions behind that person or image and fully re-own them and integrate them into your own consciousness.

To sum up these three modes:

3–FACE IT

2–TALK TO IT

1–BE IT

5.  Lighter Shades of Shadow

The shadow made not necessarily be a negative emotion or repressed feeling.   It could be that you are repressing a positive of higher capability in yourself, such as the capacity for leadership.

This is something that happened to me.   For many years, I had a dream where I was drafted into the army.   Now needless to say, I am past the age at which the actually US army would accept me as a recruit.   When I did the 3-2-1 process, I realized what was going on.   I told myself that I was not disciplined because I always believed that my brothers, who were in the military, were disciplined and I, not having been in  the military, suffered in comparison with respect to discipline.    By dreaming that I was in the military, I was trying to tell myself that my self-image of not being disciplined was “out of date”, and that I was disciplined after all!   Once I recognized this self-discipline that I had projected onto my brothers and on members of the military in general, I no longer had those dreams!

6.  Transmutation of Emotions

One of the benefits of shadow work, besides the liberation of energy which is spent on fighting oneself (or shadowboxing, to use the “shadow” image), is the transmuting of emotions of drives from their inauthentic or repressed emotions to their primary, authentic forms.    The child who gets in touch with his anger, for example, is going to be able to deal with a lot more effectively than a child who projects that anger onto his parents and then reacts to that projection in fear.

Here’s an example from my own childhood.   My mother would have me do chores, and would inspect my handiwork afterwards to do if I had done them according to her standards.   For years I would be afraid of her anger at my having not done the work according to those standards, but at some point I realized that the anger wasn’t coming from her.   It was actually my own anger based on the fact that she was not pointing out those times when I did achieve them.   When I did own up to that anger, at one point I told her point blank, “if I did the job 99% correctly, all I would hear from you would be about the 1% I did wrong!”   She countered by responding, “well, it was hardly 99%, it was more like–75%.”   I was stubborn and I said, “you’re missing the point–it’s not the percentage that’s wrong, it’s the praise that’s missing!”

My mother took my criticism to heart, and afterwards better about criticizing me in a more encouraging way.   I returned the favor by responding to her “tough love” with some tough, hard work in return to show her the truth of the saying she always appreciated, which is when you are have love for a person or an organization, hard work is love made visible!

7.   Conclusion

I use the 3-2-1 process if there is a dream image that is disturbing, or if there is someone I first meet who I am either instantly attracted to or angered by for some inexplicable reason.   9 times out of 10, the result is that I am angry at them for evincing a behavior I am guilty of myself, but have refused to recognize.   Or I am attracted to them because I think they have a quality in them which I haven’t realized until then that I have in myself, or that I have in the past told myself that I don’t have, but now I recognize that I do.

It makes you a more compassionate and intuitive person, and what’s more important if you are working on a team, it helps you shore up your own weaknesses or blind spots in your personality so that you don’t end up reacting to others in an inauthentic way.   It’s okay to have negative emotions like anger, because conflict with others can achieve creative solutions as you try to get to the root of the conflict and try to resolve it.   But projecting your own internal conflict onto another person and trying to resolve it that way is a losing proposition.

I think this is why the shadow work is included as the first core module, because it is one of the ones that people tend to neglect–at their own peril!

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1.  INTRODUCTION–A PROJECT MANAGEMENT PERSPECTIVE

As part of this series on Global Risk Analysis 2014, I wanted to look at the report from the framework of the risk management processes that are done in the course of managing a project.

The processes for Risk Management are as follows:

11.1  Plan Risk Management

11.2  Identify Risks

11.3  Perform Qualitative Risk Analysis

11.4  Perform Quantitative Risk Analysis

11.5  Plan Risk Responses

11.6  Control Risks

The first five of these processes are in the Planning Process Group, and the last of the six processes is in the Monitoring & Controlling Group.

Of course, the events of the world are not a “project” because they have no beginning and no ending, but I’m writing these posts from the standpoint of project management because risk management concepts are involved in it, and it is a framework I am familiar with.

The posts this week have been about the methodology of the report (analogous to the Plan Risk Management process), the identification of the 31 global risks and their classification into 5 categories (analogous to the Identify Risks process), and the ranking of these risks based on their probability, impact and the product of these two factors (analogous to the Perform Qualitative Risk Analysis process).

2.  GLOBAL RISK ANALYSIS 2014 and Quantitative Risk Analysis

This post is brief because it discusses the discussion in the Global Risk Report 2014 of what would normally be the next step, which is Quantitative Risk Analysis.   This would be where you take the probability of each risk and assign a probability to is from 0% to 100%, where you estimate the dollar impact of that risk if it were to occur, and multiply this quantitative estimate of the probability and the impact to achieve the EMV or expected monetary value of that risk.   For example, if the chance of a hurricane hitting the East Coast of the US of the same magnitude as Hurricane Sandy (the same one that hit in November 2012) in 2014 were 5%, then we know the dollar value of the impact of that hurricane, let’s say, $70B, then we can say that EMV of that risk is 5% x $70B or $3.5B.

Here’s what the Global Risk Report says about the this on pages 42-43:

“In the finance and insurance sectors in particular, there is strong reliance on quantitative measures of risk probability.   Some other firms, wary of being blindsided by erroneous assumptions in the numbers that go into calculating the likelihood of adverse events, prefer to focus solely on the severity of risks and disregard any attempt to estimate their probability of happening.”

However, since the risks that the Global Risk Report 2014 are discussing are a) global (by definition) and b) interconnected, it is hard to achieve a quantitative measure in terms of a dollar figure for the impact, so the Global Risk Report 2014 says that the team putting together the report decided not to try to have the respondents do such an analysis.

The important point of the quote from above is that you do not need a quantitative analysis to proceed with the next step, which is Risk Response.   However, in the case of an organization, the cost of the risk response measures has to be justified by the EVM of the risk were it to occur.   For example, in the case of an insurance company where I worked, the company paid for a “hot site” that would retain a duplicate of the data in its home office and be able to be used as a temporary headquarters were the home office to be temporarily (or even permanently) incapacitated in the case of an earthquake.   The probability of an earthquake is small but not negligible since the office was in Southern California near the San Andreas Fault.   The impact, however, of losing all the financial data would be ruinous to the company, so the expense of maintaining the hot site was justified.

Now, if you are a government and advocating for mitigating climate change as a risk response, then arguing for the funds for these measures, especially in a time of economic adversity, is a difficult task.   Getting a qualitative measure of the damage that would caused by climate change would allow someone arguing for such measures to justify the expenditure, but pointing to the cost of NOT doing those measures, if the risk were to occur.

So although it is understandable that the Global Risk Report 2014 is not getting quantitative risk analysis from the respondents, reinsurance companies are doing such analysis.   Munich RE, a multinational reinsurance company, attributes the rise of extreme weather related events to climate change.  Their records show a nearly quintupled number of weather related events in North America over the past three decades.  They estimate a loss of US $1,060 billion (in 2011 values) from 1980 to 2011 (from the website http://www.thisisclimatechange.org/extreme-weather/).

3.   Risk Responses

Rather than talk in general about risk responses for all 31 global risks, I will take a look at three specific risks that the report discusses in depth and discuss the risk responses that the report suggests for these risks.

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1.  INTRODUCTION

In my previous posts on the World Economic Forum’s Global Risk Report 2014, I have concentrated on

• the methodology of the report (corresponding to the Plan Risk Management process of Project Management),
• the identification of risks (corresponding to the Identify Risks process of Project Management)

and now in this third series of posts, I am concentrating on the next topic,

• the qualitative analysis of risks (corresponding to the Perform Qualitative Analysis process of Project Management)

This qualitative analysis is called “qualitative” because it does not fix a specific dollar amount to each risk (that would be “quantitative analysis”), but instead analyzes each risk according to some qualitative variable, usually something like likelihood, severity, and/or urgency

The three questions that the respondents were asked about the 31 global risks were:

1. Which five of the global risks are of highest concern?
2. Which five of the global risks have the highest probability of occurring in the next decade?
3. Which five of the global risks would have the greatest potential impact if they were to occur in the next decade?

In yesterday’s post, I discussed the result of asking the respondents to the survey the second question.   In this post, I discuss the result of asking them the third question, on those risks which would, if they occurred, have the greatest impact.

2.   RISKS OF GREATEST IMPACT

The respondents were asked to assess each of the 31 risks (these risks are listed on the post dated 02/04/2014) based on the probability of occurrence on a scale from 1 to 7, with a “1” meaning that the risk is not likely to happen, and a “7” meaning that the risk is very like to occur.

Those 5 risks that rated as having the highest probability of occurrence were as follows:

Here are some things to notice about these risks.

a.  Four out of five risks are highly correlated

Risk #1, the societal risk of fiscal crises, is highly correlated to Risk #4, the economic risk of unemployment and underemployment.   The fiscal crisis is the aftermath of the financial crash in 2008-2009, and has left national governments struggling in what is termed the Great Recession.   Although the federal deficit in the US has started to shrink, many state governments are still facing d

Likewise, Risk #2, the environmental risk of climate change is connected to Risk #3 of Water crises.   For example, in the US, the states west of the Rocky Mountains (like California) are experiencing record droughts.   According to the majority of scientists, this water crisis is due to a jet stream called the “polar vortex”, which normally circles the Arctic Circle at this time of year.   However, due to climate change, this jet stream has become misshapen and is forcing colder-than-normal air East of the Rocky Mountains and warmer-than-normal air West of those mountains.    This is creating the abnormal weather conditions on both sides of the mountains.   California is experiencing record droughts while Chicago, Illinois (where I currently live) is experiencing record low temperatures and snowfalls.

b. “Repeat offenders” in list

Risks #2 and #3 related to the environment are both risks that have been in the top five lists of having the greatest impact last year in 2013, with water crises having been on the list since 2012.

Regarding economic risks, the fiscal crises risk was also on the list last year, although it was called chronic fiscal imbalances in 2013.

c.   What is missing from the list?

The risk that was on the list last year but was missing this year is the diffusion of weapons of mass destruction, perhaps because of the interim agreement reached regarding Iran’s nuclear program, plus the temporary agreement reached in Syria to halt the use of chemical weapons.

3.  COMBINED MEASURE:  PROBABILITY & IMPACT

If you take a look at the risks that have highest probability, and those that have the highest impact.   Those that are high in both probability and impact are the ones that should have the highest priority.

If you look at the grid that is formed by combining these two dimensions, which is on page 16 of the Global Risk Report 2014, you see the risks which should have the highest priority.   If you take a look at the six of these data points with the highest total of probability times impact, you coincidentally get the top six risks as listed by the respondents in terms of the risks that are of highest concern.

You can conclude that these risks are the ones to watch in 2014, and that any funds for risk mitigation would be most profitably be put into measure that would reduce the risk of any of these risks.  The fact that risks #1, #2, and #4 are linked, and the fact that risks #3, #5, and #6 are linked is interesting, because it implies two things.

First of all, since they are perceived to be causally linked, efforts in improving one of them might have positive spillover effects on the other linked risks.   For example, measures to reduce structurally high unemployment/underemployment, for example, would create jobs that would in turn create demand for products and services.    The taxes on these new products and services would reduce the government fiscal crisis, and the demand for labor would also decrease the severe income disparity by raising median wages.

On the environmental side, efforts to mediate the effects of climate change by the reduction of greenhouse gas emissions would in the long run reduce the increase in the average global temperature, which is the mechanism which fuels the extreme weather events such as droughts, which in turn are causing the water crises.

The second observation is that since risks involving the economy and risks involving the environment are perceived as both being of greatest concern, that any efforts to spend money on one set of these risks be accompanied by measures that address the other.   Otherwise, your efforts will be perceived as a zero-sum game, and those stakeholders that hold one set of these risks as more important than the other will oppose your efforts.    B0th “constituencies”, if you will, need to be addressed in either case.

As an example, measures which improve the economy on a short-term basis, but which will be harmful to the environmental in the long-run, such as implementation of the Keystone XL pipeline in the US, will face more opposition due to the increased awareness of the environmental hazards attached to such a project.

However, it is also true that those who want to cancel the Keystone XL pipeline will have to assuage the concerns of those who will see a lost opportunity for jobs creation at a time when the US economy is in desperate need of the same.    Are there economic opportunities to be found in measures which would simultaneously reduce the risk of increased greenhouse gas emissions?

The insight from reading the Global Risk Report 2014 should extend not just to the awareness of those risks that need to be addressed, but also to the way to present those risks to the shareholders (the voters in democratic countries) in such a way as to maximize their acceptance.

The post tomorrow will deal with next topic of quantitative analysis as seen by the authors of the Global Risk Report 2014.

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1.  INTRODUCTION

In my previous posts on the World Economic Forum’s Global Risk Report 2014, I have concentrated on

• the methodology of the report (corresponding to the Plan Risk Management process of Project Management),
• the identification of risks (corresponding to the Identify Risks process of Project Management)

and now in this third series of posts, I am concentrating on the next topic,

• the qualitative analysis of risks (corresponding to the Perform Qualitative Analysis process of Project Management)

This qualitative analysis is called “qualitative” because it does not fix a specific dollar amount to each risk (that would be “quantitative analysis”), but instead analyzes each risk according to some qualitative variable, usually something like likelihood, severity, and/or urgency

The three questions that the respondents were asked about the 31 global risks were:

1. Which five of the global risks are of highest concern?
2. Which five of the global risks have the highest probability of occurring in the next decade?
3. Which five of the global risks would have the greatest potential impact if they were to occur in the next decade?

In yesterday’s post, I discussed the result of asking the respondents to the survey the first question.   In this post, I discuss the result of asking them the second question, on those risks which have the highest probability of occurring.

2.   HIGHEST PROBABILITY RISKS

The respondents were asked to assess each of the 31 risks (these risks are listed on the post dated 02/04/2014) based on the probability of occurrence on a scale from 1 to 7, with a “1” meaning that the risk is not likely to happen, and a “7” meaning that the risk is very like to occur.

Those 5 risks that rated as having the highest probability of occurrence were as follows:

Here are some things to notice about these risks.

a.  Four out of five risks are highly correlated

Risk #1, the societal risk of income disparity, is highly correlated to Risk #3, the economic risk of unemployment and underemployment.   You can see that the strategy of President Barack Obama in his State of the Union speech was to reduce the societal risk due to income disparity by creating policies that reduce the economic risk due to long-term unemployment and underemployment.

Likewise, Risk #2, the occurrence of extreme weather events, is happening in the US right now as the states east of the Rocky Mountains (like Illinois) are experiencing record low temperatures and snowfall as states west of the Rocky Mountains (like California) are experiencing record droughts.   According to the majority of scientists, these extreme weather events are being triggered by climate change, which is Risk #4.

b.  The top risk is a “repeat offender”

Risk #1 on the chart, the societal risk of “Income Disparity”, was also the risk considered to have the highest likelihood of occurrence in 2012 and 2013.   This shows that this problem is not only considered severe, but has remained at the forefront of the consciousness of global leaders for quite some time.

c.   What is missing from the list?

The risk that was considered #2 in terms of likelihood of occurrence in both 2012 and 2013, but which is absent from the “top 5” list in 2014, is “Chronic fiscal imbalances.”   This perhaps reflects the sea change in economic thinking from the belief that budget deficits are the most pressing economic issue for many of the world’s economies.   In Europe especially, but to a lesser extent in the US, it was considered that the solution to this issue was to cut government spending.

It seems like there is a shift to the realization that in the face of massive unemployment, stimulating the economy through some sort of government spending, particularly investments in infrastructure and vocational training, might be a more effective strategy to follow in order to improve the economy.   This, of course, is just my opinion, not that of the World Economic Forum, but this shift in thinking would account for the shift in the ranking of economic risks in the past three years.

3.  CONCLUSION

On the economic front, unemployment/underemployment and its societal counterpart in terms of income disparity is considered the risk that is most likely to occur, whereas on the environmental front, climate change and its consequences on extreme weather events are also very likely to occur.   Next in terms of likelihood is the occurrence of cyber attacks.

I’ll conclude this post with one interesting observation made in the report between a risk and a trend.   A risk is something which has not yet happened, and may happen in the future.   A trend is something which has already happened, but may reoccur in the future.   It may seem semantics, but many of the risks that are on the list describe events that have already occurred in some shape or form before 2014 and are either going to re-occur or get worse in the coming year(s).

It reminds of a quote from the science fiction novel by John Brunner called Stand on Zanzibar written back in 1968.   “Overpopulation–it’s one of those events that most people think is going to happen tomorrow, but in reality it started to happen yesterday, when most people weren’t looking.”    I’m quoting from memory, so it’s not an exact quote, but it gives the tenor of the point I am trying to make.

Okay, it’s one thing to say that a risk is likely to happen.   What about when it does happen?   What will be its impact?   The respondents were asked about that question as well, and that will be the subject of my next post.

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