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Carl FrancisCEO envisian

advisers in critical situations

Ethics in Critical Situations Beyond the Code of Conduct

1 Do you have responsibilities to clients beyond accounting?

2 What are Critical Situations?

3 Warning Signs for Advisers

4 As an Adviser – What Should You Do?

5 Getting the Right Outcomes

6 Group Exercise (s)

7 Payoffs from Critical Situations

8 Wrap up | Takeaways

1 Do you have responsibilities beyond the Code of Conduct?

1 Do you have responsibilities to clients beyond the normal Code of Conduct?

REALITY Your ability to see problems far away, to be objective and to know what needsto be done… gives you that responsibility

2 What are Critical Situations?

2 What are Critical Situations?

Very serious problems.

2 What are Critical Situations?

Not yet a crisis…

2 What are Critical Situations?

Can be positive or negative. Or BOTH.

2 What are Critical Situations?

Unique set of characteristics.

2 What are Critical Situations?

One characteristic makes them CRITICAL.

2 Critical Situations – Business Problems

Everyday and Recurring

Critical Situations

Crisis

Examples

2 Critical Situations – Business Problems

Everyday and Recurring

Critical Situations

Crisis

Examples

REALITY Executives deal with problems every day.The best ones get very good at it.

2 Critical Situations – Business Problems

Everyday and Recurring

Critical Situations

Crisis

Examples

REALITY Organizations may face manyCritical Situations over the yearsbut never have a crisis.

2 Critical Situations – Business Problems

Everyday and Recurring

Critical Situations

Crisis

Examples

REALITY Leaders and Boards cannot be experts at dealing with every kind of problem – especially problems they have never encountered.

Threat

Decision

2 Critical Situations – Types

Planning

LeadershipTransition

Transition

Change

TroubleDisaster

AccidentsMistakes

ChallengeCampaignsInitiatives

MergersAlliances Future

Warning signs

CapitalLiquidityCompliance

Bad News

3 Critical Situations – Warning Signs

Getting Nowhere

Importance

1 x 1 > Time

Risk

New

TimeDisagree-ment

Stake-holders SkillsCrosses

Lines

Potential

Time

Importance

Potential

Risk

New | Unfamiliar

Skills

Cross Lines

Stakeholders | Multiple

Disagreement

Getting Nowhere

3 Why do Critical Situations matter?

One characteristic makes some situations and transitions

critical

Game…

3 Why do Critical Situations matter?

They are game-changers – for better or worse

Reality

3 Why do Critical Situations matter?

They are game-changers – for better or worse

Reality

REALITY Handled well – excellent upside potential Handled poorly – expensive and damaging

3 Why do Critical Situations matter?

They are game-changers – for better or worse

Questions

REALITY Critical Situations can make or break your client’s future.

3 Critical Situations – Questions

Been through a Critical Situation? What typically happens? What are the problems in dealing

with situations like these? What are the constraints – real or

perceived – in resolving them?

Constraints

3 Critical Situations – Constraints

Ethical constraints Job and time constraints Political realities Skills and experience Trust and judgment Other priorities and distractions

As an Adviser

4 As an Adviser, what should you do?

4 As an Adviser, what should you do?

FOUR QUESTIONS FOR ADVISERS TO ASK YOUR CLIENT

1. Do you see (this situation) as a problem that needs attention?

2. Do you see this getting worse? In what time frame? Alt: If nothing is done, will this improve or get worse?

3. How much worse could it get? Will it be harder to solve?

4. Would you like me to help?

4 As an Adviser, what should you do?

IF OPEN > FOUR STEPS TO TAKE

1. Ask what they have considered or done so far

2. Ask if they have ever dealt with this kind of issue before

3. Ask if they are open to outside help

4. Outline the options and agree on oneDo nothing / waitUse internal resources (till when?)Go outside

4 As an Adviser, what should you do?

If you need help, get it early

4 As an Adviser, what should you do?

Don’t squander time(time determines ability to control situation)

4 As an Adviser, what should you do?

Avoid overconfidence(always balance potential against risk)

4 As an Adviser, what should you do?

Stay ahead of stakeholders(figure out what they need and want)

4 As an Adviser, what should you do?

Anticipate(everything, then do it again)

4 As an Adviser, what should you do?

Focus on outcomes (not just getting it over with)

5 Outcomes

Two kinds of outcomes

5 Outcomes

Two kinds of outcomes

WantDon’t want

6 Outcomes

Outcomes Map

Don’t want Want

5 Outcomes

Outcomes Map

Don’t want WantBad pressLose key peopleBe embarrassedDamage reputationLose donors or partnersCreate air of suspicion

Keep it quietReflect well; add to statureKeep costs lowManage stakeholdersControlSituation to resolve

5 Outcomes – Predictor

3 - 4 Poor

5 – 6 Fair

9 - 10 High

7 – 8 Good

Strong at homeworkThorough at planningSolid funding w contingenciesStrong leadershipStrong teamGood track record w initiativesExcellent accountability, incentivesFew unknowns, good anticipation, paying attentionFewer risks, threats; better preparation

0 – 2 None

How LikelyAre WeTo Succeed?

Exercises

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6 Exercises – Ethics in Critical Situations

6 Exercises – Ethics in Critical Situations

AThe leader (your client) abruptly resigns leaving a trail of questions about financial management.

The organization doesn’t know what to say and employees believe the departure was not voluntary. But she is totally unavailable anyway.

Board was taken by surprise. Audits (and advisers) are being called into question.

Should you have seen this coming?How do you advise your client?How do you protect your client?How do you protect yourself?

6 Exercises – Ethics in Critical Situations

BYour client receives an offer to merge with another similar organization.Neither party has ever been through a merger.

The problem is that everyone knows. There is no chance for quiet due diligence.

Your client is bigger. Concern by other party is being swallowed up.

How do you advise your client?How do you protect your client?What do you do first/right away?

7 Payoffs from Critical Situations

7 Payoffs from Critical Situations

If you deal successfully with a Critical Situation,

what do you get?

7 Payoffs from Critical Situations

Resolution Positive change

Trust and confidence Perceptions change

Buy time Control Progress

ROI

8 Wrap up – Questions?

8 Wrap up – Takeaways?

One thing you know now that you didn’t know before?

8 Wrap up – Closing

Thank you

advisers in critical situations™

Entire presentation © Copyright 2012 Envisian Inc. All rights reserved.

advisers in critical situations™

Entire presentation © Copyright 2012 Envisian Inc. All rights reserved.

Photography Credits

Animal photographs courtesy National Geographic Society, 2002-2012

Disaster photos

Ship photo

Gallery of slide formats

3 Outcomes

Two kinds of outcomes

WantDon’t want

3 Outcomes

Outcomes Map

Don’t want Want

3 Outcomes

Outcomes Map

Don’t want WantBad pressLose key peopleEmbarrassedStock price to drop

Keep it quietHelp recruitingDeal to work outNo lawsuits

3 Outcomes – Predictor

5 possible outcomes

ExcellentStrongFairWeakZero