Title Details

JOEL E. MCPHEE, JR., is a business strategist, former executive, and a keen student of understanding how organiza­tions as systems work. Through a holistic and integrated approach, he provides consulting services to top Fortune 500 companies. A former Senior Leader at Wells Fargo, Inc., Joel was the Chief Risk Officer for the company’s 18,000-member Operations and Technology division, and headed its Global Delivery Center. During his more than 20 years of experience he has held critical roles at other top financial institutions, placing him at the forefront of addressing some of the most formidable challenges facing this industry. He brings his rich background and fresh insights to each client. Joel and his team provide strategic consulting services in the areas of Strategy, Risk, and Change Management.

Joel, who is also an attorney, co-authored the article “Why Government Regulators Need Corporate Boot Camp” for The Washington Post. He is a sought-after industry expert and speaker and is quoted regularly in industry articles. Most recently his thoughts on off-shore banking practices were published in Bank Technology News in the article “A Reversal of Fortune.”

Learn more at : www.JoelMcPhee.com

Acknowledgments xv

INTRODUCTION

Mastering the Complexities of a New Age 1

CHAPTER 1 The Round World, the Square Pegs: Redesigning Organizations to Manage the Risks of a Different World 5

Righting the Ship: Managing the Complexities of a New Age 5

The Untold Story of Wachovia’s Demise: The Rise and Fall of an Industry Giant 7

A Symptom of a Much Larger Challenge 12

The Burning Platform: Why the Need for Change 14

Leveraging the Power of People 15

A World of Patterns: Does Nature Hold the Answers? 16

References 17

CHAPTER 2 The Three Elements: Creating, Facilitating, and Supporting Your Competitive Advantage 19

A Framework Taken from Nature 19

The Human Body as an Example 22

Ecosystems 25

The Three Elements and Our Marketplace 26

The Three Elements and the Auto Industry 31

The Three Elements and Organizations 32

The Creative Element in Organizations 34

Information Technology as an Example 36

Everything Old Is New Again 36

Summary 38

Questions 38

Note 39

References 39

CHAPTER 3 The Three Forces: Mastering Strategic Risk with Repetition, Balance, and Movement 41

Anticipating Change: Toyota 41

Three Forces that Dictate Performance in Systems 43

Movement and Change in Nature 44

Movement, Balance, and Repetition in Our Marketplace 48

Change, Balance, and Repetition in Organizations 51

The Three Elements and Forces and Our System of Government 54

The Federal Government Supports, Facilitates, and Creates: A Fractal View 57

The Federal Government and Oversight 58

A Holistic Approach 59

Summary 60

Questions 60

References 61

CHAPTER 4 Transforming the Corporate Agenda: Applying the New Learning to Master Strategic Risk 63

Aligning the Three Elements and Forces for Impactful Results 63

The Three Elements as Key Drivers of Organizational Performance 65

Creativity and Innovation through the Lens of Industry Leaders 67

Identifying Additional Centers of Creativity and Growth in the Most Unlikely of Places 71

Growth through Facilitative

Functions and Capabilities 74

Growth through Supportive

Functions and Capabilities 76

Repetition and Operational Excellence 78

Wachovia and Merger Integration 78

Managing Movement and Change 81

The Value of a Transformation and Change COE 81

The Importance of Measuring Key Controls and Activities 83

Assessing Key Drivers through the Universal Guide 85

Summary 88

Questions 89

References 89

CHAPTER 5 Risky Business: Why the Environment Should Matter to You 91

Our Self-Centered Interests 91

The Truth about Systems 94

Our Commercial Ecosystem 94

Driving Growth and Shareholder Value through Sustainability 98

Demystifying the Myth . . . What Really Is a Corporation? 100

A Lesson on the Environment and Sustainability 101

Other Factors Driving Commerce 104

Improving Our Interaction with the Planet 105

Making the Case for the Environment 110

The Corporation and the Community 110

The Realities of Life Downstream 111

In the End, It’s About the Individual 112

Summary 113

Questions 114

References 114

CHAPTER 6 Governance, the Cornerstone of Risk: The True Role of Accountability in Organizational Systems 115

Governance in Natural Systems: The Human Brain as an Example 115

WorldCom and the Bernie Ebbers Story 117

Strategy and Governance 120

Complacency and Governance 123

The Role of Accountability in Systems 123

Accountability at Adulant Technologies 124

The Importance of Roles and Responsibilities 125

A Crisis of Corporate Culture: The Story of News Corp. 127

The Independent Board of Directors 130

Summary 132

Questions 133

Notes 133

CHAPTER 7 The Game Changer: Stewardship—Taming the Land Grabbers, Passive Aggressors, and the Mighty Ogre 135

The Coup d’État 135

It’s Time for Change 137

A Profi le in Leadership 144

Summary 151

Questions 152

References 152

CHAPTER 8 The Risks of Human Capital: Unleashing the Conceivers, Deal Makers, and Sustainers 153

A New Human Resources Model 153

The Internet Example 164

A New Model for Evaluating Teams 165

The Diversity Trap 169

The Three Forces and the New HR Model 170

Summary 173

Questions 174

CHAPTER 9 Waking Sleeping Giants: The Importance of Empowering Employees 175

The Empowered Employee: The Key to Driving Peak Performance 175

Citrix Systems Inc.: Cultivating a Culture of Empowerment 178

Adapting to a Mobile Workforce 180

Employee Engagement and Its Linkage to Empowerment 181

A Professional Development Journey 183

Reinvention and the Individual 185

The Learning Organization’s Connection to Movement and Change 186

The Importance of Infusing New Blood into Your Organization 189

Employees Driving Shareholder Value 190

Tapping Employee Resources to Enhance Value 191

Do They Have a Dog in the Fight? Engagement through Creating a Compelling Vision 192

Seizing the Opportunity at Hand: A Message to Employees 196

Summary 198

Questions 199

References 199

CHAPTER 10 The Shining Moment: Unlocking the Potential and Promise of the Twenty-First Century 201

Henry Ford: Riding the Wave of Converging Forces 201

Our World Then and Our World Now 203

The Call for Transformation 204

Mastering Change Matters More Now than Ever Before 205

Enhanced Capabilities Driving Change 207

Human Beings: Our Greatest Natural Resource 208

Man’s Coming of Age 210

What Will Be Our Lasting Legacy? 213

The Way of the World: Revisiting the Core Elements and Forces 215

The Emerging Steward: Why Organizations Must Lead from the Edge 217

The Masters of Our Fate 218

Summary 220

References 221

About the Author 223

About the Companion Web Site 225

Index 227

 “Mastering Strategic Risk is a must read for all business people. Joel McPhee offers a philosophy that is unique, understandable and very logical. This book WILL help businesses of all sizes and the individuals involved with those businesses, grow and prosper financially and in ways then they cannot conceive of, if they do not read this book!"
—Rick Sures, President Allied Group-CroftgateUSA

"Books, such as this one by Joel McPhee, which address Risk Management appropriately, as this one does, are invaluable in advancing knowledge in this important discipline. Too often Risk Management is viewed as risk avoidance, which is simply a path to an unsuccessful end. Understanding and wisely addressing and mitigating the risks a business faces lead to success. Joel addresses that appropriately in this insightful treatise. The complexities impacting business decisions require disciplined approaches to risk identification, capture and mitigation and Joel's writing provides a methodology to successfully execute one such disciplined approach."
—Larry A. Hilsheimer CFO and Executive Vice President Scotts Miracle-Gro

"Joel McPhee has spent years in or advising large companies. He relishes each new challenge with a restless, imaginative enthusiasm and understanding of the rhythm of business. This is an executive who brings wisdom, energy and genuine joy to the table, an uplifting voice and an original thinker. His outlook is infectious in ways that reinvigorate the despondent and motivate them to rise to the challenges presented in today’s daunting business environment."
—Lawrence Baxter,William B. McGuire Professor of the Practice of Law,Duke University,Former Chief Ecommerce Officer and EVP, Wachovia Corporation 

"I have been associated with Joel McPhee for 15 years and have found his insights and approach to solving business problems to be both innovative and progressive. He brings a level of enthusiasm and positive energy to the task at hand, setting the stage for productive and energetic collaboration, and ultimately success." 
—Paula Herzberg,SVP, Regional Banking Compliance and Operational Risk DirectorWells Fargo Corporation

"Mastering Strategic Risk is a thought provoking and informative title that connects patterns in nature to the critical systems in our world. Filled with brilliant insights, this fascinating read will help us see the world of business through a whole new lens. As an ingenious guide, it demonstrates why creativity is the driving force in all systems. “The Power of Three” is that book for any reader who cares to know how our world works."
—Suzanne Fetscher,President and CEO,The McColl Center of Visual Art

"We hired Joel to work with our team as we needed someone who could guide us through a highly turbulent and dynamic regulatory environment. It was the best hire we ever made. As a proven and successful leader in large financial institutions and as an Attorney his inquisitive and curious style; his ease of asking questions heightened the awareness of our leaders and lead us to deeper conversations about the meaning of our work. Everyone at the company wanted him to be a part of their brainstorming sessions. He made everyone think bigger!"
—Jordan A. Miller, Jr., President and CEO,Fifth Third Bank of Central of Ohio 

"Unprecedented and fresh insight!  For too long we’ve created an atypical division between our organic world and socially constructed systems. Moreover, as our social systems continue to fail, we overlook the numerous lessons found in our natural world and repeatedly turn to the same flawed systems for answers. “Mastering Strategic Risk” breaks new ground, redirecting us to lessons that are obvious, but remain hidden in plain sight to solve every day organizational challenges. McPhee clearly illustrates the connection and interdependence of our natural systems with our socially constructed systems.  This book is a must read for managers and future managers who will provide transformative and sustainable organizational leadership." 
—Hugh Wesley Carrington, Ph.D.Learning & Organizational Development Specialist, North Shore − LIJ Health SystemAdjunct Professor, Long Island University: Business School & Department of Social Work

"For those of us who have known Joel McPhee over the years, he has always been a revolutionary thinker and master motivator with an unbridled enthusiasm and passion for making things work better. In “Mastering Strategic Risk” Joel McPhee addresses how businesses can truly realize its own potential where he explores the role of the business itself, its people, and the commercial eco-system around the business.  In the world of cookie cutter corporate advice books, this title truly stands out for the critical insights and specific guidance it provides to the business leaders to guide their businesses into the 21^st Century and achieve break-through performance."
—Zaki Saleh, Business Development Vice-President, Northrop Grumman

"I have had the pleasure and experience to work with Joel McPhee. “Mastering Strategic Risk” is a direct collection of his experiences and innovative management practices and his natural intuition of practical business knowledge applied to the balance in the corporate world.  It will make you pause and take account of your strategic direction and business model. It can be a game changer for the new global business model. He brings together the whole organization correlating interdependencies and similarities between nature and your business organization. This is a great book to reflect on your present course and incorporate his insights into your strategic thinking." 
—Michael Monaghan, Principal Monaghan and Farese Consulting,Executive in Residence Duke University Fuqua School of Business

"I have had the distinct pleasure to work closely with Joel McPhee. I have consistently found Joel to be innovative and insightful as we sought solutions to clients’ business issues. Joel not only possesses the ability to structure an analytical approach to problem solving, but is able to communicate it, both in written and oral fashion, in such a way as to allow the recipient to clearly see their way forward. His combination of background, experience and skills makes him a valuable author of innovative business practices." 
—Mark E Delane, Retired Partner in Charge, San Diego Office,Deloitte Consulting

"I've known Joel McPhee professionally for over 15 years. He is a creative and innovative executive who brings a high level of professionalism, passion and integrity to his work. As a top executive in banking, he has always been the consummate problem solver, providing pragmatic solutions to some of the most complex challenges."
—Carmen Adams  Senior Intellectual Property Counsel,Hewlett-Packard

"Filled with practical and important insights, Mastering Strategic Risk is the ideal book for anyone seeking an in-depth examination of the foundational and cultural development of business in corporate America. Joel McPhee beautifully and seamlessly moves through the whys and where’s of business past into a personal evaluation of one’s role in today’s work environment, as well as into future needs and aspirations."
—Tom ZiglarCEO, Ziglar Inc.