Half the World Away

Beware Irrelevance - part one

I've been thinking a lot about risk on my travels and I'm coming to the conclusion that most organizations have got it all wrong...read on...

Credit risk, interest rate risk, foreign exchange risk—these are all risks that are familiar to managers.  Most organizations have sophisticated mechanisms for measuring and managing such risks. Of course, sometimes these procedures breakdown as was spectacularly demonstrated by the absence of effective credit risk assessment in the U.S. mortgage market between 2003 and 2007.  However, as the world becomes increasingly interconnected and communications are near instantaneous a whole new class of risk has emerged that requires close attention by managers—that is the risk of irrelevance.

Managers agonize over the threat from competitors, analyzing every piece of new intelligence for insight into a competitor’s intentions. The big competitive rivalries are like heavyweight-boxing matches used to be when Ali fought a continuous war of words, and the occasional actual fight, with Frazier and Foreman:  over-hyped, vitriolic but great spectacles.  Think of Coke and Pepsi, Bud and Miller, Apple and Microsoft, BBC and ITV, and the Beatles and Stones. In each case the players are partly defined by their rivals. 

Rivalry is a powerful motivating force, driving each player to push harder for an edge, but it can also be distracting.  Did Coke and Pepsi spend so much time watching each other that they were slow to recognize the redefinition of the soft drink market as bottled waters, iced teas and other non-carbonated beverages took hold?  For decades, U.S. car companies fought each other for market share and largely ignored the growing threat of import models and major airlines disparaged upstart Southwest for years before recognizing that it was their own model that was broken.

However, being vanquished by a rival is often not the primary risk an organization faces.  Far more dangerous is becoming irrelevant in the eyes of your customers.

To be contiuned...

Watch out Bill Bryson and J.K. Rowling - Axson's coming!

The greatest book ever-written by a fat, 47-year-old Brit living in Akron Ohio is slated for publication on September 15th - the author's birthday no less - perfect market timing don't you think?

Half the World Away is unique in the annals of publishing and is sure to set new benchmarks in the literary world.  A humorous romp through my 20-year American odyssey from wide-eyed naive tourist to fully-fledged citizen, it chronicles encounters with deer while riding a Harley, observations at a sales convention for the American Society of Plastic Surgeons, class warfare in North East Ohio, unique cultural experiences at the Cleveland Schvitz and much, much more...

To whet your appetite here is the cover art -- watch this space for the the next exciting installment in the Half the World Away over-hyped launch campaign...

Place your bets - on the economy or the roulette table - the result is the same

Can anyone forecast the future?  Recent headlines offer an interesting perspective on the futility of forecasting. After weeks of green shoots, rallies, better than expected numbers the reality is beginning to set in again.  What is interesting is how much reliance many place on these diverse, considered but ultimately futile projections...

"Economy to Stay Weak For a Number of Years" - Bill Gross - Head of Pimco

"We're in the middle of a crash. So if I'm going to forecast something, it is that it's going to get worse, not better." Nassim Taleb, author of "The Black Swan

Sir Martin Sorrell (Head of WPP) sees no signs of economic shoots of any colour

Why is the weather so perfect in SoCal?

Finally a few days R&R in Southern California.  Been here three days and the sun hasn't stopped shining with the mercury seemingly stuck at 72F - its a tough life sometimes. 

Mission Beach north of San Diego full of the beautiful people.  I definitely spoiled the scene.  Here are some shots of me and my ladies enjoying the zoo, the beach and the Four Seasons at Avaria - the sign in the last pic gives a true CA health warning that is posted on the front door of the hotel!

 

Politics pays! Do they have any credibility left?

"The House of Representatives, with little comment or opposition, on Friday approved an 8 percent increase in the budget for members' office expenses."

Can I approve an 8 percent reduction in my taxes please?  It's nice to know our elected representatives will not suffer during the recession - its important to keep all the mistresses on the payroll during these challenging times.  And to think the scandal in the UK was over allowances of up to $75,000 compared to the $1.5 million each Congressman gets. As I was told as a kid - everything is bigger in America!

Fiat and Chrysler? Does not exactly set the heart racing does it?

So who wins in the Fiat/Chrysler deal?  It reminds me of the combination of KMart and Sears a few years ago when my overall reaction was "Why bother?"  No doubt someone somewhere sees value in the deal and clearly the U.S. government sees it as a way to save some jobs, at least in short term, but I cannot get excited about the deal's likely progeny  when and if they roll off the production line.  Putting a bankrupt company together with a marginally successful one, again shades of KMart/Sears, simply does not make much sense.

Maybe I'm wrong but there is a long track record of mergers which had much more logic than this one failing miserably--remember AOL/Time Warner, Mattel and The Learning Company, even Chrysler and Daimler had a smidgen of promise...

It will be a very different GM

If GM is to emerge from bankruptcy and have a viable future at lot will need to change--can the government as majority owner make it all happen?  We shall see.

So much of the focus has been on getting GM's costs and debt under control.  Reducing the number of brands and the number of dealers are all essential steps but the ultimate test will be whether the company can design and deliver exciting, well built cars that customers want to buy at a price they want to pay.  Even if they do this, they will still need to regain customer trust that years of missteps has eroded. 

The automotive industry is changing fast and it now seems clear that the demise of traditional petrol-engined cars is a "when" not "if" question.  Will GM ever be able to afford the investments needed to retool a hundred old business and manufacturing model?  Cheap government loans will help but it is going to be awfully expensive.  A more interesting question is how foreign buyers will perceive a company subsidized by the U.S. government; after all U.S. companies have complained about foreign governments subsidizing companies who compete with American companies for years - think Airbus, British Airways, Air France.  Now the shoe is most assuredly on the other foot.

The rise of Government Motors from the ashes of General Motors marks a sad day for the American economic miracle. 

The Tokyo Experience

Its expensive, crowded and the locals are scared of H1N1 but I really enjoy Tokyo.  The people are so respectful and polite and in my case made me feel genuinely welcome.  I was made to feel like an honoured guest and for the first time was asked to have my picture taken with attendees at my speech.  A very elegant older lady and two beautiful young colleagues - see the evidence below.  I then hooked up with a former colleague - Charles - we worked together 25 years ago and had not seen eachother for 13 years.  We had a great time and consumed much sake!  It just goes to prove that friendship is something worth maintaining.

Toilet training - Singapore style

Finally got some sleep over the weekend in Singapore, after six countries in six days.  Interesting place Singapore - its got the best air conditioning in Asia so it got my business.  Barely ventured out for two days - no need to - dining, movies, bars, hotels, shopping and mass transit all accessible without venturing outside. 

Hotel was "trackside" by the F1 circuit so I spent sometime imagining Lewis, Jensen and the boys screaming down Raffles Boulevard come September.  Politically Singapore is not really a democracy but it works very well.  They take great pride in their city, sometimes excessively so - I think littering is capital offense.  On this trip the guidance of the masses to be sensitive to their fellow citizens manifested itself for me with the sign below found in a restroom at the Marina Mall:

I was quite surprised there wasn't an offer of free lessons and unlimited "target practice" to improve your aim although I suspect that oversight will have been corrected on my next visit.

Oh, the joys of being a jet-setter!

Now on my fourth country in 24 hours and I'm knackered! Dinner in Hong Kong last night, two hours sleep in Singapore, lunch in Kuala Lumpur and hopefully a cold beer any minute now in Bangkok. Not very glamourous as I sweat my way round Asia!  

So what are the big issues here in Asia?  Well they are certainly more sanguine about the recession than us Europeans and Americans.  One example comes from today's edition of The Straits Times, one of the Singapore's leading newspapers.  The letters page was full of bile and venom -  but not about the recession, the credit crunch, British MP's ripping off the taxpayer and Sarah Palin's upcoming biography.  No the top two letters addressed the real issues of the day.  First we had a scathing attack on public servants under the headline, "Bus drivers should brake more gently"  and then we had a brutal discourse on modern youth under the headline "Library visits ruined by unruly students." 

Isn't it nice to see that some countries still focus on the real issues of the day?