notinmyworld's blog

Nail on the Head

2009-02-27T20:02:00-08:00

"Moon Shots for Management". By Gary Hamel. Harvard Business Review, February 2009.

This HBR article represents the ideas of 35 thought leaders brought together at a conference designed to "develop a bold agenda that would spur the reinvention of management in the 21st century." The conference adjourned with the assumption that management as we know it has been incrementally improved to the point of "its limits of improvement." And the assumption that management for the 20th century is also not going to be adequate in the 21st century world. I had been thinking about that recently, reflecting on my own 30 years of experience. Were my assumptions about how to lead organizations still relevant? Was I getting stuck? It's a great question that every successful leader and organization asks every so often to avoid limited thinking, and past success bias. I do recommend buying this article and using it as a basis for a group conversation. I found myself nodding after each of the 'grand challenges' listed. Here is the one I want to emphasize:

"Fully embed the ideas of community and citizenship in management systems...In the future, management systems must reflect the ethos of community and citizenship, thereby recognizing the interdependence of all stakeholder groups." (pg 92)

One of the key questions within the body of theory of organizations is "what is the role of business within society"? The past 50 years has emphasized rewarding the shareholder first, even at the expense of other stakeholders and keeping business 'separate' from society other than those who hold a 'stake'. Taken to the extreme, this concept can result in salmonella in the peanut butter. On the other hand, an organization that does not make money can result in all stakeholders losing their 'stake.' That's been made painfully clear in the unemployment figures that seem to multiply daily. What seems untenable is to make 'retention awards' to 'keep the best people' while no one who made the bad decisions is held accountable. Where were those 'best people'? when there have been so many mistakes made? Is this kind of system reflective of our community ethos? Is this the best we can be?

I agree with Thomas Friedman who wrote in his Feb. 15, 2009 op-ed, "...the world needs crazy ideas to change things, because the conventional way of thinking is not working anymore." I propose looking at what organizations 'could be' based on what they do well. I assume they do many things well however I'm not sure that many are looking beyond return on investment. I also propose we stop imitating the current top dog and look deeper into the role of collective groups of people working in the name of an organization and how they align with our community values. Instead of following 'best-practices' I think we should get creative about "what could be". Best practices imply repeating the past or just going one better. Incrementalism is just not going to take us where I believe we could go. Ask yourself, what does being a citizen of the world mean to me and how does my work reflect the community values?

The Real Truth

2009-02-15T22:59:00-08:00

They say a picture is worth a 1000 words - so here's a movie - http://video.google.com/videoplay?docid=7065205277695921912 - watch, listen and be prepared to be re-educated about what has contributed to the current state of the economy. I couldn't help thinking when watching this brilliant documentary that the current 'Collapse of Capitalism' has been orchestrated much the same as the US Government have orchestrated many prior traumatic events dating back to the 20's. I hope anyone who takes the time to view this documentary thinks twice before blindly accepting what the government and media tells you.

Move the Jews to Cuba

2009-01-06T19:50:00-08:00

At first glance you no doubt think what a racist but think about it for a minute - when Castro dies he will leave a 3rd world country wallowing in massive squalor and political turmoil. This is evidenced by a report I have just seen on BBC about this very topic illustrating the desperate state of the country's infrastructure and housing shortage. The Cubans have no money to acquire building materials and a shortage of skilled labor combined with a need for 100's of thousands of homes so here is a suggestion for Mr. Obama and an opportunity to truly be a world leader of substance.

At least with the Jews south of the border we would have allies in Cuba instead of a natural breeding ground for more terrorists. There will never ever be peace in the Middle East until the Arabs banish the Jews from the lands taken from them by force back in the 10th century. Just look at what's taking place in Gaza now - this will simply deepen the resolve and hatred by the Arabs throughout the Middle East - I think the Jewish State should make a deal with Cuba (brokered by the Americans of course) that would see the Island of Cuba become the new home of the Jewish State.

The Cubans would no doubt welcome an opportunity for their failing infrastructure and squalid towns and cities to be replaced with state of the art cities, communications, transportation and economic growth and prosperity that would inevitably be installed by the Jews. The Jews control a large part of the worlds wealth so let them spend their hearts out and build them selves a new country away from the Arabs and allow the Middle East to succeed or fail without Jewish (and American) influence.

Such a move would generate Billions in development and solve the employment problems of the region - no doubt the Donald Trumps of this world would be in there like dirty shirts vying to build new office towers, hotels and residential developments. For those Jews who object let them stay in Jerusalem dodging rockets - a radical solution - absolutely - but tell me - what else has worked? If the Americans are truly the uncrowned leaders of the free world and capable of brokering global agreements here's one that may have some merit - if you have any better ideas I'm all ears.

The UK will be the Worlds Worst Off

2008-10-06T18:46:00-08:00

Britain will be hit harder by the global financial meltdown than any other country in the world, experts warned last night. Prime Minster Gordon Browne blames global economic factors for the economic collapse. But economists warn Brits will be crippled by the credit crunch because they have been failed by the authorities in the past. They say families are drowning in debt and have little (if any) savings; Government borrowing has hit record levels and the coffers are empty; Banks lent money recklessly; Regulators failed to curb their risky behavior. This collective lack of management behavior has made Britain the most vulnerable country in Europe to the global financial crisis.

The relative importance of the financial sector to the UK economy, the high consumer debt most of which was incurred prior to the credit crunch by �To hell with the future� minded consumers using their inflated value homes as ATM�s. Now the sharply deteriorating housing market has bared the real financial truth � and now everyone faces a rapid loss of previously ill gotten gains. Families face the slow-down crippled by huge debts. The total UK debt stands at �1,448 Billion � an average of �30,255 for every adult in the country, this according to Charity Credit Action organization. It�s going to be very difficult for families who will be forced to stop spending money and start saving. The era of easy credit is over.

Europeans are better placed to weather the storm because consumers have saved more and don�t carry as much personal debt. Although the global crisis began in the US, its economy is likely to recover more quickly � it typically goes into recession quickly but recovers just as fast. The fallout for Brits will be long and severe and it is time to stop fine tuning and time to switch channels. It is time to nationalize the global banking industry, allowing these so called financial gods to play with our livelihood has been proven to be our undoing. Will the powers that be have the balls what needs to be done? I doubt it.

This �400 Billion Scam Won�t Stop the Rot

2008-10-06T18:24:00-08:00

The �400 Billion rescue package is a total rip-off that will mostly benefit shareholders at a huge expense for the US taxpayer. The pockets of reckless bankers and investors will be made fatter under the fake argument that bailing out Wall Street was necessary to rescue Main Street from a severe recession. This level of lie is akin to the Weapons of Mass Destruction bullshit we were all given to justify invading Iraq. The Treasury Plan is a disgrace and does nothing to resolve the major stress in money markets that are now close to meltdown.

It is pathetic that Congress did not consult any of the economists who have presented alternative plans that were more fair and efficient and less costly ways to resolve the crisis. This is a bailout for the rich, the well connected and Wall Street: A Treasury scam that does little to resolve the debt burden of millions of home owners. It is now clear that the US Financial system, and that of the world financial system, is in cardiac arrest and we are at risk of a global meltdown. To avoid another Great Depression, radical and unorthodox policy action needs to be taken in the US, the UK, Europe and other advanced economies.

Regardless of what we do from now on, the US and the UK will experience any ugly recession and a financial and banking crisis. But radical action can prevent a nasty two-year recession turning into a global meltdown and a decade long depression. A silent run on banks is under way, which will turn into a roaring Tsunami of epic proportions if emergency action is not taken. A crisis of confidence means even the most reputable and trustworthy financial and corporate firms are at risk of going bust � its already happened. To stop the run, the US and UK governments need to introduce a 6-month blanket guarantee on all deposits � not just those under �50,000.

This needs to be followed by a very rapid shutdown of insolvent institutions to prevent them acquiring more deposits and making even more risky loans. This generalized loss of confidence in financial markets and institutions must be reversed. If not the next step of this panic could become the mother of all bank runs and a systematic meltdown of the entire financial system. The scary thing is that US and UK governments seem to be clueless about what needs to be done other than protect the well connected.

What about the Consumer

2008-09-23T16:24:00-08:00

So Bush has bailed out the banks, which is akin to granting amnesty to Bin Ladin � too bad it won�t work � it will simply prolong the inevitable and provide an opportunity for the speculators to make more money. It won�t work because the banks won�t pass on the same �Forgiveness Strategy� to their customers � the ones they�ve been robbing for as long as they�ve been in existence. I have been saying for years that the way to deal with the global financial problems is a universal forgiveness of debt � it started some years ago when the Big 7 began waiving debt owed by third world countries. It was done with the knowledge that leaving the debt in place would be counter productive to those countries ever having a chance of restoring pride in their existence and any chance of financial stability. When faced with hopelessness countries and their people tend to begin killing each other.

Now the powers that be have realized that the banking system have become architects of their own demise. Banking has become an immoral industry churning out fictitious wealth by preying on the ignorance of the masses. They have forced credit on the consumers by offering fictitious rates on mortgages, blindly allowed people access to loans and credit card debt knowing full well that it was way beyond their means. The governments are just as guilty as the banks as they have turned a blind eye to this viral lending which has created a massive pool of toxic debt. Preferring instead to say and do nothing while basking in the glow of a so called vibrant economy fueled by false wealth. But what amuses me is that the real financial crunch seems to have been forgotten. It will be experienced by the millions of consumers hanging on for dear life with mountains of secondary debt � who is going to forgive their debt � the banks � give me a break.

Money makes the world go round and the world revolves around money � but if the consumer is handcuffed with unaffordable mortgages, auto loans, lease payments and mountains of credit card debt whose going to spend the money? Adult life begins as an initiation into debt. The unspoken message of the Blair boom years was always spend spend, spend. Why deny yourself that Easy Jet mini-break or must have handbag? Whack it on the plastic and pay whenever. Even gambling was rebranded from a vice to harmless fun � talk about the decay of morals. A credit boom fuelled the economy and a government, fearful of recession, was never going to advise its card juggling citizenry: �For your futures sake stop bloody spending money you don�t have�.

And now the financially illiterate are at the heart of the current crisis in the sub-prime fiasco. The poor and ill educated, desperate to own their own homes, never fully comprehending � or, more likely, not being told by commission motivated lenders and realtors � that interest rates could rise and that their homes will be lost. In Britain the only thing preventing families throwing up their arms and despair and declaring bankruptcy has been the pride in owning their own home. Now that millions will end up in foreclosure their pride will be shattered and their willingness to rob Peter to pay Paul will diminish resulting in millions of personal bankruptcies. Under current credit criteria once a bankrupt you are a financial leper � never to be trusted again with virtually no access to credit for the foreseeable future.

In this scenario there will be less and less money to make the world go round � the economies will stagnate, mass unemployment will begin to compound the problem. Crime will increase as good people become desperate to provide for their families, in effect we will experience serious social unrest. How can this be prevented? The only way to maintain the consumer�s ability to buy is for the financial industry as a whole be made to write off a substantial portion of individual consumer debt. This was granted immorally in the first place using unscrupulous credit granting in an insatiable desire to drive up share prices and ultimately director�s bonuses and dividends.

This could be done by applying fair and reasonable financial affordability ratios taking into account family income relative to the debt they can reasonably afford. Apply the same principals as are utilized by consumer affairs when one is faced with an Orderly Payment of Debts order. The adjudicator takes the net income, deducts housing costs, food, transportation and clothing and whatever is left is what is left for the creditors to be distributed on a pro-rate basis. In this scenario the creditors have no choice but to accept this revised offer of payment but at least they get something. The consumer is allowed to retain their home and afford the basics in life and most importantly their personal pride. To do nothing and allow the banks to bring in their collectors en masse would result in far more expensive consequences for the country, not only financially but socially. To bail out the banks and not the consumer is akin to giving the bartender the breathalyzer.

Whose to Blame for the Credit Crunch

2008-09-16T16:21:00-08:00

The credit crunch tells us perhaps not. The Holy Grail of medieval science was to find the formula to turn lead into gold. Today, globalisation is driving down profit margins in making everything, from steel to software. If you make a profit, soon someone in China will make it be gone. But deal-making, putting companies together and taking them apart, financing it all, offers great rewards. Then there are the risks. Making risks evaporate in the morning sun, or the shadows of Wall Street, seems to be where the wealth lies.

Enter our financial engineers. They don't deal in metals or mega bytes they deal in companies that make them. Combining them and financing them, taking them apart putting them together again. That's the stuff of modern fortunes. But what of those risks? The engineers that assemble these deals say all the risks can be laid off on other engineers and their clients. And by investing in each other, everyone's money will be safe. Profits without risk. They even thought they could do that with sub-prime mortgages - home loans to people who really couldn't afford them.

They bought each other's debt and erased one another's risk by dealing with one another in a giant chain letter. Until someone realised that what they were trading wasn't worth a hill of beans. The house of cards has collapsed, but were these guys the fools? Or do true wizards live on Wall Street? Perhaps they do, because the engineers have escaped with their big paydays and bonuses, and central banks like the Federal Reserve and Bank of England are underwriting the tab to foist the bill on all of us - the taxpayers. Who are the fools here? Perhaps you and me? The engineers have turned worthless paper into personal fortunes by sticking us with the tab.

Some greed is necessary to keep capitalism going. But too much greed will bring it down. Even Adam Smith, the father of economics, understood that capitalism requires some degree of trust. Yet the greed that's taken over our banking system is undermining the trust of investors, who are necessary if there's going to be any money in the banking system to invest. Here in America, the authorities are now chasing down investment bankers who recommended their giant hedge funds to investors, even when the bankers knew the funds were about to implode.

Greedy bankers like them have been running a giant con-game. They figure if they can persuade investors to buy something that's actually worth nothing, it might appear to be worth something, which lets them persuade others to buy even more, because - after all - by this time lots of investors are buying it. And then when the bubble bursts and investors lose their shirts, the bankers keep their fat commissions and a percentage of the upside gains. But what they've left out of the calculation is the trust needed next time a banker claims something's a good deal. You see, trust is a precious commodity. And it's eroding fast - which is why the credit crunch continues.

Now, we've been here before: the late 1920s and an anything-goes banking system filled with bankers ready to sell securities to the biggest sucker to come along next. Wealth then was as concentrated as it is today; debt piling up as high as it is today; greed as rampant as it is today. And then what happened? The bubble of all bubbles burst on 21 October 1929, ushering in the Great Depression. Franklin D Roosevelt told Americans they had nothing to fear but fear itself. But the fact was, the financial system had let them down - and they wouldn't trust it again for decades. Greedy bankers beware.

In his latest book, the billionaire investor George Soros makes the case that we are witnessing the end of a 25-year super-bubble. I certainly agree with his observation and would just note that the time-frame of this super-bubble roughly approximates to the career of Alan Greenspan, who, in my opinion, is responsible for its creation.

It was Alan Greenspan, as chairman of the Federal Reserve, who decided that central banks like his should not try to dampen down the sort of speculation that leads to bubbles in the first place. To do that might have slowed economic activity, an unacceptable possible outcome. But then, when the speculative bubble collapsed, after the prices of things like companies no longer represented anything remotely resembling their underlying value, Alan Greenspan just bailed out the financial system.

What began as small bail-outs became big bail-outs, from the year 2000 onwards. Interest rates were taken to the absurdly low level of 1% and held there far too long. That engendered a housing bubble, which was nourished by the complete abdication of lending standards in the banking system. Securitisation - swapping hoped-for future cash flow for large amounts of cash now - was spearheaded and championed by Alan Greenspan himself.

Deregulation was thought to be the solution to any and all imbalances, as the market would find any weak institutions and punish them for bad decisions before the whole system became rotten. The truly sad part is that this outcome was completely foreseeable. It was possible to anticipate a catastrophe of such dimensions, even as the housing boom was still in full swing. Unfortunately, the very institution that had the regulatory authority to supervise the banking system was the one leading the cheerleading - namely, the Fed, in the form of Alan Greenspan. In the end, it was sort of like putting the bartender in charge of the breathalyser.

The American dream: having a home of your own can represent security and, in the best-case scenario, a source of building personal wealth. To guide us to that dream, most home-buyers would be lost without the assistance of a well-qualified realtor, estate agent, property agent - whatever you call them, people who handle the sale of houses. The home-buying process can be a daunting experience. So, to their credit, good realtors are a real asset for potential home-buyers.

But there are many realtors who were so zealous to get potential home-buyers into homes and earn their commission that they were more concerned about closing the deal than making sure their customers could afford the payments down the line. No-one really knows how many realtors fall into that category but one thing is for sure: in today's current mortgage foreclosure crisis, there's a sobering lesson for anyone involved in the home ownership business.

It isn't just about getting a buyer into a home - it's also about making sure that that buyer has access to quality credit that isn't going to result in a foreclosure, should the buyer hit one rough bump in the road. Credit Suisse has predicted that roughly 6.5 million homes will go into foreclosure in the next five years. That's a lot of lost dreams. Knowing what we know now, realtors on the frontlines of the home-buying process can and should do more to educate their clients about the pitfalls of mortgage financing. Maybe they should recommend more modest properties, too.

That old real estate adage - figure out what you can afford, then stretch a bit - shouldn't be the advice that realtors give today's buyers. Today's message should be: buy something that fits your budget, today. Realtors ought to be giving their clients advice they can take to the bank, rather than to the poorhouse.

How I would Deal with 'Broken Britain'

2008-09-16T11:20:00-08:00

Having originally been born and raised on the tough streets of West Yorkshire and having the foresight to escape back in the early 70's I know all too well the mind set of the 'Uneducated great unwashed'. There have always been gangs and bullies and known bad guy's who infect every working class neighbourhood but never, never like it is today.

I have somewhat of a unique insight into this problem as I have recently returned to the UK after spending most of my adult life in North America. What I have observed since my return has been a shock to the system as I have witnessed first hand these low life council estate thugs terrorizing our neighbourhoods. It's time for the authorities to wake up and stop pussy footing around with these animals - it is too late to use the timid laws of the past to deal with this chronic social plague of today. See my solutions at the end of this sermon!

I believe the problems really started back in the 60's when we suffered a 'Lost' generation who used 'Sex Drugs and Rock & Roll' as an excuse to rebel against the values taught to them by responsible parents and committed teachers both with the power to dish out reasonable physical punishment. I went to an all boy�s school and believe you me the punishment dished out was reasonable and appropriate (although I didn't think so at the time). Looking back it was also very necessary and in 9 out of 10 cases fully deserved. Needs to be re-instituted!

This generation rebelled against societies values and grew up to be the lousy parents of the 80's that spawned the vermin we now see on the streets causing all this social unrest. Add to that the removal of the 'Right' of both parents and teachers to apply a crack to the back of your ear when you stepped out of line and you have the ingredients for a wayward generation. This needs to change!

On top of this you have the seemingly uncontrollable and insatiable violence perpetrated by Hollywood, television and the written media which have collectively contributed to the decay of people�s morals in general. By hiding behind the 'Freedom of Speech' they have chosen to forsake good taste in pursuit of the almighty dollar and ignored their professional responsibilities. This needs to be controlled!

Just take a step back and give your head a shake the next time you watch one of Hollywood�s latest blockbusters, the rapes, the uncontrolled and vivid acts of violence, the twisted plots of deranged fictitious individuals. Check out much of the programming on TV that is often just as graphic, listen to the language that is now considered acceptable, you wanna have phone sex - no problem - just watch the commercials on many of the channels after 11:00 pm. This needs to be controlled!

Now throw in the contribution of the internet and then consider the amount of illegal and immoral activity that this brings into our living rooms and bedrooms. Although it is a marvellous invention and is used in constructive ways such as education and communication it was never designed to be a platform for all that is wrong to be blasted into our homes and polluting impressionable minds. I remember when I bought my first computer for the home, at the time I had 2 boy's, one 8 and one 10 - they were told right at the start that it was for education only - not entertainment - and that's how it was used. Responsible parenting maybe?

Now look at the scams, the spamming, pornography, the incestuous chat rooms, the sex chat sites and who knows what else that is out there. Add to this the types of computer games that our kids now demand to own and consider how many hours they spend watching and participating in extreme violence. We kid ourselves that they won't take what they internalize out into the real world - but they do - and now you see it on the streets. These games need to be banned!

And last but not least we have today's modern music, specifically 'Hip Hop' and 'R & B' which is nothing more than American Nigger gangs promoting drugs, violence, guns, sex, hookers and generally objectionable lyrics. Check out all the kids walking around with I Pods with this crap reverberating in their heads. Not to mention the fact that it's lousy music. Needs to be banned!

On Friday and Saturday nights unhappy, uneducated council estate heathens descend on the bars and pubs, drink themselves silly and go looking for trouble. These are the same people who spend their sober time doing all the things I have mentioned above and it is this combination that is destroying our country.

When you add all these things together you have the recipe for what we have today - it's very simple - monkey see monkey do. It's time for the politicians and the authorities to change the rules, the old ones don't work anymore - proof is on our streets, in our newspapers and on the news on TV that are full of violent acts and unsociable behaviour. Somebody has to have the balls to implement some or all of the following measures to re-establish a safe society before its too late - here's my recommendations.

1. Remove the restrictions from parents and teachers in dealing out controlled and disciplined physical retribution in schools and their homes - no public displays of assault.

2. Ban all violent computer games!

3. Ban 'Hip Hop' black gang culture music!

4. Increase the legal drinking age to 21!

5. Control Television - raise the 9:00 pm watershed to midnight!

6. Simplify parental controls on TV's and computers!

7. Create 'Boot Camps' and send any teenager committing any crime away for 90-days - first offense!

8. Tell all kids entering secondary school that if they don't graduate they go to 'Boot Camp' for one year!

9. Make parents financially responsible for their kid�s crimes!

10. Take away pubs licenses for serving young people too much booze - outlaw binge drinking promotions!

Of course under our present political system no politician would have the balls to introduce and implement these changes - there is no point implementing just one or two of them (although it would help). All of them are required to correct the disgraceful behaviour of the youth of today, but equally importantly ensure we re-instil values in the youth of tomorrow.