What you could get away with… if you were a corporation (by Jon Stewart of The Daily Show)

The Daily Show, by Jon Stewart, is one of my TV habits. It’s a satirical news show, that specialises in showing up the political and corporate establishments for their hyprocrisy. Their staple diet is to take sound bites from the day’s news, and then contrast this with archive footage from the same person a few years earlier – typically making precisely the opposite point.

While some of the humour can be puerile, underneath the veneer of Comedy Central lies Jon Stewart’s insightful and incisive depth of understanding of the political scene in the US. His interviews are genius, and some of the pieces on the show are breathtakingly brilliant in their analysis.

One of the best I’ve seen in a while was from Tuesday’s edition, in which Jon tried to help us see the depth of corruption and hubris found on Wall Street. The segment was called “In Dodd We Trust”, and you can see the 10 minute video here or below (if you’re not in the UK, that is). (Get past the first five minutes or so, to reach the truly great bits!)

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Lessons from Kraft shutting a Cadbury factory

Today, Kraft executives came before the British Parliament to answer queries about the closure of a Cadbury’s factory near Bristol with the loss of 400 jobs. The reporting on this by the news media is sloppy and sensation-seeking. Kraft is positioned as the “evil empire”, too arrogant to even send its CEO to the hearings.

Yes, Kraft “promised” before the Cadbury’s takeover that they would not close any factories. And, yes, it is tragic that another few hundred people will be out of work by the end of next year. But, there is no surprise here, and Kraft should not be seen as the (only) villian.

Firstly, Cadbury had already announced the closure of the factory in 2007, planning to move production to Poland. Secondly, over the past two years, Cadbury has reduced their staff count by 7,000 people (that’s halving their workforce – according to the FT). Kraft it could be argued has, in fact, stemmed the flow of retrenchments from Cadbury. Why is there no mention of this today?

Notwithstanding the talk from headline seeking journalists or nationalistic Brits who can’t stand to see American firms take over “British” companies, there is actually no surprise over the way workers are being treated by Kraft/Cadbury. Until we fundamentally change our mindsets, the relentless pursuit of profit at any price will inevitably lead to workers being treated badly, and losing their jobs.

It’s no use moaning about this unless you’re prepared for the consequences of the alternative. As we approach Easter, would you be prepared to pay more for your chocolates knowing that you were securing 400 jobs at a factory near Wales? Would you pay a premium for Cadbury chocolates? Seriously, would you? It’s easy, for example, to moan about how the greedy bankers led us into a recession with their easy credit. But if you have an interest-only mortgage, or have a “portfolio” of properties that you have financed on cheap credit with the dream of filling them with tenants and selling them when their values escalated, you are as much part of the problem as any banker was. Ditto if you drive a car you can’t really afford, but were able to finance on cheap credit.

Until we, the world’s consumers, tell companies to change their behaviour, their only rational approach is to continue to cut costs. And we send that message by what we buy. If you join in with the general indignation at Kraft in Britain today, then take a few minutes to ask yourself what you will do to make your feelings known. Otherwise, it’s all just bluster.

Examples of Tremendous Business Leadership

I came across a fantastic post today that provides excellent leadership and company case studies. Here are some of the headline learning’s I’ve taken from this article:

- reward your staff during tough times: During 9/11 SouthWest announced a $179.8 million profit sharing payment to employees.
- Be human, approachable, genuine and transparent: Toyota’s CEO Jim Lentz appeared on a Digg Dialogg (an often hositle forum to corporate companies). The questions were asked in order of votes made by digg members, and none were filtered.
- Be humble and challenge the “nasty” stuff about your industry even if it means retaliation by the established players. Consumers will appreciate the honesty and reward you
- Don’t pay yourself excessive salary. Jim Sinegal CEO of Costco figured he shouldn’t be paid more than 12 people working on the floor. See also my colleague Graeme’s post A Radical Proposal for Executive Pay
- Trust your staff – At a time when the idea of “business blogging” was brand new (and usually feared), IBM encouraged their 320,000 employees to start company blogs. IBM leadership drafted a corporate blogging policy that encouraged employees to be themselves, speak in first person, and respect their coworkers.
- Perhaps the simplest but most powerful… always listen first, and speak last.

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A Radical Proposal for Executive Pay

Everyone agrees that something must be done about executive pay. One of the major contentious issues emerging out of the financial crisis is the way that senior executives and manager, especially in the financial industries, are remunerated. These days, executive pay often seems to be unrelated to the company’s performance, and in many industries it seems out of proportion to the value the company adds to society.

A century ago, executives earned anywhere between 3 and 20 times what the average worker in their factories earned. According to research by global human capital and risk management firm, Towers Perrin (now Towers Watson), in 1965, CEO pay was 26 times that of their average worker. This is looking at the total packages, rather than base salary. By 1980, this had risen to 40 times. In 1989, it was 72 times. In 1999 it had risen to 310 times, and by 2004 CEO pay had reached 500 times that of the average worker in their firm. In some companies by 2010, this had jumped to over 1,000 times. (In pure salary terms, in 2008, US executives took home 319 times more than the average worker, according to a report linked to the Guardian’s salary survey).

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The future of money

For years banks and credit card companies have held a strangle hold over the movement of money and charged exorbitant rates for doing so. Now this is changing and fast.

Michale Ivey the founder of Twitpay has devised a system, using code that PayPal made available to him, that allows people to make payments using tweets. The way it works is you include the recipients’ username in their message. For example, posting the update “@johnsmith twitpay $10 for lunch” would deliver the cash to that Twitterer’s Twitpay account. Simple and brilliant!

Hundreds of engineers and entrepreneurs are now revolutionising the payment industry, attacking the payment ecosystem and seeking out ways to pull down the stronghold the banks and credit card companies have built.

Here are some examples:

- Square, a new company founded by Twitter cocreator Jack Dorsey, lets anyone accept physical credit card payments using an attachment on their iPhone, any other a smartphone or computer by plugging in a free sugar-cube-sized device — no expensive card reader required.
- A startup called Obopay, which has received funding from Nokia, allows phone owners to transfer money to one another with nothing more than a PIN.
- Amazon.com and Google are both distributing their shopping cart technologies across the Internet, letting even the lowliest etailers process credit cards for less than the old price, cutting out middlemen, and figuring out ways to bundle payments to sidestep the credit card companies’ constant nickel-and-diming.
- Facebook appears to be building its own payment system for virtual goods purchased on its social network and on external sites.
- Apple has given iTunes developers the ability to charge subscription fees through their applications, making iTunes the gateway for an entirely new breed of transaction.

About 20 percent of all online transactions now take place over so-called alternative payment systems, according to consulting firm Javelin Strategy and Research. It expects that number to grow to nearly 30 percent in just three years.

This is going to revolutionise the way we use money eroding the monopoly that banks have. Serves them right for causing the Great Recession I’m looking forward to the day that we can all bypass banks. Zopa is another example of the new breed of talented companies that is reshaping the world of finance. Zopa is a lending and borrowing exchange where real people sidestep the banks to get a better deal. I’m going to research and write an article on innovative companies that are changing the world of finance so what this space.

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Learnings around working from home

One of the emerging requests/trends in today’s business environment centers around the mystery of ‘working from home’. Many people talk with much  gravitas about the ‘ins and outs’. However, in my experience, once you dig under the surface a little, you discover how little they know. In fact how little is known, period, about this subject (again that’s my opinion).

You can understand then, why this blog post from Inc Magazine caught my attention. The entire staff decided, as an experiment, to see what they could learn about working from home. And so home they went, for one month. What a great project : )

This article is written one week in, and they give a brief summary of the learnings so far:

Remember to eat

Prepare for e-mail overload

Get out of the house

Get a comfortable chair

Video chat is your friend

Don’t forget to stop

You can actually get stuff done

In the article they unpack each of these 7 points. Worth following and reading for sure….

CEOs lose faith in strategic planning, they should look to yacht racing for answers

The Great Recession has made CEOs rethink strategic planning. Walt Shill, head of the North American management consulting practice for Accenture believes that: “Strategy, as we knew it, is dead…Corporate clients decided that increased flexibility and accelerated decision making are much more important than simply predicting the future.”

In my my latest presentation Brave New World which explores the realities of the new world of work and steps companies need to take to become a talented company, I compare strategic planning of today with that of yacht racing. Strategic planning of yesteryear was more like an egg and spoon race. Competitors lined up at the annual starting line, ran in a straight line from point A to point B, making minor quarterly changes (normally to budgets and not strategy!) and once in a while someone dropped the ball (in this case the boiled egg) and pandemonium ensued.

However, for the modern talented company strategic planning is like yacht racing. Talented companies have a clear destination or vision of where they want to get to. But once out of the harbour they recognise that things can change. The course you plotted may head north but you discover that competitors are heading south, do you change your plan and follow or keep track? A weather system may develop causing rough seas on your route, do you tack around the storm or hit it head on? The key for yacht racing is that strategy is emergent! As conditions around you change so do strategy and tactics. The one element that does not is your destiny (vision), how you get there depends on team work (in emergent strategy everyone understands the quest, provides input and is involved in the strategic planning process). Ultimately the skipper (as should the CEO) steers the boat and emergent strategy required bold leadership but the team is integral to the strategy as it emerges.

The days of long term strategic planning are over but that does not mean that strategic process is dead it has just changed. Strategic planning has now become emergent strategic planning.

For more information on emergent strategy and what it can do for your business please contact me.

You can read more about the latest thinking on strategic planning in the Wall Street Journal

Rethinking Marketing and the age of consumer capitalism

In this months Harvard Business Review, Roger Martin writes that “modern capitalism can be broken down into two major eras. The first, managerial capitalism, began in 1932 and was defined by the then radical notion that firms ought to have professional management. The second, shareholder value capitalism, began in 1976. Its governing premise is that the purpose of every corporation should be to maximize shareholders’ wealth. If firms pursue this goal, the thinking goes, both shareholders and society will benefit. This is a tragically flawed premise, and it is time we abandoned it and made the shift to a third era: customer-driven capitalism.

I couldn’t agree more. Information is power and information has now passed into the hands of the consumer. Never before have customers been able to find information on available products and services easier and quicker, and with the rising power of peer reviews brochure style marketing is fast becoming obsolete.

In the new world of work talented companies will rethink marketing. The role and function of marketing will change quickly. Customer experience will be placed at the top of the strategic agenda at board meetings and the CCO (Chief Customer Officer) will become as important if not more important a role as the CFO. Companies that fail to identify this shift and implement these strategic changes risk ending up on the dust pile of corporate dinosaurs.

How to keep your staff as the recovery begins

The UK is officially out of recession, as are most countries around the world. You couldn’t call it “bouyant” yet, but the recovery has started. Over the next few months and years, it will gain momentum. One of the unintended consequences of the recovery will be that many companies will lose their best staff. We have spoken about this before.

In reading an article from Deloittes again, I thought that it would be worth repeating the advice they gave for how to stop your best staff leaving in the next year.

When economic conditions improve, a certain amount of voluntary turnover is inevitable. But if addressed early and managed correctly, the turnover doesn’t have to be debilitating. Here are some small steps to consider taking now to avoid big problems later:

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America must act now to set up the next 50 years of economic growth

I first saw Elizabeth Warren about 6 months ago on Jon Stewart’s The Daily Show. She is the chair of the Congressional Oversight Panel created to monitor TARP (The Troubled Asset Relief Program – central to America’s bailout). In the few minutes she had on the show, she gave an overview of American economic development that was elegant and stunning. I like her a lot. (If you are in a part of the world that can access Stewart’s videos on his website, then check out that interview here – part 1 and part 2).

This past Tuesday night, she appeared on The Daily Show again (see video here – it’s also available (for now) on YouTube here – in my experience this will be deleted soon).

Her message was simple, clear, and vaguely frightening. She believes that right now the American economy is being rebuilt. What we do in the next few months will set a foundation for how the economy works for the next 50 years. She believes that the American middle class is allowing Wall Street and big business to destroy it. She said: “It is simple. This is America’s middle class. We’ve hacked at it and chipped at it and pulled on it for 30 years now. And now there’s no more to do. Either we fix this problem going forward or the game really is over.”

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A banking revolution?

Accenture recently put out a report entitled, “Banking 2012: Preparing for a revolution”. How I’d love to believe they are right. The executive summary says that the banks that will succeed are those that focus on transparency, simplicity and renewed customer-centricity. Amen to that, I’d say. But there is more to this report than just those obvious statements.

The very foundations of the industry of banking have been shaken. The institution of banking is changing. The rules for success and failure have been rewritten, and legislation is now being crafted to push that even further. These are unprecedented times. This report by Accenture sheds some light on the very immediate future, and is well worth a read. Read the summary at Accenture’s own website, or right click here to download a PDF from their site. Or read extracts from it below.
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Are you working for a TALENTED COMPANY, or do you know of examples?

I’m on a quest to find companies that are extraordinary, companies that not only achieve good financial results but also contribute positively to society as a whole. I’m intrigued at how many companies have fallen down in the past few years because a number of very talented people have been behaving badly – think Enron, the financial crisis, Bernie Madoff, Lehman Brothers and the US motor industry to name but a few. Companies have wrongly convinced themselves that they need the best of the best, the most talented people, to succeed and they have been rewarding their “talent” excessively. This has resulted in a bonus culture that is eating away at the fabric and moral code of business.

Rather than build a business around star individuals I believe that companies need to be building talented systems processes and cultures. They need to be focusing on building the star company. I’m currently conducting research to form the basis of a new book about talented companies. if you know of or work for a company that has talented structures, organisational designs, cultures, systems and corporate DNA I’d love to hear from you.

Building values into business

Customers have changed, it’s not just the recession and current market turmoil, there has been a values shift in societies attitudes towards business, finance and consumerism. Our research undertaken in TomorrowToday’s laboratory is revealing that values-focused businesses are the way of the future. If you want your business and brand to be part of a new breed of talented companies and not to end up on the rust pile of corporate dinosaurs then your business needs to be built around connecting with people’s values. The new world of work demands that companies focus their organisation around social and personal values and not just corporate values. Corporate values are the old model traditionally involving trust, integrity, honesty and innovation. These values are now only the base level requirements. Companies in the new world need to go deeper connecting with more far-reaching personal values. People seek relationships with companies; they want a place to be heard, a place to be appreciated and a place to connect. New social technologies are allowing us to build relationships with customers previously not possible. Connecting on a personal values level can place you ahead of the competition in winning the hearts and minds of your customers. The bottom line is if you don’t align with society and you get out of step with value changes, then you’re going to destroy shareholder value.

Good leaders share the pain with their teams

This coming year is likely to see continued difficulties in most companies. Recovery is on its way, but it will be slow, and profits are likely to be low. In this environment, many companies are going to ask staff to forego salary increases (and even possibly accept decreases) and bonuses.

Unfortunately, their bosses are unlikely to do the same.

In the past two decades or so, a two-tier system of reward has emerged, where people at board level and in senior executive teams are treated differently from general staff. When cuts are made, they are asked to contribute much less. Paradoxically, this often happens precisely because the senior executives “pretend” to be treated equally. But let’s be honest: to ask someone earning £ 1,000 a month to take a 10% cut is not the same as asking someone earning £ 12,000 a month to do the same. The more you earn, the more you should be expected to cut. That would be fair.

Worse still, senior executives are not rewarded for the health of the company (which affects long-term growth), but rather for short-term results. They typically attract performance bonuses for cutting costs out of the system – and that can involve pay freezes and redundancies for general staff.

In some companies this year, the basic salaries of all staff will be frozen, including the CEO and senior Execs. But the Execs will have access to bonuses, whereas most other employees cannot look forward to the variable performance pay available to their bosses. Their rewards are not treated the same. This, too, is not fair.

I read a recent report on a particular company that is experiencing just this, and the conclusion was succinctly stated: “Equity is a quality rather like justice. Justice must be seen to be done; equity must be experienced; it must run through an organisation from top to bottom.” I’d put it this way: A good leader shares the pain with his or her followers. If you don’t, they may just stop following.

I still believe that the real people carnage of this recession lies ahead of us, not behind us. What are your thoughts?

Five upcoming changes in the way we work

Tammy Erickson, Harvard Business Review contributor and author of multiple books, including Retire Retirement and Workforce Crisis, has written about the five key changes she is expecting in the workplace in 2010. What do you think? Do you agree with her?

1. Two-job norm — More people will maintain two sources of income than ever before. Instead of relying on the onetime holy grail of employment — a salaried job with full benefits — workers will create a series of backup options. For many, especially those in creative or knowledge-based work, this is likely to include becoming entrepreneurs. A second job or even a small entrepreneurial venture provides a safety net, giving workers a small measure of control over their fate in an increasingly unstable environment.
2. Less “off hours” work — Recession-management approaches that made full-time employees take a day a week “off” planted some new questions in the minds of employees who had been working virtually 24×7. What is a “day?” Eight hours? Twenty percent of the time I normally work each week? For many, these questions lead inevitably to: If they only want me to work four days a week, why am I working more than 32 hours? Many companies have come to rely on very long work weeks as staffing cuts lead to more work for the remaining individuals and technology facilitated round-the-clock work. I expect to see more push back this year — in part because many individuals will be spending time advancing their second work option.
3. Competition for discretionary energy — Engagement has been a hot topic in talent management circles for the past decade. But its benefits have focused primarily on attracting and retaining employees. Increasingly, managers’ focus will shift to competing for an employee’s discretionary energy — competing with other priorities in the employee’s life, including other options for work — but also competing against employees who are only “going through the motions.” More and more of the work in today’s economy cannot be done rotely — success requires a spark of extra effort, creativity, collaboration, and innovation.
4. More diverse arrangements — By now, most companies have put a variety of flex work options on the books. In 2010, I believe these arrangements will begin to take hold in significant ways, driven by employee preferences, facilitated by new technologies, supported by new managers who themselves are more comfortable with virtual work.
5. Transparent, “adult” arrangements — My favorite change is the growth in what I like to call “communities of adults” — a philosophy of recasting the employment relationship from one of paternalistic care to adult choice. A simple example is offering a menu of benefit options and letting employees choose those that work best. Further along the spectrum would include encouraging employees to “own” their own feedback process or even set their own compensation levels. These sorts of changes won’t settle in this year, but they’re coming. I expect we’ll see more examples as the year progresses.

Source: HBR blogs

A looming retirement crisis for Boomers (with lots of opportunities)

We have argued many times on this blog that the Baby Boomers are going to redefine retirement (for example, here, here and here). In fact, we even thought we were very clever using the phrase “retyrement” to describe what we think will actually happen. We’ve had a presentation called “Prime Time” about it. And one of our colleagues started her own consultancy called the refirement network.

We’ve been saying this for at least the last 6 years, so it’s got very little to do with financial downturn of the last two years. Although the recession allowed us to add one more reason why Boomers were not going to retire in the way we think of retirement now. But maybe the recession will cause some Boomers a big headache in this area.

Because many companies will need to find ways to strip out costs over the next few years as the recovery slowly begins, they will think of removing the high remuneration costs for senior staff. The weak economy could very well result in job losses that will force more people to retire early. This would severely scupper Boomers plans to continue working longer.

However, we would argue strongly that this will simply see Boomers become entrepreneurs. We cannot imagine that they will retire gracefully to the “do nothing” state often associated with retirement. Some will move into the voluntary sector. There is therefore a huge opportunity for charities, non-profits, and faith-based organisations to target recruitment campaigns at this generation. I’d say this could work for any organisation that could use more volunteers, from local schools to the World Cup Football competition.

But, many of the Boomers are likely to try and start up their own companies. The opportunities here are boundless. This is a generation that loves consultants – and they’ll be very happy to use some of the early retirement payout to buy consulting services. They’d pay for anything from IT support to virtual secretarial services, and from business mentoring to outsourcing of warehousing and deliveries. Many of them are used to having teams of people do their bidding, and they’d probably pay to have this setup again in their startup businesses.

Given just a few good experiences, they may be able to get their heads around virtual support (such as eLance), but in general, they are a “hands on” and “face to face” generation.

There are huge challenges ahead for the Boomers. This next decade is likely to be a very frustrating one for them. But there are amazing opportunities as well.

What are your thoughts?

After Shock interview podcast

One of our most read blog posts of all times has been “After Shock” – a look at the five forces that will cause disruptive change in the next decade. Since we posted it in December, it has received huge interest and has had numerous requests for republishing and extracts.

One request came from Peter Clayton of Total Picture Radio in the USA. The radio interview ended up stretching over two shows, and is now available online as a podcast (two MP3 files). The T.I.D.E.S. of Change, Part One: Introduction and Technology, and then Part 2: What Do You Need to Know to Be an Winner in the New Normal?

2010 will be an important – but bad – year for green business

Cop15, the global conference in Copenhagen last year, produced about as much as anyone could have expected (a lot less than was hoped) – a fudged solution that requires much further discussion and negotiation. And in the UK, the CRC Energy Efficiency Scheme (the renamed Carbon Reduction Commitment) initial deadline for creating baselines was pushed out a year to April 2011. It’s unlikely the USA will be able to get to a final cap and trade agreement into legislation during 2010 (the American Clean Energy and Security Act of 2009 must still pass through the Senate). While China made positive noises before Cop15, it seems that they were really sticky in Copenhagen and were a big reason that the final agreement did not include any operational terms.

With all of these issues in mind, it seems clear that 2010 is likely to be a year of talks and discussions, but very little action. For companies involved in green industries this will be frustrating. Many of these companies are startups, gearing up for the expected demand in sustainability issues (technology, consulting, business processes, engineering, energy, and much more). But many of them won’t survive another year of waiting and delays in implementation and client demand. It seems likely they will have to.

Companies that are keen on implementing green strategies (for whatever reason) have probably started to do this already. Companies looking for an excuse to delay implementation, however, will have plenty of excuses in 2010. They’re likely to keep delaying. They’ll do so until they’re forced to change (and that’s the main reason I support emissions trading legislation!).

So, 2010 will not be a good year for those involved in the sustainability industry. But it is an important year nevertheless. It’s important to continue lobbying. It’s important to continue to search for the best solutions and the best processes that will not only produce the best outcomes, but will also be compelling for those who are not yet convinced that anything needs to be done. It’s an important year for science – more must be done to show the scientific evidence of climate change and the need for changes in our lifestyles. And it’s an important year for venture capitalists, who must try to separate out those startups that truly have something to offer from those that are just taking a chance on the bandwagon (remember the shakeup in the online IT industry just 10 years ago?).

Tesco, a talented company

I’m always on the lookout for talented companies and I think I found one on my doorstep. The company’s name is Tesco and earlier this week I gave our Mind the Gap presentation at their marketing team away day.

I’m a fan of Tesco (and have written several blogs on the company see TPF has lift off and Tesco trains their staff in generational talk) mainly for one simple reason the customer service and experience I receive when shopping there. I love the fact that they have a stated policy of never having more than two people standing at the checkout. As soon as there is a third person, a new checkout is opened, and this policy works! From the Tesco Express around the corner from where I live, to their megastores I have seen it in action without fail. It is a simple policy but its execution is genius and it keeps me going back to Tesco because I hate wasting my time standing in lines, who doesn’t!

Recently I wrote an article called the Talent Reboot and argued that companies need to be focusing on creating talented companies (by creating talented tribes) rather focusing on individual talent (as banks do). It was therefore great to find in Tesco an example of a talented tribe in action. Carolyn Bradley , Tesco’s marketing director, did a great presentation using Tesco TV adverts (from as far back as the seventies) to bring to life the history of the Tesco brand. It was amazing to see the innovative initiatives and strategies that Tesco has launched since the early 1970’s to grow its market share to nearly twice that of it’s closest competitor. What was more impressive was that this growth has been achieved during at a time when Tesco’s competitors market share has remained relatively stagnant or even decreased. But it was by observing the marketing team in action at their away day and later at their office, that it became apparent that there is more to Tesco than innovative ideas, they are been building talented tribes.

The team spirit I observed at their away day was amongst the best that I have ever seen. I was privileged enough to be given a tour of their very unassuming head office and treated to lunch at the staff canteen (I had a very tasty Cumberland sausage and mash). I was able to see how each marketing team had decorated their cubicles with Christmas themes, building mock chimneys for Santa and using fake polystyrene snow. The finance team won the best and most imaginative design supporting the belief that within each accountant there is a creative marketer waiting to break free. The marketing team at Tesco is clearly talented and full of energy. What I observed at Tesco is very similar to what Zappos, America’s most successful online shoe retailer has achieved. Zappos is often used as a case study of a company that has created talented tribes. At Zappos teams dress up to celebrate events, decorate their team areas and are passionate about what they do – customer service.

What Tesco and Zappos appear to have in common are talented tribes and huge commercial success. They are clearly getting the ingredients right and I plan to follow their stories a lot closer.

Why unemployment will rise as the economy recovers in 2010

This is a simple insight, but might help a few people as they think ahead to 2010. At this time of year it is fashionable to make all sorts of predictions for the year ahead – since I am a futurist and make my money by helping people to make sense of the new world of work, I’d better put my money where my mouth is.

I believe that 2010 will see a slow, but consistent economic recovery throughout the world. I would hope that the new UK government would have the guts to cleanse the banking industry, by demanding a full audit and accounting of their liabilities. But I doubt this will happen. Nevertheless it appears that the last of great banking surprises has now come and gone, and that we can start to rebuild. Growth will probably start first in technology, medical and green industries, with a slow growth in construction. But construction has a problem coming as government money that has been brought forward from future years runs out. And that will probably be the biggest factor that inhibits growth and keeps it slow and steady.

One indicator, however, will put some people off and confuse many pundits. Unemployment is likely to rise and keep rising in 2010. Many will take this as a sign that the recovery is not happening. But they would be wrong. This is a simple lesson in knowing what a trend actually tells you.

In most countries, the unemployment figure is actually the number of people who have signed up for unemployment benefits or assistance. In many countries, it is actually the number of people who are actively seeking work. In the midst of a deep recession, as we have experienced over the past year, many people who are actually unemployed don’t bother to register themselves as job seekers. They reason that there’s no point. But as news of a recovery begins to seep through the media, their hopes begin to rise and they sign up as job seekers, hoping to find work.

And that’s why official unemployment figures will probably rise as the economy begins to recover.

It’s not going to be easy to be a strategist next year. 2010 is going to be a wild year. And my guess is that fortune will favour the brave… and the well informed.

Capturing the Asian Opportunity

S+B (Strategy + Business) is a great ezine from Booz & Co. This week’s edition focuses on where multinational companies might want to focus as the recession draws to an end and an upturn begins. And the place to look is probably Asia – if you have a clear focus. Read their article at their website, or an extract below.

Capturing the Asian Opportunity
Economic recovery in China, India, and elsewhere in the region could be the strongest source of sustained global growth for years to come.
by Andrew Cainey, Suvojoy Sengupta, and Steven Veldhoen

In September 2008, the global financial crisis hit Asia like a tidal wave, flooding in from the U.S. and Europe. Within weeks, Asian GDP growth rates began to tumble: China’s annual growth rate dropped from 13 percent in 2007 to about 9 percent in 2008, India’s slipped from 9 percent to below 6 percent, and Singapore’s plunged from 8 percent to less than 4 percent. Underlying these stark statistics were significant declines in exports. In March 2008, China and India had boasted year-over-year export growth rates of more than 30 percent; nine months later, both were well into negative territory. Foreign direct investment in these countries, and in Korea, Japan, and the nations of Southeast Asia, fell significantly as well.

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S+B’s Best Business Books of 2009

Booz & Co’s Strategy + Business ezine is one of my favourites, and one I always make time to read. Last week’s edition looked at the best business books of 2009, selected by their top team, and helpfully categorised.

If you want to read their reasoning, and some excellent background comments, start here. All I am going to do is list the books (and make it easy for you to buy them – choose from Amazon.com, Amazon.co.uk or Kalahari.net – for South Africa):

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After Shock: the five trends disrupting business in the next 5 years

Updated in March 2010 (now with an added Executive summary in the PDF format)

Download a copy of this article in PDF format – right click here. The contents of this article can be presented as a keynote or a workshop for your team. Contact our UK or South African offices to find out how.

As the world slowly emerges out of recession over the next few years, it will become increasingly clear that this was more than just an economic downturn. Disruptive forces are significantly reshaping the world of work. Some of these changes have been brewing for a decade or more – and now this recession has exacerbated their influence and speeded up their effects. Companies that have survived the downturn need to shift their focus to surviving the upturn. We are not ever going to “get back to normal” – a new normal is emerging for everyone, everywhere.

Understanding the forces that are driving this disruptive change will give an organisation the insights needed to adjust their systems, structures and methods and gain a significant competitive advantage in the next 3 to 5 years. It will also set them up for longer term success in the next few decades. It is therefore essential to provide not just senior leaders, but all staff throughout your company, with a framework of thinking about this “new normal”. You want them to work together to take advantage of the opportunities that will emerge.

There are at least five key drivers of disruptive change that every organisation in every industry and sector needs to track. These are the T.I.D.E.S. of change. (It’s a corny acronym, I know, but hopefully it will help with both remembering the framework, as well as making it easy to use on a regular basis in team meetings and informal conversations throughout your organisation). Here then are the key drivers of disruptive change in the next decade, and some questions to ask yourself and your teams as you plan to respond to them:

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M-Pesa, Vodacom, Nedbank and Rob Shuter

Earlier this year Rob Shuter (head of Nedbank Retail) resigned from Nedbank and joined Vodacom as Financial Director. It was an exciting move from my perspective as I watch mobile phone companies (and technology in general) redefine how we do business. Not necessarily the companies, but users who adapt the technology to find innovative ways to run their businesses differently. The big question I was asking was what happens when someone with intimate retail banking knowledge and experience (especially of Shuter’s profile) gets a significant position at a mobile phone company? What happens after what comes next?

I’ve not seen anything obvious in the press, and have quite possibly missed it, but this week a couple of pieces of the puzzle dropped into place. Enter M-Pesa.

M-Pesa is an amazing Kenyan innovation, and describe themselves as:

M-PESA is a Safaricom service allowing you to transfer money using a mobile phone. Kenya is the first country in the world to use this service, which is offered in partnership between Safaricom and Vodafone. M-PESA is available to all Safaricom subscribers (Prepay and Postpay), even if you do not have a bank account. Registration is FREE and available at any M-PESA Agent countrywide. The M-PESA application is installed on your SIM card and works on all makes of handsets.

My sources suggest that M-Pesa has radically transformed the banking space in Kenya and left the banks flat-footed and out of the equation. Around 15 million people use M-Pesa to transfer money and make payments. Kenyan banks (collectively) have a third of this number as customers. M-Pesa has transformed banking access to the previously un-banked, who are found predominately in rural areas in Kenya. Areas that traditional banks have little to no access to.

The person I spoke to this week had some of the following to say about M-Pesa:

M-Pesa has made the sim card more valuable than a credit card.

M-Pesa is transforming how aid is distributed within Kenya.

M-Pesa has fundamentally re-defined the banking space.

Kenyan banks have not found an ‘anti-dote’ to M-Pesa’s presense, and possibly wont or can’t, simply because they’re unable to redefine themselves.

Maybe a little over-enthusiastic. But the hype and the numbers do confirm his thoughts.

Enter Shuter, Vodacom and Nedbank….

What if Vodacom’s next move is to bring M-Pesa to South Africa? Both Safaricom (M-Pesa’s master) and Vodacom are subsidiaries of Vodaphone. Certainly they have someone with huge retail banking experience in Shuter, and he has intimate knowledge and I imagine a solid relationship with Nedbank.

What if? Watch this space. This may be what happens after what comes next…..

The Next Wave or just a ripple?

Earier this month I posted a blog titled Is the bubble set to burst again in 2010? Today in The Times is reporting that the second wave may be hitting earlier than expected. The front cover article titled Dubai in deep water as ripples from debt crisis spread informs of the £14b in value lost by UK banks yesterday as fears spread of a dangerous new phase in the economic crisis that swept around the globe yesterday as traders responded to the shock announcement that a debt-laden Dubai state corporation was unable to meet its interest bill. The latest reports are that the market has recovered some ground but fears still remain on who is exposed the most to this new crisis. Is this the AfterShock from the tsunami that hit the world financial market just over a year ago and will our markets be able to withstand the next wave? Only time will tell but one thing that this new event does reinforce is our view at TomorrowToday that even as we emerge from the longest recession in UK records, there is now a new normal and the world has changed. Only the boldest and bravest companies will survive this Brave New World. Contact us to learn more about the trends we have identified in the New World of Work.

You can read the article in The Times or read on below … Continue Reading

25 “talented” people behind the meltdown

I’m currently researching and writing an article called “Talent has given business a bad name” and came across a really good article in The Guardian In this article Guardian City editor Julia Finch picks out the individuals who led us into the current crisis. Most of these individuals were the top of their class, hand picked individuals – talent who got it wrong! People like Andy Hornby, former HBOS boss so highly respected, so admired and so clever – top of his 800-strong class at Harvard – but it was his strategy, that got HBOS in the trouble destroying billions of pounds worth of wealth and thousands of jobs. The article by Julia makes a for a compelling read and names and shames a number of high profile business people and politicians

You can read the article below or click here to read article at The Guardian
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To degree or not to degree, that is the question!

We’ve been noticing a distinct shift in the perceived value that a university degree brings. It’s largely accepted that a degree from an university, especially an ivy league one such as MIT, Harvard or INSEAD can improve expected earnings significantly. This has resulted in a seemingly all out onslaught by young people to get degrees, to the point now where getting a university qualification does not provide the competitive advantage it offered ten years ago. With so many new graduates, instead of providing enhanced opportunities, degrees have now become minimum entrant criteria for jobs at large corporations. And don’t stop with one degree, today’s graduates feel greater pressure to further their qualification with MBA’s and PHD’s. 78% of students are concerned about getting good qualifications. To put this into perspective, that’s more pressure than they feel to have sex, fit in or taking drugs – combined!

The Telegraph has an interesting article on University: was it really worth the effort? and an interesting website called notgoingtouni is encouraging school leavers to pursue apprenticeships as a viable alternative. When one considers the success of people like Bill Gates and Richard Branson who never got degrees you do have to stop and reflect on whether or not university is the best route to ensuring a bright future especially when the Office for National Statistics revealed that 746,000 18- to 24-year-olds are unemployed – a record rate of 18 per cent. It is thought that about 100,000 of those are university-leavers who, despite their degrees, cannot find jobs.

You can read the whole article from The Telegraph below or click on the link.

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Is the bubble set to burst again in 2010?

A few weeks ago I commented on whether or not the recession would be a U or a W (see blog Is the economy in for a V, a U or a W? HSBC Chief thinks it’s a W) Our research definitely suggests that we have entered a new season and that the next few years are going to be characterised by increased volatility. Further evidence is arising to support the notion that those businesses who think things are going back to “normal” are in for a shock. Larry Elliott and Heather Stewart from The Observer write that central banks are relaxed about booming asset markets. But with repossessions rising and jobs still scarce, some fear we’re heading straight for another bust.

You can read the article here or follow the link to The Observer

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It’s (still) good to be good

One of the trends we’ve been tracking for some time is the rise of the ethical consumer. This growing group of customers do not simply look at your product or service through the traditional lessons of price, availability and value for money. They’re increasingly asking tougher questions, including: who made this?, how much are they paid?, how much are they paid in relation to how much your CEO earns?, how much damage did you do to the environment to make this and get it to me?, and so on.

A new report indicates that the recession has not dampened these consumer’s demand for an ethical component to their purchase. Doing good is still increasingly good for business. Read more here, or see the extract below.

Most consumers will swap brands for a good cause

Thursday November 12, 2009

Despite the recession, consumers are still spending with companies and brands that have a clear social purpose, according to third annual Edelman Good Purpose Consumer Study which surveyed 6,000 people in ten countries.

In fact, 57% of consumers globally feel that a company or brand has earned their business because it has been doing its part to support good causes (with Asian countries coming in highest, with China scoring 85% and India scoring 84%).

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The Recession Generation

Each generation is defined by the economic experience of its youth. The generation now finishing university and entering a dire job market will be shaped by this experience forever. This generation is what we call the cusp between Generation X and Generation Y. This week’s Spectator magazine contains an excellent cover article that explains them wonderfully. Read it here, or a summary below:

The quiet agony of the recession generation
by Matthew Lynn
17 October 2009

Each generation is defined by the economic experience of its youth. And Britain is breeding angry, thrifty cynics who are beginning to wonder if they were mis-sold university education.

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