Posts tagged ‘globalization’

When referring to your Australian office might not be a smart thing to do


There are some companies that do not realize that we live in a global community.
   And there are at least two who have done themselves a disservice by referring our account or enquiries to their Australian representative.
   We left Rackspace in 2013 although, for most of the 11½ years we were with them, things were fairly good. I had issues with them in 2005, but they weren’t serious enough to depart. In the last year, the server fell over regularly, and suddenly we found ourselves being referred to their Australian office.
   From then on, I just got jargon from their rep who tried to get us on to the “cloud”. When I asked about further specifics, I heard nothing back, and when I sent another query to the company, I found her response rude and dismissive. The sense I got was, ‘How dare you keep asking questions on how much you expect to spend.’ I can’t remember her exact words, but I seem to recall she used the, ‘As I told you before’—when in fact she hadn’t.
   So we left. It was a sad end though I still think the world of Rackspace’s techs. The guys running their Twitter are second to none as well. The guys in the US are fantastic and are completely on to it. But, as I told one of the Kiwis working from their Australian office, I wasn’t going to stand for their rudeness after paying them a fairly hefty amount each month.
   He explained that they were rude in Australia, which is a pity. I wasn’t sure if he referred to his company or to Australians in general, because I certainly haven’t found the latter to be the case on my visits there, and I haven’t encountered that in 99 per cent of Australian organizations.
   Before the Australian office was opened, we had very cordial dealings with our Texan and later Hong Kong account managers. I get why they want to localize: it’s to serve different time zones and, in many cases, to serve different languages. But, for goodness’ sake, make sure that you hire people who have had some training on how to talk to customers.
   I was always under the impression that the account manager is the one who doesn’t talk technobabble, the one who translates all of that to human, in order to secure your business. She’s not the one who joins in with the throng in a game of “us and them”—and in Rackspace’s case, undoes a decade’s worth of hard-earned goodwill, earned largely by the US staff.
   Interestingly, they were replaced by a small Australian firm run by an expat New Zealander, who tells me that there is some rudeness in the Aussie IT sector. Maybe that’s what the Kiwi at Rackspace meant.
   Hugo Boss is the other story, to whom we sent a query for press images, at their German HQ. We were referred to their Australian office. And from there we never heard back. Luckily for us, we wound up using catwalk imagery from Berlin Fashion Week, which we can access. They got their story, one which looked at their history and how it impacted on their design, written by one of our associate editors, but I’m not convinced they deserved the two pages in Lucire.
   And now we’ve been referred again by a European label to their Australian PR. I won’t name this company this time, because the rep might not have had the chance to respond yet. Or the enquiry is somewhere in their system. But it is a company for whom we had a username and password for their press database, neither of which works now. (That is a whole other story—companies which take your data but upgrades mean that you have to sign up again. I am looking at you, Telegraph Group plc.)
   She was nice enough and asked which images we sought. The reality, as I explained, was that we often didn’t know ourselves till one of our editors went through the image database for something that fitted with the issue’s theme. In addition, as we at Lucire produce magazines for the international market-place, the Australian season would be off. We needed to get access to the European database.
   Companies like Hennes & Mauritz, Swatch or Bang & Olufsen have no trouble comprehending this, but it amazes me that some still do. A New Zealand-HQed company does not necessarily produce things strictly for the New Zealand market. Why is this so hard to understand? Globalization has been around for centuries, and surely in the electronic age, it applies even more regularly.
   Of course, in future, this compels one to start lying. Or I’ll use one of our alternative addresses in New York or London, but I’ve only employed that in situations where they require a local address. I’m proud of being a New Zealander and letting people know that this country does amazing things internationally. That’s why we went to that last label, who sells next to nothing here, in order to give them some publicity.
   We’ve also been approached by what I believe is an Australian SEO firm wanting a link for their client in one of Lucire’s online articles. That’s all well and good, but I had to tell her that the domain would have little relevance for the site’s readers, 38 per cent of whom are in the US. Less than 10 per cent are Australian. However, I can imagine behind the scenes, they were employed to get these links from regional publications, and we never hide our Kiwi origins. She didn’t do anything wrong, but again the reality of globalization changes initial perceptions.
   If I wanted the local rep, I would approach them (as I have done on many occasions, e.g. with Chanel or L’Oréal—and both companies are smart enough to get me the information I need from their French counterparts if required nearly immediately, so there are no hiccups). But the first two situations are ridiculous because they seem to suggest that their regional reps don’t understand the global links in modern business. In the first case, not everyone dealing with IT is a boffin. In the second, palming things off to a regional office simply doesn’t work.
   Then you wonder how they could even have global marketing and sales’ ambitions.

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Posted in business, globalization, Hong Kong, marketing, publishing, technology, USA | No Comments »

Four million page views on Autocade


I came across an old blog post that showed that Autocade took four years to get 2,000,000 page views: not bad for an encyclopædia that receives very little promotion. That was in March 2012. It has since crossed 4,000,000, which meant the second 2,000,000 took 21 months to achieve (in December 2013). If the growth rate continues, then we’ll get to 5,000,000 some time in 2014.
   I estimate that the first 2,000,000 were achieved on 1,800 model entries. There are just over 2,400 today, which means each page is attracting more visits. The 2,400th entry was the Renault Scénic III.
   There are still a lot of holes, but not as many as when we were on 1,000 and got the first bit of press attention. I thank all the spammers and spambots: without you, I would never have locked down the wiki and restricted it to a select few specialists (not that that many people popped by wanting to add to Autocade in the early days). Peter Jobes’, Keith Adams’ and Nigel Dunn’s contributions both to the technology and the content have helped make it a very usable site.
   I’m really happy people are finding Autocade such a useful resource. It was always intended to be global and geographically neutral. I’m running into more and more people who visit it but had no idea I founded the website, and more recently, some even suggested that a printed authoritative car guide could be built around it (especially as most car buffs can poke holes in Auto Katalog and similar annuals). It takes an enthusiast to build a site for other enthusiasts, which is, once again, why Wikipedia fails so badly on the motoring stuff. Generalists will never have the same passion, or, for that matter, the same commitment to accuracy.

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Posted in business, cars, globalization, interests, internet, media, New Zealand, publishing, technology, UK | No Comments »

Joan Rivers had better facelifts, but it’s the future of the black cab


Part of me admires Nissan for going after the taxi market in a big way in New York and London.
   Another part of me wonders why on earth the London Hackney Carriage solution is so ugly.

Nissan Hackney Carriage

   I think Nissan should have asked Mr Mitsuoka for advice on how to Anglicize one of its products.
   Overall, I haven’t a big problem about a van being a black cab (neither does Mercedes-Benz). We live in the 21st century, and a one-and-a-half-box design makes practical sense. The recent Metrocab, from Frazer-Nash (whose owners are domiciled abroad), doesn’t look perfect, either, but the effect is a bit more cohesive. However, it reminds me a bit of the Chevrolet Spin.

   I’m not sure how conservative a buyer the cabbie is. The LTI TX4 still looks the best, and it is even being adopted in Australia, but it’s not as economical. The idea of the solid axle and Panhard rod at the back doesn’t scream modernity, either.
   New Yorkers haven’t really minded the advent of Toyota Siennas and Ford Escapes taking the place of the traditional three-box sedan—nor have the tourists. Therefore, I doubt much romanticism will come in to the decision. As with their counterpart elsewhere, the London cabbie will be very rational and look at the best running costs. That may suggest the demise of the TX4, at least in London. (It seems to have a life of its own in China, although that may depend on how visible it remains in London.)
   The world is so globalized that no one bats an eyelid when they see a Volvo badge on a double-decker bus. It’s not that easy to find a police car with a British marque. There’s a nostalgic part of me that wants to argue that the London city brand will be adversely affected by Johnny Foreigner making its cabs, but it won’t. Even the one regarded as traditionally the “most British”, the TX4, is made by a Chinese-owned company, Geely.
   History says that it won’t matter. As long as they are black, they can turn on a sixpence, and the cabbie has the Knowledge, then that’ll be sufficient for most. The experience of travelling, rather than the Carriage’s brand, is what tourists will remember—I can’t tell you whether the first black cab I sat in was an FX4 or a TX, but I can tell you about the conversation I had with the cabbie. One would, however, remember a bad journey—let’s say travelling in the back of a Premier Padmini in Mumbai is not as misty-eyed as it seems.
   And if one insists on a decent British solution, then it needs to be better than the competition: falling back on tradition (or at least some parody thereof) helped kill Rover when it was still around. Although I’m not sure if there are any British-owned taxi makers left. Whatever the case, the next generation of black cab will be made by a foreign-owned company, and I’m willing to bet that the 20th-century formula is toast.

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Posted in branding, cars, China, culture, design, globalization, India, UK, USA | 3 Comments »

Open the shop and strip away the jargon


I’ve been reading this Grauniad interview with Rory Stewart, MP, referred by Jordan McCluskey. I’m told that Stewart, and Labour’s Frank Field are the two worth listening to these days in British politics. On Stewart, someone who can speak with a Scots accent and has lived in Hong Kong must be a good bloke.
   Two quotations resonated from this interview, which I posted on Tumblr this morning.

Our entire conceptual framework was mad. All these theories—counterinsurgency warfare, state building—were actually complete abstract madness. They were like very weird religious systems, because they always break down into three principles, 10 functions, seven this or that. So they’re reminiscent of Buddhists who say: ‘These are the four paths,’ or of Christians who say: ‘These are the seven deadly sins.’ They’re sort of theologies, essentially, made by people like Buddhist monks in the eighth century—people who have a fundamental faith, which is probably, in the end, itself completely delusional.


We have to create a thousand little city states, and give the power right down to all the bright, energetic people everywhere who just feel superfluous.

   The second is familiar to anyone who follows this blog: my belief that people are connected to their cities and their communities, probably as a counterpoint to how easily we can reach all corners of the world through the internet. We want that local fix and to make a contribution. Power should be decentralizing in the early 21st century—which is why I thought it odd that the majority of my opponents in the mayoral election took the line of, ‘We should cosy up and further the cause of statism,’ even if they did not express it quite that way. In every speech. Yes, a city should work with central government, but we do different things and, being closer to the action, we can find ways of doing it more effectively and quickly. With statism being an aim, then the regular entrepreneurs—or even as Stewart says, ‘bright, energetic people’—came further down the list. For me, they were always at the top.
   But the first quotation is more interesting. In my work, especially in brand consulting, I’ve harboured a dislike for the manuals that get done but are never referred to. Better that a lot of work goes into a 15 pp. report than scant work going into a 150 pp. one. The former might not look impressive but if every word in there is filled with substance, then it can help get an organization into high gear. And the shorter one is usually harder to write because more preparation goes into it.
   In short: take out the wank.
   Strip out the wank and you can see the truths for what they are. And if they don’t apply, then try to find ones that do.
   Yet to make ourselves look smart—remember, I did law, and that area is filled with a lot of it—we bury things in jargon so that we keep everything a closed shop. Every profession has such a tendency. However, when things are actually revealed in plain language, does it make the specialist look superfluous? On the contrary, it makes them able to connect with an audience who come to appreciate their expertise. (On a side note, in terms of car repair, this is why I go to That Car Place.)
   So when we start dealing in international geopolitics, we want to keep the power among a closed shop. The words that Stewart used served to highlight the gulf of the occident in its dealings in Afghanistan—that is the context of his remark—and it connects with a story I remember about a certain US policy institute when I was studying law. Our lecturer said the failure of the institute in the countries it went to was its expectation that a US solution could be imposed, whereby everything would then be all right. Use enough jargon to make it all sound legitimate to the casual observer. The consequence of this (whether this was his conclusion or mine, I do not recall): blame them when it doesn’t work.
   Without understanding the cultural context of why things are the way they are in a given system—and lacking the knowledge to analyse it and quickly localizing your knowledge and gaining the context—make for a disadvantage. It must be said that even some within a system don’t realize the context! But you can strip away the mystery by simplifying the language, removing the jargon, and understanding things the way they are. Progress comes from understanding, not from creating mysteries—and Stewart is wise to have come to the conclusions he has, thanks in no small part from a global, well travelled context.

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Posted in branding, business, culture, globalization, Hong Kong, leadership, New Zealand, politics, UK, USA, Wellington | No Comments »

Campaign update: videos three to five


I have been posting these on the videos’ page as they became public, but maybe I should have added them to this blog, too, for those of you following on RSS. The multilingual one seems to have had a lot of hits. They have been directed by Isaac Cleland, with Khadeeja Dean on sound. Lawrance Simpson was DOP on the first one below.

This one was important to me, as I sent in a submission on the local alcohol policy, leaning more in favour of the hospitality industry’s submissions while acknowledging the need to reduce harm.
   Highlights from that submission: ‘The hours feel very limiting as the harm has not come from the opening hours of on-licensed venues, but from pre-loading. Most venues are responsible and safe based on my own custom. A blanket 7 a.m.–­5 a.m. with council officers using their discretion on venues failing to meet the highest standards, then restricting them back to 3 a.m. would be a better approach, while acknowledging the changes at the national level.’
   ‘I remain unsure whether harm will be decreased. I have listened to the police and hospital submissions, and I have great sympathy for them. However, if we know pre-loading and drinking education to be the greatest issues, restricting on-licence hours will not help. If it forces people to drink more at home rather than frequent the city, then that doesn’t actually decrease harm: it makes harm harder to police because it is shifted to the suburbs. It adds to the cost of health services because of travel time and the inability for those harmed to get immediate help.’
   ‘There are some good aspects in its response to the Sale and Supply of Alcohol Act 2012—and it was right for Council to respond. The arguments on density and proximity are a good response to some residents’ concerns.’
   Finally: ‘My belief is that the root cause of a lot of our drinking culture comes from socioeconomic conditions and, especially with the young, a sense of disengagement and a pessimism about their futures. While it is not the purpose of the strategy, it is something that we must address as a city.’

Judging Miromoda for the fourth (I believe) time, this time at Pipitea Marae. It must have been the first time the te Reo portion of my address was longer than the English. I need to disclose that I am not fluent but I try to make a decent stab at it at every opportunity, for the obvious reason that it is the native language of this country.

Another beautifully shot and edited video from Isaac, this one has proved a bit of a hit on Facebook and has almost had as many views as my début 2013 campaign video that was released in April. I decided not to do Swedish—I can speak a little—and Taishanese, since they might be a bit too niche. The idea: if we need someone to push Wellington globally to help our businesses grow—and we accept that the innovative, high-tech and creative ones do—then doesn’t it make sense to not only elect someone with first-hand experience of those sectors, but can open doors readily, too, especially as the global economy shifts east?

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Posted in business, China, culture, internet, leadership, marketing, New Zealand, politics, technology, Wellington | 1 Comment »

Cities are, or at least should be, driving globalization


My friend and colleague William Shepherd directed me to a piece at Quartz by Michele Acuto and Parag Khanna, on how cities are driving globalization more than nations—a theme I touched upon on this blog in March 2010. As he said, I had called it three years ago, though admittedly Acuto and Khanna have fleshed things out far better.
   It’s not just the fact that cities elicit less pluralistic feelings among the populationWellingtonians felt pretty strongly when PM John Key made his comment that our city was ‘dying’—but there are practical reasons for cities to lead the way.
   First, we can’t afford to wait for central government to take the lead on a lot of policies. When it comes to economic development, cities should be able to mobilize a lot more quickly. The idea is that cities are leaner, flatter and more responsive to change. The reality is that some are mired in bureaucracy, and if voters agree that that has to change, then I would love to see that reflected in this year’s local body elections. Based on what I’ve seen, you won’t find the agent for change within politics, however—they have had more than enough opportunity to voice this very view. This has to come from outside politics, from people who understand what cities are truly capable of, especially when they engage and realize their potential.
   Acuto and Khanna cite several examples where cities have had to go above and beyond what their national governments have provided, in the areas of security, climate change and academia. Even stock exchanges are merging between cities:

Stock exchange mergers testify to this changing geography of influence: the popularized link between New York and Frankfurt via the 2011 talks on the NYSE Euronext and Deutsche Boerse merger only hinted at a wider trend that, in the past two years alone, has seen negotiations between London’s and Toronto’s stock exchanges, and similar discussions between Sydney and Singapore, Chicago and Sao Paulo, Dubai and Mumbai or the Shenzhen–Hong Kong–Shanghai triangle, all of which indicate how global finance networks are being redrawn through emerging global cities.

   In my discussions with MBIE, the New Zealand Government has been aware of this trend, but other than the discussions about regional reform, very little of it has surfaced in Wellington. Yet the government has a focus on Auckland, and Christchurch will be state of the art once its rebuilding is completed. We have a perfect opportunity to use our inherent agility, if only we had our eyes on the prize, and moved forward rather than played politics, stuck with “think local, act local” thinking.
   Secondly, cities should find the task of marketing themselves less confusing. A nation-branding exercise, for example, hits a snag early on. When I quizzed Wally Olins about this many years ago, he identified a very obvious problem: which government department pays for it? Is this the province of tourism, internal affairs, foreign affairs, trade, or something else? A city should be able to establish sufficient channels of communications between its organizations and trust in one—in Wellington’s case, tourism—to handle it. If these channels are broken, again, it’s going to take some new blood and real change to fix them and inspire a spirit of cooperation. There’s a pressing enough need to do so, with a vision that can be readily shared. We need to think differently in the 2010s.
   Thirdly, cities can foster offshore relationships more effectively. New Zealand, as a country, has not done as well as it should in promoting itself in various Asian cities, for instance. In one major city, I have had feedback that New Zealand stands out for the wrong reasons, in not having its chief diplomat join other countries in celebrating a particular national holiday. We seem to be on auto-pilot, not being as active as we should. Yet, as Acuto and Khanna point out, almost all global economic activity is being driven by 400 cities. Wellington, especially, should be able to take the initiative and head to the world’s major cities, promoting ourselves and ensuring that the innovators and enterprises here can hook up with others. We can establish trade and cultural links more quickly if we go to the source. Many cities and provinces even have their own economic offices, so they expect such approaches: they want to work at the city level.
   And if we head offshore to promote our own, then we should expect that foreign direct investment can flow more effectively inward, too, having established that relationship.
   This all makes sense if you consider how democratization has changed the world we live in. On so many things already, we cut out the middle man: in printing, we no longer need to go to typesetters or plate-makers; online publishing has meant our words can go to the public on blogs; social media have allowed us greater access to companies and politicians. Air travel is more affordable than it was 30 years ago. Cities have the resources to engage with citizens and learn about their needs. Offshore relationships can be maintained between trips using Skype and other digital resources. The nation-state will remain relevant for some time, but cities can deliver more relevant, more specialized and more customized programmes in a more timely fashion. Now, do we have the courage to declare that we no longer want “politics as usual” this year?

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Posted in branding, business, culture, globalization, internet, leadership, marketing, New Zealand, politics, technology, Wellington | 1 Comment »

Getting ready for global


I’ve known of this for some time through Medinge: the globalizing of The New York Times. This has meant the retirement of The International Herald–Tribune name, one which brand experts are divided on.
   On the one hand, the NYT doesn’t have it wrong. There are global newspaper brands already, namely those that have taken the opportunity of the internet, viewing it was a chance to build their goodwill, rather than as a threat. The Guardian comes to mind, and even the Daily Mail has become a well known international news source. The snobs must hate it. It’s obviously worked out that The New York Times‘ brand is stronger than The International Herald–Tribune’s, and in this globalized era, it wants to push only one.
   Others, meanwhile, seem to have regressed. The Times’s momentum has been lost, thanks to its paywall experiment, at the precise time others went on a growth spurt. The Daily Telegraph, which for the 1990s and a part of the 2000s was the source for online news, has fallen behind other dailies.
   What this century has shown us is the realization of global businesses, regardless of how large or small you are. If you don’t capitalize on things at an international level, you risk becoming an also-ran. Everything you do potentially reaches the whole planet, so why not build on that as part of your strategy at the very beginning?
   I may be affected by talks with my father at a young age about how foreign exchange worked, and my godfather first introduced me to the currency conversion tables in the newspaper each day when he wondered about my converting prices of cars from Motor into what they could cost in New Zealand. I must have been around seven at the time. From there, you get the inevitable idea that exports are good, just as valuable as selling to a loyal domestic market.
   As of today, as the image above shows, The New York Times is advertising its global edition to New Zealanders. That’s a Kiwi-targeted ad in the pic above from one of our advertising providers on Lucire. Yes, it is selling its tablet and smartphone access—and why not? Again, it makes perfect sense to capitalize on the available technology.
   The numbers say that portable devices outnumber traditional desktop ones. My feeling that things will converge even further, and later this decade, the æsthetic will be such that you won’t be able to tell the difference between the app and a traditional print publication in terms of the look.
   If older businesses hadn’t begun down this route earlier, then it will take a massive corporate cultural change to make it happen. Newer ones may well be at an advantage. The message remains clear: if you don’t treat all people, regardless of nationality, as someone connected to you, then you’re missing out.

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Posted in branding, business, culture, globalization, internet, marketing, media, publishing, technology, USA | No Comments »

No surprises from Ford Australia, but it sends the wrong message for manufacturing


Ford’s announcement today that it will end car production in Australia is no surprise, with the closures of Broadmeadows and Geelong. It was always a case of when, not if.
   The official excuse is that no one is buying big cars any more, and the Australian dollar being too strong.
   However, the real reasons are more to do with Ford’s own share price, globalization, and consolidation, a process that began years ago.
   My comments, as well as those from Australian members at the AROnline Facebook group, have constantly targeted Ford for intentionally under-marketing its Falcon sedan, and I made the bolder step of saying it was a plan to shut the plant.
   There is a nugget of truth in the Ford claim. Falcon sales have been trending downwards. But whereas Falcon was once a very extensive range, the current one consists of sedan and ute body styles. The economies of scale are not there, while rival Holden is able to keep the Commodore in the top 10 of passenger car sales in Australia with plenty of models off the same platform.
   Upgrades to Broadmeadows would have cost a huge amount for Ford, and even now, there are aspects of preparing the bodyshells that are outsourced abroad that have proved uncompetitive.
   The Falcon is not a big car by modern standards. It’s smaller in most dimensions (excepting overall length) than the Mondeo. It’s no surprise that there isn’t room for a car with a large engine to fit in between Focus and Mondeo. Big car sales aren’t exactly down—because people are lapping up offerings from Japanese brands (like the Mazda Atenza, or 6) that have the sort of space Falcon has. And having a single two-litre Ecoboost Falcon, with an engine half the usual size for fuel economy reasons, was a half-hearted response (where’s the marketing for that?).
   The changes in leadership at Ford were also a sign that things weren’t going well.
   And have you visited a Ford dealer … lately? I’ve been taking photos over the last year at Capital City Ford on what is on their forecourt, to prove my point. Last week was the first time I had seen a Falcon in the main new-car lot in that time (top photo). True, there were always Territorys, but a visitor would have got the impression that Ford is the Fiesta, Focus and Mondeo company. If you don’t push the cars in marketing, and at point of sale, then naturally the numbers will go down.
   Why did I have confidence in taking my position? Simple: Ford’s very predictable. The same technique of under-marketing was used to kill the Contour and Mystique in the US, a car which buyer trends would have told you would sell really well. Ford is very political and head office has suffered from NIH (not invented here). Things have improved under Alan Mulally, but Falcon never fitted in with those long-term plans. We’ll likely see an LWB Fusion as a Falcon replacement—there’s life in the CD platform yet—but the impact on the Australian economy is going to be pretty huge.
   It might slow the brain drain here given the multiplier effect in the Australian economy, but overall, news this big doesn’t send a good signal to the public about manufacturing Down Under—when in fact the statistics, even here in Wellington, show that manufacturing remains a viable industry, if it can be done smartly.
   Holden has managed to do reasonably well with its export programme, so the idea is that one should work more smartly. However, I doubt the Australian motoring and business media are going to focus much on the positives today.

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Posted in business, cars, globalization, leadership, marketing, media | No Comments »

When it comes to convention centres, it pays to think ahead


The New Zealand International Convention Centre has been announced in Auckland. In 2010, my campaign team proposed a convention centre for Miramar Wharf, which would include a technology complex, in a format that could have been licensed to other countries, earning royalties for the Wellington business that came up with the idea. The location was to address concerns from the hospitality sector about taking business away from the centre city, and the proximity to the airport could have helped some of our visitors. (This is a matter of record and was briefly covered by The Dominion Post.)
   I felt that the project fitted in with our city’s image. I was drawn to the idea of royalty incomes for a New Zealand business, which would have showed that Kiwi ingenuity and intellectual property could be exported in a frictionless fashion. There was also a concern that we could not attract international conventions here, even in the late 2000s, and this complex could have solved it. I had been to enough conventions and conferences overseas to have seen first-hand the sort of numbers involved—and how we needed something ourselves. It was to preempt similar moves by other cities, long before the Sky City deal was announced.
   I know there are issues with this—including whether residents would want a complex there, and there would be a great need to consult with the public first. Nonetheless, it was worth raising it, and I’m grateful that it received a tiny bit of coverage, so you know I’m not engaging in revisionism today.
   With hindsight, it would have respected the memorandum issued by WCC in the 1990s that a casino was not desirable for our city. I note that at the mayoral debate for the hospitality sector in 2010, opinions on a casino were divided roughly 50–50.
   The Dominion Post is covering this topic today, and it highlights to me that this city has been caught on the back foot again.
   Wellington still strikes me as a more desirable location, with Auckland and Queenstown, for instance, a stone’s throw via an air link. It’s the same with our airport. We have an opportunity to put ourselves on the map in the next few years, while Christchurch is still rebuilding, because they will come to threaten Wellington’s position as an innovative hub within the next decade. More importantly, we need to be positioning ourselves to a global audience, something that 20th-century political thinking still prevents us from doing.

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Posted in branding, business, leadership, marketing, media, New Zealand, politics, technology, Wellington | 2 Comments »

Volkswagen is a case for critical thinking, not blind following


Here’s an article from Autoblog that combines several of the themes I enjoy writing about: cars, leadership, management and education.
   I’ve already hinted at this on my Facebook fan page, where I seem to post some of the pithy things these days. I sometimes try to avoid blogging about the same thing—a lot of what you see here are ideas that haven’t changed, especially a lot of the posts about social responsibility and branding.
   I don’t want to dissuade anyone from getting higher education but one has to remember: education, especially tertiary education, is meant to open your mind to other possibilities and to get you thinking about them critically. It’s why I enjoyed papers at law school like public law and jurisprudence: both had lecturers (Prof Sir Geoffrey Palmer and Assoc Prof Ian Macduff) who enjoyed a well reasoned argument, even when it didn’t agree with their own thinking. It’s also why I didn’t appreciate banking law, or several other papers, where you had to agree 100 per cent with the lecturer, and to hell with independent thinking.
   The MBA, then, can be a blessing and a curse. A blessing for those who treat it as it should be: a skill set, providing a framework, from which to analyse things. A curse for those who believe that certain case studies must be followed religiously, failing to take into account the conditions of their own organizations. Which brings us neatly to the Volkswagen case.
   It may be a bit of a simplification to say that MBA thinking killed GM, and Volkswagen has eschewed that to become one of the world’s greatest car manufacturers, but it’s not too far from the truth. If you read period American books on management—or even one of my favourites, Lee Iacocca’s autobiography—there is this idea of what ‘efficiency’ is, usually with a lot of outsourcing, finding cheaper and cheaper bases of manufacture, with another eye on how to raise the share price for the quarter. Not the best way to run a firm, especially when visions need to be set for years, decades or quarter-centuries. I’ve written about that aspect before.
   But the way John McElroy puts it in his article, ‘efficiency’ means an absence of overlap and vertical integration, yet with them, Volkswagen AG is the world’s largest car company ‘if you measure it by revenue and profits. Its revenue of $200 billion is greater than every other OEM. Last year’s operating profit of $14 billion is the kind of performance you expect from Big Oil companies, not automakers.’ Yet:

   Any efficiency expert would tell you that VW is too vertically integrated, has too much overlap and duplication, and has way too many brands. VW, meanwhile, keeps growing bigger, stronger and more profitable …
   Efficiency experts will tell you that on an employee-per-vehicle basis, Volkswagen looks hopelessly inefficient. Financial analysts will tell you that the company woefully trails its competitors on a revenue-per-employee basis. But VW will tell you that it makes more money than any other automaker—by far.

In fact, McElroy goes on to say that Volkswagen looks a lot like the General Motors of Alfred P. Sloan—before the MBAs got hold of it.
   The idea of ‘efficiency’ is often a misnomer. Most of British industry was dismantled with the mantra of efficiency, essentially giving it up to globalist, technocratic forces, helped along by the Slater Walkers and the governments of the time. Those decades, too, were driven by “experts”—and what resulted was neither efficient nor productive. The decline of British Leyland is perhaps one of the most telling examples of period thinking applied disastrously to the British motor industry, its skilled workers now happily picked up by the Japanese, Germans and Indians.
   By all means, if real savings can be had and long-term goals achieved, then efficiency is a wonderful thing. There are areas where technology should aid productivity. But watch out for that word efficiency. It doesn’t always mean what the experts say it means—and if revenue and profit decline as a result of it, and corporate culture is harmed, then you may be better off heeding the lessons that Volkswagen’s management has. Use that MBA as a framework, not as a playbook.

PS.: I took the same stance when arguing over how to save General Motors, as published as a reader letter in Condé Nast Portfolio magazine when it was still running. Naturally, GM followed the downsizing, brand-stripping route because it’s more efficient. Time will tell.

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