A generation ago, I donât think many would have thought that globalization could be brought to its knees by a virus. They may have identified crazy politicians using nationalism as a tool, but probably considered that would not happen in developed economies and democracies sophisticated enough to withstand such assaults.
This course correction might be poetic to the pessimist. Those who emptied their own nationsâ factories in favour of cheaper Chinese manufacture perhaps relied on appalling conditions for their working poor; and if China were incapable of improving their lotâand you can argue just why that isâthen with hindsight it does not seem to be a surprise that a virus would make its leap into humankind from Wuhan, itself not the shiny metropolis that we might associate with the countryâs bigger cities. Those same corporations, with their collective might, now find themselves victim to an over-reliance on Chinese manufacture at the expense of their own, with their primary, and perhaps only, country of manufacture no longer producing anything for them as the government orders a lock-down.
I argued months ago that failing to declare the coronavirus as a matter of international concern a week before the lunar New Year was foolhardy at best; perhaps I should have added deadly at worst. Here is the period of the greatest mobilization of humans on the planet, and we are to believe this is a domestic matter? If capitalist greed was the motive for downplaying the crisis, as it could have been within China when Dr Li Wenliang began ringing alarm bells on December 30, 2019 and was subsequently silenced, then again we are reaping the consequences of our inhumanity: our desire to place, if I may use the hackneyed expression, profits above people. And even if it wasnât capitalism but down to his upsetting the social orderâthe police statement he was forced to sign said as muchâthe motive was still inhuman. It was the state, as an institution, above people and their welfare.
We arrive at a point in 2020 where one of Ronald Reaganâs quotes might come true, even if he was talking about extraterrestrials. At the UN in 1987, President Reagan said, âPerhaps we need some outside universal threat to make us recognize this common bond. I occasionally think how quickly our differences worldwide would vanish if we were facing an alien threat from outside this world.â
This might not be alien, but it is a universal threat, it is certainly indiscriminate and it affects people of all creeds and colours equally.
Our approaches so far do not feel coordinated globally, with nations resorting to closing borders, which prima facie is sensible as a containment measure. You would hope that intelligence is being shared behind the scenes on combatting the virus. Iâm not schooled enough to offer a valuable opinion here so I defer to those who are. But Iâm not really seeing our differences vanish, even though we are being reminded at a global level of the common bond that Reagan spoke of. This is a big wake-up call.
Examining the occidental media, there appears to be a greater outcry over President Donald Trump closing the US from flights from the EU Schengen zone than there was when China faced its travel ban, suggesting to me that barring your nation from people within a group of 420 million is a bigger deal than barring people from a group of 1,400 million. One lot seems more valued than the other lot.
What I do believe is that we have made certain choices as a people, and that while the pure model of globalization raises standards of living for all, we, through our governments and institutions, havenât allowed it to happen. Weâve not seen level playing fields as we were promised. Weâve seen playing fields dominated by bigger players, and for all those nations that are sucked into the prevailing mantra that arose in the 1980s, weâve allowed our middle classes to shrink and the gap between rich and poor to grow. The one economic group that assures prosperity has been eroded.
As itâs eroded then weâre looking at economies that favour the rich and their special interest groups over the poor, rather than investing in public infrastructure and education.
No wonder many lack faith in their institutions, and their willing and continued pursuit of the monetarist order over humanistic agenda.
Yet at the one-to-one level many differences disappear. Itâs not helped by social media, those corrosive corporations that seek to separate through algorithms that encourage tribalism, but those that take the time to have a dialogue realize that we are in this together. Within these elaborate websites lies some hope.
My entire working career to date has been mostly one where individuals and independent enterprises have formed contracts to do business, creating things that once didnât exist through intellectual endeavour. We have done so outside elephantine multinationals, within which many imaginations have been stifled. We are people who can think outside the squareâand all too often, the inhabitants of the square reject us anyway.
When the world comes back online, I hope we have learned some lessons about the source of our troubles. Weâve willingly let certain institutions get too big at our expense; weâve allowed a playing field slanted in their favour that encourages a race to the bottom by outsourcing to underpaid people; and as a result weâve allowed unhygienic conditions to flourish because theyâre âover thereâ, instead of holding corporations and nations to account. It will take us making choices with our eyes open about policies that champion individuals over big corporations; genuinely creating level playing fields where entrepreneurship can flourish at every level and benefit all; ensuring that we properly fund education and other long-term investments; and having strong foreign policies that can constructively call out injustices by suggesting a better way. We need to do this over the long term. The big corporations have mustered global power and so must individuals. Nationalism is not the answer to solving our problems: it is a reaction, a false glimpse into the past with rose-coloured glasses. It is no more a reflection of our past than a young northern lad pushing his bicycle uphill to DvoĆĂĄkâs âNew World Symphonyâ. Nostalgia is often inaccurate.
Whether you are on the left or the right, whether you love Trump or Sanders, Ardern or Bridges, weâre simply lying to ourselves if we think the other political side is our enemy, when itâs in fact institutions, political or corporate, that have grown too distant to be concerned with anyone but those in power.
Call me an idealist, but we could be on the verge of a humanistic revolution where we use these technological tools for the betterment of us all. Greta Thunberg has done so for her agenda, and we have a chance to, too: a global effort by individuals who see past our differences, because we have those common bonds that Reagan spoke of. Letâs debate the facts and get us on track, resisting both statism and corporatism at their extremes, since theyâre sides of the same coin. What empowers us as individuals? In the system we have today, is there a party that can best deliver this? Whoâll keep the players honest? When we start asking these in the context of the pandemic, the answer wonât be as clear as left and right. And Iâm not sure if the answer can even be found in major political parties who wish to deliver more of the same, plus or minus 10 per cent.
Or we can wait for the coronavirus to disappear, carry on as we had been, keep dividing on social media to help line Mark Zuckerbergâs pockets, and allow another pandemic to venture forth. It can’t be business as usual.
The trouble with the graphic is that the only thing it got right was that two women were killed. Sweden wasnât having a referendum on whether to leave the EU, it was about whether it should adopt the euro. The closest British parallel would have been when then-PM John Major negotiated the Maastricht opt-out in 1991. It also claimed that the polls were for leaving; notwithstanding that that wasnât what the Swedes were voting for, the polls for and against adopting the euro were roughly neck in neck, though the wisdom was that the pro-euro camp would win. By the weekend, the result was that Sweden would keep the krona.
When I argued with some pro-Brexiters about this, they, like most pecksniffians, demanded I check my facts. I didnât have to: I have a memory that goes back further than one month, and unlike them, I know what went on in their own backyard because, in 2003, I kept my eyes open.
I should point out that I am not summarizing all Brexiters as dimwitted Britons who wanted Johnny Foreigner to go home. I count among my closest friends someone who voted leave, and for very substantial, well thought-out reasons. He felt that the European Union had become an unwieldy bureaucracy which benefited Britain little, and while I felt the benefits outweighed the detriments, I respect his opinion and his vote. At least it was considered, and at least it wasnât one that was based on the ramblings and rants of Farage, Johnson, Gove et al.
Appealing to nationalism, as the likes of Farage did, is a cheap trick in politics: it stirs a wave of nostalgia, and people might love chanting at how great their nation is, but it doesnât address the core issues that put them into the poo to begin with. Of course the UK has a great deal to be proud of; but like many countries (including ours) the globalist technocratic agenda are what have made things untenable for a growing part of the population. Itâs why real wages havenât risen yet certain corporations profit aplenty; itâs why we work more hours today than we ever did, despite futurists of a generation ago predicting all this leisure time that we would all have thanks to automation.
But is retreat the right thing to do? The remain camp believes that it wasnât: to influence Europe you must be in Europe. It wasnât that long ago that not being in Europe was fatal to British exportsâthe failure of the British motor industry, for instance, was in part due to its late recognition that the UK needed to be part of the EEC or, at least, produce vehicles there. Globalizationâs positives should be the free movement of people and of capital; and economic union to permit that greater freedom seems a sensible thing to pursue, not to run away from. The trick is how to make this work for everyday people, the growing number who are impacted by globalist forces; once there were few, now few escape them. It is, then, the role of government to either protect those who are most vulnerable, to champion (either through private enterprise or on its own accord) real innovation and industry that can create jobs, and to cut through the BS where both public and private enterprise simply reinvent the wheel from time to time, putting lipstick on the bulldog.
I am ambivalent about it because Iâve seen our own governments, National and Labour, be particularly weak when it comes to dealing with globalization, succumbing to foreign takeovers and allowing the little guy to be run over. The deals havenât been good for New Zealand in many respects, a small country that believes in its place in the first world but which can be deluded about this very fact. Our economy just isnât that solid to take it on the chin. Look at our banks, mostly foreign-owned and more unreliable than ever: remember how 40 years ago cheques would take 24 hours to clear? Yet now our computerized systems take three to five working days? Insiders tell me this is the consequence of less reliable Australian systems being foisted upon us; so much so that we have a wire transfer that has been taking weeks, and no one knows where the money has gone. Just how do you misplace tens of thousands of dollars? Why do we assume Australian bankers are smart enough to answer? And those who question such agenda donât get much truck in a media landscape also dominated by foreigners: Iâm looking at one newspaper publishing group at the least. The ways of the big countries are not always the bestâyet somehow the powers-that-be in this country have been hoodwinked by this consistently since 1984. I can’t understand it, and my initial reaction when there is such a lack of logic is to follow the money.
Brexit has made me refine my thinking: I might not like a system where New Zealandâs the little player that doesnât benefit from a level playing field, but at the same time I believe we need to find ways to influence the globalist game for the better. We love looking at Scandinavian countries because of their comparable size. They may have higher taxes but at the same time they donât seem to balk at innovation for the greater good; they believe in the freedom of movement of capital and of people, and, despite their general humility, they actually arenât afraid of creating global companies that take on the rest of the world. Look at Vattenfall or Statoil. We might not like Statoil for what it wants to do to our own environment, but we do have to ask what our equivalent is. We lost our lead in hybrid cars, which we held for most of the 1980s, but itâs an example of what we can do when government and private enterprise cooperate on something that is future-oriented. Whatâs the next big thing? Is it renewable energy tech that we can export? There are companies here already doing frictionless exports, and more need to be encouraged. Government shouldnât try to create groups of them or force mergers upon them; that can be left to the market. But there needs to be a vision or a direction that we take to create a new brand for our country where people naturally think: innovation for the greater good = New Zealand. And, maybe, to go with that, a fairer version of globalization can emerge, certainly one that is not coloured by the next quarterly result demanded by Wall Street.
Yes, there is some national fervour involved here, too, but applied correctly, it wonât be false flag-waving thatâs dependent on the past. Iâm all for being proud of your country when the victories are real and measurableâlike on the sporting field. There itâs real, and itâs often about the next game or the next season: itâs future-oriented, too. With Brexit, I canât see the vision; and the most visible foreigner among this, the Turkish-American politician, Boris Johnson, hasnât communicated one that I can discern.
And maybe this confusion is the opportunity we need for New Zealand.
After the UK abandoned the Commonwealth markets in favour of one right next door, our country found new export markets, so much so that the UK accounts for 3 per cent today. Even in 1973, when it was 40 per cent, it had been falling consistently for half a decade, if I recall correctly, and the notion that Britain would reach back out toward the Empah for trade is fanciful at best.
Being someone who has enjoyed looking at world history play out through maps, ever since I discovered a book on the subject as a third former at Rongotai College, it hasnât escaped my thoughts that this is a further retreat for the UK in terms of its global influence.
So whoâs on the rise? It might be us. The centre of the global economy has been shifting eastward in recent times and weâre well placed to take advantage of it. Weâre part of the Anglosphere so we bridge the past, where it was the dominant global culture, with those trading partners who might be on the horizon. But it has to be real. Weâre nimble enough, and I canât see why weâve been so fascinated with apeing the US and the UK for so long. Once again we need to set our own direction: we have a culture thatâs ready for it with a greater sense of identity than weâve ever had. I just wonder if we have a government, local or national, courageous enough to embark on this.
As he has done so many other times since we encountered each other in 2001, Simon Anholt has articulated my thoughts on governance and politics much better than I can through his ventures. I think this puts a very good context on why I ran my mayoral campaigns the way I did, and for that matter, a good deal of my own businesses. The ideas here are in line with what we believe at Medinge Group, tooâmore on that in an upcoming post. We live in a connected, globalized planetâand the sooner our leaders wake up to this fact, and the positive potential it brings, the better.
How can we better organize ourselves as seven thousand million people? My belief has been: if we can start at a city level, we can bring about change.
Head to Simon’s website at good.country to find out more.
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 theoriesâcounterinsurgency warfare, state buildingâwere 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 theyâre reminiscent of Buddhists who say: âThese are the four paths,â or of Christians who say: âThese are the seven deadly sins.â Theyâre sort of theologies, essentially, made by people like Buddhist monks in the eighth centuryâpeople who have a fundamental faith, which is probably, in the end, itself completely delusional.
And:
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 superïŹuous.
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 centuryâwhich 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 entrepreneursâor even as Stewart says, ‘bright, energetic people’âcame 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 smartâremember, I did law, and that area is filled with a lot of itâwe 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 Afghanistanâthat is the context of his remarkâand 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 systemâand lacking the knowledge to analyse it and quickly localizing your knowledge and gaining the contextâmake 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 mysteriesâand Stewart is wise to have come to the conclusions he has, thanks in no small part from a global, well travelled context.
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.âÂ5 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.’
âI 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.’
âThere are some good aspects in its response to the Sale and Supply of Alcohol Act 2012âand 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.
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 nationsâa 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 populationâWellingtonians felt pretty strongly when PM John Key made his comment that our city was ‘dying’âbut 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, howeverâthey 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 Londonâs and Torontoâs stock exchanges, and similar discussions between Sydney and Singapore, Chicago and Sao Paulo, Dubai and Mumbai or the ShenzhenâHong KongâShanghai 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 oneâin Wellington’s case, tourismâto 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?
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 involvedâand 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 thisâincluding 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 50â50. 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.
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 thingâa 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 managementâor even one of my favourites, Lee Iacocca’s autobiographyâthere 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 automakerâby far.
In fact, McElroy goes on to say that Volkswagen looks a lot like the General Motors of Alfred P. Sloanâbefore 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”âand 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 meansâand 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.
Every now and then, the Harvard Business Review comes up with some gems. This video, from Anna Tavis, head of talent and development at Brown Brothers Harriman, says that global experience is more important than education if you wish to be successful in business.
She also hints at the importance of differentiation, which I often apply to brands. Since many of us have created personal brands to some degree or another, in a world where MBAs are a dime a dozen, what extra attribute do you offer? What is your differentiating factor?
Leadership, too, comes from having that international edge: if you have an understanding across cultures, you are more open to best practices from all sources, rather than relying on insular thinking. Too many organizations slip on this front: they see their main competitor as the next biggest city in their own country, for instance, when there’s not much excuse, in an interconnected world, to not set (or exceed) a benchmark with the best in the world.
It was in the fourth quarter of the year that Occupy became a brand. Just capitalize it, and everyone knows what you mean. The original geographical indicator of Wall Street disappearedâto be fair, it began disappearing when similar protests began happening across the United States and then, the worldâbut I’ve only noticed in the last few weeks that the simple utterance of the word Occupy brought with it a multitude of values. That’s what a brand does: it’s shorthand or code for a range of associations.
But what associations? If one believes some of the media, then Occupy is unfocused, with its protesters simply upset at the status quo. Others see it as an attack on the technocratic agenda and the multiple facets they possess, whether it’s the financial system being broken (something Chris Macrae brought up at my first Medinge meeting back in 2002) or corruption in politics.
The truth, at least initially, was probably somewhere in between. I never believed Occupy was one where there was some “protester class” (at least one media outlet believed that), and that its members came from a cross-section of society, even if a few of the international protests brought out a few of the usual suspects from antiestablishment groups. It was clear, early on, certainly from the social networks that brought more direct news than the mainstream corporate media, that everyday people were involved. To me, the most poignant images were probably that of retired cop Capt Ray Lewis getting cuffed by the NYPD.
However, there were so many conflicting emotions at Occupy that it would be hard to sum up just what people opposed. Maybe it was very hard to voice because there are so many parts to the system that they see is broken. I know when we did our post-Enron session at Medinge, we probably had three dozen Post-It notes on a whiteboard summarizing what we thought was wrong with the business system. They were then synthesized into eight points, not without some effort.
As the protests wore on, the synthesis has taken place. It’s not an unusual phenomenon: gatherings of people can take time to figure out, through dialogue, what their common grounds are. Better doing it this way, codifying through dialogue, than having a set of values imposed on you from above: it’s a way to preserve authenticity in the movement. A good set of values that represents an organization, in a formal, corporate setting, is usually the result of in-depth research into staff, channel members and external audiences. In the branding world, especially with social networks empowering communications, it makes more sense to harness people’s thoughts through the technology we have at our disposal.
It was interesting reading what Naomi Wolf had to say about Occupy in The Guardian. The crux of her article is not about brand whatsoeverâshe highlights potentially dangerous patterns as crackdowns take place and their implication for the USâbut read on and she finds out there are certain things that Occupy wants through simply asking its supporters online:
get the money out of politics (e.g. ‘legislation to blunt the effect of the Citizens United ruling, which lets boundless sums enter the campaign process’);
âreform the banking system to prevent fraud and manipulation, with the most frequent item being to restore the Glass-Steagall Act ⊠This law would correct the conditions for the recent crisis, as investment banks could not take risks for profit that create kale derivatives out of thin air, and wipe out the commercial and savings banks’;
âdraft laws against the little-known loophole that currently allows members of Congress to pass legislation affecting Delaware-based corporations in which they themselves are investors.â
No doubt there will be variations of these with Occupy movements in other parts of the planet.
I don’t know Ms Wolf’s processes, or how academic this Q&A was, but perhaps that is not the question here. What we should realize is that the movement is taking a more defined shape, and the media’s contention that this is something unfocused is getting weaker by the day.
