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jerryking : complacency   46

How Britons forgot that history can hurt
September 19, 2019 | | Financial Times| by Simon Kuper.

Centuries of stability have created a country careless about risk... the British mainland has meandered along nicely since Newton’s death in 1727: no conquest, dictatorship, revolution, famine or civil war. The sea prevented invasions; coal made Britain the first industrialised power. Few Britons developed strong ideologies that they were motivated to kill for.

How to square this historical stability with the UK’s newfound instability?......What explains Britain’s transformation? I suspect it’s precisely the country’s historical stability that has made many of today’s Britons insouciant about risk. They have forgotten that history can hurt. Other countries remember....their citizens remember how countries can go horribly wrong (see Uganda, the French in Algeria, etc.)......Britain has no comparable traumas. Terrible things do happen there but chiefly to poor people — which is how the country is supposed to work. Even the losses suffered during two world wars have been reconfigured into proud national moments. The widespread American guilt about slavery is almost absent here.

And so, Britain has a uniquely untroubled relationship with its past, and a suspicion of anything new. No wonder the natural ruling party calls itself “Conservative”.

Britain’s ruling classes are especially nostalgic, because they live amid the glorious past: the family’s country home, then ancient public school, Oxbridge and Westminster. They felt Britain was so secure from constitutional outrages that they never bothered to write a constitution.

But it’s wrong to blame British insouciance (embodied by Johnson) on the elite. It extends across all classes. Most Britons have learnt to be politically unserious. Hence their tolerance for toy newspapers they know to be mendacious — Britons’ ironic relationship with their tabloids puzzles many foreigners.

Postwar Britons — the most shielded generation in this shielded country’s history — voted Brexit not out of fanaticism but in a spirit of “Why not?” Many Leave voters argued additionally that “Things can’t get worse”, which any Ugandan could have told them was mistaken. Some Leavers even seemed to crave a bit of history.
'30s  Argentina  Brexit  carelessness  complacency  constitutions  decay  false_sense_of_security  German  history  historical_amnesia  insouciance  ruling_classes  Simon_Kuper  social_classes  United_Kingdom  worrying 
september 2019 by jerryking
Why further financial crises are inevitable
March 19, 2019 | Financial Times | Martin Wolf.

We learnt this month that the US Fed had decided not to raise the countercyclical capital buffer required of banks above its current level of zero, even though the US economy is at a cyclical peak. It also removed “qualitative” grades from its stress tests for American banks, though not for foreign ones. Finally, the Financial Stability Oversight Council, led by Steven Mnuchin, US Treasury secretary, removed the last insurer from its list of “too big to fail” institutions.

These decisions may not endanger the stability of the financial system. But they show that financial regulation is procyclical: it is loosened when it should be tightened and tightened when it should be loosened. We do, in fact, learn from history — and then we forget.....Regulation of banks has tightened since the financial crises of 2007-12. Capital and liquidity requirements are stricter, the “stress test” regime is quite demanding, and efforts have been made to end “too big to fail” by developing the idea of orderly “resolution” of large and complex financial institutions.....Yet complacency is unjustified. Banks remain highly leveraged institutions.....history demonstrates the procyclicality of regulation. Again and again, regulation is relaxed during a boom: indeed, the deregulation often fuels that boom. Then, when the damage has been done and disillusionment sets in, it is tightened again........We can see four reasons why this tends to happen: economic, ideological, political and merely human.

* Economic
Over time the financial system evolves. There is a tendency for risk to migrate out of the best regulated parts of the system to less well regulated parts. Even if regulators have the power and will to keep up, the financial innovation that so often accompanies this makes it hard to do so. The global financial system is complex and adaptable. It is also run by highly motivated people. It is hard for regulators to catch up with the evolution of what we now call “shadow banking”.

* Ideological
the tendency to view this complex system through a simplistic lens. The more powerful the ideology of free markets, the more the authority and power of regulators will tend to erode. Naturally, public confidence in this ideology tends to be strong in booms and weak in busts.

* Political

the financial system controls vast resources and can exert huge influence. In the 2018 US electoral cycle, finance, insurance and real estate (three intertwined sectors) were the largest contributors, covering one-seventh of the total cost. This is a superb example of Mancur Olson’s Logic of Collective Action: concentrated interests override the general one. This is much less true in times of crisis, when the public is enraged and wants to punish bankers. But it is true, again, in normal times.

Borderline or even blatant corruption also emerges: politicians may even demand a share in the wealth created in booms. Since politicians ultimately control regulators, the consequences for the latter, even if they are honest and diligent, are evident.

A significant aspect of the politics is closely linked to regulatory arbitrage: international competition. One jurisdiction tries to attract financial business via “light-touch” regulation; others then follow. This is frequently because their own financiers and financial centres complain bitterly. It is hard to resist the argument that foreigners are cheating.

* Human
There is a human tendency to dismiss long-ago events as irrelevant, to believe This Time is Different and ignore what is not under one’s nose. Much of this can be summarised as “disaster myopia”. The public gives irresponsible policymakers the benefit of the doubt and enjoys the boom. Over time, regulation degrades, as the forces against it strengthen and those in its favour corrode.

The cumulative effect of these efforts is quite clear: regulations erode and that erosion will be exported. This has happened before and will do so again. This time, too, is not different.
boom-to-bust  bubbles  collective_action  complacency  corruption  disaster_myopia  entrenched_interests  economic_downturn  financiers  financial_crises  financial_innovation  financial_regulation  financial_system  historical_amnesia  Mancur_Olson  Martin_Wolf  policymakers  politicians  politics  procyclicality  regulatory_arbitrage  regulation  regulators  stress-tests  This_Time_is_Different  U.S._Federal_Reserve 
march 2019 by jerryking
CIBC’s Victor Dodig warns about global debt levels; urges Canada to prepare
SEPTEMBER 11, 2018 | The Globe and Mail | by JAMES BRADSHAW (BANKING REPORTER)

Who/Where/Occasion: CIBC's CEO Victor Dodig, in a speech to the Empire Club

Problem(s):
* alarm over rising global debt levels, warning that Canada needs to start preparing now for the next economic shock.
* some of the most acute threats to the global economy are beyond this country’s control, but cautioned Canadians not to get too comfortable while times are good.
* developing problems could ripple through interwoven financial markets around the world.
* “It sounds counterintuitive, but that same debt that helped the world recover is actually infusing risk into the global financial system today," ...“I think there’s a real serious global challenge of this low-interest-rate party developing a big hangover."

Remedies:
* clarify rules around foreign direct investment, which is falling in Canada. The main culprit is the uncertainty plaguing large business deals that require approval from Ottawa under opaque foreign-investment rules – and he cites the turmoil surrounding the Trans Mountain pipeline expansion as an example.
* more immigration to Canada, asking the government – which has already set higher immigration targets for the coming years – to open its arms even wider.
* governments and employers to work more closely with universities and colleges to match the skills graduates have to employers' needs, promoting what are known as the STEM disciplines – science, technology, engineering and math – as well as skilled trades.
* remove interprovincial trade barriers.
* allow companies to expense capital investments within one year to be more competitive with U.S. rules.

My Takeaways:
CEOs  CIBC  debt  FDI  global_economy  interconnections  interest_rates  opacity  pipelines  resilience  speeches  uncertainty  Victor_Dodig  war_for_talent  threats  beyond_one's_control  complacency  preparation  financial_system  readiness 
september 2018 by jerryking
Norway’s oil wealth swamps innovation
John Gapper OCTOBER 19, 2016

"omstilling", is the name for Norway’s nascent shift to living without the energy industry that has brought it wealth and welfare for 45 years.

Why hurry, some wonder. Its 5.2m citizens are among the world’s comfiest, with gross domestic product per head of $75,000. Its oil-funded sovereign wealth fund, set up in 1990 to help it avoid “Dutch disease” — the syndrome of resource wealth driving up national currencies and weakening other sectors — is worth $880bn. Its oil and gas reserves should last for another half-century.

The trouble is that Norway is too comfortable. It takes a crisis to get most people to change their ways radically or for an economy to adjust the way that it works. Whatever you think of Brexit, it is one of those crises. At the moment, Norway has more official think-tanks and innovation incubators than entrepreneurship and disruption.....The oil fund is exemplary in many ways: by taking the wealth largely out of the hands of the government and directing it into overseas investment, Norway has avoided the worst of Dutch disease. But it adds to the sense of the country having a cushion against change: the fund’s very existence extends its deadline to reshape the economy.

The citizens are also cushioned......Norway remains hesitant about change.....Norway is a consensus-driven society that feels comfortable only with reform that has been carefully discussed and agreed....Elisabeth Stray Pedersen, a 29-year-old fashion designer who last year bought a factory opened in 1953 by the designer Unn Soiland Dale. She wants to revive its Lillunn brand and sell more of its Norwegian wool blankets and coats abroad.
Norway  Norwegian  oil_industry  Brexit  United_Kingdom  innovation  natural_resources  resource_curse  sovereign_wealth_funds  complacency  fashion  apparel  start_ups 
april 2018 by jerryking
How does Chinese tech stack up against American tech?
Feb 15th 2018 | Economist | Schumpeter.

The Chinese venture-capital (VC) industry is booming. American visitors return from Beijing, Hangzhou and Shenzhen blown away by the entrepreneurial work ethic. Last year the government decreed that China would lead globally in artificial intelligence (AI) by 2030. The plan covers a startlingly vast range of activities, including developing smart cities and autonomous cars and setting global tech standards. Like Japanese industry in the 1960s, private Chinese firms take this “administrative guidance” seriously.

Being a global tech hegemon has been lucrative for America. Tech firms support 7m jobs at home that pay twice the average wage. Other industries benefit by using technology more actively and becoming more productive: American non-tech firms are 50% more “digitised” than European ones, says McKinsey, a consulting firm. America sets many standards, for example on the design of USB ports, or rules for content online, that the world follows. And the $180bn of foreign profits that American tech firms mint annually is a boon several times greater than the benefit of having the world’s reserve currency.

A loss of these spoils would be costly and demoralising. Is it likely? Schumpeter has compiled ten measures of tech supremacy. The approach owes much to Kai-Fu Lee of Sinovation Ventures, a Chinese VC firm. It uses figures from AllianceBernstein, Bloomberg, CB Insights, Goldman Sachs and McKinsey and includes 3,000 listed, global tech firms, 226 “unicorns”, or unlisted firms worth over $1bn, plus Huawei, a Chinese hardware giant.

The overall conclusion is that China is still behind. Using the median of the yardsticks, its tech industry is 42% as powerful as America’s. But it is catching up fast. In 2012 the figure was just 15%.......For Silicon Valley, it is time to get paranoid. Viewed from China, many of its big firms have become comfy monopolists. In the old days all American tech executives had to do to see the world’s cutting edge was to walk out the door. Now they must fly to China, too.
China  China_rising  U.S.  Silicon_Valley  Alibaba  Tencent  metrics  technical_standards  America_in_Decline?  work_ethic  complacency  Kai-Fu_Lee 
april 2018 by jerryking
BlackRock co-founder warns on complacency over Chinese tech
Owen Walker in Davos 2 HOURS AGO

“Apple was not in the music industry, Google was not in the mobile phone industry and Amazon was not in the groceries business — until they were,” he said. “Tech companies are going to enter the financial services market in a very, very aggressive way.” 

Ant Financial’s sprawling portfolio of businesses includes one of the world’s biggest credit scoring systems, a bank, an insurer and a lending platform for small businesses. It was reported last week by the FT and other news organisations that Ant Financial is seeking to raise at least $9bn in its latest private fundraising ahead of an initial public offering....“You have to expect there will be a threat from [Chinese] technology companies to financial services,” ....“But I would say Amazon is equally a threat to doing that.” 
BlackRock  Ant_Financial  complacency  threats  disruption  Alibaba  asset_management  financial_services 
april 2018 by jerryking
Mental bias leaves us unprepared for disaster
August 14, 2017 | Financial Times | Tim Harford.

Even if we could clearly see a crisis coming, would it have made a difference?

The 2004 storm, Hurricane Ivan, weakened and turned aside before striking New Orleans. The city was thus given almost a full year's warning of the gaps in its defences. The near miss led to much discussion but little action.

When Hurricane Katrina hit the city, evacuation proved as impractical and the Superdome as inadequate as had been expected. The levees broke in more than 50 places, and about 1,500 people died. New Orleans was gutted. It was an awful failure but surely not a failure of forecasting.

Robert Meyer and Howard Kunreuther in The Ostrich Paradox argue that it is common for institutions and ordinary citizens to make poor decisions in the face of foreseeable natural disasters, sometimes with tragic results.

There are many reasons for this, including corruption, perverse incentives or political expediency. But the authors focus on psychological explanations. They identify cognitive rules of thumb that normally work well but serve us poorly in preparing for extreme events.

One such mental shortcut is what the authors term the “amnesia bias”, a tendency to focus on recent experience (i.e. "disaster myopia" the human tendency to dismiss long-ago events as irrelevant, to believe This Time is Different and ignore what is not under one’s nose). We remember more distant catastrophes but we do not feel them viscerally. For example, many people bought flood insurance after watching the tragedy of Hurricane Katrina unfold, but within three years demand for flood insurance had fallen back to pre-Katrina levels.

We cut the same cognitive corners in finance. There are many historical examples of manias and panics but, while most of us know something about the great crash of 1929, or the tulip mania of 1637, those events have no emotional heft. Even the dotcom bubble of 1999-2001, which should at least have reminded everyone that financial markets do not always give sensible price signals, failed to make much impact on how regulators and market participants behaved. Six years was long enough for the lesson to lose its sting.

Another rule of thumb is “optimism bias”. We are often too optimistic, at least about our personal situation, even in the midst of a more generalized pessimism. In 1980, the psychologist Neil Weinstein published a study showing that people did not dwell on risks such as cancer or divorce. Yes, these things happen, Professor Weinstein’s subjects told him: they just won’t happen to me.

The same tendency was on display as Hurricane Sandy closed in on New Jersey in 2012. Robert Meyer found that residents of Atlantic City reckoned that the chance of being hit was more than 80 per cent. That was too gloomy: the National Hurricane Center put it at 32 per cent. Yet few people had plans to evacuate, and even those who had storm shutters often had no intention of installing them.

Surely even an optimist should have taken the precautions of installing the storm shutters? Why buy storm shutters if you do not erect them when a storm is coming? Messrs Meyer and Kunreuther point to “single action bias”: confronted with a worrying situation, taking one or two positive steps often feels enough. If you have already bought extra groceries and refuelled the family car, surely putting up cumbersome storm shutters is unnecessary?

Reading the psychological literature on heuristics and bias sometimes makes one feel too pessimistic. We do not always blunder. Individuals can make smart decisions, whether confronted with a hurricane or a retirement savings account. Financial markets do not often lose their minds. If they did, active investment managers might find it a little easier to outperform the tracker funds. Governments, too, can learn lessons and erect barriers against future trouble.

Still, because things often do work well, we forget. The old hands retire; bad memories lose their jolt; we grow cynical about false alarms. Yesterday’s prudence is today’s health-and-safety-gone-mad. Small wonder that, 10 years on, senior Federal Reserve official Stanley Fischer is having to warn against “extremely dangerous and extremely short-sighted” efforts to dismantle financial regulations. All of us, from time to time, prefer to stick our heads in the sand.
amnesia_bias  biases  books  complacency  disasters  disaster_myopia  dotcom  emotional_connections  evacuations  financial_markets  historical_amnesia  lessons_learned  manias  natural_calamities  optimism_bias  outperformance  overoptimism  panics  paradoxes  perverse_incentives  precaution  recency_bias  short-sightedness  single_action_bias  Tim_Harford  unforeseen  unprepared 
august 2017 by jerryking
The Economy Needs Amazons, but It Mostly Has GEs
the country as a whole badly needs some rules-defying risk-taking. For business, that means a bit more Amazon in the boardroom and a bit less GE....The purchase of Whole Foods by Amazon introduced a level of volatility and turmoil (at least singularly to the retail sector) which had been absent from the market for a long time....The rest of the market remained placid. And months of historically low volatility has begun to look like dangerous complacency....... another, potentially more troubling explanation: stagnation. Muted markets may be an inevitable product of steady, sluggish growth, low and predictable interest rates, declining business startups and failures, and decreased competition. In other words, the problem is, there aren’t enough Amazons disrupting the stock market and the economy.....Jeffrey Bezos founded Amazon in 1994, he has prioritized expansion and innovation ahead of profit. In its early years, free cash flow—cash from operations minus CAPEX—hovered around zero. Mr. Bezos approaches new products like a VC. Many will flop (like the Fire smartphone), but some will be home runs (e.g. AWS). Amazon launched Prime, which offers free delivery in exchange for an annual fee, in 2005. John Blackledge, notes Amazon has repeatedly innovated in ways that make Prime even more valuable to subscribers.......Amazon is now profitable, yet cash retention remains secondary to building great products and delighting and retaining customers.

....If Amazon is one extreme in how companies invest, General ElectricCo. is the other. It has long been fastidious about capital and cash deployment......CEO Jack Welch perfected this approach in the 1990s.. it continued under Jeffrey Immelt. Last week, Mr. Immelt said he would retire, after 16 years struggling to restore growth. In part, that reflected how financial engineering had inflated profits under Mr. Welch. Yet Mr. Immelt ’s investment decisions too often chased the conventional wisdom on Wall Street and in Washington. ...........growth is hard for any company that dominates its markets as much as GE does. GE’s size also attracts debilitating political scrutiny. ....In response to new regulations and pressure from Wall Street, Mr. Immelt largely dismantled the business...........Investors still want GE to return cash to shareholders, and it has obliged,.....while good for shareholders in the short run, this is no recipe for growth in the long run. GE’s cash flow is shrinking despite the company’s focus on preserving it, while Amazon’s is growing despite that company’s readiness to spend it.......North American boardrooms desparately needs some rules-defying risk-taking. For business, that means a bit more Amazon in the boardroom and a bit less GE

[ See John Authers article which references Vix]

The "Minsky Moment" occurs when investors realize that they have paid far too much for the credits that have bought, no buyers can be found, and the system collapses. Aka Wile E. Coyote running-off-a-cliff....The greatest dangers to us are not from things we perceive to be high-risk, because we generally treat them carefully. Trouble arises from that which we perceive to be low-risk.
digital_economy  Amazon  GE  Amazon_Prime  risk-taking  volatility  Greg_Ip  stagnation  cash_flows  long-term  growth  start_ups  complacency  instability  conventional_wisdom  Jeffrey_Immelt  Jack_Welch  conglomerates  delighting_customers  capital_allocation  Jeff_Bezos  financial_engineering  rule_breaking 
june 2017 by jerryking
Trump and the problem with the new normal
Twenty years ago, Nasa scientists asked the sociologist Diane Vaughan to study the causes of the 1986 Challenger space shuttle disaster. Vaughan responded by developing a concept she called "the norma...
Gillian_Tett  Donald_Trump  NASA  deviance  '80s  normality  White_House  complacency  normalization  tipping_points  normalization_of_deviance  new_normal 
may 2017 by jerryking
Unnatural calm sparks visions of a 'Minsky Moment'
31 December/1 January 2017 | Financial Times | John Authers.

Argues that it is bad news that volatility on financial markets has dropped to an all-time low as measured on the CBOE's Vix index. Economist Hyman Minsky postulated that capitalist financial systems were inherently unstable, and that stability begat instability. As markets grow calmer and bankers more confident, lending steadily rises until it is out of control. The "Minsky Moment" occurs when investors realize that they have paid far too much for the credits that have bought, no buyers can be found, and the system collapses. Aka Wile E. Coyote running-off-a-cliff....The greatest dangers to us are not from things we perceive to be high-risk, because we generally treat them carefully. Trouble arises from that which we perceive to be low-risk.
instability  Vix  indices  volatility  economists  financial_system  risk-assessment  warning_signs  complacency  dangers  high-risk  low-risk  fear  bad_news 
january 2017 by jerryking
At BlackRock, a Wall Street Rock Star’s $5 Trillion Comeback - The New York Times
SEPT. 15, 2016 | NYT | By LANDON THOMAS Jr.

(1) Laurence Fink: “If you think you know everything about our business, you are kidding yourself,” he said. “The biggest question we have to answer is: ‘Are we developing the right leaders?’” “Are you,” he asked, “prepared to be one of those leaders?”

(2) BlackRock was thriving because of its focus on low-risk, low-cost funds and the all-seeing wonders of Aladdin. BlackRock sees the future of finance as being rules-based, data-driven, systematic investment styles such as exchange-traded funds, which track a variety of stock and bond indexes or adhere to a set of financial rules. Fink believes that his algorithmic driven style will, over time, grow faster than the costlier “active investing” model in which individuals, not algorithms, make stock, bond and asset allocation decisions.

Most money management firms highlight their investment returns first, and risk controls second. BlackRock has taken a reverse approach: It believes that risk analysis, such as gauging how a security will trade if interest rates go up or down, improves investment results.

(3) BlackRock, along with central banks, sovereign wealth funds — have become the new arbiters of "flow.“ It is not about the flow of securities anymore, it is about the flow of information and indications of interest.”

(4) Asset Liability and Debt and Derivatives Investment Network (Aladdin), is BlackRock's big data-mining, risk-mitigation platform/framework. Aladdin is a network of code, trades, chat, algorithms and predictive models that on any given day can highlight vulnerabilities and opportunities connected to the trillions that BlackRock firm tracks — including the portion which belongs to outside firms that pay BlackRock a fee to have access to the platform. Aladdin stress-tests how securities will respond to certain situations (e.g. a sudden rise in interest rates or what happens in the event of a political surprise, like Donald J. Trump being elected president.)

In San Francisco, a team of equity analysts deploys data analysis to study the language that CEOs use during an earnings call. Unusually bearish this quarter, compared with last? If so, maybe the stock is a sell. “We have more information than anyone,” Mr. Fink said.
systematic_approaches  ETFs  Wall_Street  BlackRock  Laurence_Fink  asset_management  traders  complacency  future  finance  Aladdin  risk-management  financiers  financial_services  central_banks  money_management  information_flows  volatility  economic_downturn  liquidity  bonds  platforms  frameworks  stress-tests  monitoring  CEOs  succession  risk-analysis  leadership  order_management_system  sovereign_wealth_funds  market_intelligence  intentionality  data_mining  collective_intelligence  risk-mitigation  rules-based  risks  asset_values  scaling  scenario-planning  databases 
september 2016 by jerryking
Daniel S. Glaser: The Challenge of Keeping It Simple
JULY 15, 2016 | The New York Times | By ADAM BRYANT.

When I joined Marsh more than 30 years ago, he said to me, “Danny, all I can tell you is that there’s going to be a lot of people who don’t think like an owner, and you should always be thinking like you are the owner of the business, and make your decisions like that.”..Empathy is more important as he matured: "Now I have a basic belief that almost everyone wants to contribute and do well. Some people, for a whole variety of reasons, have difficulty doing that, and at least an attempt or two should be made to try to help them."...I’ve always felt that the world is filled with smart people who love complicating stuff. Working to simplify, to try to get down to that first principle, is really important.....My feeling is that companies that do well for long stretches of time have a tendency to become either complacent or arrogant, and both of those are bad paths. So how do you prevent that? To me, you do that by trying to create this striving, challenging, questioning culture, where there’s always a smarter way of doing something, and you feel a permanent dissatisfaction with obtained results.
bonuses  empathy  CEOs  leadership  leaders  complacency  arrogance  hubris  hiring  organizational_culture  forward_looking  simplicity  Marsh_&_McLennan  owners  dissatisfaction  first_principle  restlessness 
july 2016 by jerryking
The path to enlightenment and profit starts inside the office
(Feb. 2, 2016): The Financial Times | John Thornhill.

Competition used to be easy. That is in theory, if not always in practice. Until recently, most competent companies had a clear idea of who their rivals were, how to compete and on what field to fight.

One of the starkest - and scariest - declarations of competitive intent came from Komatsu, the Japanese construction equipment manufacturer, in the 1970s. As employees trooped into work they would walk over doormats exhorting: "Kill Caterpillar!". Companies benchmarked their operations and market share against their competitors to see where they stood.

But that strategic clarity has blurred in so many industries today to the point of near-invisibility thanks to the digital revolution and globalisation. Flying blind, companies seem happier to cut costs and buy back their shares than to invest purposefully for the future. Take the European telecommunications sector. Not long ago most telecoms companies were national monopolies with little, or no, competition. Today, it is hard to predict where the next threat is going to erupt.

WhatsApp, the California-based messaging service, was founded in 2009 and only registered in most companies' consciousness when it was acquired by Facebook for more than $19bn in 2014. Yet in its short life WhatsApp has taken huge bites out of the lucrative text messaging markets. Today, WhatsApp has close to 1bn users sending 30bn messages a day. The global SMS text messaging market is just 20bn a day.

Car manufacturers are rapidly wising up to the threat posed by new generation tech firms, such as Tesla, Google and Uber, all intent on developing "apps on wheels". Chinese and Indian companies, little heard of a few years ago, are bouncing out of their own markets to emerge as bold global competitors.

As the driving force of capitalism , competition gives companies a purpose, a mission and a sense of direction. But how can companies compete in such a shape-shifting environment? There are perhaps two (partial) answers.

The first is to do everything to understand the technological changes that are transforming the world, to identify the threats and opportunities early.

Gavin Patterson , chief executive of BT, the British telecoms group, says one of the functions of corporate leaders is to scan the horizon as never before. "As a CEO you have to be on the bridge looking outwards, looking for signs that something is happening, trying to anticipate it before it becomes a danger."

To that end, BT has opened innovation "scouting teams" in Silicon Valley and Israel, and tech partnerships with universities in China, the US, Abu Dhabi, India and the UK.

But even if you foresee the danger, it does not mean you can deal with it. After all, Kodak invented the first digital camera but failed to exploit the technology. The incentive structures of many companies are to minimise risk rather than maximise opportunity. Innovation is often a young company's game.

The second answer is that companies must look as intensively inwards as they do outwards (e.g. opposing actions). Well-managed companies enjoy many advantages: strong brands, masses of consumer data, valuable historic data sets, networks of smart people and easy access to capital. But what is often lacking is the ambition that marks out the new tech companies, their ability to innovate rapidly and their extraordinary connection with consumers. In that sense, the main competition of so many established companies lies within their own organisations.

Larry Page, co-founder of Google, constantly urges his employees to keep being radical. In his Founders' Letter of 2013, he warned that companies tend to grow comfortable doing what they have always done and only ever make incremental change. "This . . . leads to irrelevance over time," he wrote.

Google operates a 70/20/10 rule where employees are encouraged to spend 70 per cent of their time on their core business, 20 per cent on working with another team and 10 per cent on moonshots. How many traditional companies focus so much on radical ventures?

Vishal Sikka, chief executive of the Indian IT group Infosys, says that internal constraints can often be far more damaging than external threats. "The traditional definition of competition is irrelevant. We are increasingly competing against ourselves," he says.

Quoting Siddhartha by the German writer Hermann Hesse, Mr Sikka argues that companies remain the masters of their own salvation whatever the market pressures: "Knowledge can be communicated. Wisdom cannot." He adds: "Every company has to find its own unique wisdom." [This wisdom reference is reminiscent of Paul Graham's advice to do things that don't scale].

john.thornhill@ft.com
ambitions  brands  breakthroughs  BT  bureaucracies  competition  complacency  constraints  Fortune_500  incentives  incrementalism  Infosys  innovation  introspection  irrelevance  large_companies  LBMA  messaging  mission-driven  Mondelez  moonshots  opposing_actions  organizational_culture  outward_looking  Paul_Graham  peripheral_vision  radical  risk-avoidance  scouting  smart_people  start_ups  staying_hungry  tacit_knowledge  technological_change  threats  uniqueness  unscalability  weaknesses  WhatsApp  wisdom  digital_cameras  digital_revolution  historical_data 
april 2016 by jerryking
Why law and accounting firms struggle to innovate - The Globe and Mail
Oct. 06, 2015 | The Globe and Mail | RYAN CALIGIURI.

Why is it that professional service firms, especially accounting and law firms, find it so difficult to embrace innovation in order to build a stronger future?...The biggest factor is that professional service firms are driven primarily by billable hours and any time someone is not billable they are seen as not adding value. This means that in order to innovate someone has to “stop adding value” by not being billable. There is far too much focus on “today” in professional service firms and not enough on the future – this mentality will continue to hold back firms and do more damage in the long run....Most professional service firms also don’t have a system for driving innovation in an efficient manner so they often waste a great deal of time getting caught up in details that don’t matter. ...Many of the law and accounting firms I worked with were doing very well so they didn’t see a need to innovate. ....Firms are often not good at implementing new services or products, they don’t have a culture that supports, fosters, or encourages innovation, and they are often too smart for their own good and get overly complex with their innovation initiatives......First, a firm’s overall corporate strategy needs to incorporate an element of innovation as one of its top long-term goals. Without a strategic focus and investment in innovation, any efforts will often fall flat as they will be approached loosely or in a silo that eventually gets overtaken by billable work.....Next, get a quick win by surveying or researching your client’s business, their industry, and even their own clients. Looking deeper into your client’s business and understanding their problems and opportunities will help you find ways to add value through a new product or service and will enable your firm to get off on the right foot.....Insights from clients can drive new products, services and systems that will fill a need.
However, professional service firms that are looking for a leap in innovation need to go beyond customer insights and explore future trends, industry experts, and, yes, even patent databases for further stimulus to drive new ideas.
This is the difference between firms that innovate and those that die. If you’re in a professional service firm and believe that there is no threat, quite frankly, you are crazy to think so.
innovation  professional_service_firms  law_firms  quick_wins  accounting  challenges  billable_hours  complacency  disruption  Ryan_Caligiuri  silo_mentality 
october 2015 by jerryking
NDP win fits historic pattern - The Globe and Mail
JEFFREY SIMPSON
The Globe and Mail
Published Thursday, May. 07 2015,

Alberta was growing fast until recently. Having so much money, PC governments siphoned much of it into public services. On a per capita basis, for example, Alberta spends the most on health care (along with Newfoundland), and yet demands for even more spending never relented. The province needed more schools, more university and college places, more police, more roads, more of everything. As these services expanded, so did the number and clout of public-sector unions, who formed the spine of the NDP’s victory on Tuesday and to which the new Premier, Rachel Notley, will now be beholden. They will expect some degree of munificence from her, and she will be hard-pressed, given the province’s straitened fiscal circumstances, to accede to all of their demands.
Jeffrey_Simpson  Alberta  elections  NDP  Preston_Manning  public_service  public_sector  unions  history  reform  provincial_governments  Wildrose  Rachel_Notley  creeping_normality  complacency  Ralph_Klein  dynasties  populism 
may 2015 by jerryking
Janice Gross Stein on smugness: ‘Comfort is our biggest enemy’ - The Globe and Mail
MONICA POHLMANN
Special to The Globe and Mail
Published Friday, Dec. 05 2014

Canadians aren’t change leaders. We’re deeply, deeply risk averse. If you give us a choice, we prefer the status quo, because we think it’s less risky. What we don’t understand is the cost of inaction. Most of our public-sector institutions are buried in process....The corporate sector is the least risk averse. It has a better-developed sense of risk and understands that the status quo is not sustainable...We need more entrepreneurial spirit in this country, most of all in the public and not-for-profit sectors.

If things turn out badly over the next 20 years, what would have happened?



We would have failed to keep our young people. They will go where the work is interesting and challenging, and where they can contribute. That will be a huge loss. If we don’t reorient our institutions to make them hospitable to members of this generation, they will just walk right around them and do other things. Our institutions will atrophy, because they won’t have people to shake things up and say, “No, we’re not going to do it this way any more.”

We will also fail if we do not recover from our terminal illness of smugness and self-satisfaction. Otherwise, we are not going to push ourselves hard enough and will ultimately slide into mind-numbing mediocrity.
Janice_Gross_Stein  complacency  status_quo  public_sector  institutions  cost_of_inaction  mediocrity  self-satisfaction  risk-aversion 
december 2014 by jerryking
Nokia a lesson for backers of Canada’s nanny state - The Globe and Mail
Oct. 17 2014 | The Globe and Mail | BRIAN LEE CROWLEY.

How did it all go so wrong? And what might Canada learn from Finland’s downfall?

One obvious conclusion is not to put all your eggs in one basket, but it goes well beyond that. There was a time when economic change worked slowly enough that you could get a generation or two’s employment out of an industry before it was overtaken by innovation. Detroit dominated automobile manufacturing for many decades before its own complacency and the innovativeness of European and Asian producers came into play. In a similar vein, Nokia allowed itself to believe in its own infallibility, and Finland meekly followed suit. But the forces of change are now so powerful and lightning fast that sometimes a single product release from a competitor can signal the death knell of a previously healthy company or industry....Canada is rife with industries with their heads stuck in the sand, almost invariably because they believe they can shelter behind a friendly bureaucrat with a rulebook.

Examples abound in fields as diverse as telecoms, dairy, airlines, broadcasting, taxis and transport. Could there have been a bigger farce than the CRTC’s attempt to manhandle online content provider Netflix?...The real lesson of Nokia’s demise was that there is no substitute for being driven by what customers want, which is quality products and service at the lowest possible price...Every deviation from this relentless focus on what customers actually want makes your market a tasty morsel for the disrupters.
concentration_risk  Nokia  Finland  mobile_phones  disruption  Netflix  Uber  CRTC  complacency  accelerated_lifecycles  protectionism  nanny_state  customer_focus  change_agents  Finnish  demand-driven  lessons_learned  automotive_industry  downfall  change  warning_signs  signals  customer-driven  infallibility  overconfidence  hubris  staying_hungry 
october 2014 by jerryking
Is Poloz making the loonie fly low? - The Globe and Mail
KONRAD YAKABUSKI
The Globe and Mail
Published Thursday, Sep. 25 2014

the governor of the Bank of Canada does not take his marching orders from the government. But the government does influence monetary policy by choosing the governor.

Ask Jean Chrétien. In John Crow’s case, “I didn’t agree with what he had done under [Brian] Mulroney by opting to wrestle inflation to the ground with high interest rates in the middle of a recession and with a high Canadian dollar,” the former prime minister wrote in his memoirs.

Mr. Chrétien turfed Mr. Crow within two months of his 1993 election and replaced him with Gordon Thiessen. The dollar began what seemed like a fortuitous descent from 76 cents to 62 cents in 2002, triggering a manufacturing-led export boom in Central Canada.

The flip side of that boom, however, was complacency. With a low loonie, Canadian manufacturers ignored the need to become more productive and innovative. Thoroughly unmodern, few had any other competitive advantage to fall back on when surging oil prices drove the dollar to parity in 2007.

A lower dollar can put the wind in your sails for a while. Long-term, not so much.
Konrad_Yakabuski  Stephen_Poloz  Bank_of_Canada  loonie  interest_rates  monetary_policy  central_banking  Jean_Chrétien  productivity  complacency  weak_dollar  manufacturers 
september 2014 by jerryking
Relax
1. Develop your own personal operating system. Carve out and define your own reality, philosophy, values, and interests rather than automatically accepting those of your family, peers, religion, or culture.

2. Begin to let go of the need for validation. Don’t be motivated by the opinions or others or the desire for recognition. Be driven by what is important to you and what you value.

3. Trust your instincts and allow for experimentation. Get to know yourself and discover what you enjoy and find exciting, even if you have to fail a few times.
4. Accept others as they are. Begin letting go of judgments and criticism of others. Focus on people’s strengths rather than their faults. Learn to deal with difficult people without diminishing yourself.

5. Really hear people. Go beyond just listening and understanding. Let people know that you really get them.

6. Take care of unresolved matters in your life. Restore your integrity. Forgive and ask for forgiveness where necessary. Reclaim the energy you have given to these matters.

7. Embrace a healthy lifestyle. Get some form of exercise daily. Eat healthy foods that support your body, not your emotions. Do this because you respect yourself, not to impress others.

8. Cause things to happen. Don’t wait for them. Be a creator, an instigator, a collaborator. Share your enthusiasm.

9. Show people you care. Don’t just talk about it. Show them in ways that are meaningful to them, not you.

10. Require the best of people. See them not only for who they are, but who they can be. Lovingly reflect that vision to them.

11. Ensure your own needs are met. Discern your primary needs, and communicate fully what is important and valuable to you in your relationships. Don’t compromise these to keep peace or hang on.

12. Speak constructively. Use your words to uplift, inspire, motivate, and encourage. Don’t offer “constructive criticism” or subtle digs.

13. Laugh easily. Have a lightness about you. Take life less seriously and choose to find and create fun and joy.

14. Cease gossip. Choose not to talk about others in ways that are openly or subtlety critical. Don’t share information for the feeling of power or intrigue.

15. Make requests, not complaints. If you need something from someone, ask for it directly. Don’t whine or complain to them or others.

16. Handle situations fully. Kindly but clearly deal with negative issues as soon as possible. Don’t tolerate anything if it causes resentments.

17. Be done with arguments. Smile and walk away until healthy communication is possible.

18. Offer help only when asked. Don’t assume that others want you to fix them or that you know best for them. Be available and give help only when asked.

19. Care deeply, but remain detached. Let others know you care deeply about them when they have problems, but don’t get caught up in their problems.

20. See with your heart, not your eyes. Look beyond superficiality when seeing someone. Financial status, appearance, notoriety, all mean nothing. Look for the authentic person inside.

21. Don’t say yes when you mean no. If you mean no, your yes will be harnessed with resentment. Say yes only when your yes is given freely.

22. Let others know you are grateful. Tell them and show them that you feel blessed to have them in your life.

23. Never play the guilt card. Don’t try to manipulate or hurt someone by trying to make them feel bad about their choices, decisions, or actions.

24. Give more than is expected. Don’t over-commit, but freely give more than you promise.

25. Be inter-developmental in your relationships. Don’t be controlling, dependent or co-dependent. Create relationships that are mutually uplifting, reward, and satisfying.

26. Be a big person. Don’t try to take credit, diminish others, or hold back on praise. Offer acknowledgment and power when it is needed and deserved.

27. Be confident enough to be humble. Be able to laugh at yourself, acknowledge your flaws and failures, and accept that they don’t define you.

28. Be open to learning. Don’t flaunt your intelligence or superior knowledge. Recognize that there is always something to learn, even from those who appear “less than.”

29. Be more engaged than engaging. Show your sincere interest in others. Use the word “you” more than “I.” Listen intently and reflect back to others who they are.

30. Give gifts that others want. Not just gifts to impress or that are important to you.

31. Challenge yourself constantly. Don’t settle for mediocre. Don’t languish in past accomplishments. Keep moving forward and exude enthusiasm about possibilities and the actions to make them happen.

32. Detach from adrenaline. Simplify your life enough so you are not rushed, stressed, cluttered, or distracted. Allow yourself time and room to focus.

33. Embrace the incredible power of now. Nothing is more valuable than this moment. Make it the best moment you possibly can right now.

34. Don’t fight the flow. Don’t struggle against people or situations you can’t control. Move effortlessly in a different direction.

35. Keep evolving. Stay on a path of self-improvement and stay alert for opportunities for shifts and growth.
motivations  inspiration  strengths  affirmations  personal_growth  self-improvement  immediacy  simplicity  focus  movingonup  gift_ideas  listening  continuous_learning  humility  praise  relationships  overdeliver  gratitude  sincerity  authenticity  self-awareness  constructive_criticism  foregiveness  values  self-starters  healthy_lifestyles  gossip  self-analysis  self-assessment  self-satisfaction  complacency  personal_energy  span_of_control  disconnecting  rainmaking  individual_initiative  beyond_one's_control  next_play  walking_away 
august 2014 by jerryking
Innovation: If you can’t make yourself obsolete, someone else will - The Globe and Mail
GUY DIXON
The Globe and Mail
Published Thursday, Jun. 26 2014

I think at the root of the problem is a deficit of ambition [JCK: i.e. a lack of chutzpah or audacity] The larger the corporation, the safer they become. What I’ve witnessed, certainly between 2008, 2009, is this deficit of ambition.....All of our research points to the fact that companies that do manage and measure innovation outperform those that don’t. You can put resources into place, and that’s where managing it comes in: deploying resources that will support innovative, new ideas; ensuring that you have a strong knowledge architecture – and that it is a formal, systemic thing, so that people access knowledge that is already developed; ensuring access to markets – that’s a structural element. Do your people have access to customers and markets?; and actively managing talent and selecting people and promoting them and ensuring that they have an orientation toward innovation and the development of new ideas....What percentage of turnover or revenue is presented by products that have been introduced in the past number of years? And for different companies, in different industries, that’s going to vary. Companies that are very successful treat that number as sacrosanct for the sales projection for next year and the bottom line for next year....Way too many companies are focused on market share versus the modern metric of, ‘Are we gaining a disproportionate share of opportunity?’ [Is this distinction something to be explored with the help of sensors, location-based services and the LBMA??] And then we’re back to this abandonment thing.
Managing_Your_Career  organizational_culture  playing_it_safe  innovation  metrics  ambitions  opportunities  market_share  complacency  measurements  talent_management  ideas  obsolescence  disproportionality  latent  hidden  self-obsolescence  large_companies  new_products  Fortune_500  brands  Guy_Dixon  outperformance  systematic_approaches 
june 2014 by jerryking
Monetizing open data
September 21, 2012| Strata| by Jenn Webb

One of the big questions on everyone’s mind at this year’s Open Knowledge Festival in Helsinki, according to a report by David Meyer at ZDNet, is: Where’s the money in open data?

Ville Peltola, IBM’s innovation chief in Finland, told Meyer the situation is becoming frustrating, that he doesn’t understand why it’s so hard to properly open up data, or even just some of it. “You could have bronze, silver and gold APIs, where more data costs more,” Peltola said to Meyer. “It’s like a drug dealer. Maybe you have to solve this chicken-and-egg problem by giving samples of raw data.”

Meyer points out the real issue inherent in what Peltola is saying: “that large amounts of data are very valuable, and the companies that create them tend not to know how to realise the greatest value from them.” Peltola had an interesting idea to address this: “What if you have an internal start-up in your company tasked only with monetising your data?”

Chris Taggart, co-founder of OpenCorporates, made a more competitive argument for opening up your company’s data: it “exposes your competitors’ internal contradictions” and might inspire disruption, he told Meyer — “Most big, fat secure companies don’t have the confidence to disrupt themselves,” he said.
open_data  monetization  massive_data_sets  problems  challenges  intrapreneurship  chicken-and-egg  commercialization  APIs  disruption  complacency  contradictions 
december 2013 by jerryking
Made in Canada 2.0
October 25, 2013 | G&M | by Gary Salewicz.

Instead of a story of a scrappy Canadian company succeeding against the odds, I heard a tale that is typical of the sector. The CEO explained (to avoid embarrassment, I won't name him or his company) that the company had run up against the usual headwinds facing Canadian manufacturers. It had relied on a weak dollar to bolster margins on sales to the U.S., and it hadn't invested in modern equipment to increase efficiency. That state of affairs was fine with a 75-cent dollar, but deadly when it shot up to parity in 2007. This CEO had been brought in a year ago to save the company, and the only way to do that was to ship the jobs overseas, namely to China. The production lines in Canada stopped running in March.

That the manufacturing sector in Canada has been diminished in the last decade and a half is a gross understatement. More than two million manufacturing jobs existed in 2000, but that number had dropped by 20% by 2012 (the most recent data available). Add to this the financial crisis of 2008, which laid low our biggest trading partner, and the picture is grim. As Kevin Carmichael wrote in last month's issue, the new Bank of Canada governor, Stephen Poloz, reasons that "exports are lagging behind their historical pace because the recession left Canada with fewer exporters to make those sales."
manufacturers  Canada  Canadian  complacency  outsourcing  China  weak_dollar  Kevin_Carmichael  production_lines 
october 2013 by jerryking
Canadian business, heal thyself
Oct. 18 2013 | The Globe and Mail |Jeffrey Simpson.

, the lessons BlackBerry/RIM once followed still seem urgent for the Canadian economy: research, innovation, productivity improvements, global perspective beyond the United States.

On Oct. 1, the Council of Canadian Academies summarized seven years of studies into Canada’s capacities in science, technology, innovation and productivity, releasing a report, Paradox Lost (the title must have come from the fertile brain of the brilliant Peter Nicholson, a member of the advisory group), that laid it on the line.

The government has been doing its part, especially in funding university research, the council concluded – although more money would always be welcome. What’s lacking is an “aggressively innovative business sector.”...Canadian companies rely excessively on U.S. innovation. They are content either to play an upstream role (extracting resources) or as subsidiaries of foreign companies. Too many Canadian businesses settle, the council reported, for a “profitable low-innovation equilibrium” (a fancy way of saying second-best) that conditions Canadian business’s behaviour and ambitions.....This problem of lagging innovation and inadequate R&D coincides with four major trends that will slow Canadian growth. First, the United States is in relative decline. Second, the growing global appetite for commodities means environmental challenges and volatile price swings. Third, scientific revolutions in fields such as genomics and nanotechnology will shape business and social life, but Canadian firms are behind the curve in both areas. Fourth, our aging population will be a drag on economic growth (and government revenues).
Jeffrey_Simpson  R&D  innovation  economic_stagnation  resource_extraction  America_in_Decline?  commodities  volatility  aging  complacency  Peter_Nicholson  aggressive  beyondtheU.S.  genomics  nanotechnology  productivity  paradoxes  laggards 
october 2013 by jerryking
Checked your demographics lately?
August 30, 2013 | Adam Smith, Esq.| Bruce MacEwen.

So, to all the non-equity partners in the crowd, this is not about you. Rather, what follows is written from the perspective of someone who thinks a lot about the industry’s long run.

One of the strongest indices of organizations’ competitive strength over time is the ability to align and renew itself faster than rivals. As Scott Keller and Colin Price wrote in Beyond Performance: How Great Organizations Build Ultimate Competitive Advantage (Wiley, 2011):

Organizational health is about adapting to the present and shaping the future faster and better than the competition. Healthy organizations don’t merely learn to adjust themselves to their current context or to challenges that lie just ahead; they create a capacity to learn and keep changing over time. This, we believe, is where ultimate competitive advantage lies.

This is about, in a word, people.

We know talent matters, we pay through the nose roof for headhunters to deliver lateral upon lateral, the statistical majority of whom will disappoint, we recruit the “best and the brightest” from law school (the statistical majority of whom, etc.), and yet when it’s time for our organizations to be agile and responsive to changing client expectations and market conditions, we find ourselves throttled. How can this be?

Change—real not superficial, meaningful not trivial, lasting not flavor-of-the-month—requires people to go above and beyond. [JCK: high achieving or overachievers] It’s not comfortable, and comfortable people won’t do it. This is where, I believe, the performance hazard of too many non-equity partners in a firm begins to come in.
law_firms  Bruce_MacEwen  workforce  workforce_planning  high-achieving  overachievers  partnerships  change  organizational_effectiveness  organizational_learning  adaptability  learning_agility  books  disappointment  discomforts  competitive_advantage  talent  complacency  the_best_and_brightest 
september 2013 by jerryking
If BlackBerry is sold, Canada faces an innovation vacuum - The Globe and Mail
Aug. 17 2013 | The Globe and Mail | KONRAD YAKABUSKI.

The sale and breakup of a flagship technology company is a reoccurring theme in Canadian business. But this time is different. If BlackBerry Ltd. goes, there is no ready replacement. That’s a telling switch from the situation Canada faced with the sale of Newbridge Networks in 2000 and the demise of Nortel Networks in 2009....Canada has an innovation bottleneck. An abundance of science is generated in university labs and start-up firms but most of it never finds its way into commercial applications. Risk-averse banks and too many businesses of the bird-in-the-hand variety remain the weak links in Canada’s innovation system.

“We punch above our weight in idea generation,” observes Michael Bloom, who leads the Conference Board of Canada’s Centre for Business Innovation. “But the further you move towards commercialization, the weaker we get as a country.”....Innovation can be driven by any sector, even the old-economy resource extraction business of the oil sands. But tech firms remain by far the most R&D-intensive players in any economy.

Hence, the tech sector is a key barometer of a country’s innovation strength. And innovation matters because it has a profound influence on our living standards – it is “the key long-run driver of productivity and income growth,” ...Canadian businesses remain oddly complacent.

“We tend in this county not to look at the true market opportunity of innovation,” Mr. Bloom adds. “If you only see a market of 35 million people, you’re going to see more risk than if you see the market as Europe, the U.S. and Asia. Americans see risk, but also great opportunity.”

It’s no coincidence that many of Canada’s greatest entrepreneurs and innovators have been immigrants. Unlike his American counterpart, the average Canadian business graduate does not dream of becoming the next Sergey Brin, Steve Jobs or, for that matter, Peter Munk.

Mr. Lazaridis and ex-BlackBerry co-CEO Jim Balsillie notwithstanding, how many Canadian entrepreneurs and innovators have truly changed the world, or aspire? By all accounts, not that many. A Conference Board study released last month found that only 10 per cent of Canadian firms (almost all of them small ones) pursue “radical or revolutionary” innovations. Large firms focus at best on “incremental” innovations.
Blackberry  bottlenecks  commercialization  competitiveness_of_nations  complacency  hollowing_out  Konrad_Yakabuski  Newbridge  Nortel  innovation  idea_generation  ecosystems  breakthroughs  incrementalism  large_companies  sellout_culture  Jim_Balsillie  moonshots  immigrants  Canada  Peter_Munk  market_opportunities  weak_links  thinking_big  oil_sands  resource_extraction  marginal_improvements  innovation_vacuum  punch-above-its-weight  This_Time_is_Different 
august 2013 by jerryking
Five traits of smart risk takers
March 13, 2013 | G&M | Harvey Schachter.

Review of Taking Smart Risks by Doug Sundheim. Sundheim lists five common dangers of playing it safe for too long:

• You don’t win.
• You don’t grow.
• You don’t create.
• You lose confidence as you lose momentum and start to freeze up.
• You don’t feel alive, because you aren't challenging yourself.
Harvey_Schachter  risks  risk-taking  books  book_reviews  soul-enriching  personality_types/traits  growth  cost_of_inaction  character_traits  complacency  risk-aversion  risk-avoidance  playing_it_safe 
march 2013 by jerryking
True innovation doesn’t flow from a pipeline
Feb. 22 2013 | The Globe and Mail |Konrad Yakabuski.

... If the oil companies can’t ship raw Canadian resources using that 150-year-old technology, they will rely on an even older one – rail. And if not rail, they might just float their bitumen on barges down the Mississippi.

Huckleberry Finn might have marvelled at this inventiveness, but it doesn’t quite cut it as a 21st-century national strategy for wealth creation. Yet our frantic obsession with exporting minimally processed bitumen is sucking up all the oxygen in the national conversation. Getting Alberta’s oil to market is “the most important economic issue” facing the country, says former federal cabinet minister Jim Prentice. There is “no more critical issue facing Canada today,” adds Enbridge chief executive Al Monaco.

In fact, the most critical issue facing Canada today may just be figuring out why we find ourselves in this situation. Raw resources can be a tremendous source of income, but they are volatile, and we’ve always known that overreliance on them is a recipe for economic stuntedness. As Bank of Canada Governor Mark Carney says: “Real wealth is built through innovation.”

Innovation is not wholly absent from Canada’s oil patch. But it’s hardly a first line of business. You’d think it would be a top priority, given the vexatious characteristics of Alberta bitumen, the oil sands’ distressing environmental footprint and the Canadian industry’s growing global image problem. Even in boom times, however, the Canadian oil and gas industry spends a piddling proportion of its revenues on research and development......Last week, PricewaterhouseCoopers predicted that the coming boom in global shale oil production could slash the price of crude by $50 (U.S.) a barrel over the next two decades. “One effect will be to cut the need for expensive, environmentally destructive extraction techniques like the Arctic and tar sands,” the head of PwC’s oil and gas team told Reuters.... the real issue facing Ontario is its failure to make the shift from making low-tech goods to advanced manufacturing, the only kind that can support middle-class wages. Governments have showered the industry with tens of billions of dollars trying to make Canadian firms more innovative, to little avail. Cash-strapped and fed up, federal Finance Minister Jim Flaherty slashed R&D tax credits in last year’s budget. The result will be even less innovation, as domestic companies cut back and foreign-owned firms shift R&D elsewhere.

“Canada’s problem,” says Robert Atkinson, the author of Innovation Economics, “is that it’s not Germany, which has a much better engineering innovation system, and it’s not the U.S., which has a very good system of science-based entrepreneurship. You’re mediocre in both.”
Keystone_XL  pipelines  crossborder  oil_industry  Mark_Carney  Ontario  innovation  oil_patch  wealth_creation  books  natural_gas  natural_resources  fracking  shale_oil  hydraulic_fracturing  Konrad_Yakabuski  oil_sands  complacency  mediocrity  commodities  volatility  cash-strapped  national_strategies  environmental_footprint 
march 2013 by jerryking
Meet Bay St.'s new breed of deal makers
April 4, 2007 | G&M pg. B10 | by Jacquie McNish.

Days after Ottawa's Halloween clampdown on income trusts, a team of Bay Street dealmakers flew to New York to alert a handful of private equity funds to potential Canadian trust takeovers.

Investment bankers pitch deals to ravenous private equity buyers all the time, but this group was unique because they were lawyers.

Canadian firms can no longer be complacent about private equity deals. As traditional Canadian corporate clients fall on the takeover battleground, Canada’s major firms are moving quickly to grab their share of private equity deals.

Some law firms are wooing private equity funds by aggressively promoting deals, while most are starting to share risks by taking fee cuts on unsuccessful takeovers and pocketing fee premiums on deal victories.

A few are so eager to represent the powerful acquirers that a single firm will act for multiple buyers vying for the same target.

The deal frenzy is shifting legal M&A away from long-term relationships to a more transaction-oriented practice that is seeing firms hop in and out of deals with an ever-changing group of buyers and sellers.

Stephen Donovan, co-head of Torys’ Private Equity Group, adds, "It is no longer enough to just know the law. There is a much more deliberate effort to bring deals to clients."
deal-making  dealmakers  lawyers  law_firms  Bay_Street  private_equity  prospectuses  complacency  crossborder  M&A  risk-sharing  transactions  relationships  transactional_relationships  rescue_investing  pitches  proactivity  entrepreneurial  opportunistic 
january 2013 by jerryking
For Canada, this is no time for complacency - The Globe and Mail
LAWRENCE MARTIN

Special to The Globe and Mail

Published Monday, Dec. 31 2012
Lawrence_Martin  complacency  Conservative_Party 
january 2013 by jerryking
Black script needs new players
September 5, 1991 | Share Newspaper | letter to the editor by Malcolm Streete in response to article by Dr. Sheldon Taylor (August 1, 1991).

If problems as seen by Taylor do exist, it was even more important for him to state that cannot be addressed concretely and effectively, until some respected and credible leadership forward with a strategy.
The tragedy engulfing this whole scenario is that in Metropolitan Toronto and regions, with the largest population of Blacks in Canada, we continue In deal controversy and failure in the same manner:
* Without plan or strategy;
* With moral goals, instead of tangible, physical goals; and
* With old faces. using outdated models. that alienate the new.
More importantly --and at the same time, very damagingly-- so many of us have become too socially and economically comfortable, and have deserted the community.
There is also the growing reality that we have begun to separate ourselves from those now arriving from the Continent of Africa, without recognizing the fact that they are beginning to make up a sizable part of our growing community.
Unfortunately for Black people in Canada. the dominant culture views us in an unchanging stereotypical manner, all painted with the same Black brush. Thus. we need to look for solutions in places we have never looked before.

When we see the changing demographics of both our community and the broader community. we see an expanding pool of resources.

Firstly. there are the young, articulate and energized females and males, who are more than capable of giving our aims directions, strategies and visions.

Next. with the older torch-bearers passing the torch to this new ‘and important younger generation. we can act as an ocean of resources, sharing our experiences, knowledge. contacts and financial

Finally, let us get our act together and build a cultural centre, through which we can begin to exert some kind of control over our politics, education, economics and destiny.
letters_to_the_editor  African_Canadians  reinventing_the_wheel  Toronto  self-help  revitalization  leadership  institutions  community  renewal  self-reliance  institution-building  complacency  demographic_changes  strategic_thinking  Sheldon_Taylor 
august 2012 by jerryking
Real-World Advice for the Young
04.11.05 | Forbes | Rich Karlgaard.

We owe our young people ...a set of "road rules" for the real world.

Purpose. Every young person needs to know that he was created for a purpose. ...I would, however, argue that there is also an economic purpose to our lives. It is to discover our gifts, make them productive and find outlets for their best contribution.

Priorities. The best single piece of advice from Peter Drucker: Stop thinking about what you can achieve; think about what you can contribute (to your company, your customers, your marriage, your community). This is how you will achieve. Enron had an achievement-first culture; it just achieved the wrong things...how many schools teach young people to think in terms of contribution?

Preparation. Lest you think I'm urging young people down a Mother Teresa-like path of self-sacrifice, I'm not. The task is to fit purpose and contribution into a capitalistic world. There is a crying need for prepared young people who can thrive in a realm of free-market capitalism. This great system works magnificently, but it doesn't work anything like the way it's taught in most universities. In the real world, the pie of resources and wealth is not fixed; it is growing all the time. In the real world, the game is not rigged and static; rather, money and talent move at the speed of light in the direction of freedom and opportunity. In the real world, greed is bad (because it takes your eye off customers), but profits are very good. Profits allow you to invest in the future. In the real world, rising living standards do not create pollution. Instead, they create an informed middle class that wants and works to reduce pollution.

Pan-global view. The economy is global.... There is no going back.

Partner. Many of the great startups of the last 30 years began as teams of two...Behind this phenomenon is a principle: Build on your strengths. To mitigate your weaknesses--and we all have them--partner up! Find your complement.
Perseverance. Young people are smarter and more sophisticated today. It's not even close. My own generation's SAT scores look like they came out of baseball's dead-ball era. But apart from the blue-collar kids who are fighting in Iraq, most American kids today are soft. That's a harsh statement, isn't it? But cultural anecdotes back it up. Kids weigh too much. Fitness is dropping. Three American high schoolers ran the mile in under four minutes in the 1960s. It's been done by one person since. Parents sue coaches when Johnny is cut from the team. Students sue for time extensions on tests. New college dorms resemble luxury hotels. College grads, unable to face the world, move back in with their parents and stay for years.

Does this sound like a work force you'd send into combat against the Chinese?
in_the_real_world  Rich_Karlgaard  advice  Peter_Drucker  youth  students  entrepreneurship  partnerships  rules_of_the_game  purpose  globalization  Junior_Achievement  perseverance  millennials  serving_others  priorities  preparation  profits  greed  fitness  talent_flows  capital_flows  static  risk-mitigation  complacency  blue-collar  Chinese  capitalism  self-sacrifice  young_people  anecdotal 
august 2012 by jerryking
New urban design plays a heady game of risk
Mar 12, 2005 | The Globe and Mail pg. F.3|
Doug Saunders.

The slogan of the new movement that is overtaking Europe's cities: "To make it safe, you need to make it dangerous." Iain Borden, director of the Bartlett School of Architecture in London and a leader of this new movement. Its members recently published an intriguing report titled "What Are We Scared of: The Value of Risk in Designing Public Space."

In recent months, a school of architects and urban planners has picked up disparate cues from the urban experiments taking place in northern Europe and given them a name -- risk. Our cities, they believe, are now designed predominantly to minimize risk, and this has made them dull, homogeneous, repetitious and, paradoxically, often quite dangerous.

(Risk is more than an intellectual puzzle — it invokes a profoundly physical experience. A small amount of danger surrounding the use of public spaces might act much like a vaccine immunizing the population against complacency).
Doug_Saunders  urban  design  risks  safety  public_spaces  counterintuitive  urban_planning  uncertainty  complacency  biology  psychology  dangers  life_skills  coming-of-age  risk-assessment  high-risk  low-risk  soul-enriching  physical_experiences 
october 2011 by jerryking
Innovation isn’t in Canada’s DNA
July 24, 2009 | Macleans.ca | by Paul Wells. “I don’t think
you could say that innovation is deeply in the DNA of our Canadian
business enterprises,” he said. “We have built prosperity, up to and
including this decade, on a fairly basic paradigm: we are rich in
natural resources. We’re good at harvesting them. And we have built a
manufacturing and processing sector, and to some degree a services
sector, which has been quite successful in exploiting access to the U.S.
market.”

So Canadian business often doesn’t do much more than build factories 20
km north of the U.S. border and lob products 50 km south. For years,
that model got a lot of help from a cheap Canadian dollar. “I got into a
certain amount of trouble when I was deputy prime minister for saying
you shouldn’t mistake a bull market for brains. The fact that the
Canadian dollar was trading at 62 cents . . . you shouldn’t take that
for granted.”
innovation  John_Manley  productivity  Canadian  CCCE  Paul_Wells  complacency  natural_resources  beyondtheU.S.  loonie  weak_dollar  bull_markets  imposters 
september 2011 by jerryking
Wanted: culture of innovation
Sep.16, 2011 | G&M | Kevin Lynch & Munir Sheikh.
“Productivity isn’t everything,” P. Krugman once wrote in his NYT
column, “but in the long run it's almost everything.” Strange that, with
Canada’s poor productivity & innovation performance compared with
the U.S., that we remain complacent. Where’s our sense of urgency?
Innovation doesn’t occur in the abstract – corps. have to manage for it.
Successful innovation happens in 4 distinct areas. Product innovation:
The capacity to introduce new products & services ahead of
competitors, to anticipate consumer needs or even to create them. Mkt.
innovation: The capacity to decide to change its market, whether it’s
geographically, virtually or creatively. Process innovation: The
capacity to change how goods & services are produced and delivered
to reduce cost, improve efficiency and increase convenience for
customers. Org. innovation: The capacity to convert creativity, market
& customer knowledge & technology into marketable innovations.
innovation  productivity  Canadian  Canada  complacency  organizational_culture  organizational_innovation  urgency  Kevin_Lynch  taxonomy  Paul_Krugman  consumer_needs  process_innovation  process_improvements  product_innovation  product-orientated 
september 2011 by jerryking
The builder who revived a beloved brand brick by brick
Jul 18, 2011 FT. Andrew Ward. Jorgen Vig Knudstorp ; CEO Lego.
as head of the Danish toy maker, he helped restore the fortunes of a
national institution...Knudstorp saw that painful measures were needed
to turn the company around: layoffs, some mfg. was off shored to eastern
Europe & Mexico, and asset sales of theme parks & non-core
products....One of the hardest challenges for any CEO is to get to the
truth of what a biz is doing right & wrong - & to avoid
complacency when things are going well. Don`t dismiss the 1 % who
complain. Listen extra hard to that 1% because they usually represent a
much bigger proportion of silent unhappiness."

Lego tries to get at the truth by basing a large proportion of managers'
bonuses on customer satisfaction surveys of retailers, parents &
children...Knudstorp maintains a wide netwk of global business &
academic contacts from his time at McK and, before that, at biz schools
in Denmark, the UK & US, and describes himself an eclectic reader.
ProQuest  Lego  CEOs  Denmark  Danish  turnarounds  family-owned_businesses  theme_parks  toys  latent  hidden  complacency  customer_satisfaction  McKinsey  dissatisfaction  complaints  unhappiness 
july 2011 by jerryking
Prepared for the worst?
May 14, 2011 | Stabroek News | Editorial.

Natural disasters are, by definition, unforeseeable; but an ounce of prevention can be worth a pound of cure. Better levees would have averted much of the worst damage when Katrina struck New Orleans; Japan could have placed its power plants further inland (and away from earthquake fault-lines); and deep-water drilling could have been better regulated in the Gulf. We should not discount the need to maintain sea defences (squatters and other hindrances notwithstanding) and undertake other necessary measures before we find ourselves in a crisis. The absence of disasters nearly always breeds complacency; budgets are slashed and worst-case scenarios dismissed, until the chance for preventive maintenance has passed. But none of that should obscure the fact that the worst time to prepare for a storm is when the clouds have already gathered.
natural_calamities  prevention  preparation  worst-case  disasters  disaster_myopia  disaster_preparedness  complacency  thinking_tragically 
may 2011 by jerryking
The parochialism of Little Canada is killing us
Dec. 17, 2010 | The Globe and Mail | Jeffrey Simpson. Big
Canada can be Ottawa acting alone, or Ottawa acting in harmony with
provinces, or the provinces working constructively together. There’s no
“one size fits all” definition of Big Canada in such a sprawling,
diverse country.

Little Canada is easy to define: parochialism working against other
parochialisms, or parochialism sharpening itself by working against
Ottawa, with provincial politicians appealing to the lowest common
denominator of local prejudices.

In a hypercompetitive international world, the internal dynamics of
Little Canada are a recipe for a slow, debilitating slide toward
complacency, irrelevance and mediocrity. There are, alas, on the
political and economic landscape of contemporary Canada, plenty of
preachers of Little Canada but no one articulating and defending a
vision of Big Canada.
Jeffrey_Simpson  op-ed  parochialism  one-size-fits-all  Canadian  prejudices  Canada  complacency  irrelevance  mediocrity 
december 2010 by jerryking
20 Ways to Derail a Successful Sales Career | Company Activities & Management > Sales & Selling from AllBusiness.com
September 1 2002 | American Salesman | Bill Brooks.

#4.. They fail to prospect. Perhaps the greatest cause of failure in
salespeople is an inconsistent flow of qualified prospects. What causes
this? Becoming overly comfortable with existing customers, believing you
are in control of your marketplace... the list is endless.
#17. They never learn how to ask questions. Remember earlier I discussed
the concept salespeople fail to ask the right questions ... this is a
corollary to that flaw. Asking questions in the correct order, and in a
way that is non-threatening, open-ended and qualitative in nature, is
essential to sales success.
complacency  sales  selling  prospecting  tips  questions  sequencing  non-threatening  open-ended  qualitative  asking_the_right_questions 
december 2010 by jerryking
We are stone heads on medicare
Feb 28, 2005 | G &M Page A13 | By WILLIAM THORSELL. In
his bestseller, Collapse, Jared Diamond asks: "Why do societies make
disastrous decisions?" He is referring primarily to the environment, but
the answers apply to other things as well. Societies make disastrous
decisions because: We fail to anticipate big problems. It's hard to see
them in advance. But you can't say that about Canada's debt crisis, or
the rising crush of medicare. They were predicted for yrs., and yet we
barged on into them. We fail to perceive problems when they do arrive
because they are too small to see, or because they arrive slowly and we
get used to them....But the most potent of Mr. Diamond's reasons is "core values" -- the insistence on holding to certain defining values in the face of even mortal threats.

He cites the cult on Easter Island (cutting down trees to erect giant stone heads) as an example of bovine loyalty to core values in the face of compelling problems (deforestation).

Isn't that the case with medicare in Canada? We have raised the monopoly-pay/provider model to the status of a defining icon -- a core value of Canada itself. No matter how self-destructive and ineffective this approach may be, we are too invested in its symbolism to change it. It's a classic case of dumb loyalty to dysfunction, with deserved consequences.
William_Thorsell  Medicare  Jared_Diamond  incrementalism  anticipating  Canada  healthcare  creeping_normality  complacency  selfishness  values  self-destructive  slowly_moving  core_values  imperceptible_threats  societal_collapse 
october 2010 by jerryking
The dangers of getting comfortable - The Globe and Mail
Oct. 08, 2010 | Mark Evans. Another major challenge of having a
lot of business is making sure you don’t get fat, happy and complacent.
It is surprisingly easy to get comfortable when business is good
because there is less urgency and stress to find new customers. While
having steady customers makes life easier, it does not mean you should
rest on your laurels or take your foot off the gas.

This is a lesson I painfully learned when starting my business. After
hustling for a couple of months to get work in the door, I happily
settled into doing the job. The only problem was I stopped hustling so
that when the work was completed, the pipeline was empty. Needless to
say, there was a hot flash of panic before realizing that selling is not
something that can stop and start.
complacency  cost_of_inaction  sales  sales_cycle  Mark_Evans 
october 2010 by jerryking
globeandmail.com: All's fair in love and war, but hard to measure in business
April 26, 2010 | Globe & Mail | GEORGE STALK JR. "These
laws also mean that the informational "glue" that defined the boundaries
of industries and companies is dissolving, enabling industries to be
redrawn again and again. Companies can no longer rest comfortably in a
market position but must continually cannibalize their own and their
competitors' positions; incumbents must go on the attack to remain
viable....These competitors will not target product-market niches, but
instead define their business as the layers of events and processes that
produce a product or service, as Microsoft and Intel have. This will
happen not only in high-tech and communications but also in industries
such as biotech, media and retail. We already see successful strategies
of "layer mastery" in payments processing, contract electronics
manufacturing, and aircraft leasing. Industries and markets will be
redefined in ways that will make the traditional assessment of "fair"
increasingly difficult.
George_Stalk_Jr.  competitive_landscape  competitive_strategy  Intel  Microsoft  Google  Moore's_Law  Gilder's_Law  Metcalfe's_Law  Coase's_Law  complacency  layer_mastery  industry_boundaries  offensive_tactics  BCG  kaleidoscopic  informational_advantages  product-market_fit  market_position 
may 2010 by jerryking
Canadians must think beyond the U.S. market
Mar. 06, 2010 | Globe and Mail | Jeffrey Simpson. The U.S.
is burdening itself with debt, postponing days of fiscal reckoning. Huge
structural changes, meanwhile, are occurring in the world economy. The
challenge for Canadian business, Mr. Carney argued, is to move beyond
the cocoon of the North American economy.

He put the challenge squarely: “Canadian business will need to develop
new markets as the traditional advantage of relatively open access to
U.S. markets becomes less valuable. To seize new opportunities, our
productivity levels must improve."At issue is whether Canadian
businesses can think beyond the U.S. market. If not, Canada will be
missing most of the new economic action. It's a hard challenge for a
country with so many branch plants, so few head offices, so much
self-satisfaction, and a long tradition of looking only south.
crossborder  productivity  economic_development  growth  head_offices  Jeffrey_Simpson  international_marketing  international_trade  complacency  beyondtheU.S.  Mark_Carney  structural_change  internationally_minded 
april 2010 by jerryking
Bridging exploration and exploitation
November 24, 2009 | Report on Business | SIMON HOUPT.
Interview and book review by Simon of Roger Martin's latest book, The
Design of Business. In his latest book, Roger Martin advocates the
importance of innovation for companies - or the risk of irrelevance.
Why do successful companies wither and die? Martin suggests that too
many companies are too comfortable with merely exploiting their
innovations rather than engaging in the necessary work of innovation and
exploration. There are two solitudes: exploration and exploitation.
Exploration being highly creative people in various kinds of creative
organizations that have a heck of a time turning their ideas into
something that allows them to continue their creative activities
sustainably. Exploitation being people in the business world who are
honing and refining, running their algorithms, wondering why they slowly
expire.
innovation  design  Roger_Martin  creativity  book_reviews  Simon_Houpt  experimentation  explorers  exploitation  obsolescence  complacency  bridging  creative_types  irrelevance  exploration 
november 2009 by jerryking
Israeli Spy Had Snares Like 'Honey Trap' - WSJ.com
JULY 22, 2009 | Wall Street Journal | By STEPHEN MILLER. Obit
for Meir Amit 1921 - 2009. And to Mr. Amit, success could breed failure.
He believed the 1967 victory, for example, spawned a dangerous
complacency. "After the war we succumbed to the disease of arrogance, of
'We know better, we are the best, far above the others,'" he once said.
Shai Tsur, Mr. Amit's grandson, says his grandfather believed "the
failure of the 1973 war, especially on the part of military
intelligence, was a direct product of this 'konseptziya,'" the idea that
Israel was so strong that its neighbors would never attack.
Israeli  Mossad  security_&_intelligence  1967  obituaries  spymasters  spycraft  Six-Day_War  complacency  overconfidence 
november 2009 by jerryking
Active inertia is the enemy of survival
Oct 8, 2009 | Financial Times pg. 16 | Book review by Richard
Donkin of Donald Sull's The Upside of Turbulence ; Seizing Opportunity
in an Uncertain World ; Harper Business, $27.99/pound(s)18.99. "the
risk, says Sull, is that complacency sets in as companies and their
bosses begin to believe their own press during the good times. The CEO
on the cover of a business magazine, a boss who looks like all the rest,
a grand headquarters - all are examples of companies resting on their
laurels.
Sull concentrates on building agility in business, allowing companies to
shift resources quickly from less promising to faster-growing areas.
Some companies, such as Johnson & Johnson, P & G and Samsung,
have cultivated portfolio agility at the heart of their businesses, he
says. Sull argues that the best companies are able to absorb the shocks
of market turbulence, using cash and profits from their strongest
business streams to cushion the effects of unforeseen events."
book_reviews  Donald_Sull  resilience  upside  turbulence  adversity  complacency  cost_of_inaction  inertia  Samsung  P&G  books  Johnson_&_Johnson  agility  uncertainty  unexpected  unforeseen  antifragility 
october 2009 by jerryking

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