Monday, 19 February 2018

TERRIBLE ADVICE

Rubbish solutions are in fashion

I’m not sure why this appealed so much to me but recently I was driving through Brighton behind a van emblazoned with a sign “Brighton Rubbish Solutions” and it occurred to me this was great name for a second or even third rate marketing consultancy. Mostly I guess because most advice nowadays is so suspect. Ask any economist – or rather don’t bother. I reflected further on businesses taking bold and sometimes strange decisions.


Like Jaguar. I saw their brand new Jaguar F-Pace recently. "Gosh" I thought “smart Renault!”.  It bore no resemblance to Jaguar refinement. If it were a painting it would be called a forgery. An SUV solution but a bad one.


Or Tesco’s secret plans to launch a new retail concept to fight Aldi (the UK’s favourite supermarket say  consumers) and Lidl. The conversations in Cheshunt where the mighty Tesco is headquartered have historically revolved around the risks to the brand and of confusing consumers in introducing a really cheap Tesco as opposed to a quite cheap Tesco. Trouble is Aldi is remarkable for its quality not just its prices. In a recent survey of 10 great value/quality grocery items in the Sunday Times Aldi had two – their prosecco and their new coffee pods – and Lidl one, their aged beef. Revealingly Tesco had none.

 

If they aren’t careful Tesco will end up with a rubbish solution. As Coca Cola have done in reversing their one brand strategy and relaunching their sugar free brands in isolation.

And in the world of economics  Bitcoin is either a genius introduction to the future of money or it’s the  next South Sea Bubble. Confusingly  it could be both. Which is a rubbish situation.

In the world of politics some weird things are happening. Politicians used to yearn for “clear blue water”  separating parties. Today an ocean lies between the wrathful disciples of left-wing-Momentum and the pinstriped intolerant Tory right-wing.



Let me introduce you to Jacob Rees-Mogg. America astonished the world by electing a game-show host who’s reckless, rude and crude. In the UK the bookies have two favourites for the next Prime Minister – Jeremy Corbyn (described by an American friend as Bernie Saunders without the brains) and Jacob. Ladbrokes and Coral actually make Jacob the narrow favourite.

Who is he?  48 years old. Educated Eton and Oxford. Co-founder of a Hedge Fund. He and his wife have around £100 million allegedly. He is strongly anti-Europe and advocates abrupt and total separation from the EU. He has six children. Their names are revealing: Peter Theodore Alphege;  Mary Anne Charlotte Emma ;Thomas Wentworth Somerset Dunstan; Anselm Charles Fitzwilliam ; Alfred Wulfric Leyson Pius; Sixtus Dominic Boniface Christopher. The names tell a story.

He has an icy charm. He’s clever, well mannered, calm and very dangerous. But chances are – if you believe the bookmakers – he could be the next Prime Minister. Or possibly another rubbish solution.

We live in strange times.




Monday, 12 February 2018

WHY SHOWING YOUR STRATEGY ISN'T ALWAYS SMART

There’s this constant tussle between transparency and effective management. We see it daily with the cabinet describing the need to keep their cards close their chest in Brexit negotiations as though they were tremulous poker players. Everything has been reduced to process.

My focus is on three companies this week. They are Pepsico, VW and Royal Bank of Scotland.

Pepsico has a female Chair and CEO, Indra Nooyi, who in a radio interview described a research-finding about their brand Doritos.


She said, in brief, women were put off by the loud crunching sound they made when eaten and that their dusty residue meant fingers had to be licked. Women wanted a cleaner, quieter Dorito and that’s what was going to be given to them. A piece of careful consumer research leading to a targeted segmentation of the brand. Sounds OK; sounds like Pepsico is listening.

But all hell was let loose with women on Twitter frothing with rage – “Doritos for ladies? Ridiculous” …”I will eat my crisps however I damn well please and they will no longer be Doritos”….”How can you gender-type crisps?”

Indro Nooyi is a unusually smart CEO who speaks thoughtfully. She’s a model of restraint. No doubt she was surprised that you have to be so incredibly careful nowadays about whatever you say.
And whatever you do. Step forward VW.

They have admitted to funding a research study to test the effect of diesel emissions on caged monkeys. It didn’t take long for people to describe this as a German company creating gas chambers in which to gas little monkeys. These tests took place 3 years ago and Chief Lobbyist Thomas Steg has since been suspended. You couldn’t make that one up.


Next RBS whose Global Restructuring Group (GRG) had been castigated by the Financial Conduct Authority for mistreating thousands of small and medium-sized companies. The RBS Chairman Sir Howard Davies agreed these were the findings but disputed the conclusions. This one will run and run: “we’re not guilty…not…not!


And another thing….Andrew Krepinevitch (no me neither). He’s a senior fellow at the Centre for Strategic and Budgetary Assessments and he’s regarded as an expert on strategy.

He identifies the ten biggest strategic blunders. Here are just four of them:-
-  Failure to recognize or take seriously the scarcity of resources.
-  Making false presumptions about one’s own competence.
-  Insufficient focus on strategy by trying to satisfy too many different stakeholders.
-  Failure to understand the adversary.


I was struck by these as being pretty much the current Brexit negotiating team’s issues. They constantly overstate our national and their own importance and intelligence. They try to keep too many people happy – a hopeless quest since many are never going to be happy whatever goodies they get. The last one is obvious.

Strategy is about knowing what to do, what’s possible and how public opinion can disrupt a seemingly  logical move. Easy? No it’s not. So pay attention. Even you the highly esteemed Ms Nooyi.


Monday, 5 February 2018

SO WHAT DO YOU THINK?

I am struck by how the nature of opinion forming has changed. When I was doing ‘A’ levels we were coached in the art of balanced arguments, considering the evidence pro and con to a given question and advancing a calm conclusion. It’s a skill that judges in courts of law or good consultants need to give sound judgements or advice.

The speed of our communication is partly responsible. From speed dating to speed reading or, in the case of Donald Trump, allegedly not reading at all. We are forced to think fast and decisively (for decisively read “impulsively”). And it’s beginning to catch up with us.


 

The Police and CPS have been caught out a series of times recently for being sloppy and dilatory in the handing over of crucial evidence to the defence. But on reduced budgets and manpower you try sifting through 4000 Facebook entries although they really must because it’s their job to see justice is done;  it is not their job to get a conviction. Just as in business it is our job to do our job properly not get a profit at any cost (remember the Tesco saga?)

   

Gary Kasparov on Desert Island Discs recently was an incredibly smart, considered guest who having beaten Deep Blue – the Computer that played chess – said that he knew he’d lose most times because human beings make mistakes and computers don’t. Even with all the experience he had he still made mistakes. imagine how much more prone we are when we don’t even bother to review all the information?

The fact is we live in a world of bias. Bias means being one-sided, lacking a neutral viewpoint, or not having an open mind. Watch Question Time and you see unbridled bias.

Go to a football match and see normally civilised and sensible men become loudmouthed, biased louts.

 
Last week inspired by that epitome of  bias, Jacob Rees-Mogg  (who was once described as “a barmaid’s idea of a gentleman”) Steve Baker a Junior Minister accused the Civil Service of working against the government before being forced to retract his comments. Meanwhile Donald Trump who never ceases in his mission to astonish  by his behaviour described the FBI as acting in cahoots with the Democrats against him. Likely? No not really but it was the tone of his comments that was alarming. Presidents don’t normally leap to conclusions. This pedlar of fake-news is an exception.


It’s time we started to do our homework rather than persisting in taking shortcuts and being impulsive. Time to realise first impressions are not always right. The Brexit debate is a case in point. On Question Time last week an enraged Brexiteer started shouting that he was fed up with all this talk and that – for heaven’s sake – this wasn’t rocket science, that Brexit meant Brexit which was a total divorce of everything with the EU. That’s bias not opinion and once embraced is virtually unchangeable. But we’ve got to stop it and start thinking again.

Monday, 29 January 2018

DIFFICULT DECISIONS

I saw the Steven Spielberg film ”The Post” last week. Washington Post publisher, Katherine Graham’s decision, against the advice of her lawyers, to publish an exposé of the Pentagon Papers and potentially be damned is the core story.  The Post acquires the Pentagon Papers  - 4000 pages of damning evidence - and the clock is ticking as they rush to press. The New York Times already had an injunction against them for publishing a similar story and Richard Nixon rated by all as a vindictive opponent was on the warpath.

     

The background to the decision she makes was complex. The Post is about to do an IPO to strengthen the paper’s balance sheet and the potential criminal charges the Nixon administration could bring against them could wreck this.

Worse still the 20 odd years of cover up of the impossibility of the US winning in Vietnam incriminates successive Presidents Truman, Eisenhower, Kennedy, Johnson and now Nixon. Katherine Graham and editor Ben Bradlee were particularly close to Jack Kennedy and Katherine is still a good friend of Robert McNamara who’d been Defence Secretary under Kennedy and Johnson. When personal friendships intervene objectivity is hard.

 But the nub of the dilemma is even more poignant. Katherine has just inherited ownership from her husband who’s committed suicide and she’s a woman. And women don’t count in this man’s world of money and power.

At the centre of the film then are two contemporary themes that really matter. The first is about the freedom of the press and the check on presidential powers. This is dealt with in the decision of the Supreme Court who ruled 6-3 in favour of the press. Here’s what they said:

'In the First Amendment the Founding Fathers gave the free press the protection it must have to fulfil its essential role in our democracy. The press was to serve the governed, not the governors.'


The second is about the role of women in business. And about that decision. The tension in the film is because all the odds are on Katherine Graham saying “don’t publish”; there’s more to lose than gain at first sight. She’s surrounded by cocksure men who for the most part virtually  ignore her. Arthur Parsons played by Bradley Whitford  (Josh Lyman from West Wing in nasty glasses and a very un-Josh-like sneer) is the central opponent to publication. He nearly says “Stupid, stupid Woman” but doesn’t quite.

Katherine goes against her advisors because she’s more in love with truth than money and deep down is a newspaper person . This government cover up story is too important to submerge. As someone says in the film, 70% of the 58,000 fatal US casualties in Vietnam were to “save US face from the humiliation of defeat”.

In a week of the President’s Club scandal and the continuing exposés in Hollywood it took a woman to make the difficult decision. In this man’s world a man (Ben Bradlee apart) would probably  have caved in.


Tuesday, 23 January 2018

IS DAVOS ALL IT'S CRACKED UP TO BE?

On his doctor’s advice, Robert Louis Stevenson spent two winters in Davos. He finished Treasure Island there, but didn’t like the place:

“Shut in a kind of damned Hotel,
Discountenanced by God and man;
The food? – Sir, you would do as well
To fill your belly full of bran.
The company? Alas the day
That I should toil with such a crew,
With devil anything to say,
Nor anyone to say it to.”

‘So,’ according to E.S. Turner, ‘RLS took to tobogganing, alone and at night, which he found strangely exalting.’

(Thanks to the London Review of Books for this)

Monday, 22 January 2018

MOMENTUM, PRIDE AND HOPE

I’m getting increasingly fed up with the negativity and obstructiveness that politics creates. The latest of course being the shut-down of government in the USA. On a more local level it has irritated or, on a bad day, infuriated me.


Brighton Pier now owned by innovating entrepreneur Luke Johnson

Take Brighton. We’ve lived here for 14 years. When we arrived I was thrilled with its potential. HSBC in a 2008 study of urban potential, nominated it as a city of the future thanks to its entrepreneurial spirit, high-tech culture and Universities. I could see Brighton as the leader in a silicon-coastline breakthrough. But then the glue of cynicism, small ‘c’ conservatism and torpor set in. Brighton seemed content to be stuck in, to me, an incomprehensible swamp of mediocrity. People spoke of the glorious past…Hannington’s the department store, Brighton Rock and the West Pier. The West Pier was for us a symbol of criminality, decay and  rusting nostalgia. Like an unburied corpse it rotted just off the sea front.

A depressing book called “Shitsville UK” characterises Brighton as activist, vegan and loony:

“Brightonians consume Hummus by the bucketful as a sacred devotion to remind them of Eden before animals died. They eat it with their beards.”


Soho House New York coming to Brighton

Something however has changed. Brighton is beginning to buzz. My vision was a decade ahead of its time.

We have a premier division football team (keep your fingers crossed), the best cricket coach in the world – Jason Gillespie - in charge of the county cricket team based in Hove, a great medical school, a hospital being renovated, the i360 which has become a magnet for some classy retail development, Brighton Seafront Regeneration working with Soho House to  create a series of 21st century attractions near the pier and in the just-out 2018 Good Food Guide there are 21 entries for Brighton up from 16 in 2017…we are on a gastronomic roll.


Just 1 of 21, MasterChef Professionals winner, Steven Edwards opens in Hove to rave reviews

But the best parts of the story are the ambitious plans to create a cultural centre around the Dome and Brighton Pavilion. Restoration and development work on the old Corn Exchange and the Pavilion Theatre, to be renamed the Studio Theatre, are well under way and this together with the other facilities will make Brighton an international arts centre that will attract the best and be a beacon of innovation and excellence.


The Brighton Corn Exchange – the theatre of the future – in construction

So there we have the evidence of what will make Brighton the second capital of the south – a real city of the future. A friend called me from Long Island saying how he missed cricket, liberal thinking and conversation. Should he, he mused , retire to Brighton? Of course he should.

We have the vision, momentum, energy,  pride (that quality historically derided as being an inauthentic emotion) and we have the hope that all this will accelerate. I’m asked if we aren’t “gentrifying” the place. I just don’t understand that word. We’re doing up our home and leaving a great legacy for the future. That should be something to be proud of shouldn’t it?


Anthony Seldon’s vision 2002 is not so far away from realisation within a few years from now

Monday, 15 January 2018

IT'S OUR VALUES THAT COUNT

That’s perfect. But is it true of many/any larger companies? Is she in fact living in an idealistic dream world?


As a writer of many business books I’m sometimes asked if I’ll ever write a “proper book” i.e. a work of fiction. To which I’m always tempted to say that I already have - all those books on marketing, presenting and decision making…but that is to use irony to the disservice of all those kind people who bought and read my books. The temptation to do it is there because the world of stories is somehow seen by many as more important than the world of data, trade and customers.

Increasingly even the best companies like John Lewis are struggling to retain their lustre. When I talk to people who work there (which is as often as I can) I’m increasingly getting a “yes but” response. The biggest issue is “it isn’t like it was and management don’t listen like they did.” But, overall, it’s still a good company with, yes, some respect and trust.


But I have this sense of values being, like patriotism, the last refuge of the scoundrel or the lazy executive - they are more rewarding to talk about than prove useful. In GE, in its Jack Welch pomp, the first question anyone asked of a colleague was “are you hitting your number?” In Michael Lewis’ wonderful book “Moneyball” the story of the remarkable success of the Oaklands Athletics Baseball team in 2002 was about statistics and proven performance not style, potential or values.

Great values set alongside poor results is widely regarded as unacceptable whilst great results set alongside rotten values used to be regarded as OK. Until recently - until Weinstein, Travis Kalanick and others were stopped in their tracks. The King of Hollywood and the Emperor of Start-Ups dethroned on moral not financial grounds. The world and the importance of values have changed. So is my cynicism justified?

I was intrigued to discover what people thought who are in the front line so I emailed about 50 people and asked them if they thought “respect and trust are the foundations for any company.”

Well cynicism loses because the overwhelming response was “yes” and to my greater surprise nearly all thought this was true where they worked now. One of them said this “Respect and trust are the foundation of all relationships and companies are a collection of relationships”. 

But this isn’t simple – as someone noted several factors are fundamental not just two. But here’s an atypical response that made me giggle:

“Most companies have a very mixed set of foundations ….  these could just as easily be 'fear and suspicion'…. I have seen some pretty non-respect-and-trust places work quite well for a long time if they provide sufficient personal benefits for those who are critical stakeholders”. 



So overall my own guess that cynicism would win was wrong. I've seldom been been so glad to lose a bet.