THE INVULNERABILITY OF THE OPTIMIST

We optimists awaken at dawn full of the joys of anticipation and the certainty of success and sixteen hours later we retreat to bed wounded and weakened by the ambushes from cynics, sceptics and pessimists. We sleep fitfully but the next day we wake up full of the  joys of anticipation….

No wonder we are loathed by the purveyors of dystopian rhetoric and targeted as beastly balloons of cheerfulness. We are like low, slow-flying pheasants cheerfully indifferent to the shotguns of despair. We are, in short, irrepressible.

And if we listen to Steve Pinker (our cheerleader) we seem in the right. He says that we are, on every known measurement, progressing ever forwards to a better world of longer, happier, healthier and wealthier lives. His new book “Enlightenment now” has been described as heartening and inspiring. But it has enraged Black Swan author and  grumpy apostle of doom, Nassim Taleb, who regards Pinker as devoid of rigour.

Sceptics like him have plenty of ammunition. The betrayal of trust by politicians, economists and bankers; the Syrian catastrophe; ISIS; Al -Qaeda; the Parkland Florida shooting; Donald Trump pretty well daily and so on. But their espousal of  catastrophe is pretty thin stuff viewed against the sweep of history.

That’s not how the news sounds of course. Even some bad weather (forecast to coincide with when you are reading this in the UK or Europe) has been named “the Beast from the East”. A cold snap is demonised.

Mel Brooks, like many comics a bit of a pessimist, said: “Hope for the Best. Expect the worst. Life is a play. We're unrehearsed.”  Spot on Mel. We are living in a happier, better world for sure but it’s a whole lot messier. The sense of under-rehearsal and busking is evident in the behaviour of all our politicians.  Recently we saw a play called “The Play that goes Wrong”. It was a farce that felt very appropriate for our times. And we all laughed because that’s what optimistic human beings do when things mess up.

Our lives move faster. Our news is more fractured. Reactions are more erratic. Nuance is a thing of the past. Things are extreme - either  good or bad. We live in a binary tick-box culture but…big but… things are getting better. Institution after institution is given a roasting - as Oxfam and others were last week. They say sorry,  are reformed and then life goes on - better. This week it was the turn of the Police. The Supreme Court  deemed “failures in the investigation of the crimes, provided they are sufficiently serious, will give rise to liability on the part of the police”. This related to mistakes in the original Worboys’ investigation.  A real surprise for pessimists about human rights but as Steve Pinker reminds us:

“humans have innate desires for life, liberty and the pursuit of happiness.”  So in the end things tend to work out in justifying our desires and our unquenchable optimism.

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.

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.

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.