Anthony Jenkins, the retail banker who succeeded Bob Diamond as the Chief Executive of Barclays Bank, has rightly been criticised this week after the bank announced that it had increased its bonus pool when profits were falling and the bank is pushing through large cuts – 7,000 people – in retail banking. You judge a system by what it does, not what it says it does, and this decision spoke volumes – yelled it from the rooftops, really – about who benefits from the Barclays’ banking system.
It’s taken some time – a surprisingly long time – but at last we’re seeing a political reaction from Britain’s civil society organisation’s to Edward Snowden’s revelations. Six organisations have launched a campaign that our security laws should be governed by six principles that are closely linked to the principles that underpin our notions of democratic government.
Here’s an extract about the country’s economic prospects:
“While the last three decades tell us that it’s unwise to bet against China fixing its problems, there are some big questions.
“One is about the effectiveness of the transition to a consumer economy, which needs significant institutional change if it is to work. This leads to a second question, of whether China’s market institutions are robust enough and trusted enough to support such a transition; this is almost certainly one factor behind the country’s anti-corruption drive. An important issue in this is openness: despite its huge internal market there will be doubts about how effectively China can modernize or innovate while it shuts off its internet from the world. The cost of managing its “Golden Shield” is said to be $1.6 billion to date.
“A third question is about the cost of unwinding or writing off stranded assets, whether they are ghost cities or the government’s cotton mountain, bought at prices well about the world market. There are also questions about the overall levels of Chinese debt, and whether a combination of asset bubbles, shadow finance, and bad debts throughout the country’s banking system could prompt a financial crisis. Finally, there are signs that the “Chimerica” system, under which Chinese savings bought American debt, and Americans then bought Chinese goods, is coming to an end.
“As Robert Gottliebsen argued recently in Australia’s Business Spectator:
China does not want to fund further US deficits and the US wants to reduce its deficits. And so the US-China model that has dominated the world is changing and Chinese consumers must be stimulated to replace the Americans. … The Chinese leadership understands this but changing the model will not be easy, particularly as the population is ageing. Japan tried a similar switch and failed.”
The image at the top of this post is from Wikimedia, and is used here, with thanks, under a Creative Commons licence.
A few years ago I wrote a set of scenarios - with Joe Ballantyne and Andy Sumner – on the prospects for the world economy to the early 2020s. In one of the scenarios we saw the “West” regenerate itself by a combination of public investment and by bringing home its high value manufacturing. After I’d drafted this post, David Cameron popped up at Davos to promote the idea of “re-shoring”, even if he seems less keen on the notion of public investment. And according to a recent report in The Conversation by some Birmingham University researchers, there are signs that re-shoring is starting to happen, that British businesses are bringing it back home.
Several things have come together in my mind recently which tell a story about the process of social change – first, an interview with the British radical politician Tony Benn in which he rehearsed his story about the process of change, second, the first screening in the UK of the PBS documentary about the Freedom Riders, shown in the US in 2011, and third the case of the Arctic 30 Greenpeace campaigners. Together, they seem to tell a story about the role in creating change of the body, the person, who puts themself knowingly in a place of danger. Tony Benn first. His quote goes like this:
“How does progress occur? To begin with, if you come up with a radical idea it’s ignored. Then if you go on, you’re told it’s unrealistic. Then if you go on after that, you’re mad. Then if you go on saying it, you’re dangerous. Then there’s a pause and you can’t find anyone at the top who doesn’t claim to have been in favour of it in the first place.”
Benn’s model of change, which I’ve blogged about before (though it seemed to new to the Guardian interviewer) seems to come from Schopenhauer via Gandhi. It’s a memorable idea, but it has a big gap in it: what is the mechanism by which ideas move through the phases?
I read earlier this year Richard Rumelt’s book Good Strategy Bad Strategy, much acclaimed when it was published in 2011. And you can see why: it is lucid, well-writtem, and largely free of jargon, which already marks it out from the average business book. It also has a clear view of what strategy is (and what it is not), which is welcome, given how much the word is abused. And the business stories he tells illuminate his argument.
Rumelt is entertaining on the differences between bad strategy and good strategy – and I’ll come back to the bad strategy later. Good strategy, he says, is composed of a kernel of three elements (p77):
- A diagnosis that defines or explains the nature of the challenge. A good diagnosis simplifies the complexity by identifying the critical aspects of the situations.
- A guiding policy for dealing with the challenge.
- A set of coherent actions that are designed to carry out the guiding policy.
In particular, I found his advice on diagnosis valuable. A good diagnosis “should replace the overwhelming complexity of reality with a simpler story, a story that calls attention to its crucial aspects.” This is, in effect, a sense making exercise. And a good strategic diagnosis does a second critical thing: “it also defines a domain of action.” Good strategy can then be built on a diagnosis that points to areas of leverage over outcomes. (more…)
A spot of social history. I was doing a little light research on the folk singer Wizz Jones after seeing him live, and came across this news report from the BBC’s Tonight programme from 1960. It’s about the steps being taken by the Cornish resort town Newquay to exclude a small group of beatniks from the town – making sure they couldn’t get work in the town or buy refreshments. What’s striking about this clip is the clothes and the hair: the unwanted Beats wouldn’t look out of place in any European or north American city now, 50 years later, whereas the clothes of everyone else place them firmly in the 50s and 60s.
It made me wonder what people are wearing now that won’t have dated in half a century.
For students of British journalism there’s also the sight of the reporter Alan Whicker, mostly remembered now as a parody of himself, forensically getting the leader of the Council to admit that the ban that he had organised had no grounds other than prejudice.
So, by way of a thought experiment: what if London is about to peak? The reason would be the way housing provision and housing regulation had destroyed the economic balance of the city, and there are some serious warning signs. Recently, there’s also been a wave of commentary on this. But first, let’s just roll back to the ’70s.
I had the opportunity earlier this month to hear the American academic George Lakoff talk, at a TUC event on the future of welfare. Lakoff, who’s at the University of Berkeley in California, has studied how we shape and understand our political views, and he’s probably best known here for his short book Don’t Think of An Elephant. (The minute you start trying not to think about it, you’re thinking about it, which I’ll come back to later).
He’s not a typical academic: almost the first thing he told us was that neither of his parents went to high school (secondary school).
Anyway, the most important thing to know about his work is that it’s based on neuroscience and that once you have heard him explain it, this changes the way you think about political language and political discourse.
It’s well past cliche to commend Johannes Gutenberg for his invention of the printing press, but it was only when I read Just My Type, by Simon Garfield, that I realised how inventive he had been. As the management theorist Peter Drucker once said, innovation is about building a whole new system, not just having a single good idea. As Garfield observes, “Gutenberg’s vision concerned automation, consistency, and recycling.” He set the mould for printing technology for almost 500 years – a long time for a technology innovation to remain dominant, and he was the first person in Europe to use mass production. (more…)