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The End of Chinamerica

Interesting commentary from Harvard’s Niall Ferguson:
With China decoupled from America—relying less on exports to the U.S. market, caring less about its currency’s peg to the dollar—the end of Chimerica would have arrived, and with it the balance of global power would be bound to shift. No longer so committed to the Sino-American friendship established back in 1972, China would be free to explore other spheres of global influence, from the Shanghai Cooperation Organization, of which Russia is also a member, to its own informal nascent empire in commodity-rich Africa.
Yet commentators should hesitate before prophesying the decline and fall of the United States. It has come through disastrous financial crises before—not just the Great Depression, but also the Great Stagflation of the 1970s—and emerged with its geopolitical position enhanced. That happened in the 1940s and again in the 1980s.
Part of the reason it happened is that the United States has long offered the world’s most benign environment for technological innovation and entrepreneurship.
Read all about it >>

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Mark Anderson: 10 Technology Predictions for 2009

1.) It will be a big year for applications that can play on big screens.
2.) The big news in the mobile world will be smart phone applications.
3.) The blush is off the China rose.
4.) Flash-based computing will really take off.
5.) Wall computing gets traction.
6.) Carry-along computers will be hot.
7.) LTE (Long Term Evolution) will be the preferred technology for 4G.
8.) The less developed world will finally see widespread availability of broadband.
9.) Voice recognition will finally work right.
10.) The Internet Assistant will be born.
Don’t ask me, I’m simply reporting what Mark Anderson’s saying.
The one I’m certain about is the “carry-along” computer. I want real laptop computing in the size of a Penguin paperback. Are you listening, Apple?

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Strategic Cost Reduction: How to Trim the Federal Budget using the Pareto Principle

JH3 is a big fan of the 80/20 principle:
The 80/20 rule provides the foundation for a relatively simple exercise for executives. It involves answering the following questions:
* Which 20% of the products or services generate 80% of the profitability?
* Which 20% of the customers generate 80% of the profitability?
* Which 20% of the geographies generate 80% of the profitability?
* Which 20% of the assets generate 80% of the profitability?
These are powerful and revealing questions, yet few companies today are able to answer these questions given the way their accounting and information systems are set up.
I wonder if the same approach could be applied to the Federal Budget. Obama, are you listening?
The pareto questions might look something like this:
– Which 20% of our costs take up 80% of the budget?
– Which 20% of our services impact 80% of the tax-paying public?
– Which 20% of our geographies require 80% of our aid?
– Which 20% of our public generate 80% of our tax revenues?
Betcha these could be eye-openers!

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Accenture: How To Create A Culture Of High Performance

Accenture is advertising How To Create A Culture Of High Performance.
I agree with them that “the central attribute of a successful leader is the ability to change the way people think.”
But I completely disagree when they say that “Successful leaders get everyone to share the same mindsets.”
I think the opposite is true: successful leaders bring together diverse points of view to challenge each other and present different alternatives, thus helping the leader make informed, effective decisions.
What Accenture is calling “mindsets” is really groupthink. Groupthink is a recipe for disaster, not high performance.
In the course of a two-year investigation, Accenture determined five “mindsets” which matter most in improving business performance:
Mindset 1: Maintain the Right Balance Between Market-Making and Disciplined Execution by Avoiding False Trade-offs and Committing to a Dual Focus on Present and Future.
Mindset 2: Identify and Multiply Talent by Investing a Disproportionate Amount of Time in Recruiting and Developing People.
Mindset 3: Use A Selective Scorecard to Measure Business Performance By Relying on a Simple, Memorable Way of Measuring Success and Using Every Occasion to Share Success Stories Throughout the Organization.
Mindset 4: Recognize Technology as a Strategic Asset by Investing in Technologies that Demonstrably Lead to Better Business Performance.
Mindset 5: Emphasize Continuous Renewal by Ensuring the Organization Understands What to Preserve and What to Jettison.

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Seth Godin teaches the New York Times How to Compete

In my line work (consulting) I run into all kinds of executive mindsets. In the publishing world, however, these mindsets tend to be rather stodgy at best, reptilian at worst.
Publishers don’t understand the web. And Seth Godin takes the New York Times to task, pointing out so many obvious misses and near-misses, that you have to ask why. Why don’t publishers get it? Why do they insist on playing it safe, even as their ship sinks below them?
Godin’s answer is right on target: “organizations are run by people who want to protect the old business, not develop the new one.”
This is what VG talks about as well.
In just about any large company, the people running the show are great at yesterday’s business, not tomorrow’s.
Please read Godin’s post >>

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More Obama Lessons for Business

Bill George (yes, Medtronic’s Bill George) gives us a few more lessons learned from the Obama victory:
• Obama created a grassroots movement by building an ever-expanding organization of empowered leaders, who in turn engaged people from their social networks like Facebook.
• The entire organization was aligned around a single goal—electing Obama as President—and operated with common values (“Offer messages of hope, don’t denigrate our opponents, refuse to make deals”).
• Campaign leaders subordinated their egos and personal ambitions to the greater goal. Those who deviated quickly exited.
• Obama set a clear, consistent tone from the top (“No Drama Obama”), and never wavered, even when things weren’t going well.
• Obama’s greater mission transcended internal goals, such as fund-raising, endorsements, and campaign events, but each of these areas had goals tied to the greater mission.
• The campaign team used the most modern Internet tools to communicate, motivate, and inspire people and to guide their actions. Each day, 5 million people received personal messages from campaign headquarters or even Obama himself. This organization collaborated across a wide range of geographies and campaign functions, all tightly integrated nationally and executed locally.
Finally, just in case you missed the other business lessons, here you go >>

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Shoshana Zuboff: Obama’s Victory is Capitalism 2.0

Writes Zuboff in BusinessWeek:
“This column is dedicated to the top managers of American business whose policies and practices helped ensure Barack Obama’s victory. The mandate for change that sounded across this country is not limited to our new President and Congress. That bell also tolls for you. Obama’s triumph was ignited in part by your failure to understand and respect your own consumers, customers, employees, and end users. The despair that fueled America’s yearning for change and hope grew to maturity in your garden.”
Years ago I remember reading Zuboff’s In the Age of the Smart Machine and thinking that no one in corporate management really wants real transparency… and that the information value-chain she described was doomed to failure.
Luckily, I was wrong. Now Obama will bring process transparency to government and business.
Asks Zuboff:
“…can we invent a business model in which advocacy, support, authenticity, trust, relationship, and profit are linked?”
“Yes, we must,” she concludes.
Read the article >>
And read her book: The Support Economy: Why Corporations Are Failing Individuals and the Next Episode of Capitalism
 >>

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Tom Friedman: “Steve Jobs – want to run G.M. for a year?”

Tom Friedman made me laugh today:
“…somebody ought to call Steve Jobs, who doesn’t need to be bribed to do innovation, and ask him if he’d like to do national service and run a car company for a year. I’d bet it wouldn’t take him much longer than that to come up with the G.M. iCar.”
The rest of his column is a bit more serious. But it’s dead on!

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Business Lessons Learned from President-Elect Barack Obama

What should the new President’s priorities be? Here are some views from a few CEOs interviewed by BusinessWeek:

It’s a cliche, but big business fears Democratic leaders. Turns out that Democratic presidents are better for the economy than Republicans! Details, details…
Jack Welch has his own take on why Obama succeeded: a clear vision, clean execution, and friends in high places.
A far more insightful piece comes from HBR blogger Umair Haque: Obama’s Seven Lessons for Radical Innovators. I don’t agree with all of his points (Obama did not “minimize strategy,” he minimized tactics!) but I do commend Haque for his insights (see this post, for example, on why Obama is the Google of Politics.)
Bill Taylor has a fun post titled: How Obama Became CEO of the USA — and What It Means for CEOs Everywhere
 in which he argues that “being different makes all the difference.”
John Quelch says it’s all about better marketing.
Barbara Kellerman argues that Obama is a superior manager.
Gill Corkindale calls Obama The World’s First 21st Century Leader
For Stew Friedman, it’s authenticity.
My own view is that Obama is a true leader. And what we witnessed was the birth of Politics 2.0.
And in the end, it’s still about results, and to that end, Obama has already taken the first step.
Go Barack!

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The Return of American Idealism: Political Reaction to Obama’s Win

Reaction to Obama’s win from politicians across the world:
UKRAINE: “Your victory is an inspiration for us. That which appeared impossible has become possible.” – Youlia Tymoshenko, Prime Minister
MALI: “The United States has given a lesson, a lesson in maturity and a lesson in democracy.” – Amadou Toure, President
ITALY: “Europe which is celebrating (the victory of) Obama must know that Europe be will be called on to be a producer of security and no longer merely a consumer. I think Obama will rightly call on us to take our responsibilities more seriously.” – Franco Frattini, Foreign Minister
BRAZIL: “In this case hope has won over prejudice — this is good for the United States and the world as a whole.” – Celso Amorin, Foreign Minister
RUSSIA: “The news we are receiving on the results of the American presidential election shows that everyone has the right to hope for a freshening of U.S. approaches to all the most complex issues, including foreign policy and therefore relations with the Russian Federation as well.” – Grigory Karasin, Deputy Foreign Minister
IRAQ: “I think you will hear a lot of discussion and goals and slogans during the election campaigns. When there is a reality check I think any U.S. president has to look very hard at the facts on the ground.” – Hoshiyar Zebari, Foreign Minister
ISRAEL: “Israel expects the close strategic cooperation with the new administration, president and Congress will continue along with the continued strengthening of the special and unshakeable special relationship between the two countries.” – Tzipi Livni, Foreign Minister
VATICAN: “Believers are praying that God will enlighten him and help him in his great responsibility, which is enormous because of the global importance of the United States…We hope Obama can fulfil the expectations and hopes that many have in him.” – Rev. Federico Lombardi, spokesman for Pope Benedict
PAKISTAN: “Your election marks a new chapter in the remarkable history of the United States. For long, the ideas of democracy, liberty and freedom espoused by the United States has been a source of inspiration…I hope that under your dynamic leadership, the United States will continue to be a source of global peace and new ideas for humanity.” – Yousaf Raza Gilani, Prime Minister
INDIA: “Your extraordinary journey to the White House will inspire people not only in your country but also around the world.” – Manmohan Singh, Prime Minister
HOLLAND: “The necessity for cooperation between Europe and the United States is bigger than ever. Only by close transatlantic cooperation can we face the world’s challenges.” – Jan Peter Balkenende, Prime Minister
FRANCE: “With the world in turmoil and doubt, the American people, faithful to the values that have always defined America’s identity, have expressed with force their faith in progress and the future. At a time when we must face huge challenges together, your election has raised enormous hope in France, in Europe and beyond.” – Nicolas Sarkozy, President
AFGHANISTAN: “I applaud the American people for their great decision and I hope that this new administration in the United States of America, and the fact of the massive show of concern for human beings and lack of interest in race and color while electing the president, will go a long way in bringing the same values to the rest of world sooner or later.” – Hamid Karzai, President
GREAT BRITAIN: “Barack Obama ran an inspirational campaign, energizing politics with his progressive values and his vision for the future. I know Barack Obama and we share many values. We both have determination to show that government can act to help people fairly through these difficult times facing the global economy.” – Gordon Brown, Prime Minister
KENYA: “We the Kenyan people are immensely proud of your Kenyan roots. Your victory is not only an inspiration to millions of people all over the world, but it has special resonance with us here in Kenya.” – Mwai Kibaki, President
CHINA: “The Chinese Government and I myself have always attached great importance to China-U.S. relations. In the new historic era, I look forward to working together with you to continuously strengthen dialogue and exchanges between our two countries.” – Hu Jintao, President
GERMANY: “I offer you my heartfelt congratulations on your historic victory in the presidential election… The world faces significant challenges at the start of your term. I am convinced that Europe and the United States will work closely and in a spirit of mutual trust together to confront new dangers and risks and will seize the opportunities presented by our global world.” – Angela Merkel, Chancellor
JAPAN: “The Japan-U.S. alliance is key to Japanese diplomacy and it is the foundation for peace and stability in the Asia-Pacific region. With President-elect Obama, I will strengthen the Japan-U.S. alliance further and work toward resolving global issues such as the world economy, terror and the environment.” – Taro Aso, Prime Minister
SOUTH AFRICA: “Africa, which today stands proud of your achievements, can only but look forward to a fruitful working relationship with you both at a bilateral and multilateral levels in our endeavor to create a better world for all who live in it.” – Kgalema Motlanthe, President
CANADA: “I look forward to meeting with the President-elect so that we can continue to strengthen the special bond that exists between Canada and the United States.” – Stephen Harper, Prime Minister
AUSTRALIA: “Senator Obama’s message of hope is not just for America’s future, it is also a message of hope for the world as well. A world which is now in many respects fearful for its future.” – Kevin Rudd, Prime Minister
NEW ZEALAND: “Senator Obama will be taking office at a critical juncture. There are many pressing challenges facing the international community, including the global financial crisis and global warming. We look forward to working closely with President-elect Obama and his team to address these challenges.” – Helen Clark, Prime Minister
INDONESIA: Indonesia especially hopes that the U.S., under new leadership, will stand in the front and take real action to overcome the global financial crisis, especially since the crisis was triggered by the financial conditions in the U.S.” Susilo Bambang Yudhoyono, President
PHILLIPINES: “We welcome his triumph in the same vein that we place the integrity of the US electoral process and the choices made by the American people in high regard. We likewise note the making of history with the election of Senator Obama as the first African-American president of the United States.” – Gloria Macapagal Arroyo, President
IRAN: “The president-elect has promised changes in policies. There is a capacity for the improvement of ties between America and Iran if Obama pursues his campaign promises, including not confronting other countries as Bush did in Iraq and Afghanistan, and also concentrating on America’s state matters and removing the American people’s concerns.” – Ali Aghamohammadi, aide to Ayatollah Ali Khamenei
PALESTINIAN AUTHORITY: “We hope the president-elect in the United States will stay the course and would continue the U.S. engagement in the peace process without delay. We hope the two-state vision would be transferred from a vision to a realistic track immediately.” Saeb Erekat, aide to President Mahmoud Abbas
And for a less pompous tone, here are a few statements from ordinary people:
LEBANON: In a Beirut restaurant, Miriam, 28, said her two brothers, both members of the militant Islamic group Hezbollah, saw Mr. Obama as a leader who was willing to take diplomatic risks to avoid military confrontations. “They think Obama will not damage the Middle East the way Bush did, and they were afraid if [John] McCain made it, the whole region would be in danger.”
BRAZIL: In Rio de Janeiro, documentary filmmaker Ryan Steers said Mr. Obama could improve the U.S. image abroad. “Obama is someone the world can trust. That is the most important thing for America right now: regaining its trust in the world community.”
KENYA: People danced in the streets in Mr. Obama’s ancestral village of Kogelo, and President Mwai Kibaki declared Thursday a national holiday. In Nairobi’s Kibera shantytown, carpenter Joseph Ochieng said, “If it were possible for me to get to the United States on my bicycle, I would.”
JAPAN: “Americans overcame the racial divide and elected Obama,” said Terumi Hino, a photographer and painter in Tokyo. “I think this means the United States can go back to being admired as the country of dreams.

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Michael Porter: Why America Needs an Economic Strategy

“The stark truth is that the U.S. has no long-term economic strategy—no coherent set of policies to ensure competitiveness over the long haul. Strategy embodies clear priorities, based on understanding the strengths we need to preserve and the weaknesses that threaten our prosperity the most. Strategy addresses what to do, but also what not to do. In dealing with a crisis, experience teaches us that steps to address the immediate problem must support a long-term strategy. Yet it is far from clear that we are taking the steps most important to America’s long-term economic prosperity.”
That’s the Portermeister in BusinessWeek.
What he’s saying is Vote Obama 🙂

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Recession as Opportunity

The nerds at Bain give us a few reminders from history:
– Southwest Airlines surged ahead during the 2001 recession
– Intel pulled away from AMD (also in 2001)
– Johnson & Johnson, GE and IBM shifted focus on economically healthier regions in Q2/2008
– Bank of America gobbled up Merrill Lynch (the opportunity of a lifetime) – just a few days ago
So, where are your opportunities?

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Shaping Strategy in a World of Constant Disruption: How to Manage Your Business Ecosystem

In this month’s Harvard Business Review, authors John Hagel III, John Seely Brown and Lang Davison provide a road map for the daunting task of shaping strategy as technology-driven infrastructures constantly change.
The article is called: “Shaping Strategy in a World of Constant Disruption” and you can download it here (thanks Deloitte Consulting!) >>
In my view this is a very timely piece of thinking from my heroes JH3 and JSB (and Lang Davison). I’ll dig into it later this month on ecosystemwatch.com…
Wait, there’s more. Check out the podcast >>

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Online Selling: Procter & Gamble Goes Direct to Fight Private Labels?

Don’t look now, but P&G is trying some direct selling online.
From the Financial Times:

Procter & Gamble is testing its ability to use the internet to sell its toothpaste, household cleaners and nappies directly to US households, in a potential long-term strategic challenge to its retail partners.
…The move brings P&G into direct brand competition with its retailers, underlining the extent to which e-commerce is contributing to changes in the way the two sides have traditionally worked with each other.
OK. The site is called theEssentials.com, but so far it looks like they have very little traffic.
Is this how they intend to fight the private label war? I’ll talk about them later this month on ecosystemwatch.com

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SNL Disaster: Sarah Palin Mocks Herself

This is truly amazing. The folks at SNL get VP candidate Sarah Palin to applaud a song which rips her to shreds… What was the McCain campaign thinking? Total and utter lack of judgment on their part.
Watch as SNL schools the McCain campaign:

Brilliant work by SNL. They get the ratings and trash the Republicans.

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What Would Peter Drucker Do?

Looks like Rupert Murdoch’s WSJ is thinking along the same lines we are (for a few seconds at least).
They’ve gone an dug up an old article Peter Drucker wrote for them: Planning for Uncertainty.
Here are some of the key questions:
– …traditional planning asks, “What is most likely to happen?” Planning for uncertainty asks, instead, “What has already happened that will create the future?”
– “What do these accomplished facts mean for our business? What opportunities do they create? What threats? What changes do they demand — in the way the business is organized and run, in our goals, in our products, in our services, in our policies? And what changes do they make possible and likely to be advantageous?”
– “What changes in industry and market structure, in basic values (e.g., the emphasis on the environment), and in science and technology have already occurred but have yet to have full impact?”
– “What are the trends in economic and societal structure? And how do they affect our business?”
– “What is this company good at? What does it do well? What strengths, in other words, give it a competitive edge? Applied to what?”
He ends with a serious warning for the bean-counters:
There is, however, one condition: that the business create the resources of knowledge and of people to respond when opportunity knocks. This means developing a separate futures budget.
The 10% or 12% of annual expenditures needed to create and maintain the resources for the future — in research and technology, in market standing and service, in people and their development — must be put into a constant budget maintained in good years and bad. These are investments, even though accountants and tax collectors consider them operating expenses. They enable a business to make its future — and that, in the last analysis, is what planning for uncertainty means.
And don’t forget his advice for retail strategy >>

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Warren Buffett: “Buy American. I am”

OK.
A simple rule dictates my buying: Be fearful when others are greedy, and be greedy when others are fearful. And most certainly, fear is now widespread, gripping even seasoned investors. To be sure, investors are right to be wary of highly leveraged entities or businesses in weak competitive positions. But fears regarding the long-term prosperity of the nation’s many sound companies make no sense. These businesses will indeed suffer earnings hiccups, as they always have. But most major companies will be setting new profit records 5, 10 and 20 years from now.
Read all about it >>

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5 Questions about Strategy and Business Design

Now is a good time to ask yourself these five business design questions (ht to Oliver Wyman):
1. Who is the customer and what do we offer? Which customer segments should we serve, and what is our value proposition for each segment?
2. What is our profit model for each of our offerings?
3. What do we perform in-house and what do we outsource?
4. How do we build in strategic control? Is there a way to create sustainable differentiation?
5. How should we organize ourselves to make it happen? What is the right organizational architecture to execute the business for each segment?
You can download the business blueprint (registration required): level-one flowcharts of how to run a profitable, sustainable, online business.
1) Offer development process
2) Offer creation process
3) Sales process
4) Marketing process
5) Order fulfillment & support process
6) Financial process
7) Licensee certification process
8) Licensee business development process
9) Events process
10) Archival process