Welcome to my thoughts and passions!

Crisis solutions; back to the basics. Part two.

2011-11-18T03:12:00.000-08:00

Since my last blog in August a lot has changed. A recession in Europe has become reality and the crisis jumped fast from Greece to Italy and now even Spain is closer to a default than ever. Though this did not come as a surprise what remains unbelievable it the lack of decision making.

What is clear is that the baby boomers or still their parents - very old politicians are still too common - simply do not have the leadership to make fast decisions. Instead their management style, not too long ago embraced and heavily rewarded, looks now very fragile without confidence.

While the economic, political and social situations in Europe go further down many other countries call for leadership. Why do we allow our politicians to keep on trying with finding consensus? Where are the leaders that dear to take a decision, even if that would be a controversial one?

What is wrong and should change in 2012?

1. What happens now is that the crisis will not be defeated but extended because the old boy school network is not willing to accept change. It took years for local, regional and country politicians to get the seats they wanted. They and their parties are not willing to give up their power, not even in legimate four yearly elections.

To reform change has to be undertaken from top to bottom. From changing laws to reform local boards and committees which require good guidance and planning. There is no evidence this takes place while everyone expects governments to act. This is not enough.

2. The weakest part of country must be changed first. Only providing funding is insufficient. Those who were in charge the past years need to be replaced. Unfortunately that is again the problem of the whole system as these people find themselves too important.

Like mentioned before when going back to the basics new people are required; not managers but experts. From schools and universities to hospitals and semi-government. The management culture of the 90s has failed; high costs but no results!

3. Admitting guilt! Apologies to the public! This is what should be done but those in charge for many years burning tax money, committing fraud, being corrupt and enjoying overpaid non result jobs simply refuse to give up or share power. This is a mentality problem.

Despite the mismanagement in the financial sector problems are mostly seen as caused by products but it were the directors and managers that approved taking too high risks, to re-sell mortgages and to give loans to anyone. There is no product problem but a “who is in charge” problem. Greed has become a product, a tool and now we pay the real price.

4. In line with all the above to solve the problems in Europe harder measurements are inevitable. Yes, Greece has to default and maybe Italy or Spain too. These countries are responsible but expect members of the same club to constantly rescue them against any price.

Companies that got declared bankrupt often try to restart and are successful when doing that with a new management and new investors. Unfortunately no European leader wants to take this unpopular decision to be remembered as the one that pulled the plug. Cowards!

5. Of course this is not child play! Any default has lots of consequences. Many banks will be forced to default as well. Finally this is the result of wrong behavior, wrong management, wrong decisions, wrong people and the wrong place and wrong moments. How more wrong is acceptable?

To let them “exist” and save them all by constantly avoiding the hardest injection of the sick patient Europe (or US) the future will remain more uncertain. More funding will be needed while we run out of it. Currently decision makers do not look ahead but backwards.

Conclusion:

Looking back success and failure go hand in hand but it looks like doing a step back is out of the question. Save the euro! Save the EU! Save the banks! Save all that did wrong! Save, save, save....

The most difficult task for humans is to change, to dear turning the ship, call it the day, throw the towel, to tell others they are wrong and to replace them. Look around! Countries that changed the past decades could do that thanks to a few of these leaders, others still fight domestic wars.

The biggest challenge comes when countries become rich and wealthy. Their population becomes spoiled and fat while most politicians only deal with personal interest. What is my future after politics? What board can I enrich and become financially independent?

A regional or global crisis is needed to get rid off these egoists but to get rid off them the nation has to choose for change. That is often impossible because the majority of the voters are less educated or easier to manipulate by the system of politics and media. "When voting me I will guarantee unemployment will be solved". Excuse me? My fridge has a guarantee, not you!! Can we sue them after elections, please?

Change takes more time when heading for the abyss than when enjoying a long period of prosperity. We are so impatience!! Small changes will help though but finally it will be inevitable that an unexpected event or decision will tremor the whole world. So, my advice for 2012 will be: Fasten your seatbelts! This is going to be one hell of a roller coaster!

Crisis solutions; back to the basics. Part one.

2011-08-30T07:25:00.000-07:00

Despite the consequences of past recessions a new crisis might have similarities with past ones but has its own characteristics. Unfortunately instead of going in-depth in terms of fighting a crisis nothing is changed basically. Still changing the basics could be the best solution for the long run avoiding threats of double dips like now.

Basics are formed in each society and country by culture, education, people, jobs and politics. Here hardly changes are done and instead public investments are increased, taxes are adjusted or new projects developed but it is all too obvious and not sustainable.

To prepare a country and its society for another round of downturns it would be much better to change (read = improve) the basics. Let’s take Spain as an example for each of these basics.

* Culture: by keeping this the same, like mocking about the past too much or rivalry at a national level this can block any progress or improvements coming from inside a society, like creativity, innovation or even new inventions. A society that adapts can faster anticipate or accept reform and therefore experience a real recovery.

The Spanish government did not or could not anticipate on the housing bubble. Despite the demand for cheaper housing a new system of for example renting would be better than hoping the market recovers. Young people forced to live with their parents than can easily move out and start own lives etc. Creating regulators for this new system would also deliver jobs. Local government could regulate and integrate this system without many problems or constant interfering from Madrid.

* Education: current school systems must be adjusted (to international levels) based on the economic situation of a country not based on someone’s left / right political thinking. It is not necessary to change a system every four years because of a new government but because the economic conditions require such improvements.

Global changes should already have motivated Spain to learn better English but local national feelings, like Catalonia, block this to protect own languages while television and movies should be subtitled everywhere. Furthermore due to a crisis mothers are forced to look for jobs too but child care is not modernized like in other European countries. No governmental (fiscal) or corporate backup for working parents for example.

* People: especially young people demand changes but the older generations refuse to reform (quickly). This will finally only lead to more protests and people will become unhappier and more aggressive ending discussions at the streets.

In Spain in 2011 lots of demonstrations showed how people feel about the state of their economy and future. Still they cannot change much as their alternatives are limited or their representatives are corrupt and political polarized.

* Jobs: It is inevitable jobs will be lost in a crisis or even after as companies have to continue cutting staff to cut costs. Some sectors will hardly or even never recover demanding people to re-educate. Without the right adjustments in local job markets, like more part-time, and fiscal protection a job market will loose competitiveness or even stops growing.

Spain has the highest unemployment of Europe while half of all youngsters cannot find one. Even with economic growth back to pre-crisis levels this will take years to cut to acceptable levels. What is required is a complete reform but Spain lacks country and local leadership to make this happen or politicians simply do not want to cooperate. Elections will not change this, despite promises of the opposition.

* Politics: corruption, fraud and lack of vision only harm a society but it is more common than making real solutions. Power and money are the wrong mix for politicians everywhere. Politicians are notorious liars only presenting (read = protecting) their own interests. Globally this can lead to serious regional problems like (more) war (in Middle East, Northern Africa, India-Pakistan and Africa but even civil war-like clashes can be seen in Europe, the US or China if economic conditions do not improve but decline next 2-4 years).
´
Spain is dominated by local powers and Madrid only lobbies. The socialists, last bastion in Europe, look like to have understood their failures of hanging on socialism which is dead for some time now. Unfortunately the alternatives are not promising. The Partido Popular will not reform the economy of Spain or even try to change the basics out of fear of loosing power. Again politicians put themselves above the priorities of a country. This will sooner or later be regretted.

Conclusion:

Change is not bad, change is good. To promote change it takes a lot of time and courage even to convince those that have the power to change. This could be the older generations holding the keys of a government, city or even company. This could also be younger generations that through protests but also by studying and working hard can demand better education, housing and job generation (which their parents did before).

Spain has still the chance to make these changes but decisions now are taken too slowly. Other countries should also adapt faster and focus more on the basics, not on areas which cannot be changed. Investing in the infrastructure for example might be needed but has a too short positive effect. Governments too often choose for easy targets which can be powered up for a while like fiscal subsidies. Better is to work on the pillars of an economy, even though you will not be reelected or become most popular on TV.

To be continued…..

In Part two of this subject there will be more attention on other countries, on the threat of another recession and on the alternatives now offered in stressed countries.

Data manipulation or just rumors as usual?

2011-08-03T07:38:00.000-07:00

Manipulation has been associated before but recent market rumors do not point at Chinese governmental releases of economic outlooks but at those related to the job markets in the United States.

On top of these rumors stock exchange parties are accused of manipulating markets using inside information to keep the exchanges running due to a lack of buying activity or funding.

Now for what is seen in the past commissions like the SEC, CFTC or FDA have given severe penalties in cases of inside trading or the use of sensitive information but that did not avoid manipulation inside governments.

Manipulation is worse received in bad times than good times but so far it did not really get the western society alarmed in terms of speculation about their governmental official statistic releases. Fingers were only pointed to developing.

In countries where access is not granted or hardly any information is shared it is obvious any information is or can be disputable, even though always denied by their public servants or just ignored by the rest of the world.

But what if this no longer involves those political closed countries like China but for example the US? What if for example US unemployment figures can no longer be trusted?

Is it unthinkable that due to the ongoing crisis and events of the past years with the many bubbles, public uncertainties about governmental + local + public debt that the system no longer delivers reliable info?

Did people dealing with the numbers suddenly lost counting because they lost overview of what is reality, what is realistic and what can be expected? Have they been told to manipulate figures to avoid chaos or penalties?

What would that do for other developed economies where a threat is even higher like Greece, Ireland, Portugal, Spain and Italy? How long have we been manipulated about their balances or vulnerable bank systems?

Do we have to rely on their messengers telling us constantly that there is nothing to worry about, no defaults, growth is back, no need for more funding is necessary or that the worst is over?

Is this trust needed to remain calm (or ignored) while politicians cannot even find agreement about their country future with their ruling counterparts or oppositions facing the worst deadlines ever?

When manipulation of numbers is indeed done to avoid more damage in for example the stock, bond and other capital markets there has no longer be a reason to give a fair value to a stock, bond, equity or even economic growth indicator.

Let us believe this is not true because otherwise we can throw the whole money system out of the window. Manipulation will always be part of trade but will not rule the trade as long as their are rules and regulations adapted.

For governments this is harder to track, especially large ones like the US. Not so long ago fraud in their educational systems was discovered affecting many and other developed countries found similar case on business schools.

Here manipulation of grades was used to keep the subsidies provided by the authorities. Imagine when you as civil servant constantly have to bring bad news and fear it will cost your job while jobs are cut around you. What would you do?

Till now there was no reason to believe western governments published manipulated numbers about their economies. It always happened far away, in small numbers or it simply did not affect the developed world. Latin countries but also African and even Asian ones where this was seen as cultural & political heritage but many countries have reformed and showed progress.

Would it be possible the developed world can no longer control its numbers? If so, would it not be time for a change to avoid this kind of rumors? Why does it take so long for politicians to wake up and start making improvements instead of egocentric behavior of winning next elections and promising a golden future to the people?

The answer will come and most likely sooner than later but regaining trust in a government, in a market or in a politician will take much longer. Let’s hope for some strong leadership in these challenging times to stop manipulation and to let rumors remain rumors.

"Why the euro crisis has just got a lot worse"

2011-07-19T01:59:00.000-07:00

This is asked at the front page of my copy of The Economist, always arriving late here in Barcelona while I already could get one in the kiosk with a print date on the 16th. This has nothing to do with the crisis, this is the best the Spanish national mail company can do.

Now back to the title. Why or where did it get worse?

Without reading the articles yet, which certainly will be of interest, we all know it got worse because no real decisions have been taken so far.

It is like politicians live in another dimension where realism is not needed and it is all about positioning.

Own positions to be precise as when really helping their countries decisions would have been taken much faster (although that is why they are elected and get paid for by taxes).

In a divided Europe without jurisdiction for hard and unpopular economic measurements group wise no individual politician is willing to risk (its position) or can because of nationalism.

Even those in the local opposition, crying loud blaming the government for every crisis being their entire fault, have no real answer. It is just a matter of postponing and hoping of some market miracles. Like it solves itself or gets better.

Should we really be worried? Yes, we should but the world will not stop turning. Some will be less hurt than others but a new (or better prolongation of the current one) crisis will cost us much more.

As explained by many, like The Economist, it is not wise to keep on providing more and more aid without real reform, without signs of countries going deep to restructure debts and rebuild its economies.

Unfortunately politicians do not take decisions, they only extend problems. They do not solve problems; they leave them for their successors. They want to shine and be remembered as good leaders in the short period they have their stages.

It was like this for 50 years how developed supported developing countries where now after all we know what really happened with our (tax) money and finally some organizations decided to give aid differently.

It is time for the old democracies to do the same and perhaps it is therefore that this has to start with Greece getting down where it all started once followed by for example Italy as another former empire.

As long as politicians do not see a need of putting aside their own interest (from the US till China, from The Netherlands till Argentina, from Japan till Canada and from Russia till South Africa) there will be no real change.

Real change means a new era of communication and cooperation. Instead of contradictions (good example the current fight of Democrats & Republicans in the US) politicians should demonstrate they really care.

If the next 6 months the politicians in the euro area cannot find agreements on the future of the euro and the battled countries but only increase emergency funds more will be destroyed of what slightly has recovered the past two years.

This will mean more problems for Ireland, Portugal, Greece and also Italy will no longer be able to avoid real domestic trouble. It will mean more pain for Spain where corporate and public restructuring will increase unemployment up to 30% or even more.

Elections, sooner or later, will not change much. Like Spain many are too divided with too many individuals rather looking for personal gain than reforming a country. At the end reforming is tougher than leading a country in healthy times. Who wants to be the one making unpopular decisions?

Spain for example needs to restructure public domain, education, housing markets, its competitiveness in services and products and for sure its political systems. Who will do that? Will it really happen after 30 years of pampering by Brussels? Or do we need to wait for a next generation?

That is perhaps the real problem. We got spoiled with social security and by prosperity named consuming. Developing countries can no longer develop because all immigrate while developed is getting stuck in its own social systems. The longer this continues, the worse it will get.

Where are the type of leaders of 50 - 100 - 500 years ago that reformed countries after wars, revolutions, decolonization and human development? Where are those dare to say we failed? Which politicians can be realistic and dare to tell (us) the truth?

Or do we really need again these wars and revolutions to realize that what we have created is only to show off, for personal gain or to suppress others?

Compared to what human kind experienced so far historically any euro crisis is child’s play but let’s hope some adults stand up and make real history. It has been too long ago!

Cooperation and communication; the key to (do) better?

2011-07-01T02:26:00.000-07:00

In business and in politics it is the hardest to do; working together (to benefit together). Examples enough but let us focus on a few to end with the key.

Since Obama is president Republicans do their best to disorganize him; nothing wrong with reminding him of promises, criticizing and delivering better solutions though.

Unfortunately that hardly happens. Too much is at stake, so instead of handing over solutions they fight him internally. The biggest enemy of the US is their own political scene which decides the future.

Obama needs more support now because if he looses the next elections the Republicans will have to continue with a sloppy economy, high unemployment, the same health care problems and a huge deficit or even default. Not even mentioning the foreign threats and costly activities.

Instead of working together to fix the economy, to become more competitive, to protect the quality of life, education and human capital a few men decide they are more important. Or worse, their religion is more important.

Now this selfishness in politics is not new or can be solved easily. But why are most involved in corruption, taking advantage of tax payer’s money, not admitting any wrong doing, always blaming the other (party) etc?

Especially the past five years in perhaps the worst economic and financial crisis, the slow recovery, the global changes in terms of power and where the next generations are not ready to take over, this does not look very hopeful.

So, why do parties not work together? Why do we, the public, not force them? Why is the public a lame duck in every democracy? Are we too spoiled, too much pampered the last 50 years, too fat and egocentric to care about the next 50 years?

Talking about facts; with the highest unemployment in the euro zone Spanish politicians only accuse each other instead of working together. The results are and remain poor while elections will not change that despite the "promises".

In other countries like Argentina there is insufficient opposition to make a change. Where the rest of Latin America the past ten years could benefit from domestic reform and new strengths it seems the Argentine government is only doing what they did the last decades; taking care of those in favor of the government.

When the public cannot undo the way their politicians rule their country, even not after heavy and violent protests, the only hope is a global recovery of the economy. In that sense the European Union is better positioned than the Americas.

Despite Greece, Portugal, Ireland, Spain and Italy the other 25+ are doing better or not worse; a collective where the pain can be better spread (as the end of the pain is not in sight yet) than individual countries like Argentina or even the US.

Still even this patient, the EU, has to remove some tumors first. That can be done without loosing membership but to get an agreement about measurements, penalties and paybacks (lost investments) but a lot time is not left for clear decisions.

The next two years will be decisive for the next five years, just as the past seven years. Some will unfortunately not be able to make changes in time, some will. Those who will probably can lift some others till the next downturn.

It is too early to speak of an upturn and the recoveries have been short lived. Changing governments will not help much in this climate. Only when business and political leaders open up to their opponents proposing real cooperation and improve communication real solutions will be achieved sooner.

As soon as the signals are positive again the different parties can go back to their "individuality and ideals" but perhaps this united moment feels good. Would that not be a victory for all? Fighting the crisis together and continue working together on a better country?

The question is if these leaders really would like to have a better economy, better corporate results, better lives (for others etc). Because when things are going better, they will have competitors doing better and that is a threat to many.

It also marks that leaders are in fact not really leaders. They are scared old man (and some woman) not being able to do what they should do in their positions. That is why many fail while those who are successful shift places to continue their road.

As long as most leaders are not willing to share, only look at the short term and do not care about the happiness of others, any corporate, national or family crisis will take longer and a new one will be waiting.

Change will only occur when we really want to change and unfortunately this depends too much on some of us that decide for our future. When they do not change sooner or later we have to pay the bill (again) and the damage is done (again).

The key to do better fits in all doors but some doors will remain closed. Not because of the key or the door but because of the person that decides not to open. If only that person could agree here......

Can Spain sustain?

2011-05-24T03:15:00.000-07:00

Economic reform is clear but what about society? Can Spain sustain their siestas, their late-night shows (children sleep at schools in the mornings), the first coffee breaks before delivering any contribution, the no-service culture and the (too) many holidays?

While it is the moment every person should support a turnaround changing and challenging the national behavior of a Spaniard seems to be a taboo. Even when Spain can become Greece?

When looking at the Spanish society it is clear an economic reform, cleaning up the low valued educational systems, breaking up the housing market or other necessities there is never a rush (mañana, mañana).

The just held local elections with a victory for the conservatives will not bring faster recovery or long last benefits from short term unpopular exercises. The opposition has nothing to offer in Spain.

If Spain would like to avoid another tragedy or become more resistant for future failures it cannot only change bank rules or asking again Northern Europe for financial support like the past 30 years. That will not kick back +20% unemployment!

Every person should wonder what he or she can contribute and if continuing like this could he or she really deliver a better future for their children instead of copying the behavior of the parents. Like the Spanish culture is untouchable.

Instead of again accepting local corruption and endless wars with the government (or changing places) Spain runs short of self-criticism. Perhaps current protests of youngsters are a start but who really cares?

As long as these protests look not to be supported by all or can be compared to student protests in other countries it is another incident. Is 50% of these youngsters and students satisfied and the other 50% unemployed and protesting?

It looks like Spain remains split up in their regional (national) quarrels where Madrid looks still too often down to the rest unnecessarily feeding the anger of the local parties that cannot let go of the past, like here in Catalonia. Like Greece there is only a national interest of "we" against "the rest". Excellent choice!

A national feeling can be less disturbing as long as the public remains open for fast changes but who would really support an increase of labor productivity or even saying good-bye to the “el Jefe” status? Lesser civil workers? Better infrastructure?

Take for example Barcelona; since 1992 (Olympic Games) no main changes of entering the city. The so called "rondas" cannot digest current traffic and connection from an ultramodern airport (just to show-off to Madrid) has no efficient public transport for tourists.

Just imagine; you arrive after a long flight and decide to take a train which stops in the center of Barcelona. First you have to take a shuttle, then crossing an old and useless corridor and find yourself with hundreds waiting for 2 trains per hour.

Now if the Spanish tourist sector really would have justified complaints like above a quick lobby would open doors but instead nothing changes. The tourist industry of Spain has remained unchanged just like its society. Everyone expects someone else will do the job tomorrow.

The younger generations can only find jobs in this primary GDP market but these jobs are temporal and do not offer trust or potential while many studied but cannot find a fit in the closed labor markets.

When Spain cannot unite and is not willing to take care of the younger generations nothing will change. Youngsters remain out of jobs, live with their parents as housing is too expensive and they cannot escape their vicious circles, just like their parents.

Hopefully Spain is not becoming Greece but instead of national egoism political and business leaders of Spain should worry more about the future instead of worrying about votes or who is next in power. And voters should no longer accept these tricks or only look what happens in the "pueblo" before it is too late!

Spain has lots to offer and can become again competitive with better options for the younger generations. To do that the older generations have to admit their failures by executing more unplesant but welcome reforming. Not in 2015 or in 2020 but now!

LinkedIn; what is left of B2B? Is B2B still the key?

2011-03-28T05:45:00.000-07:00

Personal experience justified me writing critical notes about LinkedIn where requests and comments the past months were only receivable in written by Customer Service but never responded by a senior manager or someone from the development / engineering team (addressed separately through LinkedIn).

Partly disappointment about unanswered but serious B2B tool issues, fortunately still benefiting, LinkedIn was approached to deal with important matters when doing B2B over the net and most important when claiming to be the largest B2B tool.

Why would LinkedIn ignore a paid member that has success in doing what they promote?
What is the future of a B2B tool that becomes less a B2B but more a common social media tool, a clone of Facebook?

Or did LinkedIn discover success is limited and the best possible scenario is a network without B2B?

The first real (and largest) B2B network is not interested in suggestions from a paid member. Why would the management ignore what both should have as a common goal; improving the tool?

Could this mark a new mission and would this benefit the LinkedIn member looking for B2B?

The management (or responsible departments) look like to be instructed as the core business seems no longer establishing B2B but on becoming another type of network.

Facebook is for example larger, more profitable and involves no business making its entry levels very low while there are also no expectations like in B2B.

This can easily be defended since most members of LinkedIn act the same as in any other network. They show themselves but avoid doing business for their company.

After joining LinkedIn in 2005 the first goal was a large network but that changed because of B2B successes and quality became the next goal. In 2007 it was best to upgrade to a paid member which opened doors that could have remain closed or were hard to open.

This was rewarded by good opportunities saving a crisis year like 2009 while 2010 contributed well to record sales from LinkedIn (client) connections and communication.

Perhaps 2010 was an exceptional as a result. Can we as a company repeat it and can we continue using LinkedIn as the best global B2B tool?

This is honestly doubted. Known for some time many LinkedIn users, despite their settings, do not welcome business deals at all (even when their profile identify them as decision makers) and more members are concerned about new job opportunities, getting recommendations from old colleagues or welcome anyone in their network.

The real doubt or threat comes from the management of LinkedIn. What is their business plan and strategy? A short term hope of being bought by other investors or perhaps merger with Facebook? A quick profit after now being listed on Nasdaq?

Before explaining further just a short translation of users at LinkedIn that should not be here or become open to business as they represent a company or organization;

- groups discussions hardly or never involve statements related to B2B from business leaders where introductions are used to overestimate skills, achievements and experience.

LinkedIn is clearly not yet accepted by corporate means where fear of spam is justified because LinkedIn cannot filter spam. In fact they let members do the guarding of new members like group acceptances.

Still transparency and connections fortunately can undo (some of) the above but this is a too small bias and should be the stronghold of LinkedIn.

- direct approach, even when activated business deals or reference requests in profile settings, are not followed up by the owner of the profile. They do not represent employer, left organization or feel embarrassed because of wrong title?

A majority of the members should do B2B because this is not Facebook but the majority uses this tool to look for jobs, to find old class mates or trying getting the largest network. Or is doing business no longer the purpose of LinkedIn?

Besides these negative aspects of LinkedIn in the beginning of 2011 some essential utilization changes took place or better said user limitations were activated.

Partly features are reduced to force subscribers to upgrade their account, to pay more as they probably do not want to loose their business opportunities.

Subscribers but also normal members must have noticed it is no longer possible to activate a link directly at your own profile to send a group message to another connection that is part of the same group(s).

Perhaps for non frequent members not that important but when using LinkedIn for new business often it will cause delays during office hours which are not appreciated.

Removing such link is not explained by Customer Service, by their developers or engineers while knowing the reason or better the advantage should be easy explained as this has a paid service. It is like bringing your own chair to the movies.

Instead the importance for the recruiting industry, network junkies and unwanted advertisements seem to win it from real B2B deals and are the main reasons for the board of LinkedIn to go public or let their teams cut on B2B utilization.

Going public and getting the same status as Facebook explains the changes because social networks are not places to do business but to give consumer behavior insights.

Social media networks might offer B2B for companies but not for its members. When networking communities like LinkedIn claim exclusivity for doing business they should do more for their members which are professionals looking for business, not for social behavior when being on the payroll.

The question is if LinkedIn is still following the same principle or is just reaching the status of a milking cow where individual B2B will become less and less of interest, especially in case of small businesses.

As long as there is room for fake profiles, spam, insults at discussions, unanswered business deals, wrong impressions, false titles and no B2B usage improvements LinkedIn is not an exclusive and business network but just like any other.

Let´s see 2011 was just a bad start or the beginning of the end. To be continued...

Japan; what will be the impact on the (global) economy?

2011-03-24T04:40:00.000-07:00

At this moment economists of well known resources world wide come with their adjustments (and similar explanations) on Japanese economic growth (GDP) expectations for 2011 and beyond, including currencies and other leading indicators.

Now the damage, the delays and the recovery will have an impact, here is no disagreement. The question here is what this will do to your economy and business?

Some say it is too early to tell and adjust modestly, others heavily correct their forecasts downwards of Japan or other countries. Probably the truth will be somewhere in the middle but what are you going to tell your management or stakeholders? Following a heavy paid opinion in case it goes wrong?

If Japan is a key country to your business or Japanese firms are competing it will be helpful to access reliable data and to integrate them efficiently at any corporate level. Now who can deliver that? What resource outperforms others about Japan? What fits nowadays in your budgets?

Let us not tell each other stories and fairy tales about forecasting. There is no resource (or economist) able to tell you what exactly this impact will be in the short, long term, in size, in dollars or yen or in your industry. It is all guessing, constantly adjusting and no one will afterward tell how wrong they were.

Some professionals do not care and rely blindly on that brand name provider where paying the price seems of lesser concern. As corporate pays the employees follow without benchmarking or doubt. A too common vicious circle of business - market intelligence with no tangible synergies or contribution.

Others tell their planning, market intelligence, finance or other data teams to search on internet looking for more (free) information about Japan. Here extra labor costs and outdated info seem not questionable because it is for free. Sure!

When knowing all the alternatives, what is your price for reliable economic data of Japan and the effects globally? What is your tool or provider? Do you care about quality, synergy and fees when using macro parameters?

If so, please contact me because on Tuesday the 5th of April we will release our new monthly edition of Major Economies, including the last changes of 25 selected national and international institutions for 10-15 key Japanese macro parameters (2-5 year forecasts).

Key differences with other alternatives; hard to beat average forecasts, more cost / time savings and faster ROI. Is that welcome in this business climate or not?

I´d be pleased to inform you how to get this Japanese update without charge. Thanks in advance!

Do they really get away with it?

2011-02-16T01:20:00.000-08:00

This is based on real events. It is not something we can avoid in life. Nowadays it happens more or is more noticed due to for example the crisis mood among us. How can we deal with it? Is it worth to consider a change in our behavior or personality?

Actually this happens in your company too and you probably (hopefully) disagree but what can you do? And what if “they” get away with it? Does that not make you think of becoming one of “them”? Is that the way to be rewarded? Does that make you happier?

I recently got reminded of “them” due to the promotion of a senior black belt manager that despite his mismanagement of two years, despite a crisis, despite heavy job cuts and despite according to the facts he has no management talent at all, he got promoted!

Imagine your boss is never helping you. He or she is only dealing with a personal career. Then the company gets in heavy weather and even your position is at stake. You try to remain positive but then you hear your boss gets a promotion. What would you do?

Professional trainers, coaches, HR people, career planners and even mothers most likely will advise to remain calm, focus on maintaining your job, ignore the negative events and keep on smiling. Can you do that after giving years a 120% and receiving (never full filled) promises?

Can you do that while at the same moment your company decides to do a corporate survey where employees can share their feelings, motivation, comments and work happiness?

After finding out the results of the survey are positive (always) and the company CEO repeats its goals of creating a pleasant working environment where they do the best for their hard working employees by reaching their goals? Can you accept this b......t?

Of course not but you have to. It is humiliating and a disgrace to call your staff happy when the top management remains seated, stuffed with bonuses and even promotion is granted. But what can you do?

It would be much easier when jobs are plenty and switching can be done the same month. You cannot avoid getting in the same situation at your new work home but a fresh start is better than continuing in the old position. But that is not the case now, even though you can try. There is always a way out but sometimes it is not the right moment taking risks.

Instead you need to swallow your pride but not losing it by finding reasons to remain positive. The best to do is getting away from the work situation and ask for attention of friends and family. Do more sports but enjoy even more food (and drinks).

Go see nice movies or even take a short holiday. Overall look with a distance to what makes you sick (these people calling themselves bosses) and remember they will not get away with it! Never change because of your boss or management! It’s not worth it and it will not work for you! Take care and good luck!

More pain in Spain

2011-01-12T02:35:00.000-08:00

Not surprisingly but when it comes closer to home you also get worried.

I recently got informed that one of the largest insurance companies in the world will cut its work force by 30% in Spain.

I believe this is not unexpected but now advancing because of the recent labor law changes in Spain cutting the budget for firing people by 50%. Great government decision!

Instead of reforming the labor markets this kind of measurements are presents for corporate leaders that most likely will not be affected by a reorganization.

In a crisis changing the management is not seen as a good decision because you cannot blame them for what is caused by external factors. So, why firing people?

Someone very close to me working inside this French insurer updated me about the situation which looks to me a good example of how especially Spain is situated.

True, a reorganization cannot avoid firing people but who gets fired here in Spain? Not the top management in Madrid and not those related to the unions. First the teams outside Madrid, like in Barcelona and Bilbao.

Even those in Madrid who have to change jobs already are moved inside the firm while others outside Madrid are not getting the same treatment.

This is not new or shocking but it is negative in a country where many instead of contributing lack any vision or care. This country will not change soon.

The coming years bottoms will be reached and new elections probably change power but will Spain come out of the recession better? Will this insurer learn something?

I do not think so. Structural changes are needed while people have to be open for change. Well known intellectuals share solutions and comments but are ignored.

During the next years Spain will just survive thanks to the funding of the EU while selling assets at bargain prices to for example China.

When eventually the economic and industrial conditions allow it people will again be hired. The insurance company in this example needs those who got fired but most likely others take their place. Who wants to return where your value is zero?

Why do companies not take better care of human value? Why is saving now some better than saving a lot later? Or are new investments lower than former cost cuttings?

Many companies see stakeholder value as the priority. Even when saving 30% in salaries will not bring back net growth, better margins or market share.

On the contrary. Better positioned competitors definitely will benefit. To win back lost territory and clients major campaigns will be announced after this debacle.

Spain is not able to handle this kind of excesses while it is not positioned to avoid increasing unemployment. It will loose more competitiveness in the global markets as long as drastic changes are not taken.

Cutting 30% of your work force looks drastic but is not the best solution because 20% of these people will be needed again soon. Unless the firm decides to leave Spain but that seems unlikely after recently completing a large merger.

On top dis-investing will lead that the top management will walk away as assets are going to be sold. This is not the case in most (international) Spanish companies.

Finally lesser positioned or a longer recession will drive people away. A country with bad education, no first jobs available or missing an equalized housing market does not offer much of a future.

I wish all in Spain the best and hopefully my scenario is too pessimistic.

Crisis; the best excuse for corporations

2010-11-10T00:52:00.000-08:00

The past years opinions were shared about the crisis, what to do about it (always after wards) and who to blame. Countries, people and companies were accused but nothing changed while most likely a new crisis is already under way with new and old victims. Will corporations be better prepared or are they still in remote-sessions?

Announcing a new crisis is not shocking and please do not be alarmed. Perhaps this time the crisis will also hit China. Impossible? Maybe in words because that is another phenomenon seen the past years. China, where the stories are true but the data not, is not immune.

Now when and how is the future. Sure, there are global doom scenarios but also many still believe trees will continuing growing in heaven. Not in Brazil because too many are getting cut to remain competitive while the US will be back on track thanks to greed.

Well, this is all nice to know and you can disagree but what will hit you economically, financially or what makes you (more) happy? Can you influence a crisis or can a crisis only influence you? What about your work? Are you less open minded in a crisis? Less willing to take risks or make efforts for the firm?

That is the point here. Happiness in work through economic prosperity or loosing all interest and connection. Most of us are all guilty of it, some even exaggerate.

Corporations world wide, some suffer more of typical bad management, others suffer less because of better managers, products, strategies etc, have one excuse; the crisis.

The perfect excuse of stop spending and cost cutting. Not a new strategy but old fashion lay offs, budget restrictions and no more Christmas gifts for the employees.

The last is really true. One of the largest insurance companies (French, so know you now) last year at the last moment withdraw the X-mas gifts for all employees but not for the upper management. Probably they will repeat this soon. What a hoax!

Always excluded are the board, top management and shareholders because the show must go on. When not excluded your company is under-performing and someone has to be blamed (to pay the price).

This is exactly the reason of a new crisis because leaving is not without a bonus (for bad behavior), not without loosing market value and not without loosing stakeholders.

The new wonder boy or girl will mark the new place and to create space costs will be cut. The new boy / girl wonder needs full access to succeed but oops....there it happened again. A crisis disturbed all plans and the only way out is getting out.

Being exceptional is more luck than constantly outperforming others. Companies that survived the last crisis or do that now could do that because of better measurements during good times. Changing management will not do the same or can even be worse.

It is a combination of who hired who, what the person upfront is promised (bonus), can he or she manage people or are they just bonus hoppers? In fact there are too many who cannot be successful and they need to be paid too.

When the new crisis appears or even like now slowly evaluates, business leaders have the perfect excuse to secure their positions and that of their network. They tell their staff to cut costs but continue with their dinners, meetings and traveling.

It is all a visual circle where we (the staff) have to find our deals, our customers, our new jobs, our income and our future. This is colored by new technologies, inventions, medicines, leaders and social unrest & development. Where some loose, others (can) gain.

As this goes and goes for decades, even centuries, what is a crisis really? That you lost your job? That your house is not save or can be saved? That your firm is not making profit? That China is growing and the US not? Can that only happen in a crisis?

I believe that is not new at all or can really called a crisis. Perhaps a personal one but look at the stock markets. Some must make a lot of money there and those affected are watching while most others are cashing in.

It is finally the people´s attitude and not the crisis that create your situation. Unfortunately there are a lot of a-holes you cannot always avoid. Some you cannot even touch and you know they will cause the next (your) crisis.

Others find themselves the corporate dream team. Look at me! I saved the company millions said the new CFO (by destroying, not creating, what a hero!). Too bad six months or one year later these millions disappear in the accounts of the management or new manpower is needed.

The crisis creates sometimes hysterical calls for savings with really bad management. "Our budgets were cut. We cannot use your service". I do not know if this is the same for all products and services but when not using an external service that is needed the alternatives will always cost more. Great decision!

The best is to accept how it is, stay out of the way of a-holes and try to make the best of it. So, when you have the chance to make a difference, please do. Go with the flow and try to be like water more often. It is not about what you want but about what you get and do with it. Even when you or your firm is in a real crisis.

No guarantee for future predictions

2010-10-14T02:23:00.000-07:00

In the world of data intelligence providers it´s evident macroeconomic data is not as appreciated or needed as industrial / sector related analyzes. It should be!

Could it be that both providers and users cannot do without a mutual stalled feeding process while competitive advantages can only be measurable when one provider outperforms the other? What do YOU get what is not delivered to your competitor?

Tailor made analyzes differ too much to qualify them similar to raw data because a consultancy service or support is more than sending a report with numbers.

For macroeconomic data there is a different qualification. Users of country data should more appreciate quality and efficiency but still the opposite is poignant.

Here an overview of the potential single sources for global (!) macroeconomic data and among them those providers most named the past six years (own experience);

- Global Insight
- The Economist (EIU)
- Oxford Economics
- Business Monitor
- Datamonitor
- Euromonitor
- Bloomberg, Reuters, Gartner etc

There are more but this is about giving an example of well known providers that have one opinion - their own - while they all offer (similar) industrial data too. A kind of one-stop-shop but then with one opinion while overlapping is common.

Now other alternatives for latest economic forecasts & outlooks are:

- Consensus Economics (our only global direct competitor but not in quality-synergy)
- Banks (amazing how strong people judge their own contacts and get "last" updates)
- Multilateral organizations and central banks (when you like 2-4 updates a year)
- Consultants (valuable but elsewhere, remain single opinion for economic outlooks)

This is not a "competitive study" or "total product comparison" but to point at who is outperforming who or indirectly calling for the leading position of macro data.

Years ago some of these above mentioned providers proudly presented how they beat a consensus (average) by using very little and not constant data but market rumors tell this can again be expected. It is time asking "how they do it"!

Unfortunately the past five years were hardly or better not successful in case of forecasting economic indicators globally. Would they proudly present failures too?

Before 2006 for example mostly the US was used and then those indicators that hardly moved such as GDP growth (though not split in consumption and investment) or unemployment rates. Sometimes even CPI ratings but as this again has many components it was not done regularly.

Hence, the US has always been a better analytic study place with weekly and monthly polls and surveys but although still existing it cannot be used at global levels.

With upcoming B(R)IC success and economic distress in the US and other G7 economies results of "out-performers" or "track records" were no longer seen.

Due to the crisis of the past years it is unlikely there are out-performers or those that constantly beat the average in these fast changing global economies.

Conclusion:

Outperforming is hardly possible in forecasting. Using some "soft" years of lesser volatile ones combined with stability is no guarantee for future predictions. Like with investments this should be stated officially and never be used as a feature.

Fortunately for the mentioned providers or other firms dealing with forecasting many in the corporate industry do not care, even not after experiencing the last downturn.

Unfortunately this will not benefit those who care because "no interest in macro" is not because of an immunity in their corporate results, strategies or planning.

"No interest in macro" (improvements) is too often related to the decision maker who uses personal and not business reasons like not willing to discuss or a narrow mind.

The coming years traditional data providers will face hard times when not being able to distinguish (further & better) their services and performances.

Corporate time is much more valuable than "time to read nice economic background stories" or "collecting at internet outdated information".

Risks always demonstrate how difficult they can be measured or tested. Afterward it is easier concluding and making decisions. Industrial leaders should know better.

Finally "purchasing a brand name", "knowing someone at board levels" or "protecting budget to save my job" will no longer be valid due to the ongoing macro complexity.

Getting away with excuses will no longer benefit the organization in downturns, in recoveries and periods of stability or growth. Can your firm afford otherwise?

Macro is no longer a secondary intelligence since no one can constantly outperform others while forecasts are constantly adjusted do to fast country changes.

When a track record or past performance no longer is a guarantee for future predictions what is left is a decision to take that data offering most synergies!!

Reinventing Sales

2010-07-15T03:57:00.000-07:00

This title crosses my mind for some time now and it is especially for those working in the sales field in large multinationals.

My opinion was confirmed when recently reaching a corporate agreement with one of the largest BI software / solutions firms world wide.

By chance earlier this year I was invited to talk about a possible career switch at this same company.

Where I take distance of aggressive sales methods, although I can be determined, I noticed at this meeting my possible new colleagues clearly cannot do without.

Coincidentally I discovered their aggressive methods are also used by their main global competitor.

Now I work in a small shop, so perhaps can keep a better overview of what goes out in terms of sales proposals but what causes this aggression?

Is it really trying to beat competition or is it how the leading sales strategy, tactics and management tools sell their methods?

Where is the contribution knowing at the end it comes to your personal relationship building up interest, patience and overall showing confidence.

I believe it is really time to reinvent sales. Aggression has to be replaced by knowledge and external (expensive) tools can be replaced by internal training and coaching.

It is all about how you see yourself, your product and your potential client. Fancy tools are just a waste of budget and corporate time.

In Sales using your brains is without costs and being able to communicate requires some skills.

I plan to find time to start working on this reinventing but feel free sharing ideas or feedback.

Greetings,

Martijn.

"The Budget Problem in a Crisis Climate"

2010-04-09T04:14:00.000-07:00

Although budgets are always a problem this is even more in a crisis climate due to ongoing cuts and restrictions. Companies can nevertheless fast and easily learn how to to improve their budgets but their key people responsible for these budgets often are not interested. Why?

Five years now selling to big companies has not only give essential understanding how professionals deal with macroeconomic country intelligence data but also how they allocate funding. Well, they mostly don´t!

To understand this it is important to differentiate all what is related to core business and non core business. This hardly happens, so all is done with the same budget in any layer of the company.

Now mentioning for each sector, product or service these differences is too comprehensive for this posting and therefore this diligence can is focused on industrial sector specific intelligence and macroeconomic intelligence (our core business).

By referring to the challenging business climate we still live in, also makes it more simple explaining the budget differences for core business intelligence and macro. We all know what happened and we all know no one could avoid it or see it coming.

You can of course replace macro with your own product or service. The result is the same, as long as your proposal contributes to budget problems.

While avoiding the budget question is easy by not mentioning it, many potential buyers reply too soon their budgets are restricted, cut or funding is not available (till the next fiscal year).

Some do it better by replying their data bases or specific product needs are under revision or they are streamlining the business.

A logical commercial response would be "even better for this opportunity" but when you finally reached the right person this response is regrettably a dead end.

Only a few keep on listening because what you propose next is what they really should do; looking for smarter spending options or better tools for this climate.

By simply accepting "the budget is not available" nothing will change;

The internal problem will continue, involved personnel is frustrated, have to work harder, the labor costs increase, the productivity drops and worst of all, in the case of macro, the corporate risks of monitoring economic developments increase.

What are realistic short term options for any company dealing with budget problems?

1. Divide core and non core first.

Core is often the priority but in times no one can sell you reliable analyzes you do not have to spend the same on your core intelligence. Better is to use your own corporate network (all stakeholders) to help you understand your market developments and trends. It is less expensive and more efficient.

In the case of macro, which is non core, this opens the door for better tools. No longer relying on the same resource of industrial data but giving employees the chance to gain time, give the company the chance to reduce costs and give risks chances to be better monitored.

Advantages; the budget cut can be limited to what really is necessary for core market or business intelligence. When excluding macro every hour formerly used for macro search can now be spend on core. Labor costs will be justified for only core while better macro data helps professionals understand better external risks to their markets (no more out of date internet info).

Disadvantage; it requires corporate changes and people mostly do not like changes. Streamlining has its limitations. This is also seen at Six Sigma. Project leaders or other key people can disagree, cancel or delay new efficiency for personal reasons. On top, in regards to macro, many professionals are comfortable with wrong estimates from a single but well known source. They prefer to blame them then own colleagues.

Conclusion:

Many will claim not to be able to move in any direction which makes stimulating business decision makers in improving their budgets is a non-profit suggestion.

But when they do not cooperate, are open minded or willing to make an effort by forcing an opening there is only a loss. Not looking for improvements to help cutting spending is the opposite of the corporate strategy.

Even calculating their spending increases by 30, 60 or even 90% does not interest them. Despite affecting business, financial or strategic planning in the case of macro does not change their minds either.

A budget is a budget. In a crisis climate we cut it and if we are fortunate we have some left overs for your product or services. Is that all what is in their powers?

When that is the message after the worst downtrend the last hundred years in business, with all wrong analyzes and forecasts from research providers and economists, ongoing uncertainties in many sectors and more consequences like lay-offs, the following two steps are really necessary:

1. Decision makers / business leaders should consider better what affects their corporate results or well being during a recovery. Only looking at the past, what comes from above (higher management) or protecting the own interest (no changes, save zone mentality) will not make any difference in terms of cost savings.

2. When professionals deal with industrial and economic intelligence they should consider a budget split. Otherwise nothing will improve or change in their benefits.

When this is taken into account any supplier of a product or service should not have to worry about budget restrictions from the buyer but only be worried if a competitor can make a better offer in terms of quality, price and synergies.

When this is true the business leaders on the buy side have decided to adjust and adapt to a business climate that is less favorite but they are certainly better prepared for any upcoming turnaround.

We do not want to change!

2010-01-19T03:13:00.000-08:00

Do we follow people or strategies?

Perhaps a better title but the result is the same. Managers or / and business leaders upfront are excellent promoters of their own skills and responsibilities but when it comes to changes in their setting the interest suddenly drops.

It is like their strategy is cut off during a conversation or meeting. As long as it is in their own interest they are willing to cooperate. The interest does not depend on what is good for those who pay them.

In fact the following example is a good reflection of following people as a strategy:

Networking tools such as LinkedIn often ask you to respond to a discussion or survey set up by a direct contact or member of a similar group of interest (which is necessary to participate).

Recently here was asked to share in one word what kind of manager or business leader you are.

You will not be surprised 99.9% of the responses were positive and clearly overstating the reality of a person´s own objective reflection .

When all these people are really top managers and apply to their own positiveness the world nowadays would look different or at least better.

Sure, these responses come often from middle management while the real higher management is not active or hardly active at sites like LinkedIn. It also gives to these surveys a kind of Facebook image. I am nice, do you want to be my friend?

In fact they are doing all the same; calling for changes (after being criticized) but not making critical decisions to avoid personal damage (read less income or corporate power).

We already know that for centuries but the fact the middle management copies this behavior of not making changes is disturbing. You have nothing to win but all to loose?

All these managers are send to expensive trainings and courses but when it really matters they often do not decide or change the status quo.

They talk about budget cuts, restrictions, fusions, mergers, reorganizations and other excuses to postpone purchasing your services while sitting in the safety zone.

Why would I risk your service and make a more serious attempt?

I would say because it benefits you and your company but it seems they are not inspired (enough).

Inspiration normally leads to becoming an example to others, open minded, stronger, better informed, prepared and willing to contribute and overall to win.

When not being open for changes you will loose, not win. Still people have the tendency to claim a win while not changing anything. They even believe they can inspire others.

What is said or sad then is that it is too risky to make a change, so they prevented a loss. Really?

Often here is added that when changing for example an external provider of services the work to be done to complete this change is already seen as a loss (of time).

The administration, informing the involved employees, answering questions about the decision and the follow up to complete the new setting; it is all not worth it!

In my work I see this often. But unchanging does not contribute and it certainly not helps the one who takes care of your paycheck.

But look around! Where else do you see this happen besides the corporate arena?

Everywhere! In politics from government to city hall, in the media where news is dictated by a few global parents and even in your private setting where it is amazing how Facebook or Twitter influences your life.

Let´s face it. Change is personal and can be done very fast while changing a setting takes ages. Then it is time to change strategies and focus on other people!

Purchasing brand identity is still preferred. But for how long?

2009-12-17T01:50:00.000-08:00

Client behavior:

We are now in business for ten years and the last five years I had the chance to discuss with a lot of business leaders world wide.

From non cooperative narrow minded fearful closed managers to final customers who took the time to listen to the alternative for our kind of market data.

Before discussing end proposals it is interesting to hear alternatives. It is sometimes amazing that professionals take the fast lane instead of studying all alternatives. You almost hear them thinking "It is a corporate expense, so...?"

You expect in good years professionals take more their time in selecting data providers by looking at quality and in bad years a similar research is done with the focus on synergies.

This will avoid in hard times cost cuttings put an end to certain valuable data receiving or they is simply no interest in knowing what adds or what is a waste. The corporate pressure on saving is higher than on long term value.

Now most of the downturn looks like to be behind, for the time being, it is interesting to study how professionals have been dealing with their challenges in regards to market data providers.

For example in case of financial or strategic planning decisions these last years, surprisingly, many have been using one source (data provider) only. Imagine in a downturn still relying on one opinion.

What causes that kind of strategy? Lack of interest in others? Avoiding changes? No maximum budgets?

As we do not consider the global leading market data providers as competitors I believe my following comments are not without arguments but I have no problem with mentioning one of them.

This is based on feedback from others and many of our clients use them as a source. I will not criticize their services but use them to show the difference between a single source and for example how we use a multi-view of sources.

One source only:

Besides planning our kind of data of the underlying economies in countries of interest in many cases come from the same source as the sector data.

Reasons are diverse; from administrative advantages to not knowing or willing to know the alternatives.

Some even claim only to need industrial information which depending on the role in the company I can agree with. Others, even worse than using one source, use free sources such as internet. Like out of date info or extra labor costs add more value.

When a demand planner or CFO of a Retailer uses for example Global Insight for their food sector analyzes included are macroeconomic data like forecasts. A combination (package) of sector and macro from one source.

Who is the expert?

Now I can imagine when analyzing for years a food sector you learn and you can become an expert. But an expert in food is different from an expert in economics. At a corporate level with a retailer you are probably a food expert. So, you should in fact already know more than others about your business.

The same is when studying economics and explaining the food sector. We do not do that for example. It is for both client and provider better to stay in your core business.

The past years I do not believe sector experts were able to predict better the markets than economists. Every one lacked the same visibility and for many countries / sectors this continues in 2010.

There might be exceptions but they were either not contacted, they were not seen as reliable or they were ignored. Otherwise the world would have looked different many times.

Too long too positive:

This is about logic. In good times, I was reading about an upturn of ten years before the last crisis emerged, it is easier to make your analyzes come through or realistic.

No one for commercial reasons will become critical about the markets of their clients and as long as it continues, let us keep the positive mood!

Imagine a global provider would completely turnaround a certain sector trend. It hardly happens, even not in for example stock markets. The risk is too high and clients are at stake.

The continuing positive mood is partly responsible for crisis in the Finance industry. In theory all sectors have had the same models of too optimistic ratings. Only Finance works faster than Food.

A close call was the Automotive industry. Merely because here besides an oversupply, we cannot digest more cars before economies recover or become profitable, the industrial leaders did an overkill themselves by too late reformation and innovation. Still there is a lot of resistance.

When looking at market research reports, besides links to alternative energy sources or smaller different cars, the world kept overwhelmed with weekly models.

That required analyst to write again reports (positive) and any other kind of PR necessarily to promote the new vehicle. Another example of keeping the statu quo.

Optimism is here again:

As said other sectors like food might not have had the same experiences from a business model but from a market research model they did.

Even though some countries look like to have escaped (China, Brazil) and old economies are picking up (US, euro zone) in 2009 the research tone was like usual; optimistic.

Again, I might have not read all reporting out there, but the point is that it is much easier to predict a positive market than a negative one. Even in a downturn.

When writing negative comments the chance your report is bought is lower than writing you have good arguments the momentum is changing.

This is accepted, maybe already since the industrial revolution, and it will probably not change fast. But what needs a change is predictions for macroeconomics. That is not similar to market or sector outlooks.

When counting we alone have more than hundred selected different opinions. Each month for 10-15 indicators per country. That comes to about 100,000 figures per month.

Still when it comes to a GDP or inflation forecast of BRIC, US, Canada, France, UK, Germany, Italy and other countries professionals prefer a single source like Global Insight.

The truth about forecasts:

I here can easily defend Global Insight because they seems to me in their field the best alternative but not when it comes to economic forecasts. For one and only reason:

Economic data cannot be relied on, economic forecasts are not realistic and economic forecasts are too vulnerable to take a brand identity for granted.

It is like years ago when they find out a chimpanzee had better investment rates than a group of highly trained brokers (from brand identity companies).

When we already receive for one indicator in Brazil 22 different opinions we can, based on monthly updates, conclude these sources get closer or more divided.

When they get closer the economy looks like to become more stable and with more differentiation the opposite, instability can occur. But nothing is certain in economics.

What is the price or value of trust?

So, where is the brand identity, the trust? Where when it comes to economic forecasts can be more received from Global Insight than others?

Can they like with stock markets constantly beat the average? Is there such outperforming available for economic forecasts?

Now before the last downturn in a period of for example five years it has been possible to come closer to certain economic predictions but not for emerging markets, only for developed ones.

Take for example the US economy. Forecasting GDP or Unemployment was in 2002 or 2004 easier than now. Does that then give a brand identity more value?

When it comes to stock markets people decided that for any kind of advise or guidance final results cannot be relied on former or past performance. That has become a strict rule.

I believe that should be similar for all market analyzes or forecasts. Not only economic forecasts but for all kind of industrial predictions. Because who is finally going to be right? Do you get your money back when the results are worse than expected?

The fact professionals still choose for global providers such as Global Insight should only have a valuable reason, not a brand identity one.

Like for their clients this value has to be demonstrated in the current recovery from most bottom reached markets. This should be normal.

Purchasing without a reason:

Fortunately for them a lot of professionals see purchasing market data not as a valued corporate contribution. They purchase because they have to and because it worked. But does it mean there is no better alternative? When having one solution, the search for improvements stops?

Now for macroeconomic forecasts this model is changing I believe it will be changing too for any kind of sector information. On top were do business leaders take decisions based on one market scenario?

This will not threaten for example Global Insight but will give them and others the chance to adjust, to learn and to improve their services.

Professionals that purchase brand identity will always remain. But hopefully for their company this will change before the new uptrend is followed by another downturn.

Conclusion:

Looking ahead markets will get more complex and volatile. This requires value upgrades of data and separations of core and non core cannot be postponed because there are no longer more advantages than disadvantages.

Except for those who, when it comes to market data, do not care much about cost / benefits but they would not read this. I wonder if their management is aware of their lack of interest. Probably they will before the next downturn because nowadays getting a second chance is harder than before.

We are pleased to notice the downturn also has had the advantage of offer professionals a better priced alternative. By continuing improving and expanding we can even offer more of the same price-quality.

We might not become of the same sized brand identity like Global Insight or similar providers but we learned our customers do not care. They care about their company. Purchasing brand identity is still preferred. But for how long?

Request

2009-12-01T02:39:00.000-08:00

Request:

This week I was asked to explain more about our company, what we do and where we distinguish ourselves. Referring to our website seems not always enough and I do prefer personal contact by sending some recent reports and exchange thoughts by phone later.

I decided to make an exception. In this blog normally I only would like to have an indirect motive to combine my opinion with my work.

Nevertheless it seems a lot of professionals have no idea what we do or what we do for their competitor, government, central bank or even university.

Lacking the time to make a real fancy article I decided to keep it simple. At the end it is simple;

We improve your macroeconomic forecasts data of 50+ countries world wide by offering more quality, creating costs and valuable time savings while our fees can be up to 90% lower than your alternatives.

Get your economic forecast differences in 2010!

One of the most difficult parts of economic forecasting is avoiding damage while having very high costs.

The past years due to the economic slowdown forecasts lost most of their value. All forecasting sources lacked visibility and 2010 looks like a bumpy ride. So, what is then left? Synergies?

When talking about economic forecasts in general people claim only to look at them once or twice a year. When dealing with domestic markets, a small business or in non management position this might be possible but not in a regional or global role.

Some firms are less hurt by fast economic changes but they still make costs of monitoring.

When dealing with for example financial/strategic/demand/ planning, treasury activities, management reporting, business decisions, international salary calculations, new market entries etc. this is absolutely more frequently.

The past years should have wake up professionals and increased their demand for better economic forecasting tools or at least more efficient ones.

The combination of no value and high cost in a downturn can no longer be ignored. Let’s have a look at how most companies deal with this kind of forecasts during a period of 12 months.

Alternatives for economic forecast data:

1. Companies use the same source for macro as for industrial specific / sector data; the large traditional global providers.

While it might look efficient to keep all under the same roof there is hardly any advantage, especially in the past years.

Why relying on a single source? Would you accept that when your Pension Fund is managed by one person?

Sure, it is easier to administrate or to get approval. But cost / benefits remain at a very low level and there are no extras such as savings.

In fact people need more time to separate industrial from macro while others to avoid one opinion only use extra core time on internet to find more forecasts.

2. Companies cancel all or most of their external data providers to save costs.

A good example of mismanagement; cutting subscription costs but creating more labor costs as people now have to do their own data searching and compiling.

Sure, cancel what you do not need but what you need, do not do yourself by inventing the wheel.

Here costs can increase with almost 100%. Being on the payroll is a definitive direct cost, even when having lesser personnel, extra hours are directly wasted and much higher than fees of external providers.

Labor cost example:

Professionals on an average look at a certain country economy (outlook, indicators, forecasts) at least one hour a week. A variety here can occur as some months might be more important but per month a total of 4-5 hours is easily reached.

As these man hours are coming from mid and higher management the average hourly salary would around US$ 50. This brings costs of only monitoring macro per year at US$ 3,000 for one person.

Excluded are risks of using wrong data and the total expense depends on the size of the company. But either having 100 or 10 people the costs are too much.

Conclusion:

Some do not care. They have a budget and they order without looking at the benefits. Purchasing a brand identity is easier than purchasing value.

Others see improvements as a threat or believe appointing the management of the differences cannot lead to positive contributions (for them).

When using data providers it is important to choose those that can really help. Look at the alternatives for example. What is overlapping and what has the best ROI for example?

Keep core data about your industry or sector separated. Besides your own internal knowledge it is easier to integrate than combine it with macroeconomics.

Do not underestimate macroeconomic data by copying it from free sources. Out of date information can do more damage than good. And stop wasting corporate time on own economic research. It is not your core business, so why getting paid or budgets for it?

On top of core business changes a difference can also be made for non core, such as economic data. Instead of extra costs this can result in cost savings up to 90% and time savings which can be used better for core activities.

As long as traditional providers do not add extras or can demonstrates their values in downturns people should keep looking for better alternatives and smarter spending.

Remember in good times it is easier to make results or develop research but has your company already left the uncertain market conditions? Are budget restrictions off line and cost cuttings are no longer necessary?

How will your company deal with costs and values of macroeconomics in 2010?

When you are interested FocusEconomics can demonstrate the difference in terms of labor costs and valuable time for macroeconomic data inside your company.

Remember no one can predict economies. Why then spending more than necessary?

For a special offer for 2010 please contact me at; moostveen@focus-economics.com

Please select from the following regions; Americas, Asia Pacific or Europe.

Thanks and good luck with the business in 2010!

Complex sale or buying complex?

2009-11-25T03:56:00.000-08:00

During the last years it is remarkable how sales efforts are qualified. Old tricks are even sold as new breakthroughs while it is widely known making sales is no longer a trick every dog can learn but doing serious business.

Still at the buy-side responses are remarkable. Barking, biting and guarding the door are more common than looking for a serious B2B opportunity. How come?
It looks like buyers have an easier task but in fact most do not even care. As long as there is enough competition or demand can be facilitated without long negotiation, the buyer feels comfortable.

Now this is not about exceptions but about general sales. In general it is time to criticize buyers instead of always looking for apologizes from sellers. Who is really more aggressive, for example?

Yes, sellers should not be aggressive, unless it is a numbers game. Wrong but this is not about informing call centers how to fix that problem. A very interesting and easy solution is available but that is not the discussion here.

This is about buyers that represent (read: are on the payroll) of multinational companies. SMB’s cannot be excluded but this is about companies with a global interest (2 or more regions).

Whatever you sell them, you may call yourself fortunate when you have a real interest or someone taking the time. This partly can be affected by being a sales pro but there are limits. Limits made by the Buyer and often without reason.

A buyer that not only likes your product or service but really makes an effort, i.e. using well his or her position paid by his or her organization, is not common but exceptional.

Not the person that starts telling you that they already have your stuff or no longer have budgets. Or use words in their feedback such as “sufficient”, “satisfied” or even “happy”. Lucky for them their company is not affected by downturns!

Do they get training to say this or are they really not interested in improvements for the company? Or do they fear Sellers?

Some even believe they can decide for the whole company. "Sorry, but WE....."
It is not only wasting time for the seller, assuming her or she is prepared well and has indeed an additional value to offer and is well educated. This is also a missed B2B opportunity.

So, what is the value of giving excuses? What will add that to the company?
Instead of "nothing" the person, that should consider the purchase better, at least must give the seller the benefit of the doubt (unless your offer pencils to Staedtler, latest news to Reuters or printers to HP).

Now when you as a good sales person deal with these situations there are two options:
1. Moving on, ignoring, no further efforts, let them have a worse solution etc
2. Show some teeth.

Those who go for number 2 will have most of the struggle but also more success. First of all you do not have to eat them or scare them. You only have to be persistent and showing how dedicated you are.

There is nothing wrong with being determined and demonstrating where a buyer is mistaken or where he or she failed in the evaluation / decision process. The problem only is that hardly any one is really making that effort. Why?

Is it easier to go for number one? Does this not confirm the whole idea of distinguish yourself from a numbers game or competition?

According to research top annoyances of sellers are over aggressiveness and failure to listen. Really?

That is remarkable because why would a majority of Buyers choose these above a lack of preparation, a lack of follow through or a lack of product knowledge?

The answer is simple; top annoyances can only be created (by) when Sellers consider their prospects as numbers. For this you do not need preparation or knowledge. You just hammer them!

This has provided Sellers a bad name when you offer your products or services. There will always be the feeling “They want to sell me something” when contacting potential Buyers.

It also has not helped Sellers getting a better negotiation. Patience and less pressure on your sales cycle can be a better strategy to fill your pipe-line.

Now when looking at what impresses Buyers in this same research on top you find; thoroughness/follow-through, willingness to fight for the customers, knowledge of the customer needs, market / product knowledge.

In other words; when you are able to come close to the above Buyers are impressed. But are they also buying?

Without making further research concluding from the above Buyers mostly find themselves more important than their company. Otherwise best impressions should be Quality, Synergy and Price.

The impressions nevertheless are useful and praised but not by all Buyers. Partly this is understandable because who cares about what your company uses, wins in terms of cost and time savings or finally pays for? When being able to decide, you decide because of you.

The typical Buyer will also first look at his or her position. Does this decision undermine my power or status? Can this affect my career or promotion? Do I have to work harder now when using this product or service?

Buyers will of course deny but why would there be so many products and services on this planet? Is it not just to satisfy someone for a moment or that we stop thinking?

In fact in some industries it is all about brand identity. Local or small players have to use other instruments to get the Buyer’s attention. Often here is forgotten that Quality, Synergy and Price has no or hardly any value.

Imagine a manager or director who uses product / service A from a well known source. Would he or she do that because it is really better or because he or she feels more comfortable when sharing it with the higher management? Is impressing your management more important than the quality or contract details?

A contradiction is born. While this higher management urges for cost cuttings, savings and freezing budgets the company Buyers stop acting. Even those who normally appreciate better solutions. They now have the perfect excuse for any one who offers a B2B opportunity. Postponing has become the key.

This not only blows away bad proposals from aggressive sellers but also good proposals. Until the management declares the company is back on track or profits have returned Buyers will not even give you the benefit of the doubt.

Another contradiction as now it looks like only in good shape the company is willing to consider or use your products or services while many make the difference during hard times.

Fortunately there are exceptions from both Buyers and Sellers. But the essence is no longer what you have to do as a Seller to get the Buyer´s attention but what the Buyer should do with this attention. Then they can benefit all.

Making a Sale more complex is not the solution. Complexity is already there when the Buyer is not giving what he or she should give; a chance. Selling will remain the same with the same pros and cons and this is repeated over and over.

What now is needed is that Buyers become more open minded and really look what can help their organization, not only their own position. This is not as complex as it looks like. It should only be much easier to find both Sellers and Buyers at the same time and place with the same objectives.

Why the economy can be blamed instead of bad management.

2009-11-16T06:34:00.000-08:00

Why the economy can be blamed instead of bad management.

The past twenty months or so and in current corporate reporting the executive branch uses the economic downturn and some pickups in regional economies as arguments for not being able to give full year or quarterly guidance to share and stakeholders.

First of all there is not much they can do about it. These recoveries are fresh and in many countries too small to even call it a recovery. Some countries are excluded but exceptional companies when it comes to avoiding economic risks are hard to find.

So far understandable and the guidance from executives will remain without a clear vision for the time being. This might slightly improve but as limited is this outlook is also the ability to predict corporate results for 2010 and even beyond.

Secondly it seems when it comes to economic risks for many this is still not related to the real economy but only an easy phrase or excuse. Based on first hand communication with several business leaders world wide, especially those with a focus on emerging markets and BRIC markets, improvements or needs of more quality data / information are not a priority (of their management).

Too often professionals using macro for completing market analyzes, for making business decisions, supporting management meetings, doing internal reporting or using the data as a strategic or financial planning tool they rather rely on one source only. In most cases the same source used for industry specific data.

This is very strange and also kind of worrisome. Imagine this is also done for Pension Funds or IT Security. Billions invested in only one stock, for example Walt Disney, a good example when discussing fairy tales or economic forecasts of one source. Using one provider for IT Security will give them a lot of power.

Companies are crowded by advisers, especially coming from banks and other financial institutions. Mostly external ones get paid heavily for sharing an opinion that is different from any other. Does this not look familiar when talking about economic opinions? All these opinions from IMF, World Bank, OECD, central banks, governments, corporate economists, experts, gurus etc?

We all know they are all wrong but these same advisers work with institutions which have their own economists. Again each divided about any economic country trend. No one can really outperform because all face the same interference from political, social, demo-graphical or other kind of instability, disturbance or equal phenomenon.

So, why then relying on one source? Or is economic guidance no longer helping the company? Why mentioning economic reasons of slowing down your results or using recovery signals as hope for a short term revival?

A third argument that contributes to blaming the economy, and not taken economic risks (more) serious, instead of blaming management are the claims of having sufficient information or teams doing already economic analyzes.

Does sufficient indicate no other data can be better and therefore ruling out economic risks? Does sufficient cover for bad management decisions? Since when next to your global leadership in the food sector your core business involves macroeconomic research?

And when internal teams do these analyzes should that justify no other analyzes can be better? Justified how? In costs? Savings? Better guidance?

Unfortunately when looking at the above many companies still seem not to worry about economic risks and find it an easy way to blame their bad management. They keep on relying on one provider, they do not care about the quality of available information and do not consider non core business corporate time as a problem for cutting core business time (including labor expenses rising).

The worst of worst is the decision of budget restrictions. No, we are not interested in cutting costs by 90%. Sorry, our management blames the economy, not me.

Too simple would also be the explanation of missing realistic forecasts. Like as no one can make them, why arguing about them? While it is true this pure outlook cannot be given it does not exclude improvements. Especially not when paying too much, spending too much or not benefiting from synergies.

What will these companies do the coming years?

They will keep on blaming the economy for the bad results instead of bad management. They will continue cutting costs but only the easy core ones. Oeps, another restructuring charge. They will reorganize in the hope to attract better managers instead of better instructions. But as budgets will remain under restriction, good people will leave the company, competition benefits etc.

But they mostly will fail because those who do not take economic risks serious by focusing only on core business or do not demand full concentration of its employees on core business and those who believe one source is enough to guide them through rough times will miss a lot of opportunities for improvements.

These opportunities can only be discussed when the decision maker is truly identified, is open minded and is interested in business deals. Not someone who is only interested in his or her own position. Because then we only hear and see the same excuses over and over again, the economy is again blamed for not being able to make a corporate change.

This can easily be measured in labor costs. For every manager, analyst, director or corporate leader monitoring the underlying economic trends of countries of interest a process is needed. Either someone delivers them internally a report or this report is purchased directly.

People do not like reading but most reporting is useless when not using the best tools. Lots of corporate value time is lost when stopping searching for these tools. Every process of macro data is therefore an underestimated cost and time inefficient process when using one source or counting on own research.

On an average at least one hour per week people read about economies. Not to study but just a number or country report. Based on an average corporate salary per year this reaches easily 2,000 US$. Multiplied with an average of 10, 20, 50, 100 or more people, depending on company size, these costs are a waste of assets and valuable time. Big companies loose 100/200K while for smaller 10/20K is acceptable.

Excluded here from better data and cost / time efficient tools are the positive effects on eliminating risks, recognizing better economic trends, better prepared for internal and external meetings, more core corporate business time available and more core corporate budgets available.

Including these last items for missing revenues or miscalculations losses can reach millions.

When that is not of an interest, it is clear why economic risks are not taken (more) serious and why the economy is only used to cover up mismanagement.

"It's the economy, stupid"

2009-10-21T10:31:00.000-07:00

"It's the economy, stupid" was a phrase in American politics widely used during Bill Clinton's successful 1992 presidential campaign against George H.W. Bush.

The recession at that time cannot be compared to the current one (in size and matters) but when looking at corporate campaigns the phrase has lost a lot of value.

Corporate spending on information has drastically been reduced as part of a total cost cut. This looks relevant and necessarily but what about economic intelligence?

Since May experience learn a lot about corporate spending behavior. Where outlooks remain grey and lacked with visibility it is not a surprise budgets for information have been cut.

Market conditions still show a volatility that should keep professionals informed of the potential business opportunity, even the smallest, which world wide is much decentralized.

This requires more time and stress testing to make sure when getting back into markets risks remain under control as far as possible.

Professionals in prosper times easier can make decisions as market conditions remain profitable but why not exploring better tools in desperate times?

To answer this it might be a false accusation but is it logical when economic outlooks are missing any visibility to continue with existing data providers or tools?

What makes decision makers decide to maintain essential economic information to support operations while the past 12 months no additional value was seen?

There can be five explanations for these questions:

1. They simply do not care or miss time to care. Business leaders, although referring to the economic impact on corporate development, do not look at macroeconomics or find them relevant in their decisions. They have other priorities.

This can be true because at certain levels, at the top, there is not time to monitor every country of interest. But what about lower levels of corporate finance & control, strategic planning, business development, market intelligence etc?

Why would in these departments managers not consider more effective tools for macroeconomics?

2. They leave these decisions up to their teams. Why would professionals not inform their upper management of possible improvements?

3. Only in good times it is allowed to spend on secondary information, such as macroeconomics. In other words when there is a budget left over.

4. A change would implement extra attention and labor to make the change successful. The fear of a change to distract people and learn another tool seems to override the potential benefits.

5. As discussed in other blogs it is fear itself of making a wrong decision. Rather no changes than any change that can jeopardize someone’s position.

Combining the above it still does not justify not welcoming improvements in terms of less spending, more time efficiency and overall benefits for each employee using macro to complete micro. What happens when nothing changes?

1. Total costs remain at the same high level or are even increased. While with current information providers discounts could be achieved any kind of synergy will be missed as long as additional benefits cannot be integrated.

2. Besides costs such as fees labor expenses are often higher because not all employees have access and need to find alternatives (internet is the worst alternative). People often forget to be on the pay roll.

3. Costs of risks cannot be calculated but when not improving any efficiency level operational results will rather decline than remain stable. Professionals in downturns often face higher work pressure and risks will be higher.

What can happen when making the right changes?

1. Total costs will be reduced as no longer (over) expensive and overvalued information providers are used or new tools are added to compensate them.

2. Corporate time savings will lead to lower labor expenses. As people have more time for core business, core business will directly benefit which increases the ROI.

3. Less stress and better time management can help risk assessments in for example market analyzes, financial reporting or strategic planning. Even business decisions are better supported.

Conclusions;

Instead of walking away from changes or being afraid of them it is better to consider them. It is too easy to claim satisfaction or sufficient access to available alternatives.

The past period has learn there is no such thing as “security”. When not being open for change will harm your corporation. It is then no longer the economy but corporate inefficiency, stupid!

p.s. This blog is written on personal title but related to my work as Global Sales Manager of FocusEconomics

"Reliable is no longer realistic"

2009-10-09T04:57:00.000-07:00

How reliable is current business / market intelligence?

Global providers have earned a lot of credit before the financial crisis and economic meltdown started. Projections about sectors and industries were often very realistic and producers used this guidance to the top.

Analyzing markets in a downturn is a different ball game. First analysts have to get rid off their wrong projections. What was predicted in 2007 did not happen in 2008 and in 2009 etc.

Secondly adapting to more challenging market conditions must not be underestimated. This will not lead to better advises while clients should demand more values for their (high) fees.

Third and perhaps most important information providers can no longer rely on their historical performance. Without changing these promises to clients it would be harder to keep them.

Was it really quality info or just benefiting friendly market conditions?

Without doubt experience counts. Explaining an industry and the trends or competition and pricing can only be done after years of study and involvement.

Information providers could claim therefore for years their knowledge and valuable analyzes. Selling it for large amounts was not difficult as budgets were available and in an upturn there is less doubt (worry / fear) about the outcome.

Until two years ago. Without having to study all predictions made in 2007 or before half 2008 it can be said that 99% did not happen due to the fast and unexpected turnaround in global markets.

Exceptions were hard to find and therefore a lack of quality information is nowadays a reality.

What is left of the value of current industrial analyzes?

While facing difficulties in most markets and countries up till now the past two years many information providers continued with making wrong predictions.

It seems the strategy of pleasing customers with positive information about their industry, even though at much lower levels than before 2008, was for many the only or best option.

Reports about recoveries in all sectors are floating to the markets and many use historical excuses for explaining their projections.

Instead of becoming more conservative most remain focused on what the client would like to hear and not about the very small chance of a fast recovery.

As historical performance is no longer a guarantee for offering realistic future information, what should information providers do?

All main information providers claim to be reliable and being the best alternative for their clients. But do they learn from this set back and can they adjust to keep the client on board?

Information providers must stop selling their past performance. Until now they got away with it as most clients kept buying information.

But what happens when this buying dries up completely due to the ongoing budget cuts inside companies?

When information providers cannot adjust and offer a better service, becoming another value for their client than only delivering the same wrong conclusions it will be a tough short term future.

Conclusion:

There are too many similar information providers (wrong). Too many offer the same reports about a certain sector or industry but instead of being critical they remain positive or at the save side.

Probably out of fear of losing the client. Some still can afford to warn their client that what is ahead is not delivering same profits as 2-5 years ago. Would it not be normal that current analyzes are less positive to make them more acceptable or at least more understandable?

Here lays the difference between quality and price/value. Consolidation is good for every industry and also for information providers. From large providers to small consultancies there will be tough times ahead or already facing.

Changing the core business to improve it is best to do. Offering a better service including discounts could work for now. But what really would help is stop selling unnecessarily optimistic expectations which finally do not occur.

At the end that only creates false hope, intimidation and wrong assessments. It will not help any company reaching final goals. Reliability based on only analyzes is no longer realistic in this business climate.

Who are the Winners and Losers in this Cost Driven Business Climate?

2009-07-31T00:40:00.000-07:00

Who are the Winners and Losers in this Cost Driven Business Climate?

There are winners and losers in today’s management. Not those who already blew it with fraud, greed and mismanagement but those who are not capable of convincing their management of making a change which leads to a long term cost / time saving.

Perhaps a bold statement but it is true. After almost one year of being in daily contact with decision makers it is clear that there are winners and losers in this environment.

Excepted are those leaders who cut the big peaces out of the cake. Everyone can fire 10,000 people. Short term cost cutters are no winners. Maybe they are not losers either because they get paid for it very well.

Also excepted are the unfortunates who simply had no chance and were part of the inevitable job cut. But this is about those who still are out there and can make a difference for the company, for the colleagues and even for themselves.

The easiest way to describe a winner is a manager who continues looking for improvements and is willing to approach his or her management asking for a change.

As this change involves spending this manager is risking a lot but with the right argumentation and attitude there is nothing to loose.

When can be demonstrated that with often a small investment a large saving will be realized this can only create a win/win situation.

Think of for example tools with an annual investment of 1K, 5K, 10K or 20K where otherwise 10 times more will be spend.

Imagine you propose your management to spend 20K to save 200K. Would they look at it or call you insane?

It is noticed that while the upper management welcomes this kind of opportunities the lower management is not making the effort to inform them. Fear or disinterest?

Losers will not even think about trying. They will deny every possibility of making improvements. They do that for own (job) protection, disinterest or simply to avoid any confrontation with the management.

In fact they see this crisis as a great opportunity to say `no`. “Sorry, we are told to cut spending, so we have no budget”.

What no budget? Will your upper management postpone a decision when all computers are hit by a new virus?

"Sorry, we cannot afford to fight this virus because there is no budget, try again in six months time".

Is the economic crisis not a kind of virus? How come companies blame the economy for missing orders but not spending better on economic information for example?

It is similar to consumers who stop spending which will not help the economy recover. When companies keep on using secondary tools to "understand" economic threats, waste hours on non core business research etc, is that helping?

Is it because economic information is not important or there is no better alternative available? It does not matter because the outlook remains uncertain?

Have you really tried and compared in terms of cost/benefits or it really does not matter costs remain higher in terms of labor and fees of ´we can only contribute in good times` providers.

Unfortunately due to the global crisis there are more losers than winners. Again, this is about working winners and losers.

Where in this cost driven business climate a search for more efficiency and the naturally cost cut is a priority most managers remain silent. What is the benefit of this hiding?

Almost every company turned into a cost cutting machine to remain profitable or keep losses controlled.

While this is an old trick it has to be done but it will not be the best way to prepare the organization for a recovery. It certainly should not be awarded.

What is more important are the smaller changes like for example the attitude of employees but also secondary expenses.

Would some one who after making an effort surprises his or her management with a contribution to the new corporate strategy in the form of a cost/time saving not be better off?

Of course size matters. Big charges will contribute faster than smaller ones but the effect on the long run (economic recovery and growth will take some years) is smaller.

After cutting the large parts it is time to look for smaller parts. But here is entered the domain of the mid and lower management where there are more losers.

To be more successful a company not only needs a restructuring from the outside (immediately visible for share and stakeholders) but also on the inside (not available to public domain). A difference in looking at short or long term results.

Changes on the inside of an organization can only be done by the managers. They have to search for new tools to help lowering costs but without creating disorder or sending wrong messages to their teams, like the upper management with their large cuttings.

To do that you have to be a manager that can operate in both good and bad times. Most managers now only think of their own situation, lesser about the organization and not at all about the colleagues.

They even consider leaving the company or already accepted another job. Sure, surviving is a priority but who guarantees your next job is save? Would it not be better to become a winner?

Who says it is not possible to gain from this momentum? Can you only perform when everyone is winning and loose when everyone is losing?

Should we all feel miserable and wait till the storm is over? Stop being creative and taking initiative? Not listen to what is available in the markets because there is no budget?

Is it really true when offering the board, the higher management or whoever is above you a solution that helps cutting costs, you will be ignored?

Is it more important to stop new spending because of budget restrictions or orders from the top instead of creating a long term synergy? Is it better only to contribute to a short one?

Managers who accept it is time to stop producing, to make no further attempts and wait for the next episode have a higher chance of losing. Not only jobs but around the corner there are always winners.

Managers who can convince their bosses certain changes do not affect negatively but positively business. Managers who for example come with a tool that demonstrates a welcome ROI after the first day, week or month.

These managers can demonstrate efficiency is out there and this is the best time to find and implement it. Even when an initial investment needs to be made. Making a change is not without investment.

Investments can be small but for sure can be done smarter. Why spending 100K when it can be done for 10K? Because it is easier or the ´we are so used to this provider`excuse?

Who would not accept a change from 100K to 10K? Who would not invest 10K when this would lower costs from 100K?

Only winners will accept and will make an effort. Not because it is impossible but because it is the best alternative.

How Corporate Spending affects negatively your Corporate Planning.

2009-07-24T03:10:00.000-07:00

During the past 12 months the global companies (read decision makers) negotiated with in regards to supporting them with essential economic data reports clearly were divided in two groups:

One group fully agreed making changes in the cost structure is needed at all means. Not only restructuring the work force or shutting down plants but also saving costs coming from non core business activities.

The other group in contrast was very determined in not spending at all but only in the core business. No chance of smarter or better spending when it comes to external intelligence, no need for additional economic data despite the worst economic crisis in their job history and certainly not willing to even look at the proposal.

When it comes to Corporate Spending is a negative impact on Corporate Planning justified? Can it easy be eliminated or limited?

My main focus will be on the second group. Not only because I disagree with their spending rituals but because I simply do not understand in this climate there is no need for better economic data combined with cost/time savings.

Current market shifts are caused by changes in the local economies and when these recover more market opportunities will occur. This will go slowly and not by one region.

When China improves the immediate affect on Korea or Malaysia will be smaller. The same for Brazil for example while recoveries from the US and Euro zone remain uncertain.

It all needs time and during this period every minute or dollar spent on non core business issues is a direct extra cost. This is not different per sector or industry.

The global crisis is not caused because of one industry. Housing and finance are related but cannot be marked as one industry. Economic data is essential in every market.

To be prepared or in better shape for potential market recovery most attention is paid to the largest efforts of cutting costs; laying of 5, 10 or even 20% of the staff, cutting salaries of executives or shutting down plants abroad. This will save millions and people actually get rewarded for it.

The irony is that when recovery takes place the staff is hired again and plants are re-opened or re-built but that is the way it is.

But what is wrong with a cost cut of 10, 30 or even 100K?

The past 12 month is noticed group two is not interested. Especially when this is regarding non core business information there is no interest as it is not seen as part of the core Corporate Strategy or Planning.

The majority is not prepared to listen or consider a change here as a contribution. Instead they continue wasting corporate time and expenses on non core business information such as economic information.

The contradiction here is that for group two good or bad times do not matter. They do not care who provides them the forecasts or costs involved. They even prefer a well known brand to “blame” for wrong established analyzes.

But they forget hidden costs like non core business spending finally reduce budgets more resulting smaller budgets. Where remain benefits?

People can only spend once in terms of time and expenses. When a too large part is not related to own business it will have a negative effect on the total.

This total includes all budgeting and corporate planning. While those who are in charge of the larger restructurings clean up the next 12 months hidden costs remain untouched.

Why?

An easy calculation concludes that in every organization operating in other international markets 10% spends corporate time and expenses on non core business information such as macroeconomics.

This 10% contain professionals linked to for example corporate / regional / country departments such as Finance, Marketing, Business Development, Country Management, Strategic Planning etc where macroeconomic data is used to complete market insights.

Per person a cost calculation will result in an annual extra non core expense of at least 1,000 dollars based on one hour per week with an average hourly salary of US$ 30.

Just multiply that with the 10% of your work force. Is that a not relevant or can be missed under the new corporate objectives?

Often current external provision is not under revision which leaves costs unchanged which is a missed opportunity. Lack of interests or lack of decision making power?

The same professionals claim not to be able to work without certain global providers of information (business / market intelligence) but are they right?

Should they not instead to complete the new program of Corporate Strategy and Planning, which is adjusted to this cost driven climate, not look for better and more efficient tools?

According to group two this is again not necessary. Conclusion;

New Corporate Planning requires new settings but this cannot only be focused on core business expenses.

When business leaders complain about the market conditions every dime saved should be embraced.

Business leaders should not hide behind the new Corporate Planning, even though this indicates more savings than spending.

All what can positively affect the corporation should be explored and welcomed; even if this is only 10K instead of 1000K.

When a service can cut down 80-90% of non core business costs of similar information and help professionals prepare for a new era of corporate growth, should that be ignored?

Group two screams about the worst performance in decades but only looks at the big and easy numbers. Their non core business spending will therefore remain inefficient in terms of costs and corporate time.

While this looks like a small issue it will finally slow down the whole corporate processing and directly Corporate Planning.

Helping improving the non core business part by spending smarter resulting from the first month in more time and assets available to core business should be welcomed.

Otherwise Corporate Spending will affect negatively Corporate Planning.

Only efficient market research is vital

2009-07-09T03:34:00.000-07:00

Please read first at:

www.marketresearchbulletin.com

Top B2B Tips For Emerging Markets

These are my comments:

I especially like the tip that market research is vital and the need of using independent sources.

Still many believe what can be found for free (internet) is better because it is for free. The fact this info is out of date, increase labor costs or can harm results seems of lesser importance.

On top who is best? What market information provider really makes a difference or has done a good job the past 12 months?

I have no doubt many have good knowledge about certain industries or call themselves sector experts.

Still predicting a trend is not the same as explaining one.

Therefore I believe professionals using market research have to divide this in two groups:
1. One for all information directly related to the core business, i.e. industrial analyzes and competitive intelligence.
2. One for all information about the operational countries, especially those where it is hard to find reliable macro data.

For 1. there is a wide range of providers. Most of our clients use one of them or even let them overlap to secure each specialty per provider (for their core business).
For 2. they have our macroeconomic consensus forecast reports because they do not want to rely on single sources (1.) only for different scenario planning.

Furthermore without 2. more valuable research time is spent during core business hours and already time limited professionals are further cut back or delayed.
On top every one complains about costs. Well, in a cost driven climate you should look for more efficient tools and not postpone a small investment.

Unfortunately even the smallest investments on market research are examined or are simply postponed / canceled because the upper management can no longer fly first class or spend corporate money at fancy restaurants.
This is a time for solutions and every contribution should be welcomed.

Now those not being able to use our reports will spend 10, 20 and sometimes even 100 times more the coming 6-12 months in extra labor costs, hence not even including the risks on the results of bad data.
Imagine you can choose between spending 5K or 500K? Would you not go for the 5K and impress your upper management with the cost saving?

Finally emerging markets remain volatile, unstable and less predictable. Still some have clearly become more developed but the information stream remains difficult in regards to economic forecasts.
This cannot be solved (only) by the other steps mentioned by Matthew Harrison.

There is also no one-stop-shop for market research. Like with doing your private shopping also for corporate shopping you must change and become a smarter spender.
Look around or look at our website. I look forward to send you a copy of our global regional reports or any country in special.

Yes, market research is vital but those the one which is most efficient. Or otherwise do not complain about lost revenues due to the crisis.
When for macro intelligence there is no interest in improvements, what is then to worry?

The Value of Macroeconomics

2009-07-02T03:22:00.000-07:00

I received the past 24 hours very interesting comments about my former blog "The value of business intelligence" and how this is used among managers.

Most of the feedback was related to the fact that indeed the right information does not arrive at the right people while they need backup in using this information best.

I agree certain information needs a backup, especially when it is regarding the core business you are in. At least that is what I hear and see.

Still this is strange; getting education about your business from an external professional. I am often told this is to for come valuable information is missed or used by competition. Acceptable reasons but what about non core business information?

I find it very strange in our business that delivering none core business intelligence is not seen as important or lesser important. What is the value of Macroeconomics?

I agree macroeconomic forecasts are not very reliable. But are industrial trends easier to predict? Is it not the same kind of models and calculations where finally the lucky one is closer to the real outcome? Is it not true there are more under than outperformers?

Is it not true industrial and economic trends are too related to make a choice which is more important and that one cannot do without the others?

Of course core business is core business but still many claim macroeconomic data sources do not need to be improved or the way it is currently provided and utilized.

When looking back in history I find this hard to accept. Besides technology I believe industries have not experienced so many downtrends as economies. We are still in the middle of one!

On top is claimed macro data is not used frequently or can be found in the public domain. So, why all the fuss about the economic crisis when the numbers are not taken seriously?

Let us ignore growth indicators or consumer spending signals and when we need it we all go for the free out of date numbers. Is that a conspiracy or just a “I do not care what is better for the company” mentality?

Almost every corporate press release about the latest results or 2009 / 2010 outlook is full of blaming the economic crisis but so far hardly anyone seems to be upset about the numbers used inside their organization.

Or is it indeed just an excuse for not making the numbers promised 3-6-9 months ago?

When that what is available is called sufficient, why complaining about the economic turmoil? Should you not be warned then by your current resources? Or your local contacts / clients?

And what about your exclusive bank relations? Did they not shared their latest opinions or where they dealing with more important clients?

Furthermore new cost cutting strategies focus mainly on the short term but where are the efforts to look for improvements on business intelligence?

Is an economic crisis not the best time to look for better tools or spend smarter?

We believe the solution is to offer macro data in a consensus format to at least demonstrate the often large spreads between different forecasts of (well known) sources.

This tool will not claim delivering the best forecasts as such tool or resources not exist. More important is what the tool adds in terms of synergies (compared to what is available).

Like with any kind of information the implementation has to be done by the key users. We can deliver backup by explaining certain calculations but for sure want to for come lecturing time limited professionals about macroeconomic trends.

Some one informed me that numbers are the foundation of a building. "You need it for the structure, but you don't have a building with only a foundation".

In that sense we do deliver only a foundation as our material is not used by one key target but by all kind of key professionals through an organization. In this case the organization is the structure and the building at the same time.

This is the Value of Macroeconomics. Not as a priority but as the cement to keep the bricks together. To make sure professionals do not loose valuable corporate time researching non core business data in corporate time and to present a wider opinion of different sources than using the same provider that tells you what will happen in your industry.

I would like to add people have the tendency to criticize others without looking first at the differences. I believe a better solution would be to look at the pros and cons before making any decision or gesture. Then only with an open mind and giving the other the chance to communicate will lead to a win/win situation.

Unless of course there is no budget. There is an economic crisis but no budget for economic sensitive data. That is like sending out the fire department but without water. Risking spending more seems a better choice than spending a few bucks on a country report.

Using a budget restriction for a tool that is helping you in the crisis is like forwarding a decision to prevent a new computer virus hitting your PC. Sorry, new budget is available in 2010, put your computer off and let us all go home! See you in 2010 or when economies less affect the business. Then we will have another evaluation!

I look forward to your comments. Thanks again.

The value of business intelligence

2009-07-01T06:32:00.000-07:00

"Up to 50 percent of managers place no confidence in the numbers presented to them". Business intelligence research, Cambridge University 2009

Is that to hide behind the brand or personal failure?

I am a great fan of publications of KPMG International. I quoted them before and will do again as I fully agree with one of their latest published studies:

"Being the best Thriving not just surviving" - "Insights from leading finance functions"

What really hit me is the conclusions that;

A) Real business intelligence is still rare and it’s time to stop downloading and reworking.

B) Almost half of business leaders do not place confidence in numbers of current external resources.

Before putting my own input on these conclusions I would like to share some of the text from this study first.

"In today’s global economic environment, there are two key components to building greater influence – better business intelligence (right information, right time) and deep business skills (right people)".

Here I will focus on better business intelligence as we cannot offer the right people. We have them but they are not for rent, our intelligence is. The study continues with “Real business intelligence is still rare”.

“Business intelligence is a term that means many things to many people. Simply put, it is a collection of ‘intelligent’ information that helps business leaders make better business decisions that enhance shareholder value.

“When it works, it can deliver the real competitive advantage that business leaders strive for. It is the provision of robust business intelligence that in many cases differentiates top performers from the rest”.

“High quality business intelligence is driven by a collection of processes, applications and technologies designed to gather, store and provide easy access to information. At the heart of this, however, is data”.

Absolutely true! But do business leaders really want to be helped? When the data is wrong would that not be the perfect excuse for internal / personal failure? Would that in this challenging climate be a reason not to go for the “change”?

“In many cases it is the underlying data structures and hierarchies that are driving inefficiencies in the production of real business intelligence. These problems also contribute to why such a high proportion of business leaders place no confidence in the numbers presented to them”.

“Finance leaders should address these issues head on. They should invest to align data with key business metrics, and focus on getting to the root cause of inefficient data structures”.

What decides what is best (for themselves or the company)? I am confronted with finance leaders who assume they are fully covered. I would say wrong covered because would that indicate there is no better solution?

Business intelligence inefficiency in terms of cost and time are put aside as long as other priorities are in place in the current downturn. Short or long term vision?

“The recent market conditions have also illustrated the need for a much greater focus on cash and working capital information. The need for truly effective business intelligence, addressing multiple business dimensions, has never been greater”.

“Can the future of the finance function be manipulating data in spreadsheets to “cobble” together information for boards and investors? Top performers know change is needed and are well on the way to developing solutions that deliver real competitive advantage”.

To not only create cash on the short term more effective business intelligence is a must. Manipulating data by collecting certain information from the internet for example should be banned.

How can out of date info become guidance to the board or investors?

To make change business leaders should be willing to change first and to have the ability to change.

Only cutting costs and not spending smarter will not make the change while waiting for market conditions to improve a search for better business intelligence should become a priority instead of postponing.

"Adapting the finance function is now more urgent than ever, by providing the right information at the right time to help business leaders navigate through turbulent times".

Jochen R Pampel
Global Head of Financial Management - KPMG

It seems combining the words of Mr. Pampel and the above mentioned conclusions (A and B) point out that providers of business intelligence can only succeed when:

1. Distinguishing from others. By offering better quality data, more synergy such as time savings and finally helping cutting costs will be directly contribute to “change”.

2. Delivering the right information to the right people will help much better than receiving an overload of information (overlapping) or doing a non core business search internally. Especially now business leaders are more time limited than ever.

3. Finally the urgency as discussed by KPMG should not be interrupted by budget restrictions. Here I would like to give the following example:

Business threats are not only coming from industries and economies but also for example from a simple computer virus. Imagine tomorrow your office is hit by a new virus.

Would the responsible IT or other leaders postpone a cure because of budget restrictions and have to wait till the next budget cycle?

This is exactly what currently happens in regards to macroeconomic intelligence. While facing the worst economic decline in their own professional career many business leaders cannot access valuable reports.

Even when country reports on a monthly basis only cost a few dollars. Understanding this from a rational point of view can justify this decision but would that not undermine the current needs of quality information?

Or is it really like the computer virus that fighting an economic downturn can be done by not changing (improving) your information streams as this only can be done when market conditions have improved?

This might be the answer why almost 50% of the managers place no confidence in the numbers presented to them. I would rather say they lack own confidence in making a change or convincing their management to do so.

I look forward to get your opinion. I sincerely hope business leaders start welcoming better economic intelligence. Not only for us but to finally serve better professionals who for market insights need the kind of data we publish.

Thank you all for the attention in this discussion.

Warm regards,

Martijn Oostveen

FocusEconomics / LatinFocus
Barcelona - Spain
Tel. +34 93 265 1040 / Fax. +34 93 265 0804 / Skype: fe_martijn
www.focus-economics.com / www.latin-focus.com
"FocusEconomics: Global Economic Insight with a Regional Focus"
LinkedIn: http://www.linkedin.com/in/martijnoostveen