Saturday Feb 28, 2009

Never Waste a Really Good Crisis

Huge article in the NY Times about the financial crisis. It's called The Big Fix, by David Leonhardt. Really nice bit of perspective and history and a great read. But what keeps jumping out at me is one quote that puts things into an interesting context:

"TWO WEEKS AFTER THE ELECTION, Rahm Emanuel, Obama`s chief of staff, appeared before an audience of business executives and laid out an idea that Lawrence H. Summers, Obama’s top economic adviser, later described to me as Rahm’s Doctrine. 'You never want a serious crisis to go to waste,' Emanuel said. `What I mean by that is that it's an opportunity to do things you could not do before.'"

That's absolutely true. Even a quick flip through history demonstrates this concept quite clearly and it cuts right across a variety of societies. The leaders of countries (the smart leaders, anyway) tend to use a serious crises to change policy significantly and usually in ways that, in retrospect, represent an obvious paradigm change. In other words, big changes that are only realized later. I'd feel better about it if the power elite suffered the same consequences of these paradigm shifts as the rest of us, but that's not how the world works. I get that. Also eerie about Emanuel's comment is just how much it reminds me of Naomi Klein's latest book, Shock: Disaster Capitalism, in which she documents leaders manipulating events, shocking their populations, and changing policies radically (and generally to the detriment of the people). This phenomenon is not new, and it's not used exclusively by leaders of so-called capitalistic societies. Noam Chomsky has talked about the concept for years, especially and most recently with respect to how governments around the world used 911 to clamp down and reduce freedoms if those tendencies were present in the first place. The crisis was their opportunity. And they didn't waste it. Now, in the quote above, Rahm is obviously talking about fixing things, but the process is the same as wrecking things: you do it using a crisis.

So, if the power dudes view a good crisis as an opportunity never to be wasted, why don't we feel the same way and do the same thing? It's certainly a different way of thinking, but it can be liberating if you look ahead and actively jump paradigms on your own terms instead of holding on to the past as it crumples under your feet because others are acting in their own interests. This is a good lesson for project management as well. The life cycle of any great project snakes around like a river running wild, so it pays to step back occasionally and plan for those times when things break badly. They are opportunities "to do things you could not do before." Take advantage of them.

And finally, here's Rahm's crisis video at the Wall Street Journal.

Sunday Oct 26, 2008

Leadership Today

Really good conversation about leadership from Charlie Rose at the Harvard Business School with John Doerr, Jeffrey Immelt, James Wolfensohn, Meg Whitman, Anand Mahindra. My favorite bits come around the 31 minute mark when they start focusing more about the economic shift to Asia and the keys to leadership. Some of the concepts they talked about include:

    \* Spend what you earn. That doesn`t sound so anymore, eh?
    \* Educate people for a global world. The U.S. is still focused on the West.
    \* Don`t forget the liberal arts. Think.
    \* Ask people to help. People want to gather together, be involved, volunteer, help. Ask them.
    \* Build the following: a sound financial system, an energy policy, a health care system.
    \* Be accountable for results.
    \* Balance right brain and left brain thinking.
    \* Encourage a culture of acknowledging mistakes.
    \* Knowing is not nearly as important as learning.
    \* Expect unpredictability.
    \* Be willing to make decisions and stand by them.
    \* Communication.
    \* Transparency.
    \* Ideas are good, but execution is absolutely everything.
    \* Teams win.
    \* Character. You know it when you see it.

I`m extremely suspect of so-called experts and big names predicting the future nowadays, but this panel was a nice mix of sobering realism and inspiration with very little preaching. Just some people talking. Well worth a listen.

Saturday Jul 19, 2008

Exit and Voice

Recommended book: Race for The Exits, Leonard Schoppa: "The system worked so long as Japan was kept in its postwar homeostasis, its economy relatively closed to the world, its firms restricted in their exit options and women pushed into and confined to household roles. It could not survive the transition to a globalized economy in which success depended more on openness." -- Tobias Harris

Interesting book review from Tobias Harris about some of the economic and social problems here in Japan. The ramifications from "exit and voice" -- the ability to dump a bad system or change it from the inside -- seems so very obvious to me living here. So much for closed systems. They die as a result of isolation. I`ll have to read this book.

Sunday Jul 06, 2008

Energy Efficiency and Economic Opportunity

Japan sees a chance to promote its energy-frugal ways: "According to the International Energy Agency, based in Paris, Japan consumed half as much energy per dollar worth of economic activity as the European Union or the United States, and one-eighth as much as China and India in 2005. While the country is known for green products like hybrid cars, most of its efficiency gains have been in less eye-catching areas, for example, in manufacturing ... Japan's strides in efficiency are clearest in heavy industries like steel, which are the nation's biggest consumers of power." -- International Herald Tribune

Seems that high oil prices are offering the Japanese new markets around the world for their technologies. China seems particularly interested. For obvious reasons.

Monday Apr 28, 2008

Blowing Hot or Cold on Japan

Japan May Escape Recession as Chinese Surge Increases Exports: "Japan's manufacturing sector is actually a showcase for how to implement globalization,'' said Jesper Koll, director of Tantallon Research Japan, a hedge fund. "Whether it's Russia, the Middle East or Latin America, take your pick, Japan's on top of it.'' -- Bloomberg

Good economic news about Japan is rare, but this article above cites the possibility that Japan may dodge a recession (due to the slow down in the US) because some key Japanese industries have diversified into rapidly expanding markets in China and throughout Asia. That's cool. And perhaps other Japanese companies here, and even entire industries, will take a lesson from the manufacturing and auto guys and learn how to be a "showcase for how to implement globalization." We'll see. The results will be obvious either way.

Sunday Apr 13, 2008

Mega Regions

Unlike emerging economies within specific nations -- such as Brazil, Russia, India, and China -- there is another way to look at the global economy, which is via something called the mega-region. That´s the real driving force of the global economy, according to Richard Florida in Wall Street Journal -- The Rise of the Mega-Region.

Florida says that "
[t]he world's largest mega is Greater Tokyo, with 55 million people and $2.5 trillion in economic activity. Next is the 500-mile Boston-Washington corridor, with some 54 million people and $2.2 trillion in output. Also in the top 10 are mega-regions that run from Chicago to Pittsburgh, Atlanta to Charlotte, Miami to Tampa, and L.A. to San Diego. Outside of the U.S., you can find megas around Amsterdam, London, Osaka and Nagoya, Milan, Rome and Turin, and Frankfurt and Stuttgart."

He also says that
"China is not our real competitor. Rather, we should be thinking about the great mega-regions around Shanghai, Beijing and the Hong Kong-Shenzhen corridor, which account for roughly 43% of the output of the entire country."

Interesting perspective. Florida recommends a few ways of dealing with the megas, but the one I found most engaging was the promotion of density to increase innovation and production. So much for suburbanization, I guess. I´m not sure how this works with the Internet, though. The Internet enables massive distribution (or decentralization, I guess) of talent, innovation, and, in many cases, production. Does that support or undermine this mega density perspective? Perhaps both.

Monday May 28, 2007

Tokyo Financial Hub

The Japanese are responding to pressure from global and other Asian competitors in the financial industry -- Japan aims to reinvigorate Tokyo as global finance hub. But they will have to overcome not only challenges such as regulation, taxation, and transportation but also language issues: "Foreign managers in Tokyo often bemoan the lack of sufficient staff who are fluent in English." -- AFP
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