andEs Corner: How many times do we have to pay?

To abuse a famous Winston Churchill quote from World War II:

Never have the mistakes of so few been paid for by so many, so many times.

The financial crash seems to now be reaching new levels – it is not over. Not even really started.

But the one thing that is now starting to make me boil and rant is that people like me, a man in the street are paying for it in so many ways.

Here are a couple of examples:

1- worst case getting laid off to save costs

2- absolutely no chance of pay rise in the last 12 months or next 12 months – more likely a pay drop but more work to deal with unfortunate colleagues caught by 1.

3- no chance to change to a better job as hiring is vanished (I am btw not really looking, but still I am still “lucky”)

4- cost saving plans across the board by employers on things like business class flights (even for overnight long haul flights! which I personally think Amnesty should get busy on)

5- depressed atmosphere almost everywhere I go (unless the people are drunk!)

6- reduced service everywhere as companies save costs

7- reduced quality of products ditto

So we are losing out in our jobs and also in the goods & services we buy. i.e. we are not only getting less money but getting less for our money.

But as we are all involved in this cost cutting the company’s margins are not cut as badly.

Which means that the bankers on wall street who caused all of this continue to get MASSIVE bonuses.

I no longer think Al Qaida is our biggest enemy. This is a smokescreen. We are.

I wonder how far we can be pushed.

Now should I send a facebook event invite out to join World War III?

Would you accept?

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andEs Corner: a symptom has been missed

Having read the FT (my favourite media at the moment for obvious reasons) http://www.ft.com/cms/s/0/3d89a930-220d-11de-8380-00144feabdc0.html I realised that everyone including Obama are healing the wrong symptom. Or at least they are missing one on their to-do lists.

They are looking into healing the banking system so that it can finance industry. While this may be necessary they are neglecting one huge area: household income which is the second of the root causes (behind or maybe also alongside the first one, greed) and the reason we are seeing deflation. i.e. helping the man on the street is something I cannot see in anybody’s policies.

The problem is that I cannot see the economies catching up again until the normal households (that’s you and me) can start spending again. The FT piece is fantastic although it doesn’t thoroughly explain this effect. But basically we are becoming paralysed (at least house owners whose property is now below the value they bought it for. I don’t think mine is there yet but it is, I suppose, on the way).

I am actually still waiting for one or all of visa, mastercard, amex … to collapse as defaults start rising. Now this would be fun to see how the internet’s online shopping world would then continue… I thought initially this would happen in the first wave but I think now that it will happen as the second stage hits us which will happen around the time inflation transforms from close to zero to double figures. I guess early 2010.

So anyway, I digress. So how could the man on the street have been helped? Well, some of these ideas are radical but basically the same principle: do not give the banks the money but bypass them and go straight to the people. I still think the best approach for Obama would have been to simply give everyone their houses – i.e. the state buys them off the banks at the reduced market value. Reduces all this toxicity immediately. And probably costs the same. With much more understandable effects (i.e. instead of introducing a new crazy toxics market!). And not just the rich banks benefit… People’s money being spent for once on the people and not on the rich. Maybe not giving them but offering LOW (1%) fixed rate interest loans to existing mortgage owners.

Another topic here which annoys me incredibly is the exposure that normal people have had to the risks and costs transferred to them automatically by their financial institutions. Of course there is a risk that shares and investments could lose money but this risk should not have been increased by banks doing a bad job. There seems to be insurance for the banks but none for the customers.

The taxpayers money could have also been used at least to cover bad bank practise for the customers. To me it appears that currently the banks are being rewarded for making disastrous decisions (with even Lehmann Brothers back in the black) but the man on the street punished in more than one way: once he has lost his savings and twice he may lose his job (as the banks still continue to hoard this money).

The money could have been used in a much better manner: paid in part back to the investors with this then imposed as a fine on the banks that had to be paid back over time – i.e. a complete reversal of what has happened now. In this manner the investors are protected and reimbursed and would then maybe even be willing to reinvest in a newly regulated system. This would have also indirectly cleaned up the bad banks, some would have failed as the man on the street could then decide which had cleaned up their act enough to warrant their custom.

The option may of course be that we will not spend our way out of this recession and that truly a new world is coming not based on consumerism & infinite growth. Maybe Obama has already this plan in mind. Now this would be a nice surprise…

In part 2 of this I will discuss what would happen to the money that the man on the street would get and how this would stimulate the real economy.

andEs Corner: Silver is the colour of the future

In the past we were told to look after our youth as they are the future. Now I think, at least in Europe, the message should be that we need to look after our older generations as they have just an important a role to play in the future as the youth.

As Europe ages we need to find a solution. And it needs to be a long term one which is not based on returning to 10 kid families. Or the socially challenging (impossible?) task of integrating half of Africa into our society. However, I think the solution is going to be easier than many economists consider. Quite simply as infinite financial growth will not be the driving factor as we proceed into the new world.

Currently when you reach the age of approx. 60 you suddenly get written off from society  -you can no longer provide a valuable input. What a waste. 60 years of experience which will now at most be shared with your direct descendants. As we live longer this is slowly turning into the half way point.

I have heard people calling this the Grey Generation, But try telling my mum that the colour grey is the best fit to her and her generation. She would never agree to this especially as she is currently up in the Andes visiting Machu Pichu. Which is anything but grey. I think she would agree to being part of the Silver Generation.

Anyone who has owned real silver cutlery will know that it is easier to stop it looking horrible than to repair it later with “Silvo”. In the same way we need to be looking after ourselves to prevent the Silvo treatment as we launch into the 2nd half of our lives.

Going back to my mother, she is the perfect example of silver that was well looked after: she has now turned 60 and is actually I believe doing more than before for society as a whole (she does more than visit spiritual sites in Peru!). But of course in general people nearing societies write-off date need to change. Need to become open to the changing ways of the world. Need to remove any bitterness they may have to how their life ended up. But I already see this happening in many of my mother’s generation (especially when compared to my grandparents). But not all.
My father-in-law provides the perfect example of silver cutlery pushed through the dishwasher one too many times. Bitterness, viewpoint dictated by his favourite tabloid, body ruined by physical overwork and eventually pickling his brain in schnapps so that he is now doing little more than awaiting the full time whistle. Which is such a waste when I remember for example the help he gave when doing up our old flat. All I have from his array of “hands-on skills” now are his huge selection of old tools which he doesn’t need in his retirement home – but which also I only know how to use a half of. A waste of the knowledge he could have handed on.

As I reach the supposed half-time in my career life and sit in the changing-room eating oranges and drinking tea pondering the second half, I now have more ideas than ever as to what I could do. And I suppose by the time I reach full-time I will have just as many as to how to spend the period of extra-time I hope I am awarded (being English I assume that I will not win the penalty stage but hope by then to have played well enough to win the game),

So what is needed? Well, I believe ongoing education is one thing. Many people seem to cram all the learning they are going to do into the first quarter of their life. This is ridiculous:
1. To adapt the Obama quote: the world changes and you have to learn about these changes.
2. You should always broaden your horizons.
This additional training & learning should benefit the Silver Generation in two ways: preparing them for extra-time and also helping them participate in providing the experience of their years to many others. And I don’t just mean training for the latest project at work.
I am also still not convinced that teachers for example should be allowed to teach until they have actually experienced a bit more of life. Although I am still undecided here as the teachers of both of my daughters fit this mold and have done an excellent job, But I believe that life studies (in many aspects) is something missing.
Anyway, in part 2 of this topic I will discuss what else is needed to prevent the Silvo treatment… and deal with the much harder topic of preventing bitterness & creating openness…

andEs Corner: the next Boom has started – part1

As I said in a previous blog, financial booms are history. I simply don’t believe and also don’t hope that we will see another one of them. With the Financial Boom comes the Financial Crash. And as I have said before: the Boom was practically invisible to most people (at least in Europe) but the Crash not.

However, I do believe a Boom will come – it will just not be a financial boom this time round. As with most cases as one boom turns into an ugly mess the next has already started to climb out of the crap it left behind. This time I suspect the boom will be in the area of open source. And I am not limiting this to the open source we have so far seen most of, IT, but in many areas of business. I know opensource in IT has been around for some time but it has now reached a critical mass as people start to use and contribute in greater numbers. I have even recently passed back code into the community for my eeepc ACPI Fn F2 button (ok it was small and insignificant but it’s years since I did coding for a living).
Opensource probably needs a more general definition: I think it is “free use and distribution of ideas with possibly the only restriction to the user being to redistribute any additions / modifications made to the idea”.

I think the Chinese are helping us here by NOT enforcing copyright / patent issues. And personally I agree with this. Nobody “owns an idea”; can you imagine if it were possible to trace the inventor of doughnuts? Would this person then be paid a couple of cents for each doughnut sold across the world. As ridiculous as companies like Qualcom – which to me make no sense. Armies of lawyers protecting their ideas with patents. Is this efficient on a global human scale? Wouldn’t it make much more sense for this to be an open source foundation sponsored by Nokia,  Sony Ericsson Huaweii and the like. In a similar way to google sponsoring the mozilla (firefox) foundation? Everyone benefits – except the negative work from patent lawyers (which we of course all indirectly sponsor). The companies not investing would of course have no say on the directions of research but would still be able to use the results. Similar to what is happening with the symbian OS.
Android (the OS on the googlephone) is another perfect example of how people can make money from open source. And in the end everyone benefits. But open source projects like firefox, linux, android and symbian also show how even in IT there are different models for making money without ruining the opensource ethic.

So, let’s look now at a couple of other industries outside of IT to see how here the opensource model is being used and could be extended….

Already in the fashion world with burdastyle.com there is a platform for opensource fashion design. This has the advantage for the designer that they get a lot of free marketing as their profiles get lots of hits. If they are clever they can then point to other platforms where their wares can be bought. And of course they can also perform quite clever market research amongst their peers.

Why should all car makers fight alone trying to make the perfect hybrid motor. They can still add their USP at the end of the chain. Who cares if the new earth saving battery is the same used everywhere – infact it would probably make a lot more sense if it were – reducing cost. And in the end everyone wins again. If the experts from Toyota, GM, VW, … got together in an opensource foundation type model I am sure we would get a better solution faster. The car industry has already started in a way in this area with a series of joint ventures in the areas of manufacturing – all is needed is a little more fantasy to identify the truly global components. This may not only save the troubled car industry but also the world.

The same could be true for many engineering type products. There is always a basic common fundamental with room for everyone to add a USP. Take a flat screen TV: most of the components are the same – i.e. this basic design could be opensourced with each vendor adding their polish or rendering engine as the USP.  Supporting an opensourced foundation spreading costs between many firms would enable experts from all companies to work together and ultimately make products cheaper for everyone.

I guess the writing of blogs is also an extreme form of opensourced thinking with ideas and thoughts being made freely available. Also, I see more and more e-books also often entering into this area. Here the aim being to promote other work of the same author. The reader has the chance to try and if good buy the next one.

Architecture has probably always worked in this mode – or at least I am not aware of a patent on a “square window” or “stairs down to cellar”.

If further proof is required that this model works check out the news in last weeks “Die Welt”: the fastest CPU of the world has just been produced by an international team focused around Karlsruhe Uni – it overtook the previous fastest from Intel. Proving that money is not the motivator.

So as you can see opensourced thinking is already not restricted to the IT SW domain and has potential to spread into others although it is important to understand that each industry will have a slightly different model. The learning curve will not be easy but I think as you see it just makes sense. I think many forms will be found such as foundations and I also believe research teams in universities will have a big role to play.
But as we all have ideas then I guess we can all make a difference. Open up your mind takes on a whole new meaning…

If I were a patent lawyer I would be retraining myself now on learning things like the various flavours of GPL , BSD, … and how these kind of license models can be used in the rest of the world.

There is a lot still to be discussed here so … to be continued…

andEs Corner: accountable capitalism – get rid of “them”

One of the things that has been milling round my mind over the last week has been the topic of accountability within the old world. Something that through globalisation and large corporations has seemingly vanished. The word’s “them” or “they” are used so often in the place of “we” or “us”. This was of course seen within the financial industry but, as I have given them enough stick recently, I would also like to show this time they are not the only guilty parties (although maybe they were the root cause).

What do I mean?

Well lets take a look at a world close to where I am: software development. If I do not give ownership of a SW component or module to a specific person or team that piece of code will be a disaster waiting to happen. Various developers all adding and changing bits of code – with nobody fully understanding how the code should work from end-to-end. Ultimately it will be full of bugs. Slow or unresponsive. Bloated. In short over time it will become useless or worse.

The same is true of any business. I can use one of my pet hates to explain this: the British rail “Service” now split into a myriad of companies and so ultimately removing any level of accountability or ownership. Talk to the representatives of the company running the train you want to take (which is late or cancelled) and they will blame the “them” running the rails. Or complain to them that there are no benches at the station to sit on to wait for your late train and they will blame the “they” running the station. This really shouldn’t have to concern me as a passenger: I bought the ticket from the train company so I ultimately have a “contract” with them. Whatever difficulties they have with the “them” delivering the rail service / running the station are not my issues. But good luck trying to argue this with Bob working at Customer “Information” on the platform at Manchester Piccadilly. In somebody’s excel sheet in the City Of London it may have made perfect sense to split up these parts of the company. In reality it simply doesn’t work.

Because of the simple fact of ownership.

The “thems” and “theys” are also present in single large companies, for example supermarkets when “they” didn’t deliver enough milk or in a chain of dry cleaners when “they” didn’t get your winter coat back yet; basically nobody is held responsible for the fact that now you are going to have to eat dry cornflakes or freeze on the weekend’s skiing trip. If companies are going to be successful in the new world I believe that ownership has to be pushed out across to each employee.

But first of all the **company** has to feel accountable.

If the world is going to change then it’s not only the corporate world that has to change but also government. The “anonymous MP concept” whereby once every four or five years at election time you get a leaflet through your door / see some posters on the street and maybe if very lucky get visited by the candidates has to vanish. I can see this working very well (not perfect but I am not asking for a perfect world) for example in our little village in Leopoldsdorf where I know our mayor and also many of the local council as they attend various social events in the summer and are easily accessible in the town hall during the week. Which is how it should be. I am paying them to work for me. So if they make a decision there is immediate and direct ownership of this decision. Of course there are different parties in the council so not all of the members will carry the ownership but it is also quite transparent as to who owns this decision or policy.

One of the major problems I see is that Austria is trying to move towards the English model – and the European Union model is also not helping with the EU politicians being even more faceless than Austrian national MPs. Infact the EU has introduced facelessness on a level rarely seen ANYWHERE in the world.

How this should work  i.e. the complete solution has to be the topic of a separate blog (especially as my ideas have to crystalise first)…

andEs Corner: when will corporations understand globalisation

Will multinational corporations understand globalisation or will they cease to exist.

This is a major challenge that I see coming.

So, why do I think they don’t understand globalisation? Because they have been mislead for years. But first of all a tiny bit of sidetracking…

I believe that this global meltdown had two major causes:

1. the set of well known reasons: subprime mortgage / credit fiascos etc. etc.

2. the real economy not really being real or stable on its own anymore

Point 1 has been discussed enough already so here I will start to discuss one aspect of point 2 (I think other topics will come in future blogs): globalisation where multinationals have been advised incorrectly for years about what this means.

From what I can see the only people in a corporation thinking about globalisation effects are the money men, CFO/CMO/… who look to either:

  1. save money (cheaper employees – or at least cheaper hourly rate)

  2. make more money (bigger markets)

But I think also the tech leaders CTO/CIO/… should be looking at one other aspect of globalisation if they want to make their projects more successful – and this is how does it effect decisions regarding where to locate employees or expertise.

At the moment I see multinationals making location based decisions on at the most two criteria:

1. hourly rate of employees between locations

2. geographical distance with relation to a customer or other team.

Infact, often companies also neglect item two. But there is a third factor which seems to have been completely neglected (or I have yet to see it be officially stated ANYWHERE): that of national trait.

I think it there are some well known national traits like English people drink beer quickly, Germans eat lots of sausage and the French can’t go to bed without a red wine. But there are other common traits too. And ones much more interesting for multinationals.

I am not an anthropologist so I cannot provide you here with a definitive list of where to do what jobs but to provide a couple of examples of what I mean, based purely on my experiences (DISCLAIMER: and again not applying to everyone I have met!!); for example Germans are excellent testers. Possibly the best in the world. They take pride in finding a fault and getting to the bottom of it. It is the Deutsche Grundlichkeit that takes full effect here. The people I worked with in Canada were the best designers I have ever worked with. I guess this must be related to all of the long winters stuck in doors with nothing else to contemplate apart from their belly buttons (actually I think it’s mostly to do with the freedom & lack of fear which are both essential for creativity). Indonesians seem to be some of the most persistent people I have met and also hardest to demotivate; nothing seems to phase them – despite the chaos that seems to reign there which makes them excellent at integrating systems where interfaces are not well defined; Going with the flow is an Indonesian trait (if you listen carefully there is a flow and they seem adept at jumping into it.). This could be related to the TERRIBLE traffic there.

Of course a national trait does not apply to every single person in that country BUT it does apply to the majority. And for the long term success of a company it is certainly a more valuable criteria too use when setting up a location strategy than hourly rate which varies greatly over time (exchange rates, wage rises, …) and ultimately says nothing. (IF you are going to measure purely on a cost basis then hourly rate is not sufficient. Total cost of product needs to be considered. This is a more long term average cost with factors such as quality, travel, employee fluctuation, training etc. all factored in.)

So, why have corporations been so blind to this? Well, this goes back to other reasons related to business practise in the old world:

1. they are thinking again in financial quarters; focused on giving quick dividends. Not considering long term goals and strategies. And they rarely stay in the their jobs long enough to get past thinking beyond hourly rate.

2. they have lost any understanding of actually how they do business and what makes REAL sense – choosing rather to listen to what market analysts tell them or their share price value.

3. it is much easier to make a decision based on one simple number than a whole list of factors – i.e. out of pure laziness.

4. because everyone else is doing it. The sheep mentality. There seems to be such a common understanding that it makes sense to consider only hourly rate that the old saying “you never got fired for buying IBM” could almost be replaced with “you never got fired for moving a project to India/China/Vietnam/Atlantis” (assuming dolphins will be the ultimate cheap labour once labour prices have normalised).

So if you are a CEO running a global company it would be a sin not to make use of the global pool of traits at your disposal. Start working. Start thinking. It is YOUR DECISION. And hire an anthropologist.

So what do you think? Am I totally wrong? Do you have other traits you can think of? What traits fit to the english? 😉

andEs Corner: shares, the root of all evil

The more I think about what is wrong with the old system (and believe me this thinking has been going for a decade – just maybe restarted a thread due to the recent occurrences) the more I think that the root of all this evil is shares. Ok, well the real root cause is as we know greed but the instrument maybe most misused is shares. I am not so sure we can cure greed but we can start to take away it’s heroin.

I am much more a fan of loans, or in financial market terms bonds. Why is this?

Let me look at an extreme example to explain this: assume I worked for the supplier of network equipment for mobile operators (which coincidentally I do) and a friend of mine was a very successful hairdresser who had some money to spare (which coincidentally I don’t). He decided to invest his money in shares in our company. In the current world he would then have some power over decisions made at the company despite, as a hairdresser, not knowing ANYTHING about what we are doing. And also not really wanting to. It would make much more sense for him to invest in bonds. Here he would have fixed return rate and it wouldn’t matter for him how our company managed it. He also wouldn’t have to check daily the share value. It also allows our company to focus on mid and long term goals instead of always having to think in evil quarter of year segments. And it allows our company to actually deal with decision making ALONE allowing our CEO to focus on the REALLY important things in running a company (i.e. based on technical strategy and not totally misleading KPIs – actually maybe KPIs deserve their own flaming blog – they are almost as bad as shares as they are always defined so badly as to be evil) …

And yes I do think the people managing an equity fund have about as much knowledge about how a supplier for mobile operators works as a hairdresser…

Disclaimer: I have nothing against hairdressers – the same would apply if the example were reversed – what does a mobile network supplier now about hair extensions? I hope nothing…)