Future of your Business, Family and Wider World by Dr Patrick Dixon, Futurist Speaker, Keynotes on Growth Strategies and Leadership, Lecture Slides, Articles and Videos from Conferences - 15 million unique visitors to MAIN Futurist site (articles / keynotes / videos) - link on right to www.globalchange.com
February 09, 2004
Future of marketing - global business and consumer trends: "Keynote speech by Dr Patrick Dixon for Finland Marketing Federation in Helsinki, audience of 500, plus many other resources on the future of marketing and consumer trends: direct mail, network, email, strategies, ideas, relationship marketing, market research, consumer reports, campaign slogans.
Themes: branding, successful brands, new consumer values, slogans for the third millennium, direct marketing in the mobile digital age, how to reach target groups more effectively, product placement, designing and testing future advertising campaigns, image-building, corporate identity, selling into developing markets, understanding consumer preferences and behavior."
Themes: branding, successful brands, new consumer values, slogans for the third millennium, direct marketing in the mobile digital age, how to reach target groups more effectively, product placement, designing and testing future advertising campaigns, image-building, corporate identity, selling into developing markets, understanding consumer preferences and behavior."
February 08, 2004
Future of banks and financial services - major challenges - Web TV interview with Dr Patrick Dixon Futurist: "Internet banking, banking trends, free internet banking, internet banking uk, compare internet banking, online banking internet banking security information, future of electronic banking, online banking internet banking security, history of internet banking, advantages of internet banking, offshore internet banking, internet security online banking, national internet banking, the history of internet banking."
Future of Banking and Financial Services
See huge number of resources on the future of banking, insurance industry trends, risk management, internet banking, security issues, investment banking, retail banking and private banking.
See huge number of resources on the future of banking, insurance industry trends, risk management, internet banking, security issues, investment banking, retail banking and private banking.
Conjoined twins: Conjoined Twins: Tragedy and Joy - twins with two heads and other treatment dilemmas.
Should doctors decide (or parents or lawyers in courts) whether one should die so the other conjoined twin can live? What are conjoined twins? Two heads on one baby. Moral / ethical issues and debates.
Conjoined twins (or Siamese twins) are often in the news, for example this week following the tragic death of a baby called Rebeca Martinez in the Dominican Republic, born with a two heads - joined at the skull - after doctors operated to remove the additional face, brain and other structures.
We saw another tragedy in 2000 following the arrival in the UK of distraught parents from the Maltese Island Gozo, seeking specialist surgical help to separate their two newborn babies, Jodie and Mary. Pediatric surgeons at St Mary's Hospital in Manchester had no experience of separating conjoined twins but feared that unless they acted fast, both would die. The parents were told that despite appearances, Mary's internal organs were so poorly formed that she could not survive without being joined to Jodie. The parents of the conjoined twins refused an operation, and the case was heard in court. The Judges ordered that the operation should go ahead..... but.....
What are Conjoined Twins?
Conjoined twins are formed from a single egg which develops into two almost separate balls of cells. In normal twinning, each ball becomes an identical twin. As a result cells in conjoined twins become confused about where they are in the body - indeed which of the two conjoined twins they are actually in.
In normal embryo and foetus development every cell knows where it is in the body because the neighbours produce chemical messages. So a skin cell knows not only it is skin, but that it is - say - nose skin, rather than chin or ear or lip skin. In conjoined twins these chemical messages don't work properly - how can they? The end results can be very bizarre: a single organism with two heads, two hearts, four legs and arms - or is that single org"
I once was present in the labour room when a child was born with two heads - yes two heads - on a single set of enlarged shoulders. conjoined twins or just another major abnormality? So then. you can't label all conjoined twins the same. There are huge variations in the degree of joining. Some are born with two bodies and one head for example.
In the case above, the two headed child / conjoined twins was / were stillborn. But what if it / they had stayed alive? What if we had landed up with two thoughtful conjoined twin brains on the same body - perhaps only one actually in control of movements below the neck?
Strangely enough, a surgeon has made an artificial conjoined twin of a monkey, onto which a second head was transplanted. (See video).
The moral debate on separation of conjoined twins
In fact the situation with the conjoined twins in the UK was in a way quite similar. Although at first sight each appeared to have a separate well formed body with some joining at the lower body, detailed tests showed these conjoined twins were very unequal - one was providing the heart, lungs and many other basic functions.
The other conjoined twin was very poorly equipped for separate life. To make matters worse, these conjoined twins, Jodie and Mary, were also to some extent mutually dependent. If separated, the stronger and more capable conjoined twin (Jodie) would need huge amounts of surgery over subsequent years, and was likely to suffer significant handicap.
The parents came in a hurry to the UK because they heard that Britain was expert on the management of conjoined twins, hoping no doubt that both could be separated with few long term problems. The long court battle was decided with doctors being given the right to cut off the weaker conjoined twin, thereby killing Mary, to preserve the life of Jodie - against the parent's wishes. They felt that if the two could not be safely separated then they should be left together and nursed with loving care until natural events took over. Some doctors said that both would soon be dead in that case. Others said that these two conjoined twins could survive far longer with good basic care.
Doctors have second thoughts on separation of conjoined twins
Of course, once the court battle was won by doctors, they began to have second thoughts. It is a brave doctor indeed who is willing to take the knife to two conjoined twins, both of which are at that point alive and growing, and see perhaps both conjoined twins die in the operating theatre or very shortly afterwards. Easier to go ahead if the parents want their conjoined twins separated and understand and accept the risks - but what if you have had to force the whole thing on them in the first place?
And there is another issue. The survivor of these conjoined twins would need huge care efforts and community support. The parents said this was unlikely in their own culture.
A fundamental problem in conjoined twin decisions is that the parents themselves may not always agree, they may each feel differently on different days. It is common for parents to feel somehow that the birth of conjoined twins is their fault, or to blame each other, doctors, society or God. The natural joy of birth has been replaced by overwhelming grief for the loss of what might have been - in this case one or two perfectly normal children. This is a hard place to make life-changing decisions about conjoined twins management.
Doctors should treat with great care
My own view, on balance is that doctors should tread with great care when parents are refusing certain treatments for their children, where the outcome of successful treatment is likely to be severe handicap and loss of quality of life. It is a human right for any human being to refuse medical treatment, and it is the responsibility in the case of children for parents to take those decisions on behalf of their children. In this case the fight was because some doctors disagreed with the parents and wanted to take that responsibility away.
But these parents had come to the UK in good faith, seeking advice on the management of conjoined twins. They did not expect to find themselves imprisoned in the country, forbidden to take their children back home, and forced to take that advice, when they believed it to be morally wrong. Their conjoined children were essentially kidnapped by court, and imprisoned against their parents' will in the UK. That does not sit comfortably with me.
Medicine gone mad
Too many times I have seen medicine gone stark raving lunatic mad with aggressive over-treatment and stupid decisions. Even the Catholic church, traditionally the most conservative in these matters, has taken the position that doctors should not strive officiously to keep someone alive. This is a common issue in the care of those dying of advanced cancer. It was in keeping with this that the Vatican offered a safe refuge and hospice care.
Here is a strange irony: if mother had arrived a day before going into labour, under existing UK law doctors could have killed the conjoined twins in the womb and then forced a labour and buried or cremated them without any fuss whatsoever. The UK has one of the laxest abortion laws in the world. But the moment these two conjoined twins were born, the world began to worry that every possible effort should be used to at least keep one alive.
It would be far safer for the future of humanity if we meddled less, and allowed nature far more room to take its own course, neither slaughtering babies in the womb just hours or minutes before birth, nor going over the top to fight for life at all possible costs after birth.
* The Siamese name often used for conjoined twins comes from the well known twins Eng and Chang born to Chinese parents in Siam (now Thailand). The first surgical separation of Siamese twins was in 1953.
Should doctors decide (or parents or lawyers in courts) whether one should die so the other conjoined twin can live? What are conjoined twins? Two heads on one baby. Moral / ethical issues and debates.
Conjoined twins (or Siamese twins) are often in the news, for example this week following the tragic death of a baby called Rebeca Martinez in the Dominican Republic, born with a two heads - joined at the skull - after doctors operated to remove the additional face, brain and other structures.
We saw another tragedy in 2000 following the arrival in the UK of distraught parents from the Maltese Island Gozo, seeking specialist surgical help to separate their two newborn babies, Jodie and Mary. Pediatric surgeons at St Mary's Hospital in Manchester had no experience of separating conjoined twins but feared that unless they acted fast, both would die. The parents were told that despite appearances, Mary's internal organs were so poorly formed that she could not survive without being joined to Jodie. The parents of the conjoined twins refused an operation, and the case was heard in court. The Judges ordered that the operation should go ahead..... but.....
What are Conjoined Twins?
Conjoined twins are formed from a single egg which develops into two almost separate balls of cells. In normal twinning, each ball becomes an identical twin. As a result cells in conjoined twins become confused about where they are in the body - indeed which of the two conjoined twins they are actually in.
In normal embryo and foetus development every cell knows where it is in the body because the neighbours produce chemical messages. So a skin cell knows not only it is skin, but that it is - say - nose skin, rather than chin or ear or lip skin. In conjoined twins these chemical messages don't work properly - how can they? The end results can be very bizarre: a single organism with two heads, two hearts, four legs and arms - or is that single org"
I once was present in the labour room when a child was born with two heads - yes two heads - on a single set of enlarged shoulders. conjoined twins or just another major abnormality? So then. you can't label all conjoined twins the same. There are huge variations in the degree of joining. Some are born with two bodies and one head for example.
In the case above, the two headed child / conjoined twins was / were stillborn. But what if it / they had stayed alive? What if we had landed up with two thoughtful conjoined twin brains on the same body - perhaps only one actually in control of movements below the neck?
Strangely enough, a surgeon has made an artificial conjoined twin of a monkey, onto which a second head was transplanted. (See video).
The moral debate on separation of conjoined twins
In fact the situation with the conjoined twins in the UK was in a way quite similar. Although at first sight each appeared to have a separate well formed body with some joining at the lower body, detailed tests showed these conjoined twins were very unequal - one was providing the heart, lungs and many other basic functions.
The other conjoined twin was very poorly equipped for separate life. To make matters worse, these conjoined twins, Jodie and Mary, were also to some extent mutually dependent. If separated, the stronger and more capable conjoined twin (Jodie) would need huge amounts of surgery over subsequent years, and was likely to suffer significant handicap.
The parents came in a hurry to the UK because they heard that Britain was expert on the management of conjoined twins, hoping no doubt that both could be separated with few long term problems. The long court battle was decided with doctors being given the right to cut off the weaker conjoined twin, thereby killing Mary, to preserve the life of Jodie - against the parent's wishes. They felt that if the two could not be safely separated then they should be left together and nursed with loving care until natural events took over. Some doctors said that both would soon be dead in that case. Others said that these two conjoined twins could survive far longer with good basic care.
Doctors have second thoughts on separation of conjoined twins
Of course, once the court battle was won by doctors, they began to have second thoughts. It is a brave doctor indeed who is willing to take the knife to two conjoined twins, both of which are at that point alive and growing, and see perhaps both conjoined twins die in the operating theatre or very shortly afterwards. Easier to go ahead if the parents want their conjoined twins separated and understand and accept the risks - but what if you have had to force the whole thing on them in the first place?
And there is another issue. The survivor of these conjoined twins would need huge care efforts and community support. The parents said this was unlikely in their own culture.
A fundamental problem in conjoined twin decisions is that the parents themselves may not always agree, they may each feel differently on different days. It is common for parents to feel somehow that the birth of conjoined twins is their fault, or to blame each other, doctors, society or God. The natural joy of birth has been replaced by overwhelming grief for the loss of what might have been - in this case one or two perfectly normal children. This is a hard place to make life-changing decisions about conjoined twins management.
Doctors should treat with great care
My own view, on balance is that doctors should tread with great care when parents are refusing certain treatments for their children, where the outcome of successful treatment is likely to be severe handicap and loss of quality of life. It is a human right for any human being to refuse medical treatment, and it is the responsibility in the case of children for parents to take those decisions on behalf of their children. In this case the fight was because some doctors disagreed with the parents and wanted to take that responsibility away.
But these parents had come to the UK in good faith, seeking advice on the management of conjoined twins. They did not expect to find themselves imprisoned in the country, forbidden to take their children back home, and forced to take that advice, when they believed it to be morally wrong. Their conjoined children were essentially kidnapped by court, and imprisoned against their parents' will in the UK. That does not sit comfortably with me.
Medicine gone mad
Too many times I have seen medicine gone stark raving lunatic mad with aggressive over-treatment and stupid decisions. Even the Catholic church, traditionally the most conservative in these matters, has taken the position that doctors should not strive officiously to keep someone alive. This is a common issue in the care of those dying of advanced cancer. It was in keeping with this that the Vatican offered a safe refuge and hospice care.
Here is a strange irony: if mother had arrived a day before going into labour, under existing UK law doctors could have killed the conjoined twins in the womb and then forced a labour and buried or cremated them without any fuss whatsoever. The UK has one of the laxest abortion laws in the world. But the moment these two conjoined twins were born, the world began to worry that every possible effort should be used to at least keep one alive.
It would be far safer for the future of humanity if we meddled less, and allowed nature far more room to take its own course, neither slaughtering babies in the womb just hours or minutes before birth, nor going over the top to fight for life at all possible costs after birth.
* The Siamese name often used for conjoined twins comes from the well known twins Eng and Chang born to Chinese parents in Siam (now Thailand). The first surgical separation of Siamese twins was in 1953.
February 06, 2004
The truth about the Iraq war
The Truth about the Iraq War
We can debate the morality and chaotic aftermath of the 2003 Iraq War, and miss the bigger picture, which is far wider than the post 9/11 war against terror, or the current crisis among Palestinians and Israelis, or the situation in Afghanistan, Saudi Arabia, North Korea, or the convulsions in the UN and the EU, or US global dominance and accusations of aggressive imperialism.
The problem of the global village - and the truth about the Iraq war
Here is a simple but fundamental question, which was at the heart of the Iraq war controversy: how is the global village to run and be governed? It’s the hidden basis of the political conflicts in the UN over Iraq and similar issues.
The inescapable fact is that we are moving further every day to a one–world economy without a one–world government or legal structure.
Last-century thinking describes a world of nation states, where national sovereignty is absolute and cannot be violated under international law except to resist aggression and in self-defence. That was the French and German position on the war with Iraq and it has very powerful historical precedent.
But life has moved on. We will need a new model altogether if we are to live in prosperity and peace during the third millennium. That’s because at least 4 billion people are already living in towns, cities or rural areas which are profoundly affected by globalisation and the techno-communication revolution. They are already citizens of the global village, or the global nation of all nations.
The start of a new world order began with war in Iraq
Since the collapse of Communism we have seen the beginnings of a new world order: all nations working together in a semi-democratic global body to seek the common good, for the whole of humanity. It may be primitive and rather innefective, but is becoming more significant.
In the last decade the UN has grown in stature from a feeble committee weakened by bickering, paralysed by a tiny minority of countries who had the right of veto. The UN has become a stronger unifying force in world affairs. That’s why sharp debates over how to discipline Iraq’s government have been all the more shocking.
But don’t be misled by aggressive speeches: when you think back to the days of the Cold War, the consensus amongst developed nations in early 2003 for some kind of significant UN intervention in Iraq’s affairs was overwhelming by historical standards, although you would have been forgiven for thinking the opposite from the media coverage of UN voting intentions.
Lesson from the Cold War
During the Cold War, any threat of military invasion of a country by Russia or America would have produced in most cases immediate counter-threats by the other. As a result most wars were waged by proxy in far away places, between small nations funded and armed by both superpowers.
But in March 2003, despite all the hot air, not one nation in the world offered to fight for Sadam and protect Iraq from American invasion, least of all Russia or China. Not one other national army offered soldiers or weapons to protect Iraq national sovereignty, to liberate the people of Bagdad from foreign US-dominated forces, to underpin survival of the Sadam regime.
Sure, some nations held back, abstaining, remaining neutral. Some national leaders were making strong statements of protest - but these turned out to be only words, not backed by bullets. Where were the countries lining up to sell hundreds of high-tech missiles or tanks or planes to Iraq?
So the strange reality is that while it appears at first sight that the new fragile world order is crumbling into the dust, the opposite may be the case. Of course much depend on how Iraq instabily settles or flares, the early and "successful" withdrawal of US and other foreign troops, life for the Iraqi people post-withdrawal, and the impact on the region as a whole.
The current tensions and conflicts may well fuel further waves of terrorism, especially if the US fails to take a powerful lead, together with international support, to help establish a “just” Middle East peace settlement for both Palestinians and Israelis. It may also lead to destabilising regime changes in other Arab nations, replacing family dynasties with anti-American Islamic fundamentalism in countries like Saudi Arabia. But the current spats are unlikely to lead to destruction of the UN, nor the break up of the EU, nor the rapid neutering of American power - quite the opposite.
The world is far more united than words suggest
The truth is that most nations of the world united in condemnation of Iraq’s invasion of Kuwait, and again in imposing sanctions of many kinds over more than a decade since. They united again post-9/11 in a coalition against terror and more recently in insisting that UN-monitored disarmament took place.
When it came to discussions about weapons inspections and the threat of armed intervention, disagreement was almost entirely over process rather than substance: how disarmament should be achieved, measured, monitored and if necessary imposed, and over what timescale? At what point should the international community conclude that all alternatives to armed intervention have been exhausted? What form should military intervention take under such circumstances? How should it be led and financed? How should the peace be kept, reconstruction proceed and national autonomy be re-established?
Our memories are short. The level of multinational consensus about the need if necessary to intervene in the affairs of rogue states is extraordinary and unusual in world history.
That is why there is such a consensus about Iran now amongst France, Germany, Russia, UK, US, China, India and many other less powerful nations about the need for the international community to act by force if necessary, if Iran continues despite many warnings with an active programme to rapidly develop nuclear warheads.
And so we return to the global village – or rather the global nation of all humanity.
Economically, the world is already operating as a single closely inter-related organism. The problem is that mechanisms for governance, law and order are still primitive – feudal or medieval in nature. We have yet to grow up.
So we have “cities” in the global nation behaving like little kingdoms, taking the law into their own hands whenever it suits them (Russia and America), while at other times appealing to the “government” to impose common will on others.
What of the future? Life after the Iraq war will never be the same
Expect the world-wide love-hate relationship with America to become even more polarised, on the one hand hungrily devouring American media culture, on the other hand increasingly bitter and resentful at American power and lack of sensitivity to how the rest of the world works.
Expect new generations of terrorists to take courage and exact “revenge”, with the aim of “wounding American pride and arrogance”. Every one of them will tell you they are fighting for a higher moral cause.
Expect America to continue to feel deeply hurt, increasingly isolated and angry, the target of frequent terror attacks and general animosity in many places, acting forcefully around the world wherever it feels national interests dictate, and withdrawing to lick its wounds when it does not.
Expect America to be increasingly hostile to the idea of submitting in any respect whatsoever to the will of the global majority, whether on the environment, trade agreements or any other matter, and to be in even less mood to compromise than pre-Iraq War. Expect the US at the same time to make intensive diplomatic efforts to try to win back lost friends, but with ever-deepening suspicion of UN controls, inefficiency, corruption and influence.
In contrast, expect almost the entire rest of the world to invest intensively in the UN as the sole vehicle for solving complex international issues, in a quest to create a more sustainable and peaceful future.
Expect the EU to forge ahead with renewed energy to create structures to balance US power economically and militarily. But the EU will be severely restrained by ongoing internal conflicts, which will be made worse by every new country joining, as well as by unfolding events. Expect the UK to be frozen out of significant decisions by France and Germany who will seize every chance to dominate the future of the EU together, and to humiliate the US. Expect UK doubts to grow about whether it will ever sit comfortably within a Franco-German led federation of EU states. Expect France and Germany to be increasingly worried about rapid enlargement, and dilution of their power by pro-US nations with shaky economies, arguing passionately that the world will be a better place if there is a significant European counter-balance to the US.
Expect several non-European nations to embark on dangerous military adventures, arguing that the US has set a new model for them to copy: “legally” invading other countries when they could possibly be a future threat. India and Pakistan, North and South Korea and so on. These local wars could produce huge problems for the future stability of the world. Expect concerns about this to lead to calls for stronger structures and processes within the UN.
Reforming the UN as a more democratic global authority
A key challenge will be to reform the UN so that it can become more effective and fair as a federation of nations. The current powers of veto are anti-democratic and smack of nineteenth tyranny, held as they are by very few supremely powerful, wealthy nations,
The UN will only carry true global moral authority when each nation is able to cast votes in proportion to it’s contribution to global population, so that each citizen is represented equally without fear or favour. But this is an unthinkable prospect.
Even an idea of such a global assembly will provoke huge reactions in wealthy nations, because it strikes to the root of the most important unsolved problem on the planet today: the fact that most people are extremely poor, with no voice and no vote in world affairs, living off less than $2 a day.
Why global democracy is so unpopular
And so we find an interesting fact: those who live in democratic nations, who uphold democracy as the only honourable form of government, are not really true democrats after all. They have little or no interest in global democracy, in a nation of nations, in seeking the common good of the whole of humanity.
And it is this single fact, more than any other, this inequality of wealth and privilege in our shrinking global village, that will make it more likely that our future is dominate by terror groups, freedom fighters, justice-seekers, hell-raisers, protestors and violent agitators.
The lesson of history is that tyrannies and dictatorships get overthrown, that the will of the majority eventually finds a voice and freedom.
And that is exactly what will eventually happen in our non-democratic, dysfunctional, unjust, global village.
We cannot wind back the clock
We cannot wind the clock back fifty years to a cosy world where these country by country contrasts no longer matter. CNN and Hollywood have seen to that.
On TV screens in the poorest slums on earth, millions of people see their wealthy neighbours go about their daily lives while they scrabble in the dust to find money for basic food and shelter. They have seen the truth.
The digital society created the global village and globalisation the basic rules for trading within it, but neither has taught us how to live together in such a small cultural space. This is the greatest moral challenge of our time.
In a future world where small numbers of activists will wield unimagineable power with dirty bombs, nuclear devices, chemical weapons and strange viruses, our very survival will depend on finding a way to live together in harmony, with freedom and justice for all.
And that will require further extrensions of global governance.
History may record that it took us many decades, possibly, to agree to it – but what will be the pain along the way?
The Truth about the Iraq War
We can debate the morality and chaotic aftermath of the 2003 Iraq War, and miss the bigger picture, which is far wider than the post 9/11 war against terror, or the current crisis among Palestinians and Israelis, or the situation in Afghanistan, Saudi Arabia, North Korea, or the convulsions in the UN and the EU, or US global dominance and accusations of aggressive imperialism.
The problem of the global village - and the truth about the Iraq war
Here is a simple but fundamental question, which was at the heart of the Iraq war controversy: how is the global village to run and be governed? It’s the hidden basis of the political conflicts in the UN over Iraq and similar issues.
The inescapable fact is that we are moving further every day to a one–world economy without a one–world government or legal structure.
Last-century thinking describes a world of nation states, where national sovereignty is absolute and cannot be violated under international law except to resist aggression and in self-defence. That was the French and German position on the war with Iraq and it has very powerful historical precedent.
But life has moved on. We will need a new model altogether if we are to live in prosperity and peace during the third millennium. That’s because at least 4 billion people are already living in towns, cities or rural areas which are profoundly affected by globalisation and the techno-communication revolution. They are already citizens of the global village, or the global nation of all nations.
The start of a new world order began with war in Iraq
Since the collapse of Communism we have seen the beginnings of a new world order: all nations working together in a semi-democratic global body to seek the common good, for the whole of humanity. It may be primitive and rather innefective, but is becoming more significant.
In the last decade the UN has grown in stature from a feeble committee weakened by bickering, paralysed by a tiny minority of countries who had the right of veto. The UN has become a stronger unifying force in world affairs. That’s why sharp debates over how to discipline Iraq’s government have been all the more shocking.
But don’t be misled by aggressive speeches: when you think back to the days of the Cold War, the consensus amongst developed nations in early 2003 for some kind of significant UN intervention in Iraq’s affairs was overwhelming by historical standards, although you would have been forgiven for thinking the opposite from the media coverage of UN voting intentions.
Lesson from the Cold War
During the Cold War, any threat of military invasion of a country by Russia or America would have produced in most cases immediate counter-threats by the other. As a result most wars were waged by proxy in far away places, between small nations funded and armed by both superpowers.
But in March 2003, despite all the hot air, not one nation in the world offered to fight for Sadam and protect Iraq from American invasion, least of all Russia or China. Not one other national army offered soldiers or weapons to protect Iraq national sovereignty, to liberate the people of Bagdad from foreign US-dominated forces, to underpin survival of the Sadam regime.
Sure, some nations held back, abstaining, remaining neutral. Some national leaders were making strong statements of protest - but these turned out to be only words, not backed by bullets. Where were the countries lining up to sell hundreds of high-tech missiles or tanks or planes to Iraq?
So the strange reality is that while it appears at first sight that the new fragile world order is crumbling into the dust, the opposite may be the case. Of course much depend on how Iraq instabily settles or flares, the early and "successful" withdrawal of US and other foreign troops, life for the Iraqi people post-withdrawal, and the impact on the region as a whole.
The current tensions and conflicts may well fuel further waves of terrorism, especially if the US fails to take a powerful lead, together with international support, to help establish a “just” Middle East peace settlement for both Palestinians and Israelis. It may also lead to destabilising regime changes in other Arab nations, replacing family dynasties with anti-American Islamic fundamentalism in countries like Saudi Arabia. But the current spats are unlikely to lead to destruction of the UN, nor the break up of the EU, nor the rapid neutering of American power - quite the opposite.
The world is far more united than words suggest
The truth is that most nations of the world united in condemnation of Iraq’s invasion of Kuwait, and again in imposing sanctions of many kinds over more than a decade since. They united again post-9/11 in a coalition against terror and more recently in insisting that UN-monitored disarmament took place.
When it came to discussions about weapons inspections and the threat of armed intervention, disagreement was almost entirely over process rather than substance: how disarmament should be achieved, measured, monitored and if necessary imposed, and over what timescale? At what point should the international community conclude that all alternatives to armed intervention have been exhausted? What form should military intervention take under such circumstances? How should it be led and financed? How should the peace be kept, reconstruction proceed and national autonomy be re-established?
Our memories are short. The level of multinational consensus about the need if necessary to intervene in the affairs of rogue states is extraordinary and unusual in world history.
That is why there is such a consensus about Iran now amongst France, Germany, Russia, UK, US, China, India and many other less powerful nations about the need for the international community to act by force if necessary, if Iran continues despite many warnings with an active programme to rapidly develop nuclear warheads.
And so we return to the global village – or rather the global nation of all humanity.
Economically, the world is already operating as a single closely inter-related organism. The problem is that mechanisms for governance, law and order are still primitive – feudal or medieval in nature. We have yet to grow up.
So we have “cities” in the global nation behaving like little kingdoms, taking the law into their own hands whenever it suits them (Russia and America), while at other times appealing to the “government” to impose common will on others.
What of the future? Life after the Iraq war will never be the same
Expect the world-wide love-hate relationship with America to become even more polarised, on the one hand hungrily devouring American media culture, on the other hand increasingly bitter and resentful at American power and lack of sensitivity to how the rest of the world works.
Expect new generations of terrorists to take courage and exact “revenge”, with the aim of “wounding American pride and arrogance”. Every one of them will tell you they are fighting for a higher moral cause.
Expect America to continue to feel deeply hurt, increasingly isolated and angry, the target of frequent terror attacks and general animosity in many places, acting forcefully around the world wherever it feels national interests dictate, and withdrawing to lick its wounds when it does not.
Expect America to be increasingly hostile to the idea of submitting in any respect whatsoever to the will of the global majority, whether on the environment, trade agreements or any other matter, and to be in even less mood to compromise than pre-Iraq War. Expect the US at the same time to make intensive diplomatic efforts to try to win back lost friends, but with ever-deepening suspicion of UN controls, inefficiency, corruption and influence.
In contrast, expect almost the entire rest of the world to invest intensively in the UN as the sole vehicle for solving complex international issues, in a quest to create a more sustainable and peaceful future.
Expect the EU to forge ahead with renewed energy to create structures to balance US power economically and militarily. But the EU will be severely restrained by ongoing internal conflicts, which will be made worse by every new country joining, as well as by unfolding events. Expect the UK to be frozen out of significant decisions by France and Germany who will seize every chance to dominate the future of the EU together, and to humiliate the US. Expect UK doubts to grow about whether it will ever sit comfortably within a Franco-German led federation of EU states. Expect France and Germany to be increasingly worried about rapid enlargement, and dilution of their power by pro-US nations with shaky economies, arguing passionately that the world will be a better place if there is a significant European counter-balance to the US.
Expect several non-European nations to embark on dangerous military adventures, arguing that the US has set a new model for them to copy: “legally” invading other countries when they could possibly be a future threat. India and Pakistan, North and South Korea and so on. These local wars could produce huge problems for the future stability of the world. Expect concerns about this to lead to calls for stronger structures and processes within the UN.
Reforming the UN as a more democratic global authority
A key challenge will be to reform the UN so that it can become more effective and fair as a federation of nations. The current powers of veto are anti-democratic and smack of nineteenth tyranny, held as they are by very few supremely powerful, wealthy nations,
The UN will only carry true global moral authority when each nation is able to cast votes in proportion to it’s contribution to global population, so that each citizen is represented equally without fear or favour. But this is an unthinkable prospect.
Even an idea of such a global assembly will provoke huge reactions in wealthy nations, because it strikes to the root of the most important unsolved problem on the planet today: the fact that most people are extremely poor, with no voice and no vote in world affairs, living off less than $2 a day.
Why global democracy is so unpopular
And so we find an interesting fact: those who live in democratic nations, who uphold democracy as the only honourable form of government, are not really true democrats after all. They have little or no interest in global democracy, in a nation of nations, in seeking the common good of the whole of humanity.
And it is this single fact, more than any other, this inequality of wealth and privilege in our shrinking global village, that will make it more likely that our future is dominate by terror groups, freedom fighters, justice-seekers, hell-raisers, protestors and violent agitators.
The lesson of history is that tyrannies and dictatorships get overthrown, that the will of the majority eventually finds a voice and freedom.
And that is exactly what will eventually happen in our non-democratic, dysfunctional, unjust, global village.
We cannot wind back the clock
We cannot wind the clock back fifty years to a cosy world where these country by country contrasts no longer matter. CNN and Hollywood have seen to that.
On TV screens in the poorest slums on earth, millions of people see their wealthy neighbours go about their daily lives while they scrabble in the dust to find money for basic food and shelter. They have seen the truth.
The digital society created the global village and globalisation the basic rules for trading within it, but neither has taught us how to live together in such a small cultural space. This is the greatest moral challenge of our time.
In a future world where small numbers of activists will wield unimagineable power with dirty bombs, nuclear devices, chemical weapons and strange viruses, our very survival will depend on finding a way to live together in harmony, with freedom and justice for all.
And that will require further extrensions of global governance.
History may record that it took us many decades, possibly, to agree to it – but what will be the pain along the way?
February 05, 2004
How to Survive the Future: "FUTUREWISE - How to survive the FUTURE
Six Faces of Global Change - new edition of book just out this month
Managing through the downturn
Many CEOs I know are feeling battered and bruised right now. Hit by one event after another, there's little time to regroup or reflect, and the top of a corporation can be a lonely place. Profit warnings, share price pressures, painful layoffs and great geopolitical uncertainties can sweep away even the most comprehensive strategies - and that's despite outstanding management over many years. (This article was published in Leigh Advisor June 2002)
It's easy to lose sight of the bigger picture in the rush to cut cost and conserve cash. Hopefully you succeed in protecting the business, satisfying shareholders and analysts, but what about morale and momentum in the senior team?
To be a winner in the next three years you need to use the downturn to reshape for growth, propelled by an unshakeable conviction that your mission is still important, that more prosperous times lie ahead, and that in some way your company is helping to build a better kind of world. Your own passion for running the race matters most of all in a downturn when people are insecure and loyalty is tested.
Your corporation's future will be dominated by six factors, or faces of a cube, spelling F U T U R E. So if you are going to cut, then cut carefully for healthy fresh growth, and take the rest of the workforce with you with a renewed sense of direction. And what direction is that?
Fast: The world is changing faster than boards can think, so survival means scenario planning as far as possible before events happen, with rapid response plans, making every dollar count. Market research can't predict the future in a rapidly changing world - it just shows what consumers think. We "
Six Faces of Global Change - new edition of book just out this month
Managing through the downturn
Many CEOs I know are feeling battered and bruised right now. Hit by one event after another, there's little time to regroup or reflect, and the top of a corporation can be a lonely place. Profit warnings, share price pressures, painful layoffs and great geopolitical uncertainties can sweep away even the most comprehensive strategies - and that's despite outstanding management over many years. (This article was published in Leigh Advisor June 2002)
It's easy to lose sight of the bigger picture in the rush to cut cost and conserve cash. Hopefully you succeed in protecting the business, satisfying shareholders and analysts, but what about morale and momentum in the senior team?
To be a winner in the next three years you need to use the downturn to reshape for growth, propelled by an unshakeable conviction that your mission is still important, that more prosperous times lie ahead, and that in some way your company is helping to build a better kind of world. Your own passion for running the race matters most of all in a downturn when people are insecure and loyalty is tested.
Your corporation's future will be dominated by six factors, or faces of a cube, spelling F U T U R E. So if you are going to cut, then cut carefully for healthy fresh growth, and take the rest of the workforce with you with a renewed sense of direction. And what direction is that?
Fast: The world is changing faster than boards can think, so survival means scenario planning as far as possible before events happen, with rapid response plans, making every dollar count. Market research can't predict the future in a rapidly changing world - it just shows what consumers think. We "
February 02, 2004
Death of shareholder value as main driver of business strategy
Future Death of Shareholder Value:
Why current obsession with "bottom-line profit" and "shareholder value" is looking tired: having failed to help leadership, motivation, marketing, product innovation, change management, or customer loyalty - danger of destroying the value that people sought to gain
You can have the greatest strategy in the world but if your vision of the future is wrong you just land up travelling even faster in the wrong direction. A prime example of this is the dangerous obsession with shareholder value and bottom line profit, which has driven board policies of many multinationals to the point of distraction and damage.
* Dr Patrick Dixon is Chairman of Global Change Ltd, a regular contributor to Business School executive programmes, and has recently been ranked as one of the fifty most influential business thinkers alive today (Thinkers50.com).
The language in some corporations is already changing. "Shareholder value" is being retired from such places as corporate websites. Expect further steps in this direction over the next three to five years.
1) Shareholder value has failed to motivate boards or staff
"Shareholder value" has been a useful emphasis for companies which were insufficiently focussed on profit-making, cost-reduction and share price, particularly in a difficult economic climate where falls in share prices can lead rapidly to a hostile takeover. We have seen a number of events where wrong decisions have destroyed vast amounts of wealth in a short time, so many have argued that more attention to shareholder value is needed, not less.
But "shareholder value" implies that shares themselves have a "value" which has a rational basis. As we saw in the dot com boom and bust, and on many other occaisions, this is often not the case. On the contrary, we have witnessed an increasingly fickle and restless market, which has imposed near-impossible demands on boards to produce perfect results every quarter, resulting in very short-term thinking by executives.
Many CEOs have been acutely frustrated to find their well-crafted strategies swept away by alarming share price wobbles, each an over-reaction to some small piece of news about their own company or a competitor, or the industry or wider operating environment. "Our current share price makes no sense" is a common cry.
Too high a price can be just as damaging as under-valuation, because when the inevitable correction comes, the CEO can be hammered in the media for "destroying shareholder value" with "billions wiped off the value of the corporation in just a few months". The reality may be that the market over-priced, and is now under-pricing. Nothing much has changed in the meantime in the fundamentals of the business.
In any event, the outcome of prolonged turbullence is often the rapid departure of a Chairman or CEO who may in fact be a stronger and more experienced leader than the person dragged in at high speed to replace them.
It is all a question of perception.
A further complication is that CEOs are finding it increasingly difficult to know who their shareholders really are. The average share owned by an individual in the US is kept for just weeks or months. Churn has never been higher. Institutions are also constantly changing the balance of their investments, buying and dumping proportions of the same stocks on a daily basis.
The end result of all this is that every corporate strategy tends now to be accepted or rejected according to how the board thinks the market will react, and the market reacts how investors think other investors will react - based more on psychology, mood, emotion and intuition than pure logic or longer term conviction. Because investment funds often hold such large percentages of total shares, many CEOs are having to spend huge amounts of time trying to persuade a few individuals inside these institutions that they know what they are doing, and that the share price will rise.
I have sat in many internal presentations by CEOs to their own top teams, where they have laid out goals such as "increasing market capitalisation by 35% in three years" and so on. Even in a rising market such word and number games looked faintly ridiculous, since achieving such goals usually depends on a number of external factors such as competitor merger and acquisition activity. But in a falling market these kind of targets make a previously confident CEO the laughing stock of the corporation, and of the investment community. How do you measure shareholder value in a recession?
In the recent down-turn, many companies resorted to ever more complex graphs, formulae and tables to show how their own market capitalisation had fallen less than a benchmark of a carefully selected group of competitors. But every business is unique, particularly in these days of aggressive globalisation and multiple business units, so such comparisons can be superficial and naive.
"Underperforming" or "outperforming" are at the end very difficult judgments, which unfortunately are often muddled by short-termism. The most important assets of many companies are notoriously hard to value: for example the creative brain-power of a very talented new senior team, or a pipeline of products for a pharma company, none of which will come on-stream for a decade or more, or the future potential of a group of wealthy clients for cross-selling a new product range, or the good-will and respect at the highest levels of the government in China and so on.
You may disagree: you may consider yourself a great expert on corporate valuations and assessing corporate performance, but there is another, more fundamental problem. The trouble is that "shareholder value" (even if it can be reliably measured) cannot by itself as a concept create value. Nor can it create vision, nor direction, nor purpose, nor a sense of mission.
"Shareholder value" as a concept does not invent products, neither does it promote initiative, nor create ideas about new services. Nor does it inspire people to greater efficiency, especially when those efficiencies may come at inconvenience and cost to themselves or those they care about. For these and a host of other reason, by definition "shareholder value" cannot drive a business forward.
In fact the very opposite.
As we will see, "shareholder value" on it's own is a morally bankrupt, narrow idea that took root in investor minds, and then became the latest fad as a mindless, meaningless, last-century business mantra, chanted in unison by millions of senior executives around the world, despite the fact that those same executives were already bored to death by it.
Morally bankrupt because the only obligation in such a narrow business philosophy is to those owning the corporation. Obligations to treat customers well, or staff fairly, to care for community and environment, are seen only through the lens of how such activities add or detract from "shareholder value". Such corporations have been rightly condemned by the public as having no heart, as being amoral, interested only in profit, ready to break the law, bend the rules, exploit the vulnerable, if the end result is higher dividends and share prices.
The current focus on corporate ethics is because our society is coming to recognise that trying to build "shareholder value" without strong ethical values is a complete nonsense.
In any case, "shareholder value" is a useless motivator. Who on earth wakes up in the morning and thinks: "What a great day - let's go and make some extra sharholder value, let's make some more dividends and make the share price soar?"
No one I have ever come across in corporate boards, executive teams or business school classrooms - unless it is their own personal startup or family business.
Executives are focussing today on other things, and the trend is becoming stronger. Just look at the growing number of people who are worried about their lack of work-life balance (almost 100% of every executive audience I have ever polled). Consider also those who are talking about down-sizing, turning down promotion, taking pay cuts. This is new. Different from the 1980s and early 1990s.
Look for a moment at those who are more passionate about the work they do for nothing (volunteering) than about their "jobs". Over 60% of Americans last year gave time to their communities - on average around 200 hours each - and the numbers are not much less in many other nations. But tell me this: who on earth "gives time" for no other reason than to make extra shareholder value for someone else? Who wants to go an extra mile for an employer just for that?
Take a global bank: who cares about making even greater profits for other people at year end? That is, unless their own job or bonus is at stake.
"Shareholder value" is becoming thoroughly discredited as a dominant business driver. Expect an even greater backlash followed by a major rethink across all industries by 2010. "Shareholder value" business gurus will be kicked out of corporate boardrooms, heavily criticised and held up to public ridicule - unless they change their message soon. It may happen faster than you think. Like waking from a deep sleep, the moment of recognition can strike a hard-pressed CEO in a moment.
I have rarely met a CEO or Chairman (perhaps never) of a publicly listed company who is trully passionate about either shareholder value or bottom line profit, or what the market thinks - compared to the passion they express when they talk about their families, the work they do for nothing in the community, or other things they believe in. A possible exception is where the company was started and taken to market by the individual.
This lack of passion and personal commitment is hardly a surprise when you consider that the average survival in post of a Footsie 100 company chairman or CEO before being sacked is just 38 months. That means many are told to go far sooner than that - maybe because they failed to make their numbers for a couple of consecutive quarters. But if CEOs have no real passion for shareholder value, don't expect it further down the feeding chain.
Corporate investors show zero emotional commitment to company leaders in times of trouble, so don't expect emotional commitment by their leaders to the future shareholder value or profits of the corporation - unless merely as an expression of naked self-interest with their personal financial rewards linked to share price and so on.
2) It is factually incorrect to say that the only purpose of a corporation is to make shareholders wealthy
I am not for a moment suggesting that corporations should abandon a healthy interest in profitability and an aim to reward investors. However, some who have learned their last-century script from certain business schools or books, or have been infected by similar nonsense from colleagues, proclaim that the only possible purpose a business can have is to make money for the owners.
This is not only a very foolish position to take when marketing or building a loyal customer base, but is also factually incorrect, as a moment's common-sense reveals. We see the paradox revealed when marketing messages reach investors and the other way round. They are not the same and are often in conflct. In the past one could keep messages separate but in a web-enabled world they collide in embarrassing and counter-productive ways.
Marketing: we are here to serve you as a valued customer
Investor: we are here to make money out of customers to give to you
Many corporations are in trouble over this conflict right now.
Take an life insurance company: try telling policy holders that the only purpose of the company is to charge the largest amount possible given competitive pressures, to pay staff as little as possible, to pay out the absolute minimum to those who die, and to rip as much wealth out of the business as possible to give to shareholders.
Sadly that is not so far from the public perception of the insurance industry in general - and is what you get if you follow the "shareholder value" mantra to an ultimate extreme, and are overheard in public places.
But nothing could be further from the truth.
A life insurance company exists for only one reason, and was created for that purpose: to pay out... to families in the "club" who are in trouble because their relatives have died. Allied to that is a secondary purpose which is to enable members of the club to sleep at night, knowing that if disaster strikes, financial help will be available from pooled resources that the club has collected in the past. All insurance companies are collective community-based organisations which are run to share risk.
shareholders? Yes, capital is raised in the market, to expand and develop the number and range of such clubs, and those shareholders are rewarded for their help with dividends and capital growth. But you cannot drive a successful insurance company for long if you only talk about rewarding shareholders. It can only be a matter of time before you kill the business.
But insurance companies are not unusual: all businesses exist to satisfy the requirements of their customers - in a mutually rewarding and profitable way.
Lost the plot
Senior team members of many different corporations in different business sectors tell me things like: our staff are not passionate about the strategic objectives we have; our turnover is higher than we would like; our customers say that our call-centre staff don't seem to care; our sales team is demoralised and our rewards programme is not getting expected results; the image of our industry is not what we would like; people say we are greedy, they talk of fat-cat salaries, exploitation and so on....
But that is what you are likely to get when all people feel matters is making numbers on Excell spreadsheets. And incidentally, they may suspect that however outstanding last year's performance may be, the bar will always be set ever higher.
Imagine a restaurant where it says on the menu:
"We exist to make make a profit out of feeding you"
"This restaurant exists to make as much money every week for me, the owner, as I can possibly extract. That's why we always use lower cost ingredients where we can get away with it, pay staff a pittance, spend the minimum on cleaning the kitchens, and charge as much as we can persuade you to pay."
It would be out of business in a couple of months. Customers want a different kind of service. The want to feel that the whole focus of the restaurant is to give people a great eating experience in a wonderful environment. They want to feel that the owner really cares how the food is prepared and takes great personal pleasure and pride in every aspect of menu creation, is hospitable by nature and enjoys giving people a great time - not that he hates the restaurant and the people in it, would stop tomorrow if he could, and only does it for the money. It may be partly a fantasy, but they want to feel it is a reality.
3) How to motivate, encourage and inspire
Stop talking so much about shareholder value. Start talking to people about the people who buy things from you : who they are, what they want, why what you do makes a difference to other people's lives (if you can't answer that, get out now, life's too short, time to find another job), and finally why you feel your corporate mission is so important.
Focus on customers, meeting their needs, delighting them time after time with outstanding products and services, which you are able to provide in a profitable, sustainable and enjoyable way.
That's always been the basis of every business that has prospered.
"We are here for you" - not " We're only in this for the money."
Sadly, the morally empty obsession with shareholder value has encouraged a culture of greed, and an orgy of corporate excess, creating a the right conditions for a host of corporate scandals.
Future consumers will demand that success be measured on a far wider agenda.
Connect with all the passions people have and they will follow you to the ends of the earth, buy your products and services with pride and may even be willing to work with you for next to nothing.
The fundamental requirement for future corporations will be to demonstrate how you build a better world in a broader sense: not just for shareholders, but also for customers, consumers, colleagues and communities as well as for yourself and those you care for.
Just look around. It's already happening.
Future Death of Shareholder Value:
Why current obsession with "bottom-line profit" and "shareholder value" is looking tired: having failed to help leadership, motivation, marketing, product innovation, change management, or customer loyalty - danger of destroying the value that people sought to gain
You can have the greatest strategy in the world but if your vision of the future is wrong you just land up travelling even faster in the wrong direction. A prime example of this is the dangerous obsession with shareholder value and bottom line profit, which has driven board policies of many multinationals to the point of distraction and damage.
* Dr Patrick Dixon is Chairman of Global Change Ltd, a regular contributor to Business School executive programmes, and has recently been ranked as one of the fifty most influential business thinkers alive today (Thinkers50.com).
The language in some corporations is already changing. "Shareholder value" is being retired from such places as corporate websites. Expect further steps in this direction over the next three to five years.
1) Shareholder value has failed to motivate boards or staff
"Shareholder value" has been a useful emphasis for companies which were insufficiently focussed on profit-making, cost-reduction and share price, particularly in a difficult economic climate where falls in share prices can lead rapidly to a hostile takeover. We have seen a number of events where wrong decisions have destroyed vast amounts of wealth in a short time, so many have argued that more attention to shareholder value is needed, not less.
But "shareholder value" implies that shares themselves have a "value" which has a rational basis. As we saw in the dot com boom and bust, and on many other occaisions, this is often not the case. On the contrary, we have witnessed an increasingly fickle and restless market, which has imposed near-impossible demands on boards to produce perfect results every quarter, resulting in very short-term thinking by executives.
Many CEOs have been acutely frustrated to find their well-crafted strategies swept away by alarming share price wobbles, each an over-reaction to some small piece of news about their own company or a competitor, or the industry or wider operating environment. "Our current share price makes no sense" is a common cry.
Too high a price can be just as damaging as under-valuation, because when the inevitable correction comes, the CEO can be hammered in the media for "destroying shareholder value" with "billions wiped off the value of the corporation in just a few months". The reality may be that the market over-priced, and is now under-pricing. Nothing much has changed in the meantime in the fundamentals of the business.
In any event, the outcome of prolonged turbullence is often the rapid departure of a Chairman or CEO who may in fact be a stronger and more experienced leader than the person dragged in at high speed to replace them.
It is all a question of perception.
A further complication is that CEOs are finding it increasingly difficult to know who their shareholders really are. The average share owned by an individual in the US is kept for just weeks or months. Churn has never been higher. Institutions are also constantly changing the balance of their investments, buying and dumping proportions of the same stocks on a daily basis.
The end result of all this is that every corporate strategy tends now to be accepted or rejected according to how the board thinks the market will react, and the market reacts how investors think other investors will react - based more on psychology, mood, emotion and intuition than pure logic or longer term conviction. Because investment funds often hold such large percentages of total shares, many CEOs are having to spend huge amounts of time trying to persuade a few individuals inside these institutions that they know what they are doing, and that the share price will rise.
I have sat in many internal presentations by CEOs to their own top teams, where they have laid out goals such as "increasing market capitalisation by 35% in three years" and so on. Even in a rising market such word and number games looked faintly ridiculous, since achieving such goals usually depends on a number of external factors such as competitor merger and acquisition activity. But in a falling market these kind of targets make a previously confident CEO the laughing stock of the corporation, and of the investment community. How do you measure shareholder value in a recession?
In the recent down-turn, many companies resorted to ever more complex graphs, formulae and tables to show how their own market capitalisation had fallen less than a benchmark of a carefully selected group of competitors. But every business is unique, particularly in these days of aggressive globalisation and multiple business units, so such comparisons can be superficial and naive.
"Underperforming" or "outperforming" are at the end very difficult judgments, which unfortunately are often muddled by short-termism. The most important assets of many companies are notoriously hard to value: for example the creative brain-power of a very talented new senior team, or a pipeline of products for a pharma company, none of which will come on-stream for a decade or more, or the future potential of a group of wealthy clients for cross-selling a new product range, or the good-will and respect at the highest levels of the government in China and so on.
You may disagree: you may consider yourself a great expert on corporate valuations and assessing corporate performance, but there is another, more fundamental problem. The trouble is that "shareholder value" (even if it can be reliably measured) cannot by itself as a concept create value. Nor can it create vision, nor direction, nor purpose, nor a sense of mission.
"Shareholder value" as a concept does not invent products, neither does it promote initiative, nor create ideas about new services. Nor does it inspire people to greater efficiency, especially when those efficiencies may come at inconvenience and cost to themselves or those they care about. For these and a host of other reason, by definition "shareholder value" cannot drive a business forward.
In fact the very opposite.
As we will see, "shareholder value" on it's own is a morally bankrupt, narrow idea that took root in investor minds, and then became the latest fad as a mindless, meaningless, last-century business mantra, chanted in unison by millions of senior executives around the world, despite the fact that those same executives were already bored to death by it.
Morally bankrupt because the only obligation in such a narrow business philosophy is to those owning the corporation. Obligations to treat customers well, or staff fairly, to care for community and environment, are seen only through the lens of how such activities add or detract from "shareholder value". Such corporations have been rightly condemned by the public as having no heart, as being amoral, interested only in profit, ready to break the law, bend the rules, exploit the vulnerable, if the end result is higher dividends and share prices.
The current focus on corporate ethics is because our society is coming to recognise that trying to build "shareholder value" without strong ethical values is a complete nonsense.
In any case, "shareholder value" is a useless motivator. Who on earth wakes up in the morning and thinks: "What a great day - let's go and make some extra sharholder value, let's make some more dividends and make the share price soar?"
No one I have ever come across in corporate boards, executive teams or business school classrooms - unless it is their own personal startup or family business.
Executives are focussing today on other things, and the trend is becoming stronger. Just look at the growing number of people who are worried about their lack of work-life balance (almost 100% of every executive audience I have ever polled). Consider also those who are talking about down-sizing, turning down promotion, taking pay cuts. This is new. Different from the 1980s and early 1990s.
Look for a moment at those who are more passionate about the work they do for nothing (volunteering) than about their "jobs". Over 60% of Americans last year gave time to their communities - on average around 200 hours each - and the numbers are not much less in many other nations. But tell me this: who on earth "gives time" for no other reason than to make extra shareholder value for someone else? Who wants to go an extra mile for an employer just for that?
Take a global bank: who cares about making even greater profits for other people at year end? That is, unless their own job or bonus is at stake.
"Shareholder value" is becoming thoroughly discredited as a dominant business driver. Expect an even greater backlash followed by a major rethink across all industries by 2010. "Shareholder value" business gurus will be kicked out of corporate boardrooms, heavily criticised and held up to public ridicule - unless they change their message soon. It may happen faster than you think. Like waking from a deep sleep, the moment of recognition can strike a hard-pressed CEO in a moment.
I have rarely met a CEO or Chairman (perhaps never) of a publicly listed company who is trully passionate about either shareholder value or bottom line profit, or what the market thinks - compared to the passion they express when they talk about their families, the work they do for nothing in the community, or other things they believe in. A possible exception is where the company was started and taken to market by the individual.
This lack of passion and personal commitment is hardly a surprise when you consider that the average survival in post of a Footsie 100 company chairman or CEO before being sacked is just 38 months. That means many are told to go far sooner than that - maybe because they failed to make their numbers for a couple of consecutive quarters. But if CEOs have no real passion for shareholder value, don't expect it further down the feeding chain.
Corporate investors show zero emotional commitment to company leaders in times of trouble, so don't expect emotional commitment by their leaders to the future shareholder value or profits of the corporation - unless merely as an expression of naked self-interest with their personal financial rewards linked to share price and so on.
2) It is factually incorrect to say that the only purpose of a corporation is to make shareholders wealthy
I am not for a moment suggesting that corporations should abandon a healthy interest in profitability and an aim to reward investors. However, some who have learned their last-century script from certain business schools or books, or have been infected by similar nonsense from colleagues, proclaim that the only possible purpose a business can have is to make money for the owners.
This is not only a very foolish position to take when marketing or building a loyal customer base, but is also factually incorrect, as a moment's common-sense reveals. We see the paradox revealed when marketing messages reach investors and the other way round. They are not the same and are often in conflct. In the past one could keep messages separate but in a web-enabled world they collide in embarrassing and counter-productive ways.
Marketing: we are here to serve you as a valued customer
Investor: we are here to make money out of customers to give to you
Many corporations are in trouble over this conflict right now.
Take an life insurance company: try telling policy holders that the only purpose of the company is to charge the largest amount possible given competitive pressures, to pay staff as little as possible, to pay out the absolute minimum to those who die, and to rip as much wealth out of the business as possible to give to shareholders.
Sadly that is not so far from the public perception of the insurance industry in general - and is what you get if you follow the "shareholder value" mantra to an ultimate extreme, and are overheard in public places.
But nothing could be further from the truth.
A life insurance company exists for only one reason, and was created for that purpose: to pay out... to families in the "club" who are in trouble because their relatives have died. Allied to that is a secondary purpose which is to enable members of the club to sleep at night, knowing that if disaster strikes, financial help will be available from pooled resources that the club has collected in the past. All insurance companies are collective community-based organisations which are run to share risk.
shareholders? Yes, capital is raised in the market, to expand and develop the number and range of such clubs, and those shareholders are rewarded for their help with dividends and capital growth. But you cannot drive a successful insurance company for long if you only talk about rewarding shareholders. It can only be a matter of time before you kill the business.
But insurance companies are not unusual: all businesses exist to satisfy the requirements of their customers - in a mutually rewarding and profitable way.
Lost the plot
Senior team members of many different corporations in different business sectors tell me things like: our staff are not passionate about the strategic objectives we have; our turnover is higher than we would like; our customers say that our call-centre staff don't seem to care; our sales team is demoralised and our rewards programme is not getting expected results; the image of our industry is not what we would like; people say we are greedy, they talk of fat-cat salaries, exploitation and so on....
But that is what you are likely to get when all people feel matters is making numbers on Excell spreadsheets. And incidentally, they may suspect that however outstanding last year's performance may be, the bar will always be set ever higher.
Imagine a restaurant where it says on the menu:
"We exist to make make a profit out of feeding you"
"This restaurant exists to make as much money every week for me, the owner, as I can possibly extract. That's why we always use lower cost ingredients where we can get away with it, pay staff a pittance, spend the minimum on cleaning the kitchens, and charge as much as we can persuade you to pay."
It would be out of business in a couple of months. Customers want a different kind of service. The want to feel that the whole focus of the restaurant is to give people a great eating experience in a wonderful environment. They want to feel that the owner really cares how the food is prepared and takes great personal pleasure and pride in every aspect of menu creation, is hospitable by nature and enjoys giving people a great time - not that he hates the restaurant and the people in it, would stop tomorrow if he could, and only does it for the money. It may be partly a fantasy, but they want to feel it is a reality.
3) How to motivate, encourage and inspire
Stop talking so much about shareholder value. Start talking to people about the people who buy things from you : who they are, what they want, why what you do makes a difference to other people's lives (if you can't answer that, get out now, life's too short, time to find another job), and finally why you feel your corporate mission is so important.
Focus on customers, meeting their needs, delighting them time after time with outstanding products and services, which you are able to provide in a profitable, sustainable and enjoyable way.
That's always been the basis of every business that has prospered.
"We are here for you" - not " We're only in this for the money."
Sadly, the morally empty obsession with shareholder value has encouraged a culture of greed, and an orgy of corporate excess, creating a the right conditions for a host of corporate scandals.
Future consumers will demand that success be measured on a far wider agenda.
Connect with all the passions people have and they will follow you to the ends of the earth, buy your products and services with pride and may even be willing to work with you for next to nothing.
The fundamental requirement for future corporations will be to demonstrate how you build a better world in a broader sense: not just for shareholders, but also for customers, consumers, colleagues and communities as well as for yourself and those you care for.
Just look around. It's already happening.
January 31, 2004
The Truth About Westminster
See this online book on British political life - and how so many people with integrity can find themselves altered - corrupted even, albeit in subtle ways - by the process of government and the pressures of office. Relevant to posting below, on the battle between media and politicians, based on a morally dubious pattern which tends to polarise and exaggerate party differences, in order to try to gain added public attention or audience.
See this online book on British political life - and how so many people with integrity can find themselves altered - corrupted even, albeit in subtle ways - by the process of government and the pressures of office. Relevant to posting below, on the battle between media and politicians, based on a morally dubious pattern which tends to polarise and exaggerate party differences, in order to try to gain added public attention or audience.
Future of BBC radio, TV, online, broadcasting, audiences, social trends, news, current affairs, charter review - and commercial television - by Dr Patrick Dixon
Presentation to the BBC on the future of broadcasting, and the urgent need for reform of journalism / political debate
Presentation to the BBC on the future of broadcasting, and the urgent need for reform of journalism / political debate
The truth about Westminster, politics, the BBC and the Hutton Enquiry
In December I spoke to around 100 of the most senior people at the BBC about their future, and future of broadcasting / journalism in general.
There is a huge crisis of confidence in both politicians and journalists which is undermining our democratic process, with falling interest in political debate, manifestos or election voting.
A primary reason is that most people believe that politicians are insincere, and that journalists exaggerate to make a story.
In my own experience of the media (audience reach over 200 million in the last 12 months on various interviews - see medialog) there is constant pressure to fill papers and programmes, because or a lack of enough real news.
The gap is filled by debate and conflict between individuals. However there is not enough of that either, so it is often hyped or even invented.
I have lost track of the number of times over the years I have been phoned to appear on a TV or radio programme, and it has been made absolutely clear that they are looking for highly coloured views. If they think that one's views are likely to reflect those of the middle majority, they are keen to proceed if it a general comment piece, but if it is a debate they tend to drop the idea of an interview with me and start pumping me for the phone numbers of people who have a more extreme position (it makes better TV).
Frequently I have found myself in a one-to-one interview being invited on-air to criticise what someone else has said in a previous interview. On many occaisions that person's own words are re-positioned to give a superficial characture of their actual position. I know for a fact that has also happened immediately after I have left a studio.
It also happens in the press. A journalist trying to stir up a fight may phone to suggest that an individual I know has said a particular thing, sharply critical of what I am saying on an issue. A time to take care. A quick call to the person concerned or a reading of their own press release often makes it abundantly clear that their own position has been deliberately distorted.
The truth is that most people agree on most things in most Western countries and this is especially true in the UK.
Most politicians also agree on most things.
Tony Blair and Michael Howard agree in private on most things. That is an inescapable fact. We know that whoever was in power over the next three years, very little would actually change.
The truth is that ministers try to do their best, but have very limited influence. Their job is difficult and complex: they are also very dependent on advice they receive (which can be wrong). Many decisions are dictated by Brussels, much of the rest is decentralised. Yet other decisions were inherited by a previous government. Most other parts of traditional government have been privatised. What little that remains is run by a civil service that endures from one government to another, comprising of (in the main) experienced and competent people who maintain stability and continuity through all the fads and fashions of political policy experiments.
New governments very rarely reverse legislation when they get into power - however bitterly at the time they have pretended to be opposed.
There is a collusion between politicians and the media, both of which have a strong interest in exaggerating differences. For the media it makes interesting copy (they think) or rivetting viewing (they hope). For politicians it gives them exposure and (they fantasise) makes people see them as different from the other side so they win support.
This offensive and melodramatic drama is played out every day in the public media theatre.
It looks awful, is very tedious and boring, invites ridicule and cynicism, damages broadcasters and politicians alike, destroys ratings, contributes to the decline in audiences for current affairs and news programmes, makes a rising generation disinclined to enter politics at all.
After all the virulent criticism of Lord Hutton, the BBC has on opportunity to lead our nation in a more mature political debate.
The BBC, along with all news outlets, must learn to tell the truth - and force politicians to admit the reality.
The truth is that in Select Committees different parties work very happily and harmoniously together for the good of the nation. That MPS seem to undergo a personality refit when elevated to the House of Lords, leaving the infantile rough and tumble of party-poltiical posturing in the dustbin where it belongs. That most MPs have very good friends in the other parties. That many MPs agree more with MPs in other parties over a number of issues than they do with their own leadership. That there is overhwelming agreement on the fundamentals about how the economy should be managed, the need for social welfare as well as vibrant free-market economy which is friendly to business, a cautious view of entry to the Euro-zone, and so on.
The alternative is to continue with the current madness, which is such a distortion of reality. Failure to bring a culture change will result in further destruction of public confidence in both politicians and the media, and will risk further misjudgments such as that which led to the Hutton enquiry.
In December I spoke to around 100 of the most senior people at the BBC about their future, and future of broadcasting / journalism in general.
There is a huge crisis of confidence in both politicians and journalists which is undermining our democratic process, with falling interest in political debate, manifestos or election voting.
A primary reason is that most people believe that politicians are insincere, and that journalists exaggerate to make a story.
In my own experience of the media (audience reach over 200 million in the last 12 months on various interviews - see medialog) there is constant pressure to fill papers and programmes, because or a lack of enough real news.
The gap is filled by debate and conflict between individuals. However there is not enough of that either, so it is often hyped or even invented.
I have lost track of the number of times over the years I have been phoned to appear on a TV or radio programme, and it has been made absolutely clear that they are looking for highly coloured views. If they think that one's views are likely to reflect those of the middle majority, they are keen to proceed if it a general comment piece, but if it is a debate they tend to drop the idea of an interview with me and start pumping me for the phone numbers of people who have a more extreme position (it makes better TV).
Frequently I have found myself in a one-to-one interview being invited on-air to criticise what someone else has said in a previous interview. On many occaisions that person's own words are re-positioned to give a superficial characture of their actual position. I know for a fact that has also happened immediately after I have left a studio.
It also happens in the press. A journalist trying to stir up a fight may phone to suggest that an individual I know has said a particular thing, sharply critical of what I am saying on an issue. A time to take care. A quick call to the person concerned or a reading of their own press release often makes it abundantly clear that their own position has been deliberately distorted.
The truth is that most people agree on most things in most Western countries and this is especially true in the UK.
Most politicians also agree on most things.
Tony Blair and Michael Howard agree in private on most things. That is an inescapable fact. We know that whoever was in power over the next three years, very little would actually change.
The truth is that ministers try to do their best, but have very limited influence. Their job is difficult and complex: they are also very dependent on advice they receive (which can be wrong). Many decisions are dictated by Brussels, much of the rest is decentralised. Yet other decisions were inherited by a previous government. Most other parts of traditional government have been privatised. What little that remains is run by a civil service that endures from one government to another, comprising of (in the main) experienced and competent people who maintain stability and continuity through all the fads and fashions of political policy experiments.
New governments very rarely reverse legislation when they get into power - however bitterly at the time they have pretended to be opposed.
There is a collusion between politicians and the media, both of which have a strong interest in exaggerating differences. For the media it makes interesting copy (they think) or rivetting viewing (they hope). For politicians it gives them exposure and (they fantasise) makes people see them as different from the other side so they win support.
This offensive and melodramatic drama is played out every day in the public media theatre.
It looks awful, is very tedious and boring, invites ridicule and cynicism, damages broadcasters and politicians alike, destroys ratings, contributes to the decline in audiences for current affairs and news programmes, makes a rising generation disinclined to enter politics at all.
After all the virulent criticism of Lord Hutton, the BBC has on opportunity to lead our nation in a more mature political debate.
The BBC, along with all news outlets, must learn to tell the truth - and force politicians to admit the reality.
The truth is that in Select Committees different parties work very happily and harmoniously together for the good of the nation. That MPS seem to undergo a personality refit when elevated to the House of Lords, leaving the infantile rough and tumble of party-poltiical posturing in the dustbin where it belongs. That most MPs have very good friends in the other parties. That many MPs agree more with MPs in other parties over a number of issues than they do with their own leadership. That there is overhwelming agreement on the fundamentals about how the economy should be managed, the need for social welfare as well as vibrant free-market economy which is friendly to business, a cautious view of entry to the Euro-zone, and so on.
The alternative is to continue with the current madness, which is such a distortion of reality. Failure to bring a culture change will result in further destruction of public confidence in both politicians and the media, and will risk further misjudgments such as that which led to the Hutton enquiry.
January 29, 2004
Interesting discussions with two different clients today about the death of shareholder value as a single driver of business targets to the exclusion of all else.
As I have been predicting for some time, the language of shareholder value is changing, softening on websites, in annual reports and internal communications in Europe, tempered by one scandal after another in companies which focussed on narrow definitions of success and corporate duty.
It is absued nonsense to try to build a business on giving shareholders loads of rewards. The core of every successful business is providing customers what they want, in a profitable way - a rather different emphasis.
I cannot understand how apparently intelligent and experienced executives could possibly see otherwise.
Satisfied customers must be a first priority and focus. Placing shareholders first in the feeding chain creates a culture where executives are tempted to cut corners, short-change customers. You cannot allow pressure from shareholders to suck the business dry.
See presentation slides on Real Success
As I have been predicting for some time, the language of shareholder value is changing, softening on websites, in annual reports and internal communications in Europe, tempered by one scandal after another in companies which focussed on narrow definitions of success and corporate duty.
It is absued nonsense to try to build a business on giving shareholders loads of rewards. The core of every successful business is providing customers what they want, in a profitable way - a rather different emphasis.
I cannot understand how apparently intelligent and experienced executives could possibly see otherwise.
Satisfied customers must be a first priority and focus. Placing shareholders first in the feeding chain creates a culture where executives are tempted to cut corners, short-change customers. You cannot allow pressure from shareholders to suck the business dry.
See presentation slides on Real Success
January 26, 2004
RFIDs - the new techno revolution
I met today someone whose company (Alien Inc) has a machine the size of a small room able to make 10 billion Radio Frequency Identification Tags - or radio barcodes - in a year. Ten of these machines could provide 100 billion tags a year. Since Wal-Mart alone will need 5 billion just to tag pallets and boxes, it is clear the market is going to grow fast and prices will tumble - perhaps reaching as low as 3.5 cents per device. The technology is ingenious. I have in my pocket 100 chips in a small bottle. These automatically find their way in solution into identically shaped slots in a plastic membrane where they become permanently attached, so that they can be separated, and mounted onto a piece of paper on which is printed an aerial in special metallic ink. They are then fully active with hardware, software, permanent memory, operating system, and ability to write and receive data. It all happens more or less without human intervention using huge silicon wafers, and wide sheets of special laminates and papers which are then cut up to make each tag.
See presentation I gave today in London on RFID technology and security / privacy issues RFID SLIDES
I met today someone whose company (Alien Inc) has a machine the size of a small room able to make 10 billion Radio Frequency Identification Tags - or radio barcodes - in a year. Ten of these machines could provide 100 billion tags a year. Since Wal-Mart alone will need 5 billion just to tag pallets and boxes, it is clear the market is going to grow fast and prices will tumble - perhaps reaching as low as 3.5 cents per device. The technology is ingenious. I have in my pocket 100 chips in a small bottle. These automatically find their way in solution into identically shaped slots in a plastic membrane where they become permanently attached, so that they can be separated, and mounted onto a piece of paper on which is printed an aerial in special metallic ink. They are then fully active with hardware, software, permanent memory, operating system, and ability to write and receive data. It all happens more or less without human intervention using huge silicon wafers, and wide sheets of special laminates and papers which are then cut up to make each tag.
See presentation I gave today in London on RFID technology and security / privacy issues RFID SLIDES
January 25, 2004
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