Busy times on the Côte d'Azur. A 20 minutes bike ride along the coast towards west and I reach the Croisette and the glamour of the Cannes film festival, if I ride towards east I pass the Hotel du Cap after ten minutes and a pack of paparazzi sitting on their scooters smoking and chatting while waiting for some celebrity to go for a morning run. Do they do that?
Even more to the east, about 90 minutes ride, you get to Monaco and the F1 circus of last week.
The glamour, the expensive cars, the champagne, the often intended jaw dropping appearance of the opposite sex - all interesting to watch, all in all quite a contrarian display these days.
Nuff said, the more interesting issue was pointed out in NYT/IHT on Saturday - namely how the new and scrappy teams are beating the shit out of the well funded, well managed old teams. How Brawn and Toro Rosso beats the MacLarens, Williams and Ferraris.
In a way it's an image of how dramatic times changes the rules, in particular how the established and their ways that works like a dream during stable and good times then lets the heretics and sceptics win when the rules changes. And the rules are changing. Big time.
It's happening everywhere, just ask anybody at any big corporations. It's far beyond an issue of cutting costs and realigning, it's about much bigger changes. And for that we need sceptics and heretics.
Heretic - somebody holding an opinion at odds with what is generally accepted.
Sceptic - somebody inclined to question or doubt all accepted opinions.
Attitudes, both two sides of the same issue, that are made for times like these. Perhaps they're even instrumental in pushing the rule changes?
But as attitudes goes, attitude comes from the heart. A sceptic reacts instinctively, a heretic has no fear of being rebuffed. Nothing you can add to your personality palette by reading the latest "10 rules to...". A sceptic child is called quarrelsome, a heretic child is a disrespectful one. Some survive the attempts to being conditioned and good is that.
And the results of being a sceptic and heretic are well... eh... results. You cannot be say a contrarian, that would lead nowhere. It's the sceptic that might choose to act in a contrarian fashion and become a heretic. That's contrarianism with meaning. And only meaning gives... eh... meaning.
Let me expand on the claim by asking "what really is saving?"
Initially it was about stashing away some food for a rainy day. That the fresh meat could rot had to be accepted, losing some was still better than outright starving later.
On the other side, if there is an opportunity to invest in an increased output of useful products or services using less resources then a return could be negotiated. But if no increase in the rate of value creation is obtainable there is no need for funds nor would there be a yield to be had.
If I have 9 cows and a bull and the yield is 1 calf per year, year after year, there is no reason why I should borrow anything. But if, by building a shelter, I could increase that to 2 calves per year it would make sense to borrow and build. But only if interest, annual principal repayment and my living expenses added up to less than 2 calves.
You are at all times free to stash away for a rainy day, no return on those savings of course, most probably negative earnings. Still your sole prerogative.
But if you want a return on your savings you have to find somebody, directly or indirectly, that has a way to invest in increased rate of value creation. Such savings cannot be pushed, it has to be pulled, that privilege is the borrower's.
In other words saving is either:
Stashing away while accepting loss of value or
investment in increased output of useful products and services.
But at some point of time we got used to getting a return, to the point where we're now hardwired to believe that we can save at any time and get a return from the savings. But as opportunities to invest in increased value creation comes in leaps and bounds, like when a new technology or method is invented, saving with a return should not always to be had.
That opened for new professions to create "saving forms" decoupled from investing in increased value creation. In other words, savings that mostly could be termed humbug.
And the humbug could take three forms:
Investment in scarcity. Expensive watches, art, real estate, gold. Investing in a flat on Manhattan makes sense as long as there is increasing value creation elsewhere in the society, wealth that flows into New York eventually in the form of people moving there. But soon that could turn and the zero-sum game becomes a reality. And I'm not saying art and the other scarce products do not have a value, they have, but they do not increase the value creation and should not yield a real return. Having been conditioned to believe something does not necessarily make it true. "Gold? Dig it up, then bury it, then dig it up, and bury it again, so where's the value creation?"
Power leverage. You're sitting on excess funds today while the younger generation struggles. That creates an opportunity for you to lend it to the younger generation for their consumption today, then sit back and see them work twice as hard as you had to in order to pay back with interest. They have little choice, you can push through high interest, hence the power leverage. (In fact much of the scarcity investing is a version of this, sell your inflated value big house to a young family and you get the point.)
Schemes and fakes. Read any paper from last nine months and take your pick among the disaster "instruments" for further study.
There is only one way out of this crisis and the saving-investment need mismatch; find the balance. That can be had by less saving or increases in value creation. Everything else is a waste of time or at best band-aiding a broken leg.
In the latter part of the last century the US personal saving rate was much higher than today, but then it was a period of huge investment needs world-wide in infrastructure, new manufacturing methods and equipment including IT - all increasing the world's value creation. The last few years we've seen much lower saving rates, more matching the lack of opportunities to invest in value creation increases. But then, typically China and the oil producing countries saved huge amounts that increased the imbalance tremendously despite low saving rates in the US.
Good thing that the world's governments seems to be well underway to do their part in the investment bit, hope is that it's towards real increases in value creation. Bad thing is that saving is increasing as well.
At the end of the day, the way to find the balance is to remove the universal notion that we have a prerogative to save with a return while exposing the "humbug" saving for what it really is. That would be the only long term fix.
[Hat tip to my friend Pete (url free alas) who prompted the discussion.]
First time in years that I missed this despite SAP being so kind to invite me again. Too much busyness on my side I'm afraid.
Kind of interesting not to be there, sitting here slurping live videos, sniffing at tweets and reading blog posts by my friends.
Did I learn anything? Well, I definitely and sorely missed being there and seeing all my friends, but still, here are a few takeaways from afar:
SAP shows the usual tenacity in regards Business By Design, and I applaud them. Here my fellow IrregularJosh debunks a critic with aplomb giving you the gist of how they proceed and accept reality despite what I could imagine being cries of desperation from a marketing department.
SAP has no qualms about telling it as it is. In the otherwise very geeky and highly enjoyable keynote by Professor Plattner he even showed how the sales curve hit the wall last year, even telling about customers who acted up and said things along the line of "sure we have a contract but we will never pay".
By the way, Professor Plattner stressed that he was not speaking as an employee, merely an academic, then merrily using "we" about SAP in every other sentence. Quite the natural thing to do, humanised keynote behaviour we all know to appreciate.
SAP know what they want. Despite crisis, despite competitors acquiring each others, SAP shows the long term commitment to enterprises despite any small stuff a nitpicking critic can dig up. And that long term attitude is what makes a difference. Here's Pascal Brosset, as good as always, explaining another EI friend, Vinnie, what SAP's vision of the future is.
And last but not least, it seems we can say good bye to the "The best-run companies run SAP" on a full size image of some anonymous person at all European airports. Now it's "Clear New World". And I have to admit I like it. Oops seems the old one has been relocated to fine print next to the logo, ah well...
But they got it right with the new tag line, IT means less resource use if used right and that ends up not only on the bottom line, but used to full extent it can move any corporation closer to sustainability. I've been chirping on that theme since my very first post herein more than four years ago so how could I not like it?
Have to admit my first thought was to rip their new tag line and tweak it to "Brave New World" for my own enterprise framework, but after remembering the somewhat warped content of Mr. Huxley's book I had second thoughts :)
"my experience suggests that while there are plenty of gr8 ideas 'enterprise' represents a daunting brick wall for many entrepreneurs. I'd like to help break that down if I can."
Two important terms should be noted; "brick wall" and "break that down".
The wall is there for a reason; to defend status quo and keep things quiet so we can leave our offices early and in general have as little upheaval as possible.
That said, fellows like Dennis and myself are of the kind that immediately want to break down stupid walls, good for us, but there are smarter ways:
Mr. Tzu (first name Sun) would have told us to avoid the wall. That's built to defend. Walk around it. Avoid it altogether.
Secondly Mr. Tzu would have said something along the lines of "if you want to avoid detection and move quietly around the defence you must not approach with drums and flags and masses of troops".
Did large corporate sales departments knock on CEO doors supported by big noisy campaigns trying to push e-mail to the corporate world? Quiet, bottom up, around-the-wall, don't ask for permission easier to ask for forgiveness, under the radar, back door - that worked without a word in the papers.
One must solicit the aid of those who's daily life is bettered and not ask the powers for permission.
Implementation must be incremental.
Costs must be under-the-radar and coffee budget sized.
Don't try to take hostages, they hate that and it'll only bog you down.
In other words, getting new stuff that would challenge the status quo into corporations requires such to be designed following these rules:
Deliver instant and daily value for the end user. Forget about ROI and other mumbo-jumbo meant for the higher ups. Instant value for me as a user rules. (See e-mail example).
Start small anywhere, grow in any direction at any time whenever the users are ready for it. Up front analysis by armies of consultants and any whiff of waterfall will hit the wall.
Puny per user costs, no binding, not even contracts to be signed is ideal. Let the growth in number of users take care of income over time. Heck I could live nicely on the coffee budget of a corporate conference or any Wall Street HQ.
All data must be portable, it's their data, their IP, let them extract it at any time and be free to leave you at any time.
My two cents (that I have to live by) knowing very well about the solid brick walls called "official IT policy" and such...
Don't fight anything, make the defence irrelevant, that option is yours!
I'm quite fond of my adopted homeland, France. Sometimes their quirks and ways deserves some vigourous shaking of head (but what country does not?) and sometimes one may get annoyed (same for most places). But mostly they serve great lunches and in general behave very civilised, in short a good place to be.
But this time I'm scared stiff by the lack of understanding by the lawmakers, and if they keep it up I might very well be out of here sooner than later:
I'm talking about the "three strike law" regarding download of copyrighted material. No courts involved, all in the hands of an "above-the-law" agency that can shut down your access to internet based on the instructions from the music and film industry.
My concern is not about the legality or lack thereof if downloading copyrighted material, neither do I oppose a democracy to impose law and order as they please.
The internet has become the backbone of almost all commerce and industry as well as private life. It's the core of many people's social life, aka communication, and no corporation can exist without being able to connect plants, offices, people, suppliers and customers.
If I break the law of the road when driving they will give me a slap or a fine. I can even be a danger to other people's life by driving all too fast and still get away with a mere € 50 fine. Loosing the right to drive requires a very serious offence and the courts will be involved.
Now, if you insult or trespass the "rules" as the music/film distributors see fit they'll take away the road, not only the right to drive, gone will be the access to road and pathways. For all use, walking, getting to school, cycling, everything, lock you up basically. And no court involved, just a rather powerful bureaucrat. Those will soon rank among the most feared and powerful in the land, parallels to the Inquisition will be easy to summon.
The days of bossnapping and suing your employer will be a thing of the (popular) past in France, instead any disgruntled employee will start downloading pirated music or movies in short time effectively putting his employer out of business without much effort nor risk.
If you in any form or fashion are involved in any commercial activity in France; better be keeping an eye on that legislation now, you might have to think about moving.
[Update May 7: The EU parliament is more sensible... here are some quotes:
"The European Parliament on Wednesday rejected a long-planned revision of the Continent’s telecommunications laws because of a controversial provision to punish Internet pirates. In Strasbourg, the Parliament’s lower house, by a vote of 404 to 56, passed an amendment to the telecommunications package making it illegal for any E.U. country to sever Internet service unless a citizen is found guilty in court, effectively blocking the broad revision."... “The Parliament has taken a stand against the arbitrary cut-off of Internet service to E.U. citizens,” said Alexander Alvaro, a German lawmaker from Bonn. “This is something we simply cannot allow to happen in Europe, allowing punishment to be assessed before a trial takes place.”... "“The legal precedent that would be set — that one is penalized before being tried — is a troubling statement,” said Francisco Mingorance, the European policy director in Brussels for The Business Software Alliance, which represents software makers."
[Update May 11: Work at French television (largest, private) + disagree with the law proposal + send mail to your MP = lose job. Nice one!]