The Management Mythbuster

Watch out - the French maybe right!

Sorry to be a grump as Thanksgiving Week starts but the incessant rise of the stock market is still defying reality.  Now normally I have little time for French economic insight - after all its normally an oxymoron, but a report published by French Bank, Societe Generale caught my attention on Sunday as I watched the Cleveland Browns reach new heights in their attempts to lose games in truly unique ways. 

SG has published a doomsday scenario (http://tinyurl.com/ybs4qhl) advising its clients to prepare for the worst - a global economic collapse in the next two years - driven by high government debt levels, a collapsing dollar and anemic consumer spending.  While their worst-case scenario is not their most likely scenario which focuses on slow growth, it is very plausible and should give us all cause to pause in our planning for 2010 and beyond. We want to believe things will get better but what if they don't?  Remember it took a war to end the Depression and Japan is still waiting to recover from its lost decade.

Economic schizophrenia? Or am I just paranoid?

Are you confused yet?  The stock market seems to be saying that things are getting better - do you feel it?  I know unemployment is supposed to be a lagging indicator but the numbers are still bleak.  There will be some growth from stimulus spending (by the way when is the real spending going to start? Only $150bn of the $787bn has been spent so far) never mind most of the jobs are not sustainable anyway, the consumer is not spending - after all 10 percent don't have jobs, cars are not moving off the lots without clash for clunkers and corporate profits have only grown through cost cuts - not much top line growth, and there are lots of "For Sale" signs here in Ohio and not many "Sold" signs.

Maybe Wall Street bankers will single-handedly jump start a consumer spending revival with their record bonuses? And then this morning the ultimate mixed signal, on page A3 of the Wall Street Journal is a story headlined "Hunger Threatens More Households." On the same page are four adverts, one for Tiffany offering a diamond pendant for $10,825, one for fractional jet ownership - I guess its cheaper than buying the whole jet, one for Versace, and one for a Jaguar you can lease for just $599 a month!

Go figure...

U.S. auto industry - is there another sector that has got it so spectularly wrong?

Tax payers now own two-thirds of the U.S. auto industry and are likely to do so for some time to come - so what have we got for our money?  The  good news is the three big companies (Ford is the supposed star but has little to boast about really) are consistent performers; unfortunately its been consistently awful.  Look at the U.S. market share numbers for the large autos:

GM  -  1999:  29.6%; 2008: 22.3%

Ford - 1999:  24.2%; 2008: 15%  (and they are supposed to be the star!)

Chrysler - 1999: 15.6%; 2008: 11%

Toyota - 1999: 8.8%; 2008: 16.8%

Honda - 1999: 6.4% 2008: 10.8%

Not only have they lost share but combined revenues of the big three are down from $407 billion to $342 billion.  GM takes the top prize and it was interesting to read former auto-czar Steve Ratner describe GM's once vaunted finance function in Fortune magazine this way:

"Everyone knew Detroit's reputation for insular, slow-moving cultures. Even by that low standard, I was shocked by the stunningly poor management that we found, particularly at GM, where we encountered, among other things, perhaps the weakest finance operation any of us had ever seen in a major company."

Both former-CEO Rick Wagoner and current-CEO Fritz Henderson are graduates of GM Finance - inspires one with confidence doesn't it.  

How sad that this should happen to an industry that largely defined America's rise to become the world's richest nation.

Customer service - why is it usually form over substance?

Customer service has become an all consuming mantra.  Any self respecting organization must emphasize its focus (often using adjectives like insane, passionate and dedicated) on customers, yet the reality is that most customer service is superficial. It consists of mechanical actions that lack genuine commitment and which are rarely backed by any authority to actually do something meaningful. Consider the following examples:       

1 "Can I help you sir?"  This is not bad in of itself but all too often I am asked this questions five times within three minutes of entering a store.  First, I am quite capable of asking for help if I need it so please just leave me alone. And second, if I do ask for your help, don't tell me that "Everything we have is on display" or "I'm sorry that's not my department."  Even worse is when the answer is "I don't know."  I received a call this morning from Bank of America who are theoretically handling my mortgage refinancing.  I have got this call every week for the past eleven weeks and every week it goes like this: a very polite person inquires if they can help me in anyway; I ask, "Can you tell me when the process will be complete?" they say, "I don't know sir, but I am sure it won't be long." Well thanks a bloody lot!

2. "Did you find everything you need?"  This is a retail favorite and most of the time I robotically answer with a dismissive "Yes." However once in a while I answer, "No." Typically this produces a reaction ranging from shock to bewilderment accompanied by absolutely no idea as to what to say next. If you can't do anything about it - don't ask.

3. "Excuse me sir"  This is usually uttered by the check-in clerk at a hotel.  I am standing in front of them trying to get my room key when the phone rings.  Suddenly I become invisible and the "answer every call on or before the second ring" mantra kicks in.  I then stand patiently as some idiot on the 8th floor asks for detailed reviews of fifteen local steak houses.

4. "How was your meal?" I don't mind getting this question once, but four times in eight minutes is bit much, particularly when it interrupts a conversation.  Why can't restaurant managers get it in their thick heads that when I am talking to my wife, children or a business associate it is not alright to interrupt?

If you want to serve me - just deliver what is promised and get the hell out of my way -  so there!

English bigger than Mandarin

According to latest estimates there are now 1.6 billion people who can speak English either as their first or second language (more than double the number of just ten years ago). By comparison, Mandarin is at around a billion.  There are now more people who can speak English in China than there are in the U.S and more in India than in U.S. and U.K. combined.

I believe the numbers, in my travels to over 30 countries this year, English has been everywhere.  Only a few countries (Japan, Korea, Brazil, Russia, Ukraine, Colombia and Chile) offered simultaneous translation of my speeches and nowhere were more than a third of the audience using it.  In Thailand 400 people came and no translation was offered. Twenty years ago on my first visit I was accompanied by a translator to every meeting.

It is estimated that more than 2 billion people are learning English worldwide meaning  that in ten years time it is likely that more than half the world's population will struggling to comprehend why "i" comes before "e" except after "c'" (except of course for words like foreign, species, seize, weird - oh never mind).

We Brits may have lost our empire but our language rules!