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Monthly Archives: March 2011
In Extraordinary Popular Delusions and the Madness of Crowds, the Victorian writer Charles Mackay describes a company formed during the South Sea Bubble in 1720 which declared in its prospectus that it was “for carrying on an undertaking of great advantage, but nobody to know what it is”. After investors hurried to buy shares, the founder “set off the same evening for the Continent” and was never heard of again.
Ricky Ponting has resigned as captain of the Australian national cricket team, but he intends to stay on as a player. If he were chief executive of a business, however talented, he would never try to pick up the threads of his earlier career as, say, a top salesman. Why not?
Ponting, 36, was the most successful international cricket captain ever, but he was widely perceived to have failed recently. His team just lost to India in the quarter-finals of the World Cup. Yet as a batsman, Ponting still has plenty left to offer. Indeed, the World Cup quarter-final saw him return to form, scoring a typically brave century. As he told the press in relinquishing the leadership:
Now that I won’t have all the extra responsibility of the captaincy, I think I can turn myself into a better player than I’ve shown in the last six months.
Predictions of rapid economic growth trigger in me the same breathless fear and excitement as news that tickets for a show or sporting event are going on sale and will sell out instantly. How much more stressful these forecasts must be for chief executives, whose destiny, and that of their companies, depends on being near the front of the queue when visions of the future come true.
The New York Times paywall (or pay fence) goes up today and there has been an enormous amount of speculation/analysis about it. For what it’s worth, I think it will succeed.
This is not because people “should” pay for the NYT’s journalism any more than they should buy any other product, but because the organisation does produce a lot of valuable and unique information. That means it can attract paying customers online as well as in print.
One of the main arguments deployed against the NYT asking at least some of its readers to pay (it is erecting a fairly porous barrier that allows people to click on 20 articles a month free, and an infinite number if they arrive at an article through a link) is that news is now a commodity.
Gary Silverman has a fascinating column in the FT today about the Triangle Factory fire 100 years ago today in New York, in which 146 people died and which changed industrial safety laws. He compares the risks taken by the owners of the factory with Wall Street’s abiding appetite for financial risk.
We all know that the world’s economic centre of gravity is moving east as India and China grow rapidly, but Danny Quah of the London School of Economics has managed to draw a map of it.
If you read anybody on the reputational threats facing McKinsey, it should probably be Walter Kiechel. As author of the definitive history of strategy consulting, The Lords of Strategy, he knows a lot about what goes on inside consultants’ heads.
On the Harvard Business Review blog, he’s used his knowledge and the latest revelations from the Galleon insider trading trial to explore “the beguilements…. beckoning to consultants over the last two decades”, in search of a better understanding of how Rajat Gupta, former head of McKinsey, “could have gotten himself into the current mess”.
(Gupta, who left McKinsey in 2007, is accused of sharing information, acquired in 2008 when he was a director of Goldman Sachs and Procter & Gamble , with Galleon founder Raj Rajaratnam. His lawyer has said the Securities and Exchange Commission’s civil charges of insider trading are “baseless”.)
Two weeks ago, I had what I thought was a clever idea. I owned an iPhone that I had not been using in New York because I did not want to pay AT&T’s data charges of up to $45 per month for e-mail and browsing. Why not just connect it to the network on a voice plan and use it for this alone when not in WiFi range?
Having worked in Milan in the mid-1990s, I have a soft spot for Italy’s imprenditori – the enterprising corporate leaders, often company founders, who make up the backbone of the industrial economy. They must be ashamed of the way their government is stirring up protectionist sentiment against French takeovers of Italian companies like Bulgari.
At last, a bit of perspective on tax avoidance.
Andrew Witty, chief executive of GlaxoSmithKline, says something is lost when companies switch tax domicile on a whim. The pharma boss tells The Observer:
One of the reasons why we’ve seen an erosion of trust broadly in big companies is they’ve allowed themselves to be seen as being detached from society and they will float in and out of societies according to what the tax regime is.
From the Birmingham Post to the Christian Science Monitor via the Korea Herald, the severe impact of the earthquake and tsunami in Japan on global companies is making observers question the risks implicit in the country’s “vaunted ‘just-in-time’ approach to business” (as the New York Times put it).
AT&T produced some slides for its announcement showing the rapid growth in mobile data use – 8,000 per cent over four years according to its calculations – and is justifying the acquisition partly by warning of spectrum exhaustion.
Twitter, meanwhile, is the first big social media company to be conceived with mobile in mind. It’s 140-character limit for messages was based on the original 160-character limit for phone text messages.