Around the turn of the last century, I heard Jack Welch recount how he had visited a clothing store on New York’s Fifth Avenue to buy a sweater. A sales manager approached the then boss of General Electric, said he was a fan, and in an embarrassed whisper, sought his advice. Was it essential to get rid of the worst-performing 10 per cent of his staff every year, even though his own team consisted of just three people? “Of course,” Mr Welch replied breezily.
Both John Gapper and I are away on holiday this week, so expect a short break until July 23, when normal service will resume.
Royal Dutch Shell’s plan to reintroduce attendants to the forecourts of Britain’s petrol stations is bothering me.
Don’t get me wrong, I’m all in favour of better service, but, as everyone knows, such improvements – particularly the personal “shall I check your tyre pressures, madam?” service promised by Shell – cost money. I’ll drink a litre of unleaded if the Shell plan isn’t really based on selling more stuff. Read more
“I can’t be confident about anything after learning about this cesspit” – Paul Tucker, deputy governor of the Bank of England, to the House of Commons Treasury committee, July 9, 2012.
Paul Tucker’s disgust at the Libor rate-rigging scandal (echoing business secretary Vince Cable) sent me back to records of the last time a foul stench of rottenness overwhelmed the UK parliament: the “Great Stink” of 1858. In that year, the smell of raw sewage, decanted into the Thames through overburdened sewers, reached the Palace of Westminster. It prompted emergency debates on “the state of the Thames”, in which R.D. Mangles, MP, told the House of Commons (as reported by Hansard): Read more
Barack Obama has labelled Mitt Romney an “Outsourcer-in-Chief” in his latest campaign ads. He’s tapping into a deep well of suspicion about a decades-old business practice.
Jeff Bezos is famously smart but I wonder whether he has thought through all the political implications of Amazon’s strategy of becoming back-office ecommerce infrastructure provider to the world.
The first part of FT colleague Barney Jopson’s series on the etailer was full of insight, but it was the comparison between Amazon and investment banks that struck me most forcefully. As Barney writes:
One investment banker says Amazon’s position is reminiscent of Goldman Sachs’ dual role as a broker and trader at the centre of capital markets. “People complain about conflicts of interest. But you still have to do business with them.”
Like Goldman and others, Amazon has set out to simplify the life of its clients, so they can concentrate on what they do best. One business identified by the FT investigation – RJF Books and More – has delegated the “selling, shipping, customer service, payments and complaints” functions to Amazon, which left me wondering what else was left for RJF to do. Simplification was a strong theme of my recent trip to Silicon Valley, where countless start-ups, and a few larger businesses like NetSuite and Salesforce.com, are offering businesses the opportunity to “plug in” their operations to outsourced back-office services and payment systems. Read more
I’m never sure whether to be reassured or not that the biggest reason for aircraft to crash is through pilot error, rather than mechanical failure or terrorism. In the case of the Air France Airbus 330 crash in July 2009, in which 228 people perished, pilot error is the culprit once again.
The statistics show that many of the things that typically worry passengers — turbulence, engine failure, the possibility of hijacking etc — are much less dangerous than the simple risk of someone in the cockpit making a mistake. Read more
Two decades ago, I attended one of the most gripping press conferences of my life. It was called by Andrew Buxton, Barclays’ then-chairman, to apologise for the bank’s £414m loss, mainly on reckless property lending, and to announce that he would be halving his job by resigning as its chief executive.