My column in the FT this week is on what Steve Jobs can teach US companies:

Steve Jobs is returning to his post as chief executive of Apple, following a liver transplant, to some good news. On Sunday, Apple’s iPhone 3GS, the latest version of its device, passed 1m sales in three days.

Mr Jobs permitted himself a boast that “customers are voting and the iPhone is winning”. This was aimed at Palm’s Pre, which is the best effort to match the iPhone, but trails it in one vital regard.

Owners of iPhones can choose among 35,000 applications, most built by other companies, that run on the phones. Competitors including Palm and Google have not yet matched this creative alliance.

The fact that Apple persuaded others to rally round has helped to shield it from the margin squeeze in the personal computer and consumer electronics industries. It has become the hub of a creative network.

Lots of businesses are suffering in the recession but that masks a longer-term trend that only relatively few – Apple among them – have managed to buck. This is a squeeze imposed by intensifying competition across many industries.

Chief executives sometimes bemoan the passing of the old days, when the pace of change was slower and they were under less pressure. It sounds like self-delusion but they are correct: it is harder to make a good return than it used to be.

Evidence for this comes from some intriguing research into US corporate performance by John Hagel and John Seely Brown of Deloitte’s Centre for the Edge. They found that the return on assets at US companies has fallen steadily since 1965, from about 4 per cent to 1 per cent.

Consumers have done well out of this squeeze since they can get more for their money, while employees with scarce skills have been able to get more of the pie. The shareholders (and less-skilled workers) have been served thinner slices.

The notion that companies are suffering is counterintuitive since corporate profits reached an all-time high as a percentage of US gross domestic product in 2006, at the expense of wages. But this rosy picture for companies and investors masks an underlying deterioration in corporate performance.

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There is what I found a rather remarkable piece in the FT this morning by Irwin Stelzer, director of economic studies at the free-market Hudson Institute, praising Neelie Kroes, the EU competition commissioner and taking an anti-trust dig at Anton Scalia, the right-wing Supreme Court justice.

Mr Stelzer’s support for the EU’s action against Intel may be influenced by his consulting role to AMD, which complained to the EU about Intel’s pricing strategy and aggressive use of discounts. Even so, such a strong stance in favour of the European style of anti-trust is striking:

“Take it from a conservative economist who prefers less to more government: if markets are not competitive, or if they are otherwise failing to function properly, it takes the long arm of government to protect the invisible hand. Let us hope that this view is shared by Mr Obama’s Supreme Court nominee, Sonia Sotomayor – and that she is prepared to take on the formidable and otherwise estimable Justice Antonin Scalia, who has little use for the antitrust laws”

The signs are, as Mr Stelzer points out, that the US anti-trust regulators will fall in line with Europe’s more vigorous approach in future. Silicon Valley, and big business, should watch out.

My column in the FT on Thursday is about luxury and premium good in the downturn:

The harder they come, the harder they fall, one and all. The decade of decadence, of affordable luxury and premium everything, from expensive spirits to fashion label clothes and first-class air travel, is over.

It was, of course, an illusion to imagine that the business cycle had gone away in historically cyclical industries such as airlines and luxury goods. But the years of expansion carried on long enough, with only a brief interruption in 2001, that a lot of people came to think so.

They have changed their minds. Virgin Atlantic expects to lose money in this financial year. Giancarlo di Risio, chief executive of Versace, is to step down after falling out with the family amid a 13 per cent fall in revenues in the first quarter.

Double-digit falls in demand for luxury and premium goods and services are common in recessions but this hangover is especially sharp. Big airlines suffered a 35 to 40 per cent fall in revenues from international first- and business-class passengers in the year to March.

So what should such industries do when faced with a slump in consumer demand? The textbook answer is to cut costs, curb output and do everything possible to adjust – apart from slashing prices.

“You must accept that you will sell less but the biggest mistake is to cut prices across the board and ruin your brands. People are not refusing to buy because prices are too high, but because they are frightened and are hoarding money,” says Hermann Simon, chairman of Simon-Kucher, a pricing consultancy.

There is logic to what Mr Simon says. Even for non-premium industries it takes three to five years to get consumers to pay the full price again once you have started discounting. As for luxury goods, price-cutting rips apart the industry’s artfully constructed image.

Discounting can exact a terrible price, as the imminent bankruptcy of General Motors shows. The company was the king of cheap finance and price-discounting even in the good times; it was left with thin to non-existent margins, having put its brands through the crusher.

But the reality for many companies (happily for consumers) is that they have no choice. Luxury and premium brands have grown so much – and reached so far into the mass market – that their owners cannot choose from a menu of cutting costs, output or prices. All are required.

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It has always struck me that lengthy face-offs among internal candidates within companies to become the next head, a tradition popularised by Jack Welch when he was about to step down as chairman and chief executive of General Electric, are internally destabilising.

Having two or three senior executives publicly duking it out in something akin to a medieval joust for a king’s or queen’s approval absorbs a lot of energy and exacerbates internal fiefs.

In most cases, however, there is at least a chief executive in place to oversee the process and keep everyone more or less honest. What happens when there is no-one there to referee?

BP and its Russian partner in TNK-BP, the oil joint venture, are about to find out. Bizarrely, two outsiders will be brought into the company to tussle for the top job over the next six months, after the two sides failed to agree on who would succeed Robert Dudley.

To observe the fall-out from such contests, BP need only cast a glance sideways at Royal Dutch Shell, where Linda Cook, head of its gas and power division and a former contender to be its chief executive, has just resigned.

Ms Cook does not seem to have wanted to see her empire within Shell curtailed by Peter Voser, the man who beat her to the top job and takes over as chief executive on July 1.

I would say it was a recipe for instability at TNK-BP, except that the company is hardly an oasis of calm at the moment, with Mr Dudley having been forced to resign in a bitter dispute last December.

Still, the worst may be yet to come in terms of management upheaval.

The financial crisis has at least had one good effect, finally pushing over the top the right of US shareholders to nominate directors to company boards. I am not sure whether that is strictly logical, since there has not been a broad failure of corporate governance - just one on Wall Street - but so be it.

Since I hail from a country where shareholders have more explicit rights than in the US, I have always found the US system of corporate governance hard to grasp. In particular, the notion that investors need either to sue or to mount a public battle to displace directors in order to be heard strikes me as odd.

The Securities and Exchange Commission proposal to give larger shareholders the right to nominate directors without going through a proxy contest does, of course, impinge on the rights on states such as Delaware to set how locally-incorporated companies run their affairs.

However, despite my soft spot for the Delaware chancery court, I do not believe that should stand in the way of SEC action. It appears that this time, after three failed efforts in the past five years, Mary Schapiro has the votes to get the proposal through.

David Brooks has an interesting column in the New York Times this morning about the traits of successful chief executives, which concludes that execution and organisational skills are far more important than the ability to inspire or be a good listener:

“The CEOs that are most likely to succeed are humble, diffident, relentless and a bit unidimensional. They are often not the most exciting people to be around.”

However, having examined the research on which he bases this conclusion, I have to raise a red flag. For he leaves out the salient fact that the research examines the characteristics and record of 316 candidates to head leveraged buy-out and venture capital companies.

I think this makes quite a big difference, for the qualities demanded of the head of a private equity-owned company need not be the same as those of a Fortune 500 company, and indeed may well be quite different. As the study’s authors - Steven Kaplan, Mark Klebanov and Morten Sorenson - put it:

“The people we study are CEOs of buyout and VC-funded companies that may have special needs. As a result, it is not possible to know whether the results generalise to CEOs of other firms, particularly public companies. However, we believe the similarity of our results to those of [Peter] Drucker (1967) is suggestive in that Drucker’s work was based on personal observations of many executives in many different types of firms.”

The Drucker reference is to his 1967 book The Effective Executive.

Intuitively, I would have thought that private equity funds want someone who is extremely detail-oriented and consistent in order to push through large changes in a limited amount of time at a company that has gone astray. That lets the owners exit for a higher price in three or four years.

Meanwhile, although those same qualities are useful in a public company, the ability to inspire lots of people and tell a convincing story to analysts and a disparate investor base are also at a premium. The people who have them, whom Brooks compares to politicians, are rightly in demand.

I do not dispute the conclusion that the ability to execute consistently is important in a CEO, as Jim Collins pointed out in Good to Great, but the narrowness of the data is relevant.

All the signs are that the global economy is recovering from the precipitous drop we have experienced in the past year. Jean-Claude Trichet, president of the European Central Bank, is hardly a professional optimist but he now expects a gradual economic recovery.

Meanwhile, various companies are becoming cautiously hopeful about the future - or at least that the worst is over. Carlos Ghosn of Renault/Nissan joined the club today, predicting that Nissan will return to profit in its 2010 fiscal year, which runs to March 2011.

But what will economic recovery feel like for consumers and businesses? I think it is safe to say that, while less frightening than the abrupt halt to economic activity in late 2008, the next couple of years are hardly going to be exciting - or pleasant.

Thanks party to Alan Greenspan’s tenure at the Federal Reserve, we have become used to short, sharp falls in economic activity followed by rapid recoveries. The best example was the post-2001 downturn, which the Fed addressed by cutting interest rates aggressively.

But the experience of the past few years is not typical. The recessions of the early 1980s and early 1990s did not last as long as this one has but the recoveries were slow, and did not feel very joyful to those trying to run businesses. That was even more true of the 1970s oil shock recession and recovery.

It is hard to imagine this emergence from recession being faster - indeed, there are lots of reasons to think that it will be slower. Public budgets in the US and UK are in bad shape, since governments have spent so much already on fiscal stimulus, and there is plenty of private sector adjustment to go.

It may be a recovery but, to many businesses, it will feel like the doldrums.

This is my column on Asia and business brands in the FT:

Not long ago, Joanna Seddon, a marketing executive, lost a button on her Louis Féraud suit and looked for a store in New York or London at which to get it replaced.

Ms Seddon, an executive vice-president of Millward Brown, was out of luck: the late French designer’s New York store on Madison Avenue had closed. She had to turn to China, where Féraud has 11 outlets. A brand made popular in the US in the 1980s by the soap operas Dallas and Dynasty had gone east.

The realigning of Louis Féraud from the US to China is an unusual story but it is becoming more common. As it does, our postwar assumption that the US is the place where most global consumer brands get launched before being spread around the world is being undermined.

This week, Porsche chose the Shanghai motor show to launch its Panamera four-door saloon, the fourth Porsche line after the 911, the Boxster/Cayman and the Cayenne (a US-oriented sports utility vehicle).

This time, there is no mistaking the Asian influence on Porsche’s product development. The Panamera is a global model but its length – nearly as long as the stretched Series 5 that BMW made for China – tells the story. Rich car buyers in China prefer to be driven by chauffeurs.

The car industry is a leading indicator. The US slump has led to China turning into the world’s largest car market this year, accentuating a long-term shift towards Asia.

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