Silence of the leaders in Postal and Climate Protests

August 21, 2007

images1.jpgWhen leaders are silent, the absence of noise may be revealing. David Cameron and Gordon Brown remain remarkably quiet over the Postal Dispute. This week, their silence extended to the climate change protests at Heathrow

As the great Sherlock Holmes taught us, the hardest thing to see is what is missing from a story. One of the functions of the Press is to point to the gaps, the spaces between words. To drag a response out of politicians, for example.

I mentioned in an earlier post a lack of contribution from our political leaders into the on-going postal dispute . The Prime Minister may indeed have been attending to a host of urgent issues over the last two months. That might just explain it. He can’t be expected to speak out on everything. But what about his ministers? Isn’t that a more surprising silence?

Then there’s David Cameron. Why hasn’t he pointed out that Gordon Brown has been guilty of inaction over the dispute? And why has Ming Campbell been so silent, on behalf of the Liberal Democrats?

The silence of our political leaders this week has extended to story of the protestors against the third runway at Heathrow. Which, inevitably is also about political policy over global warming.

Leaders have to choose where to stand and fight

There can be little doubt that Brown and Campbell have thought about and discussed the Postal Strike, and the events this week around the perimeter of Heathrow Airport. For whatever reasons, they have made deliberate decisions to say nothing. Silence is significant.

The press has shown minimal interest in the first of these stories. But it was for its duration particularly interested in the second. A Daily Telegraph piece about the protest resulted in as many on-line replies I have ever come across in reply to a news story.

What happens next? One day after the protests, the story is off the news agenda. Try finding follow-up reports after the one-week protest ended on Sunday August 19th 2007. The most comprehensive account I could find appeared in The Guardian in a slightly truncated form of the blog by environmental activist George Monbiot.

This week, David Cameron chose to target possible closures of local hospitals. Ming Campbell was busily drawing attention to the tricky matter of troop withdrawals from Iraq. David and Ming have chosen where they wish to fight for the moment. Gordon Brown keeps his powder dry, and his position secure, garrisoning his political forces behind the barricades of impressive opinion polls of recent weeks.

What conclusions can we draw?

If we shift the military metaphor to that of a military game, the chess concept of Zugswang comes to mind. In chess it sometimes is worse for you if you have to move, better if you your opponent has to move. It’s like meeting another car in a narrow lane without passing spots. Someone has to reverse out of there. If that retreat is not acceptable to either, you have a stalemate or no result.

The point is, each player is reluctant to move. But in chess the rules of the game force one player to move or forfeit the game. A player in Zugswang moves, and if the opponent knows how to continue, there is a forced win (or more subtly a forced weakening of position).

The lack of action on either side suggests there is a zugswang-type position building up. Cameron watches Brown. Brown watches Cameron. Neither can find a satisfactory active move. Tick follows Tock follows tick.

Why might this be so? The specific contexts of the two examples have to be explored more deeply. The outlook for the Post Office Union looks bleak. Mr Brown seems have accepted the broad strategy position for its modernization developed under the Blair regime. Either that, or he may be biding his time before making an intervention. Cameron wishes above all to secure the moderate political ground, but it requires a leap of imagination that I for one am incapable of making, to find a way in which he could offer strong support in favour of the Union position. There are too many ways in which the stance could be claimed to be anti-progressive.

However, the Heathrow protest is rather different. Mr Cameron would like to be seen as a strong supporter of environmental causes. In this case, it could be seen as a progressive move to find some common cause against the Government’s transport policy. His advisors will be assessing the significance of the volume and tenor of responses to the Daily Telegraph article mentioned above.

According to Monbiot

We haven’t prevented runaway climate change by camping beside Heathrow and surrounding the offices of BAA, nor did we expect to do so. But we have made it harder for … unheard people to be swept aside, and harder for the government to forget that its plan for perpetual growth in corporate utopia is also a plan for the destruction of life on earth

He may well be on to something.

With grateful of acknowledgement for the image Silence of the lambs from Flickr. by Victoriano Great photograph.


The Murdochs ride out

August 2, 2007

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The Murdochs are on rampage. One force led by father Rupert overpowers the Dow Jones ranch. Meanwhile another raiding party headed by son James makes a lightening raid, and claims ownership of the Amstrad territories. Can anyone stop the Murdoch gang?

Got a bit carried away there. First the surprise news that BSkyB, led by James Murdoch, has acquired Amstrad. Then a less surprising report. The long-running News Corps seige of the Dow Jones organization conducted by Rupert Murdoch has come to an end. The prized asset, The Wall Street Journal, has fallen to the mighty News Corp.

Both are relatively small deals, but each is of a high profile nature.

Before we get too tricksy in linking the two stories, let’s recap on recent events. The Wall Street journal tells it as it sees it, as a delicate dance between suitor and target. Suiter and Target? That’s not very romantic, but the story is well worth a read.

Behind the scenes, however, the media mogul had orchestrated a deal over two years. He quietly gathered intelligence on Dow Jones’s operations and consulted Wall Street figures to plot his moves. An emissary for him talked with family members who had been Dow Jones dissidents a decade ago

The story then rotated around the reluctance of the powerful Bancroft family to sell its shares. The sticking point was not so much a fair price, as the loss of what was reported as the values of independent news reporting esposed by family members.

Meanwhile, at BSkyB

Meanwhile, News Corporations’ subsidiary, BSkyB, announces that it has reached a deal to buy Amstrad. Coincidence, but another victory for the Murdoch family and News Corp. Like father, like son, The offer is a no-nonsense one, valuing Amstrad high enough above the traded value of its shares to deter other would-be bids. This is salient, as prospects for the Amstrad have not been rated highly by analysts.

The agreed figure is some £150 million. But the deal comes with a lot of trappings. Amstrad is the company that Sir Alan Sugar created and led to its current position. That alone would have secured him a niche as one of the UK’s most successful entrepreneurs, but then he starred in his own TV series, The Apprentice.

BSkyB is high-profile in the UK, through the impressive success of its satellite broadcasting, and particularly through its impact on Premier League football. Its deal is generally regarded as a major factor in the rocketing finances, and players mega-contracts. Add to that is a whiff of (Mills & Boon) drama starring a less-favoured offspring of James Murdoch striving to prove himself to patriarchal father Rupert and to the world.

Students of takeover battles can find details further details in earlier posts.

Financial analysts concede that the bid is advantageous for Sir Alan. In strictly financial terms the value to News Corp is less clear.

Some blue sky thinking

Those of us at a distance from the key players have to reply on efforts of imagination, trying to make sense of the available information. This is a nice training exercise for would-be strategic leaders. Can you push yourself beyond first impressions? Can you make sense of otherwise curious aspects of the story as it is presented to you?

Here are two puzzling aspects. Why did Rupert Murdoch make an offer for Dow Jones that is widely beyond what anyone else would have been prepared to pay? Why did James Murdoch likewise make an offer which again is one that is high enough to baffle commentators?

It is likely that there is an explanation that lies beyond the basic short-term numbers involved. The targets possess some value to News Corp that go beyond financial valuation of assets. For Dow Jones and its Wall Street Journal we could investigate whether the figure could be taken as reflecting that mysterious intangible ‘potential value of the brand’. I can’t see that work so well in the case of Amstrad (Sorry, Sir Alan).

In the first case, the intangible may be seen as the WIT price meaning ‘whatever it takes’. Rupert Murdoch wants the Wall Street Journal. A majority of its shares are held by individuals for whom the company is not valued in terms of a stock-market figure. Some ‘offer they can’t refuse’ has to be made. And eventually pragmatism wins over deeply held emotions. The WIT pricing simplifies the deal-making, by removing the possibility of some third party white knight appearing on the battle field.

In the second case, the seller, Sir Alan Sugar is founder of Amstrad. He has never presented himself as bound to it through a deep emotional commitment. Sugar the entrepreneur and market trader has the pragmatism of the entrepreneur. Faced with a deal in a company whose best days seem to be behind it, he acts decisively.

So what was James Murdoch up to? The ‘killer fact’ for me is the reliance that BSkyB has for Amstrad to supply its satellite boxes. With Amstrad stock otherwise rather unattractive, might it be attractive as a nice little move for, say, Richard Branson to make a bid of Amstrad. At very least that would send the price of Amstrad up. Until recently, that would also have been a real concern also because of BSbyB’s dispute with Virgin Mobile.

Is that what happened?

No more than speculation on my part. But it does show some of the considerations those strategic chess players have to be aware of in these corporate battles. And at least it does not reply on disentangling the spin put on the story given to ‘in the know’ financial journalists.


Vodafone boardroom battles

July 24, 2007

Vodafone approaches its AGM as a very modern company. And not only for its high-technology product base. The resolutions under discussion on Tuesday 24th July 2007 reveal the new kinds of pressure from activist shareholders who are making additional demands on corporate leadership.

You have to look below the surface of corporate announcements to detect the dramas of business. Take the notice of Vodafone’s AGM, for example. In the ritualized language of corporate meetings, twenty five resolutions have been presented as recommendations from the board. These will almost certainly be passed (unless there are even darker schemes afoot to destabilize the company’s leadership) rebels. There follows other recommendations which give a glimpse of the pressures being exerted by this new breed of corporate activist. These are the particularly interesting proposals. They give a clear indication of the pressure brought to bear on any company which has attracted the attentions of this new kind of activist. The issue is very much a matter of control.

A nice example is the resolution on Verizon Wireless. The company holds a 45% share in Verizon. The activists would like more dynamic involvement of Vodafone in Verizon, and suggest various initiatives.

The company rejects the proposals robustly, indicating that such moves would be complex, risky and undesirable.

Verizon Wireless (Resolution 26)
Resolution 26, if approved, would require your Company to put proposals to shareholders to alter the capital structure of the Company by the issue of a special class of shares of the Company the return on which would be dependent on the performance of Verizon Wireless (“tracking shares”) or shares in a new holding company
Maximizing the value of this shareholding is a key element of the Company’s current strategy and one that is kept under constant review. As part of these reviews, the Company has considered a number of alternative structures, including tracking shares and spin off options [leading to the conclusion that] the structures proposed would not deliver to shareholders effectively the current value of the Verizon Wireless shareholding and could potentially significantly undermine the directors’ ability to maximize the value of the shareholding in the future

Power without responsibility

It is tempting to recall the old saying about power without responsibility. This is too simplistic. The activists would argue that they are looking after their financial interests. Their actions are leading to far greater alertness on the part of corporate leaders to the interests of their shareholders. The moves are, to go back to a chess metaphor, to some extent a threat which influences the course of the game, even if it is not directly successful.

The fate of Vodafone

The outcome of today’s AGM will not settle the fate of Vodafone. It will, however, indicate the developments in a company that has seen its fair share of boardroom strife as it transformed itself into a global telecommunications operation under Sir Christopher Gent and Lord McLaurin. Its takeover of Mannesmann was eventually seen as too generous, calling for revision of its corporate worth. Now Vodafone’s dynamic and controversial CEO Arun Sarin takes on the challenges of running the company. There have already been criticisms of directors’ remuneration packages. He is not facing an easy ride.


Tevez Transfer Stalemate: A Lesson in Sporting Leadership?

July 19, 2007

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Attempts by Manchester United Football Club to sign Argentina’s Carlos Tevez have been described as in a stalemate. Did complicated legal issues make this inevitable? Or in hindsight, might more creative leadership actions have avoided this impasse? And if so, by whom?

This has not been the happiest week in the footballing life of Carlos Tevez. A week ago he was a leading member of the Argentinian team favored to win the prestigious Copa America competition. In addition, Manchester United Football Club had announced that a transfer deal of the star from West Ham United was all but complete.

Over the weekend, Brazil recaptured enough of their brilliant skills in the final to sweep aside bitter rivals Argentina. Tevez headed for Europe, final destination Manchester, for a pre-transfer medical check-up with the club of his dreams. Personal terms had been agreed with his agent.

No so fast, Senor

Even as he was completing the last leg of the flight, the story took on a new turn. There had been delays in sorting out the contract, and now last-minute talks between West Ham and MUFC had broken down. Tevez arrived in Manchester, but he had not been granted permission by West Ham to put himself forward for a medical examination.

What’s going on?

English football fans were familiar to the background of a rather complicated story. I will try to capture the various inter-related threads, from the various press reports.

Where does a story start? We have to go back at least as far as the time that West Ham became involved in a very unusual transfer deal involving two Argentine footballers, Carlos Tevez and Javier Mascherano.

The deal in Auguest 2006 was unusual because unlike other contracts agreed through the FA and The Premier league, the players were still, in some unrevealed way, not fully contracted as West Ham players at the outset of the deal. The arrangement was not with their former club (Corinthians) but with an agant, Kai Joorabchian on behalf of a shadowy background organization Media Sports Investments (MSI).

According to BBC reports

MSI were headed until June by Kia Joorabchian, who resigned but retained an investment in the two Argentines. MSI were linked with a takeover of West Ham last season but eventually pulled out.

While the contract was unusual, there have been other abnormal contractual arrangements permitting players to move on loan to and between Premier League clubs, with small-print not made public. The Premier League and The Football Association accepted reassurances from West Ham that satisfied them enough to sanction the arrangement. This was later to become one of the contested areas in the matter.

At the time of the contract, West Ham appeared to be struggling to survive in The Premiership. Financial limitations prevented them investing in top-flight players. Within considerable turmoil on and off the pitch, performances remained bad.

Enter The Egg

It was with some sense of relief that the club passed to new ownership with deeper pockets. The new owner quickly caught the public imagination. Eggert Magnusson (The Egg) is a wealthy Icelandic businessman who had already been involved in football as President of the Football Association of Iceland
His somewhat quirky appearance and enthusiasm and commitment to West Ham seemed to silence even the more extreme xenophobic reactions from the Alf Garnet faction still active among the club’s supporters.

West Ham’s problems persist

The club’s fortunes continued to decline until demotion was almost inevitable. Tevez had failed to live up to the reputation mainly earned through his World Cup performances. Magnússon sacked manager Alan Pardew in December 2006 replacing him with Alan Curbishley. The question of Tevez’ contractual position was again raised. A lengthy enquiry began.

The great escape

Then a great escape occurred. Tevez began to score match-winning goals. West Ham began a remarkable winning streak. Survival was still a possibility. Eggert had a contagious belief in his new players.

But other clubs facing relegation began to speak out against the arrangements that had brought Tevez to West Ham. Legal action was threatened. Sheffield United manager Neil Warnock, anticipating a close finish, was particularly vociferous, arguing that West Ham should be punished by losing points. This would help Sheffield United but effectively condemn West Ham to demotion.

An independent enquiry found that the club had initially been technically wrong in their contractual arrangement. The punishment was a fine, but no point deductions. During this period, one concern regarding the outcome of a future transfer of Tevez. The club claimed to have ‘ripped up’ an agreement [presumed to be Joorabchian and partners]. This was seen as protecting West Ham from the charge that future transfers might also be unconventional and taken as possible evidence of the club’s further illegal arrangements with Tevez’ agents.

In a gripping climax to the season, other struggling clubs (including Sheffield United) stumbled. West Ham avoided relegation when they won the last game of the season against Manchester United who had already won the League. Desperation triumphed over classy complacency. Tevez impressed enormously and scored a fine goal.

The legal challenges to West Ham petered out.

Manchester United bid for Tevez

The close season in the English Premier league is also a transfer window (the other window is in January). After their League triumph, MUFC revealed their recruitment plans for the new season. Unlike West Ham, they were able to compete for the best players.

Apparently, Tevez is a player whom Manager Sir Alex Ferguson had admired for some while. His admiration must have been reinforced by the performance of Tevez in the last game of the season.

In a recent press conference, AF announced that a deal to secure Tevez was nearly complete, subject to some details to be agreed with the League. He sounded confident, revealing that the final details would be sorted out by Club lawyer and former director Maurice Watkins. He added that Club Chairman David Gill had been working on the matter for a while, but he and Gill were shortly leaving with the squad on a pre-season tour in Asia.

Confidence at Old Trafford in clinching the deal began to drain away, after an emphatic statement from West Ham to the effect that they still held the rights to the player, and that he was not up for transfer.

From Japan, David Dill announces that FIFA has been called in to ‘expedite a resolution’ of a dispute between player and West Ham, and that he expects the resolution to find ‘in favor of the player’. He still expects Carlos Tevez to be playing for MUFC at the start of the new season.

Leadership lessons

The stalemate metaphor is only of limited application. Stalemate in chess occurs when the player to move has no legal move available. This is invariably the player who would otherwise lose. The stalemate is the result of a previous careless move from the player who was in the stronger position. In this case, it seems as if MUFC had the stronger position, but West Ham had been able to avoid accepting defeat. MUFC has to set up arrangements for another more conclusive battle.

In fact, you can see how chess metaphor as a source of strategy insights can be taken a bit further. The MU leadership may have taken for granted that their position was so strong as to require no deep risk analysis. This is suggested by the way that David Gill had delegated the case to solicitor Maurice Watkins, while Magnus Magnusson remained very much on the case at West Ham.

One of the special features of the business is the potential for blame to be attached to various parties, including the Premier league. The blame may have serious financial and legal consequences.

These were the ‘events’ that turned the matter of completing a football transfer into a complex problem.

Don’t hold your breath on this one…

Update

There were a few more twists and turns. Eventually a contract was signed and Tevez joined MUFC on loan for two years. On loan from whom? Not West Ham, although the club received a payment from the Joorabchian camp in a deal which confirmed it was not West Ham.


Tit for tat diplomacy: Chess as a source of strategy insights

July 17, 2007

kasparov.jpgA dispute between Great Britain and Russia has blown up into tit-for-tat political gestures. We examine the process as a strategic game, using chess as a source of strategic insights

Tuesday July 17th 2007

In another challenge for the Government, the new Foreign Secretary David Miliband faces his first international incident. The episode can be traced to the death in London in mysterious circumstances of the Russian political dissident and activist Alexander Litvinenko.

Mr Litvinenko, a former KGB agent, died of exposure to radioactive polonium-210 in London in November 2006. The trail led to Andrei Lugovoi, another KGB agent still living in Moscow.

Efforts to investigate the case further led to escalation into a political dispute. On Monday July 16th 2007, The BBC reported that four Russian diplomats were being expelled expelled from Britain.

Mr Putin has already indicated strong rejection of the claims and the British actions.

Russia’s Foreign Ministry chief spokesman Mikhail Kamynin said:

“London’s position is immoral. Such provocative actions masterminded by the British authorities will not be left without an answer and cannot but entail the most serious consequences for Russian-British relations”.

Russian President Vladimir Putin’s spokesman Dmitri Peskov said: “We don’t want to be provoked into a ping-pong game, although of course the Russian side will provide a necessary response.”

So where does chess come into all this?

Chess hasn’t come into the story all yet. I am just continuing to build a case that Chess is a powerful lens through which to examine strategic issues. Dmitri goes so far as to say that Moscow is not interested in ping-pong diplomacy. Quite right. That’s more the approach favored by Chinese leaders of recent memory.

But Chess. That’s different. Remember Ian Fleming’s celebrated tale of the Russian Grand Master hauled out of a chess tournament to bring his brilliant mind to bear on a tricky stategic problem? May even as I write, something like that is going on in Moscow. Although it sure as hell will not be Gary Kasparov at work. He is already bending his brilliant mind to strategies for opposing Mr Putin.

Incidentally, the image above comes from The Kuwait Times of April 15th 2007. It shows Gary (back to camera)engaged in his new career as a politician.

So what strategic insights might be revealed as we extend the chess metaphor? I must add that this is no attempt at black humour, and I do not deny the real-life seriousness of such a ‘game’ that led to the murder of Alexander Litvinenko, and arguably other murky activities and plans.

Assume the players are London (white) and Moscow (black). The game has been in play for a while and we pick up the position recently.

Move 1: Four Russian pawns are captured

The pawns were no direct threat to London. The move invites a reply from Moscow. Prior moves suggest that London would like Moscow to give up Andre Lugovoi. Moscow has indicated it will not make this move in response. London’s move is therefore to be viewed not as a direct threat forcing a reply, but as a move with a concealed threat or intention.

Moscow is expected to reply in a way which is seen to be a consequence of the London move. Sooner rather than later …


The positions change on the EADS chess board

July 16, 2007

A major restructuring is announced at EADS, the parent of the high-profile Airbus organization. The complex double helix of German and French bonds has been split apart. The reconsituted entity is a more recognizable structure. Will it provide for more effective corporate governance and strategy, as it faces severe internal and external challenges?

The announcement on the EADS website was calm, hardly signifying any major changes. It all read as if everything was well-planned.

EADS shareholders have decided – together with the EADS management team – to modify the company’s current management and leadership structure. Guiding principles of the modification are efficiency, cohesiveness and simplification of EADS management and leadership structure, towards governance best practices and in the respect of balance between the French and the German shareholders. The German Government has been consulted as well.

Under the simplified management structure, EADS will be led by a single Chairman and a single CEO.

Rüdiger Grube will assume the position of sole Chairman of the Board of Directors of EADS. In this role, he will be responsible for overseeing the Group’s strategic development and dealings with its Shareholders. In particular, he will chair the newly created EADS strategic committee.

Louis Gallois will assume the position of sole CEO of EADS. In this role, he will be responsible for leading the management team in the execution of the Group’s strategy and managing the company’s interaction with public shareholders.

Thomas Enders will assume the position of CEO of Airbus in the Toulouse headquarters of the company, reporting to the CEO of EADS. He will be supported by Fabrice Brégier as COO of Airbus.

According to the BBC,

The French joint chief executive Louis Gallois will take sole charge at EADS while his German co-head Tom Enders gets the top job at Airbus.

EADS’ complex structure has been blamed for many of its recent problems.

“We need to be a normal company,” Mr Enders said.

Previously, EADS had two chairmen and two chief executives: one French and one German. Daimler executive Ruediger Grube will become sole chairman of EADS, a post he previously held jointly with France’s Arnaud Lagardere.

The implied abnormality by Enders was the double-harnesses imposed on EADS by the influences exerted by two co-chairman, and two co-CEOs This was the heritage of the company’s formation, and reflected the ‘least worse’ way of maintaining cooperation between the company’s two main national interests in France and Germany. No alternative better could be found than the structure which permitted one French and one German chairman, one French and one German CEO on the main board.

But let’s see what can be concluded beyond the formal statement:

One or two commentators suggested that the changes were not particularly unexpected. I will be charitable and suggest that those commentators must have been holding back on the outcome for some reason or other. The details are far from expected.

In ealier posts I had chronicled the various problems at EADS and its the troubles that have piled up for its major subsidiary, Airbus. The recent press reports had led me to conclude that attempts to resolve the complicated dual-management structure appear to be centering on co-chief executive Tom Enders.

Mr Enders is a controversial figure in France after he publicly criticized political interference from Paris and suggested the possibility of sensitive asset disposals. However, Daimler, the core German industrial shareholder in EADS, is determined that Mr Enders should not be sacrificed in any final deal.

Let me put a few pieces on the chessboard. Louis Gallois, head of Airbus, is widely admired, and believed to be needed to stick it at Airbus, and see though Power 8, the strategic plan to streamline the business. This is a production and commercial imperative. He is co-CEO of EADS with Tom Enders at present.

Arnaud Lagardère of the media group of the same name is French Co-chairman of EADS. His German co-chair is Rudiger Grube.

Nicholas Sarcozy and Angela Merkel are also in play, with special concerns for their national interests (and for their own political positions). EADS Shareholder DaimlerChrysler has signaled willingness to increase its holding, a positive gesture to Sarcozy who would like to reduce the holding of the French Government. DaimlerChryser’s bid is linked to their interests in keeping Tom Enders in play.

The rumors in the French press

Rumors suggest the game will involve taking Enders off the board. This has been denied emphatically by the company.

So what is ‘behind the headlines?

The company statement seems to have airbrushed out Arnaud Lagardere, the earstwhile Co-chair of EADS. Strange. So the German Rudi Grube takes over as Chair of the EADS main board. But Lagardere remains a powerful figure and shareholder. It has been suggested that he has escaped scrutiny over earlier share scandals, and is ‘protected by Sacozy, who in turn is aware of a rather soft-ride from M Lagardere in his recent election campaign. And there is the possibility that the media figure will be in line to return as sole Chair of EADS in the future, in an agreement in which the Chair will rotate from German to French holders every five years.

Another ‘solution’ left Louis Gallois as CEO of EADS and Tom Enders in charge of the subsidiary Airbus. This grants Gallois his (alleged) wish to avoid being left to sort out Airbus while answering to Tom Enders. On the other hand, the one figure widely regarded as key to implementing the Power8 plan at Airbus is Gallois, now expected to play a more political role.

The changes are sufficiently complex to warrant a working party investigating them.


Boeing, theater of dreams and Airbus nightmare

July 8, 2007

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Boeing launches its much-awaited Dreamliner 787. For Airbus is must seem more like a nightmare. In this fantasy battle, their champion, the Airbus 380, appears to be as potent as Superman in Kryptonite underpants. Can the European aero-dream still turn out all right in the end?

In Seattle they build planes. And, at the moment they are also very much in the Hollywood territory of selling dreams. The fantasy object is the new Dreamliner. High-tech, high-flying, the i-phone of the skies, the flying apple of the mind’s eye.

Meanwhile, some six thousand miles to the East (well within the 8000 mile range of the Dreamliner), Airbus executives put a brave face on for the ceremonies.

The power of the dream

Who can doubt the power of the dream? Who knows what happens if we stop believing, as James Barrie reminds us in Peter Pan, and Terry Pratchett points out in The Hogfather.

The selling of the dream has been a signal success, with press release claims that the 787 is already the fastest-selling commercial airplane in history with over 600 orders valued at more $100 billion at current list prices.

Even those us immune to the romance of the tale know that the 787 is the next giant leap of a line of aircraft of great consequence in the history of civil aviation. The 707 was a first. The 747, affectionately known as the first Jumbo jet. Now the 787, the star in the theater of aero-dreams.

Airbus versus Boeing

From the American side of the Atlantic the battle is a no-contest. Here’s the view of Lance Winslow, a not totally unbiased correspondent assessing the Dreamliner against its most direct competitor the Airbus A-350

Is the A350 really that spectacular? Hard to say, but one thing is for certain it is certainly no match for the robust, daring and dashing Dreamliner of today. Airbus’s attempt to compete with the Free Market Boeing Company has once again earned itself a distant second place or last place in the battle for the sky. The A-350 will use the same fuselage as the A330, but the wings will be made of composite. This is hardly a reciprocal response to Boeing’s cutting edge technology and advancements in design. But we have come to expect mediocrity from Airbus. When flying do you really want to ride in a bus while traveling at 30,000 feet in the Air? Think about it.

The Free-Market Boeing versus EU-subsidized EADS is important issue which will continue to be brought into the debate. The article also gets to another the key factors in the argument, the technical merits of the competing products.

Meanwhile in Europe …

In Europe, the financial press is more preoccupied with the boardroom battles within EADS, the corporate parent of Airbus. The Financial Times suggests that the efforts to restructure its complicated dual-management structure appear to be centering on co-chief executive Tom Enders.

Mr Enders is a controversial figure in France after he publicly criticized political interference from Paris and suggested the possibility of sensitive asset disposals. However, Daimler, the core German industrial shareholder in EADS, is determined that Mr Enders should not be sacrificed in any final deal.

We will continue to follow the twists and turns of this board-room battle. My point here is that persistent stories of corporate infighting may be indicating that the overall position is highly unsatisfactory. Boeing, we may presume, is doing very nicely. So nicely, that there are few rumors of boardroom clashes. In contrast, EADS leadership is forced to attend to the battles over its international border disputes.

The Chequer Board

What if anything can EADS, and more specifically the larger part of the outfit which is Airbus, do to break out of its nightmare? Incidentally, a deadline is approaching (July 16th) which dragged the New French President into the battle.

Let me put a few pieces on the chessboard. Louis Gallois, head of Airbus, is widely admired, and believed to be needed to stick it at Airbus, and see though Power 8, the strategic plan to streamline the business. This is a production and commercial imperative. He is co-CEO of EADS with Tom Enders at present.

Arnaud Lagardère of the media group of the same name is French Co-chairman of EADS . His German co-chair is Rudiger Grube.

Nicholas Sarcozy and Angela Merkel are also in play, with special concerns for their national interests (and for their own political positions). EADS Shareholder DaimlerChrysler has signaled willingness to increase its holding, a positive gesture to Sarcozy who would like to reduce the holding of the French Government. DaimlerChryser’s bid is linked to their interests in keeping Tom Enders in play.

The rumors in the French press

Rumors suggest the game will involve taking Enders off the board. This has been denied emphatically by the company.

The current form of the EADS/Airbus nightmare will be shared more widely in Toulouse after this month’s summit meeting.


Sicko: Moore reveals his wider game-plan

June 30, 2007

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Michael Moore believes he has been thinking like a chess grandmaster in planning the impact of Sicko, his new health-care movie. But has he checkmated his political and cultural opponents in doing so?

In an interview with USA Today [Friday 22nd June, 2007] the controversial film-maker continued to plug his new movie, Sicko, which has already been widely pre-trailed. He describes how his earlier movies had failed to achieve his political goals.

“Did going to (former NRA president) Charlton Heston’s home reduce school shootings in this country? I don’t think so ..[ recalling a scene in Columbine] ..
“Did trying to get onto the 14th floor of General Motors (in Roger & Me) to see (chairman Roger Smith) convince GM to start making cars that people want to buy? No ..
“ Did Fahrenheit stop the re-election of George W. Bush?”
“So a lot of thought went into, ‘OK, I get it. It’s a game of chess, and so far I’ve been in checkmate.’ … I need to find a different way to get to where I want to go.”

As there’s only one checkmate per game ..

Strictly speaking, Moore means that he has been playing a whole series of chess-like battles through his movies. And that in Sicko he’s found a different way for him to win this particular game.

He went on to explain that his earlier films have not succeeded in winning people over to his side of the argument. A closer examination suggests that he believes specifically that the stunts in the films may have made people laugh, but did not win converts to his cause. The different way, is to retain much of his compelling style but to avoid demonizing individuals. This will, he believes make him, through the film a more potent political warrior.

It’s a point of view

He may have been able to put a clearer case under less pressured circumstances (he was interviewed while taking a break from a public meeting with a thousand wound-up health care workers). As stated, it’s a bit muddled and a bit megalomaniac. What sort of film might have ‘convinced GM to start making cars that people want to buy’? Or one that might reduce home shootings? Or change the course of a presidential election?

I’m inclined to argue against the idea that any film, however brilliant, can achieve such goals. That’s because I believe what I learned from the writings of the great Kurt Lewin who presented social systems as stabilized through a set of forces which tend to be mutually self-adjusting. And I believe in such a systemic view because it has been confirmed whenever I have found myself caught up actively or otherwise in systems going through change processes.
That’s not to say that thought leaders and their creative efforts can not play a part in great revolutionary changes. Tyrants are notoriously sensitive to the dangers of being made to look foolish, or even to look less than special. Charlie Chaplin in The Dictator didn’t defeat Hitler, but I share the view that humor can be part of a radical cultural move.

Or, if we stick to the chess metaphor

Michael Moore may well have been playing quite a successful series of games of chess. Only he has been playing against in more than two dimensions, and against more a range of powerful opponents. He is unlikely to checkmate them all. But he shows his resilience, and may indeed have worked up a better plan. By attacking a system not its agents, Sicko may leave the film-maker-cum-chess-warrior feeling not completely checkmated in the end-game.


Nurses pay won’t go away. Gordon Brown must have his say

May 28, 2007

_42810465_noreena203.jpgA recommended pay award for nurses in England was partly delayed by the Government. The Royal College of Nursing is to ballot its members for possible industrial action. Politicans back the call. A tricky and possibly important early challenge for Gordon Brown’s leadership. Is there anything he might learn from Nicholas Sarcozy’s first weeks in office?

How long is a leader’s honeymoon period? As long as a piece of string. Gordon Brown has over a month to go even before the nuptuals are celebrated. Already there are malcontents likely to be at the wedding ceremony.

Gordon Brown as Prime Minister will be not be given as much time to find his feet as was David Cameron on his appointment of leader of the Conservative party and wannabe Premier. Brown’s honeymoon will be briefer, if only because he has been in the public eye as a political heavyweight for a more that a decade (and a decade as we all know is a very long time in politics).

In this respect he has something common with Nicholas Sarcozy, the newly elected French president. Sarco had a tricky little test within days of coming to office. As he was preparing to assume the trappings of power he had a little time to consider the rumbling discontent of workers at Airbus.

Now Airbus in the French psyche is not quite the cultural icon as is The National Health Service in the British. Not quite. But combine the threat the French jobs with the traditional willigness for action direct and you are looking at a challenge that had to be dealt with at risk of a bad first impression as a leader. So we might conclude that Gordon has this also in common with the French leader.

The joys of opposition

The circumstances provide one of the joys of opposition. The opportunity to espouse a popular cause. Already there is further support from activists who have enlisted Professional Footballers to the cause.

Gordon Brown in opposition would have been in there with his political opponents (which, as they say, can be found in, as well as outside, his own Party).

According to The BBC

Nearly 200 MPs, including the leaders of both main opposition parties, have backed calls for nurses to get a full 2.5% pay increase this year. Nurses in England, Wales and Northern Ireland have been offered a 1.5% rise followed by another 1% in November .. [The MPs also include] several leading Labour figures – the deputy leadership candidate Jon Cruddas, former health secretary Frank Dobson and former ministers Kate Hoey and Stephen Byers

What might Gordon do?

There is a juicy dilemma of leadership here. Gordon as social reformer would like to find a way of supporting the Nurses. As politican he would also like to win some points for being nice to such a cherished group of workers. As Chancellor, he has already faced the tough financial and political consequences of granting a modest-looking pay award in full and on time. As would-be leader his famous concern for prudence is likely to be gnawing away as he nail-bites his way to a decision.

A tip from across the channel

The parallels with the Airbus case are strong enough to be worthy of consideration.
In an earlier post I suggested that:

There are times in politics, when as in chess, the leader has to find a waiting move. In chess, the idea is to move without disturbing the delicate balance in a complex and dynamic situation. You do best by effectively not disturbing the status quo. … So it was in Toulouse. Facing angry Unions, represtatives of the Company’s French leadership, and the wider international press, he signals two somewhat contradictory positions. Yes, he will ‘stand by’ and ‘do his duty’ to the interests of the French employees. But in the longer term, he does not rule out selling the Government’s stake in the company. I will return, he promises. In July. When he will be accompanied by his new friend Angela [Merkel]. If not masterful inactivity, we have seen an example of how to create a little wriggle room in a tricky situation.

Gordon, who would have made a good chess-player if he had not chosen other pursuits, has to find a waiting move. He will try not to upset the nurses. That would never do. He will try to appear not to have been forced to act by political opponents. That will never do, either.

And so we will not have long to wait to find out what happens next. The next game in the leadership match is starting, and Gordon Brown’s clock is ticking away.

Update

Later, May 28th 2007. Gordon brown’s website has a vote on issues of the week. Voters were opting for the NHS by a narrow margin (over international affairs).


Margaret Hodge: A good time to resign?

May 26, 2007

_42947981_hodge_bbc66.jpgResignation from public office is an extreme leadership decision. It can make or mar a career. But resigning is not necessarily a forced move. Margaret Hodge may find it an option worth considering.

Margaret Hodge has taken a high-profile position over immigration. So high-profile and dangerous that I am inclined to fall back on one of my favorite metaphors – chess as a source of leadership insights. Margaret is in a tricky position, so she weighs up the possibilities, and makes a dangerous move in an attempt to break free. In chess terms, it’s a forced move. Or no-brainer.

In chess, faced with a forced move, a player will sometimes stare at the board, wasting valuable time, looking for another playable move. This is mostly futile. It’s better to make the move and take the consequences, or resign and take the consequences of that.

There might be another move

Even in chess, there may be an overlooked possibility. Training books have examples of positions in which a player has resigned, failing to see an unexpected move. The forced moves believed to lead to certain defeat were not forced after all.

So let’s look at the salient features of the position Margaret Hodge finds herself in. The problems appear to be to do with social housing, the British term for state-provided housing, traditionally controlled by local councils, hence ‘council estates’. But council estates impact on national politics.

A tale of two Margarets

Margaret Thatcher believed that selling off as much council housing stock as possible would be a good step in her social revolution. Her opponents point to that decision as a disaster in its longer-term consequences. According to the BBC

More than 1.5m homes have been sold off since the Conservative government introduced “right to buy” legislation in the 1980s.

The Treasury-sponsored Barker report said in 2004 that Britain needs to build 140,000 new homes a year – of which 23,000 should be social housing units – if housing supply is to meet demand. The Lib Dems say there are 1.6m families on waiting lists for social housing – compared to 1m in 1997.

There are more than 8,000 families on the waiting list in Margaret Hodge’s Barking constituency alone. There is concern Labour voters are turning to the BNP, which blames the shortages on immigration. Labour’s left blames the shortage on Tory “right to buy” policies and the government’s reluctance to build more council houses

It is hardly surprising if Margaret Hodge has drawn attention to the issue. As a Minister of State she has chosen to make broaden the debate.

Ken has his say

Ken Livingstone is well-aware of London’s housing problems. His high-profile actions as Mayor have not enabled him to influence local council housing decisions. His frustration is evident in his observations:

Margaret Hodge is wrong. Far from it being the case that immigrants are jumping the housing queue, the opposite is true, with immigrants naturally finding it very much harder to find their way round a system with which they are not familiar … Instead of making remarks which will be seen as scapegoating immigrants, senior politicians like Margaret Hodge should be working to solve the real housing shortage affecting all communities. [Her] suggestion that housing allocation should be based not on need but factors like length of residence would be catastrophic for community relations. In reality it would quite rightly be illegal to take immigration status into account in allocating housing.

The other move

Even in chess, there are good times to resign. A strong player has some social obligation to ‘go over the game’ afterwards showing where his defeated opponent went wrong. This encourages an early resignation. It’s part of the learning and maturing process for juniors, who tend to prolong the agony rather than capitulate.

So, I’m suggesting that resignation is anything but a no-brainer for Margaret Hodge. If she is right, she is under increasing threat of losing her parliamentary seat. Her own stated estimate is that 80% of white families in her constituency were tempted by the British National Party. At the recent local elections the BNP won 11 of the 13 seats it contested in Barking and Dagenham, making it the second party.

The unexpected move in the wider game would have been resignation from her ministerial duties, so that she could fight more directly for the interests of her constituents. Such actions have more credibility if the leader clearly is prepared to suffer personal damage for the wider cause.

Realistically such a move would have made more sense before she stood for the current election for deputy leadership of the Party. This is unlikely to happen. I offer it as a thought experiment of possibilities for leadership rather than as a prediction.