Billionaire donates millions to Brexit, but may lose them more from the undecided vote

May 17, 2016

Marmite

Billionaire Peter Hargreaves is the leading donator to the Out of Europe , or Brexit campaign. But other supporters worry that his enthusiasm for creative destruction may cost them the election

I have tried to remain an impartial observer of events in the build-up to the EU referendum.  This week [May 9-15] it has been easy, as David Cameron for the In group, and Boris Johnson for Brexit have been equally strident and over-the-top in their main offerings.

Shooting Self in Foot Award

But my candidate for a shooting-self-in-foot award is Peter Hargreaves

Much admired for his entrepreneurial spirit, Mr Hargreaves was a student at Clithero Grammar School, an education which equipped him in life to find success from a financial start-up ‘in the spare bedroom of his Bristol flat’ in the early 1980s.

More recently he has backed the Brexit campaign through his substantial financial resources and high voyage energy which helped him accumulate his Moola.

Not a vote-winning message?

But his message, while likely to bring a resounding round of applause at an Institute of Directors meeting, may not swing as many votes as he is hoping for.

Voting for uncertainty and creative destruction may be counter-productive among a sizable proportion of older voters believed to be sympathetic for a Brexit . It could produce the well-known Marmite effect.

Mr Hargreaves could consider staying stum, but sponsoring Uber to ferry voters to the polling stations.

Oops. Have I suggested a better use of his millions?


Habitat, Conran and Creative Destruction

June 27, 2011

As Sir Terance Conran’s iconic ‘love child’ goes into administration, we reflect on the process of creative destruction

Habitat is a much-loved British institution. In the 1960s it pioneered a life-style revolution for a generation of home-makers, bringing a splash of coordinated colour into the design plans of a generation of young home-makers.

Design and Creativity

It serves as an example of the ideas of design theorist Margaret Bruce. Writing in the Routledge Companion to Creativity, she argues [p 40] that “design is the purposive application of creativity throughout the process of innovation.”

Professor Margaret Bruce

Margaret is Professor of Design Management and Marketing at Manchester Business School. Commenting on Habitat for LWD she noted

“I would put Habitat’s problems as being partly in the squeezed middle market not consuming high ticket items such as furniture. Low cost competitors like Ikea came in offering the same style. There are fewer first time buyers needing items for appartments. So Habitat failed to differentiate tself with an attractive proposition. In addition it may not be strong online which has high growth in the UK and its service needed to compete better than it has”

The decline of Habitat

The BBC reported the decline of Habitat

All but three UK Habitat stores are being put into administration in a deal to sell the indebted furniture chain. Home Retail Group, owner of Argos and Homebase, will buy the Habitat brand and three central London stores for £24.5m in cash. Habitat, which was set up in 1964 by designer Sir Terence Conran, has been owned by the private equity firm Hilco since it bought the heavily-indebted retailer from Ikea-affiliate Ikano in 2009.

“Of course I’m sad that my love child, Habitat, appears to be dying, but I am more interested in the future of my own business and design projects – that is my focus,” said Sir Terence.

You can see a video of the story here

Terence Conran

Sir Terence Conran has been one of the most influential British designers since the 1960s. His restless creativity has been implemented in life-style ideas. But unlike some entrepreneurs, Conran moved on. His remark about Habitat as his “love child” seems also to capture the capacity of the creative individual to be both involved and detached. The proud father and the rational economic entrepreneur. It is captured in the famous quote from Graham Green that “there is a splinter of ice in the heart of a writer.”

Creative Destruction

The demise of Habitat also demonstrated how creative change brings about destruction of the old and at the same time carries with it the seeds of its own destruction. Habitat was such a powerful idea that its niche position was eventually invaded by slicker and more modern alternatives such as Ikea.

Acknowledgement

Image is of the Habitat store in Cheltenham from skip to the end.com


Toyota’s Business Model on Trial

January 7, 2009

toyota-i-unit
Toyota’s business model comes under increasing scrutiny as auto sales plummet around the world. Its reaction to a forecast billion-dollar loss suggests it has a promising long-term survival plan that contrasts with its American and European rivals

Update

This gloomy report [Jan 2009] was followed by a more upbeat one six months later.

Original Report follows

Leaders we deserve has made no secret of its respect for the creative management shown by Toyota over the years. We even helped coin the term Toyotaoism (with Professor Xu) for its unique management philosophy.

The sternest test of a business model is when it has to deal with external threats to its core products. That is the situation facing all auto-manufacturers. Toyota is hurting, and Company chief Katsuaki Watanabe recently announced a projection for a first annual trading loss in its seventy year history.

And what a loss: 150bn yen (£1.1bn) in yearly operating profits from its core operations, attributed to an unprecedented global financial downturn coupled with a rising yen. Its December 2008 US sales fell faster that than those of GM or Ford

But Toyota’s pain still seems likely to be more sustainable than that being suffered by its rivals, whose fate is one of the urgent problems facing incoming President Obama, and who are pressing (begging?) for state bale-outs. For Chrysler, and GM, job losses are inevitable, while even survival in their present state seems increasingly unlikely.

In contrast, Toyota appears to be confronting its short-term problems in light of a longer-term strategy. Its reaction to over-supply is to announced a temporary suspension of production for 11 days [in Feb-March 2009] in all its 12 Japanese production units.

The old and the new

In some ways the response is one consistent with the Japanese cultural tradition which regards employment as a life-long two-way contract. Toyota’s business model preserves that deeply-held cultural value. On the other hand its success is strongly linked to its capacity to innovate. Innovation has been incremental and remorseless, and at time radical. Professor Xu’s analysis of creative organisations in China and Japan identifies Toyota as an example of a one such organisation.

The creativity is manifest in a culture within which ideas are expected from all employees, and reinforced through leadership support providing both intrinsic and extrinsic rewards. A worker in an automotive plant is still expected to pay vigilant attention to repetitive regimes and demanding quality targets. However, the creativity (that word again) which establishes teams with a degree of involvement and control over their activities (for example through the cell system, and its quality circles) comprise a genuine innovation which contrasts with the celebrated Fordist production line, with its direct connection to Adam Smith’s principle of division of labor.

Built to last

To use the terminology of American business theorist, Toyota is a built to last company. Its leaders may or may not be charismatic, but the results speak for themselves. Toyota has to be studied in the context of its cultural setting, and care must be taken in making comparisons with firms such as GM. It is even more difficult to make a simple comparison with Marks & Spencer, which according to Sir Stuart Rose [7th Jan 2009] faces its financial crisis by closing 27 stores, 25 of which were the Simply Food group opened recently, and quickly recognised as ill-matched to the company’s strategy needs (too small, poor and locational access).

What is no longer in doubt, is that the longer-term perspective offered by the Toyotaoism model provides a compelling case for creative leadership of creative organisations. Curiously, the current financial crisis may also bring (force) opportunities for new organisational structures in the future. That is the implication of the notion of innovation arising from what Schumpeter called creative destruction