20
ene

EUROPE 2013. SELF-MUTILATION Part-Two?

Escrito el 20 enero 2013 por Jesus Guerro en General

Ten months ago European Regulatory Institutions received Spanish government

representatives to fix the deficit for 2012. As the mere act of signing a paper

and taking some photos supposed its achievement by divine fact

The game swung towards negotiating some decimals. Brussels seriously demanded

a 5.3% while Spain finally was proud to relax the figure to a “more realistic” 5.8%.

Of course, reinforcing the policy of austerity based on the simplistic message of “we cannot spend what we have not” when the duty of every government is “procuring income to pay what it is economically and socially required.”

Otherwise we will always bite our own tail, increasingly short, missing revenue even at higher rate than reducing expenses and so, increasing deficit that, besides, never mind in the past for rich countries, ( UK struggles to be down 10% for decades).

Today everyone forgets that Spain had one of the lowest European public debts in 2007, down 40%. It is the Management of the Crisis rather than the Crisis Itself, which carried us to Hell.

Even that times,  the discussion on 5 decimals emerged comic  for  those skeptics of the disastrously European strategy on track and we shall soon find it insulting when, after all the sacrifices imposed, the Spanish deficit figure for 2012 exceed dramatically those ridiculous limits of vacuous debate.  They did not know the formula was a blade on the hurt.

Or there are Dark Intentions or Very Few Lights. Otherwise this is not understandable.

The commitments for 2013 and 2014 are even more untreatable. Below 3%. How? Further mutilating?? Paralyzing? Cutting investment and services? Because that is exactly what will be said.

And so, pursuing these lords of wisdom.., Greece has been destroyed again 3000 years later.

The blindness of all individuals involved in the fact that today Europe is the only region in the world in process of self-mutilation is Distressing.

Now, some visionaries begin to realize that punishing the Ill does not cure, but kills faster.

The figures are undisputed. Unemployment in the eurozone has recently reached a record high of 11.8% and the recession in the Northern countries waits just around the corner.

This Europe, influencing an inopportune propaganda based on the ideals of Union and Harmony, to the point of reaching range of axiom that no one can even put in minimum doubt, has clumsily trying to hide its true nature:

A Cruel Dislocation.

This Europe ,where the country that astonishingly captures the sovereignty of others and stands itself as Dogma, as point of reference.., remains incapable to grow a decimal despite financing its brutal Debt free of interests with total impunity, while other members have to face unaffordable interest rates out of 6%. First class tickets on a journey from exemplary low public debts to high record figures in record time. Congrats.

Abandoning people to pay interests to speculators? No thank you.

Please I want to get off this train ..

So what to do?

There will not any solution while capital was not extended on the table at a reasonable and equal cost to everybody.

And do it fast.!

This will bring benefits for all members, some at short term and the rest at a longer term  due to the improvement experimented by the firsts. Moreover, their clients.

Some countries invest, others sell. People work, pay taxes and States recover wealthy.

Otherwise, we will continue our particular self-mutilating torture everyday holding less arms, legs and hearts, to move the engine and enjoy the trip.

References: THE WHEEL OF MISERY in this blog.

 


6
oct

OUTSOURCING and THE SIN OF PILATE

Escrito el 6 octubre 2012 por Jesus Guerro en General

Outsourcing services and operations means a clear trend in recent years.

The question is, why do we really outsource?

Unfortunately, this decision is often taken on the basis of cost-reduction without analyzing properly how to drive the process to obtain the benefit pursued.  Taking out processes that we have not been able to manage or to handle under control.

Delegating operations on third party companies can bring cost reductions by leveraging the partner´s capacity and synergies with other clients, and know how, so acquiring economies of scale, but Never Automatically.

Sometimes the decision to externalize operations exceeds the range of a specific service to dramatically withdraw entire departments, as we have seen in the IT function where even the CIO is erased from structure, naming a Project manager in place hanging from the CFO. Is it really necessary or even advisable?

The obsession comes from getting nervous about closing up non-solved processes  by just, signing a contract, washing hands and transferring the responsibilities and obviously, the same problems, to the partner who will become even more confused.  It is not difficult to foresee that the situation will end up exploting more complex,frustrating  and obviously, more expensive.

Signing an Outsourcing Contract is not and End but a New Beginning.

We keep on being the Owners of all processes.

Outsourcing means a strong competitive weapon when the decision is based on the question:  

Who is the best carrying out this function? Who is the one who will better join our philosophy and business model?  

Actually, many modern organizations are built up upon strategic partnerships with specialist firms. And It has nothing to do with issues about core or non-core functions or value or non-added value activities as the old concept of subcontracting prayed when it was born.

Today all type of strategic functions are delegated to partners. Namely, Product Development, Marketing and Publicity, Manufacturing, Distribution, Customer Contact or Strategic Aim Advisory.  are we able to think in something more core or valued? No. So that is not the question.

By contrast, the main reason to outsource should be based on working with people who demonstrate excellence in the things I need or I want to do, while my Top Challenge focuses in driving all this set of separated entities as a Unit, as a compact body, as a fast and powerful engine. We need people to do that.

This degree of externalization is so important that often the real and maybe unique Core of the Company remains just on the Brand, the rest is actually, interchangeable.  This is why creating an Identity is so essential today. Although great teams inside make it possible.

Therefore, previously to the decision to outsource we must draw the new scenario, design the new processes, establish the new relationship model, communications workflow and decision making points to boost the engine more efficient.

Who will be in front, who this side?  How will we connect reliable and sustainable links?

Who are the best both sides to remove the red line?

 This is how we will reduce costs, without putting in danger the most sacred thing, customer satisfaction which selects us.

 

28
may

Freelance or Manager?

Escrito el 28 mayo 2012 por Jesus Guerro en General

The number of freelance professionals is growing at

high rate in recent years.

This trend will likely be accelerated even more striking in the coming years.

Many companies have decided to focus their activities towards a model based on project management, flexible organizational structures, avoiding unproductive fixed costs during idle times and going for the best professionals in their fields to perform very specific functions in response to goals and deadlines clearly settled beforehand.

The Great Challenge, from the Strategic point of view, is the master coordination of all functions regarding the type of contract that engages the relationship. This management Skill is what is being called, ORCHESTRATION.

There is a theory in the context of the HR which claims that the greater the talent of a professional, the  stronger her bias to swing, once the objectives she was responsible for when she was hired, have been achieved and the business situation is stabilized. As a gifted child who is rapidly bored, she wants to play a new game.

Provide new fields for talented employees who become overqualified in their jobs, is not always an easy task. The firm is not often able to offer these new opportunities for growth.

In order to avoid having managers inside the organizational structure who may have lost part of their initiative, companies increasingly aim to create tailor made multidisciplinary teams of specialized professionals, according to the needs and challenges they face in every single moment.

However, this trend is still maturing.  The main barrier to the development of this model remains as a cultural issue. There is still a widespread perception in companies to interpret the interim professional someone with little sense of loyalty, when the thin red line that separates any labor contract termination rarely exceed more than a 15 days’ notice.

On the part of individuals, many of them refuse this formula considering this option as insecure, unstable and so too risky.

From the Taxes point of view, professional contracts benefit both sides. Freelance have the option to deduct certain expenses and the firm saves Social Security cost, which exceeds 30% out of gross salary.

Anyway, the key to decide one way or the other, should not be based on security perceptions or even money.

This decision should be triggered from the deepest inner core of each one.  In the field of Consulting, the professional must reflect on her principal strengths and motivations.

She must roughly think on what she wants to do and what she wants to be.

Although the role of Project Manager is sometimes hired on subcontracting basis, this is not an usual practice in general terms although it will change. Today, in the majority of cases, project management and Client interlocution relies on internal employees.

Nowadays most of freelance demanded are strongly skilled consultants in a specific area of domain. In other words,  highly accomplished “hands on” professionals.

These consultants are very autonomous in their jobs. They usually prefer to manage systems instead of people. They address to go on specializing in what they are knowledgeable acceding to cutting edge technology projects in their field of expertise.

On the other hand, professionals driving a Consulting Career, are a totally different profiles in nature.

These consultants like coordinating and leading teams.  They enjoy being a critical point of contact with the Customer and are constantly aware about new business opportunities for their company. They like to contribute to the talent development of teammates and peers.

These consultants visualize themselves progressing in the Consulting Business from senior consultant position to achieve growing responsibilities as manager, senior manager, director and why not, partner. They aspire to manage bigger teams, broadening international scope and to acquire higher challenges dealing with Key Accounts and Business Development Goals.

So, when you think on setting aside the line, think on who you are and what you really want.

 

16
ene

Se buscan diseñadores para mejorar un país.

Escrito el 16 enero 2012 por José Luis Fernández en General

Os dejo este regalo de un amigo y compañero de viaje por el aprendizaje, Patxi Bonel.

 Dentro de la entrada encontrareis una convocatoria y una llamada a aquellos en los que resuene el mensaje:

Acabo de terminar estas vacaciones de Navidad la lectura de la biografía autorizada de Steve Jobs por Walter Isaacson. Un ser humano complejo y contradictorio, pero apasionado por el diseño hasta sus últimas consecuencias.

Acaba de fallecer D. Manuel Fraga Iribarne, uno de los artífices de la Transición Española, un ejercicio de diseño de la nueva realidad democrática a partir de pasiones contrapuestas y  compartidas.  

 Es por ello que llevo días pensando que necesitamos diseñadores con esta pasión. Ya no valen los ejercicios de parchear el presente a base de ejercicios de Seis Sigma, ISO, Círculos de Calidad, Lean … necesitamos un diseño nuevo para este nuevo contexto, y necesitamos diseñadores: economistas, políticos, artistas, profesores, periodistas, ingenieros  apasionados por el diseño de un lugar común que sea mejor y un futuro brillante para todos.

El próximo día 30, en el Club de Operaciones de Antiguos Alumnos del IE, tenemos una oportunidad para juntarnos y comprender cómo el IBV, un centro de referencia de investigación español, está ayudando a otras empresas a mejorar y orientar el diseño de sus productos y servicios a sus clientes.

Nadie mejor qué Steve Jobs para explicarlo con sus propias palabras en una carta personal al final del libro (http://www.desdelanube.com/?p=931):

“Mi pasión siempre ha sido la de construir una compañía duradera en la que la gente se sienta motivada para crear grandes productos. Todo lo demás era secundario.

Obviamente, era fantástico obtener beneficios, porque eso es lo que te permite crear grandes productos. Pero la motivación eran los propios productos, no los beneficios. Sculley les dio la vuelta a esas prioridades y convirtió el dinero en la meta. Es una diferencia sutil, pero acaba por afectar a todos los campos: la gente a la que contratas, quién recibe ascensos, qué se discute en las reuniones.

Algunas personas proponen: «Dales a los clientes lo que quieren». Pero esa no es mi postura. Nuestro trabajo consiste en averiguar qué van a querer antes de que lo sepan. Creo que fue Henry Ford quien dijo una vez: «Si les hubiera preguntado a mis clientes qué querían, me habrían contestado: “¡Un caballo más rápido!”».

La gente no sabe lo que quiere hasta que se lo enseñas. Por eso nunca me he basado en las investigaciones de mercado. Nuestra tarea estriba en leer las páginas que todavía no se han escrito.

Edwin Land, de Polaroid, hablaba acerca del cruce entre las humanidades y la ciencia. Me gusta esa intersección. Hay algo mágico en ese lugar.

[…] Cuando los chicos de ventas dirigen la compañía, la gente que trabaja en los productos pierde importancia, y muchos de ellos sencillamente se marchan.

[…] Odio que la gente se etiquete a sí misma como «emprendedora» cuando lo que en realidad está intentando hacer es crear una compañía para después venderla o salir a bolsa para poder recoger los beneficios y dedicarse a otra cosa. No están dispuestos a llevar a cabo el trabajo necesario para construir una auténtica empresa, que es la tarea más dura en este campo. Así es como puedes hacer una contribución real y sumarte al legado de los que vinieron antes que
tú. Así es como construyes una compañía que siga representando unos valores dentro de una o dos generaciones.

Eso es lo que hicieron Walt Disney, Hewlett y Packard, y las personas que construyeron Intel. Crearon una compañía para que durase, y no solo para ganar dinero. Eso es lo que quiero que ocurra con Apple.”

 

2
dic

De dioses y mercados

Escrito el 2 diciembre 2011 por José Luis Fernández en Lean Services

Con esto de la crisis de la deuda, llevo meses escuchando a personas tratando de interpretar el comportamiento de mercados e inversores.

Los mercados no están satisfechos con tal o cual dimisión, cambio, reconfiguración o medida, los mercados necesitan más, los mercados se van a enfadar, los mercados no están entendiendo nuestras acciones a medio plazo, los mercados ya lo habían descontado, los inversores especulan con nuestra deuda, nos están vigilando, saben cuáles de las medidas adoptadas podemos o no cumplir….

Algunos, muchos,  me recuerdan a los sacerdotes de diferentes religiones tratando de interpretar y aplacar la cólera de esos dioses, los mercados, que tienen un poder absoluto sobre nuestro presente y futuro.  En  un libro magnífico sobre la sostenibilidad, Colapso (Jarred Diamond  Collapse: How Societies Choose to Fail or Succeed.) relata cómo los habitantes de la Isla de Pascua dilapidaban sus pocos recursos naturales tratando de construir estatuas cada vez más deprisa y compitiendo entre ellos para agradar a estos “dioses”.

Si nos dedicáramos a trabajar, administrar nuestros recursos y a buscar formas de ampliar y mantener los vínculos y enlaces que nos garanticen la conexión comercial, política, financiera…Tendremos más posibilidades,  ayudándonos nosotros, de que nos ayuden los dioses…je.

27
nov

ANALYZING EMPLOYEE TURNOVER

Escrito el 27 noviembre 2011 por Jesus Guerro en General

Today’s society is essentially driven by continuous change. Capability for planning has given way to the ability to improvise. We see this fact more clearly than ever in the world of finance and politics.
In this context, and transferring the same concept to the Human Resource field, maintaining  a low turnover rate while retaining worthy talent within a company is not  an easy task.

Appart from the issues we will comment below, we should  Never forget that Rotation is not always a terrible Disease, It is a Fact, a real Trend. Something to be embedded, even, as a natural need for both people and companies.- Projects and goals change. Refreshing also brings innovation. New challenges is part of growth,.
However, it is advisable to make certain distinctions when analyzing rigorously the employee turnover in our company. That which really hurts, that which we did not expect.
Firstly we should differentiate duo position/professional according to two main criteria:
1 .- Level of Criticity. It responds to the strategic value of the position / employee, by means of inherent responsibilities or  know-how acquired by the employee along his/her background in the business.
2 .- Demand for Replenishment. It relates the degree of difficulty to identify and seduce outsider professionals with similar skills in the market.
Therefore critical positions are those which comprisse a set of technical  and management skills coupled with the knowledge of organizational culture. The former factor can be imported, the latter  only can be built-up, it is never regenerated in the short term.
So, Critical employees are  those who, attending to their unique skills or knowledge, we face a limited supply of professionals in the market, so that substitutes are difficult and expensive to identify and attract.
Thus, we might think of an universe with 4 types of employees in our Organization:

A-      Critical Positions Hard to replace

B-      Critical Positions relatively easy to replace.

C-      Non Critical Positions Hard to replace.

D-      Non Critical Positions relatively easy to replace

Search and Replenishment  imply a high cost not only in terms of cash but also in terms of time  and effort spent and even more important, Transitional Organizational Void.

According to this approach, basically the company must focus on two major challenges:
1 .- Retaining Talent in Group A, whatever It takes.
2 .- Set Agility as primary goal on Replacement policies for the rest of groups.

Efficient Human Resources are those who lead to business success, by proactively listening and efficiently reacting to unexpected turbulences that arise, improving replacement processes, through speed and cost minimization.

Now.., how to retain Talent in the company?
As we said, It is all but easy. This essentially involves personal ad-hoc plans. Not all the employees will have the same preferences and concerns: namely, Professional Development, Training, Competitive Salary, Insurance Compensation covering the family, possibilities of internationalization, working environment and…. Flexibility, both in terms of time at work as well as ideological, workers need to contribute with their ideas, express and feel themselves useful in what they do.

So, It is important to highlight that there are not unique recipes or magic formula.

People are diverse, concerns too. Some people are motivated to change and growth, others are more attracted by salary and status, and there are those who like to remain in a stable environment where they feel safe in all respects. For some people, traveling is an incentive but for others it means a handycap … It is crucial therefore, to exactly know the motivations of each key employee in particular, to know in advance their concerns and be vigorously determined to change what is not going well for them.
In this sense it is essential for HR Department, to provide employees with a fully trusted environment. We must be certain that a disgruntled employee will come to us before seeking a solution outside even in our competitors.

Attending to the concept itsel, we can find different approaches to the Definition of Employee Turnover. Most of them, point out the percentage of incorporations and departures in relation to the total number of employees. (Incorporations + Departures)x100 / Number. of Employees
According to other theories, the index should be calculated as: (Incorporations – Departures) x100 / No. of Employees
From our point of view this latter  is even less appropriate than former to analyze Talent Retention.

If we understand Turnover Rate as Data which helps us to assess how effective our strategies to retain talent in the organization results, It must be redefined as:
                                                          (Unexpected Departures needed to be Replenished) x100 / No. of employees

So, we should keep following cases aside from this approach:
1 .- New members resulting from company’s organic growth.
2 .- Expected departures (pensions, reduction plans ..) or those attending to time-bound projects.
3 .- Positions not necessarily essential previously identified as subject to removal.
4 .- Departures promoted by the company. They must be considered also as rotation, but for other purposes.

Then, this ratio has to be crossed in turn with each of the four groups of employees that we pointed out above.
In parellel, we need to measure:

a)        Average Period for Replacement, understood as the time elapsed from the start of a new Search to full integration (not just incorporation) of candidate in the Company.

b)      Replacement Cost: Dedication of HR Department to recruiting process, cost of Headhunter recruiting services, publications…. and more importantly the cost of Organizational Void incurred by the company until the replacement is complete.

So, the company has not only to focus endeavor on retaining Class A Positions, but also to establish mechanisms to reduce replacement time to a minimum. We insist, this time is not only cost effective in monetary terms but in relation to damage on organizational efficiency.
Conclusion, and trying to respond to the debate of what is that ideal rotation rate that balances stability with renewal, my answer is Zero, since we have to separate the replenishment promoted from the suffered, the expected from the unexpected departures and then weight each case with a value of criticality, which should be irrefutably linked to an average cost of replacement.

Only then, we will know at which extent we are able to retain talent and how turnover affects quantitatively our business.

19
nov

Recovering the Value of the Land

Escrito el 19 noviembre 2011 por Jesus Guerro en General

Today is like we had forgotten what we eat, what we wear, what we learn, what we need and what is behind all these things, the work of all of us.

We decided to spend our resources on paying interest. We forgot the value of real things and the reasons by which  they come to us, opting for buying financial products, named with initials we do not even understand trusting phantoms who delivered dirt after promising gold.

Aspiring to buy the present, we have sold the future.

Capital flows have been channeled rapidly in the same direction, with the same destination, there where decision makers dwell, those who gave you crumbs before taking the bread away. The same guys who beat democracy today as penultimate step to a new form of slavery or revolution.

Raising capital to heaven, we have forgotten the value of the land.

We have forgotten the Reality. Now we only face fog ahead.

We have forgotten the value of Production System as the primary engine to gear the Big Wheel while we all preferred to play, nearly drunk, with casino chips, black, red, or purple but no color had exchange at the exit.

Juggling funny until the mace fell down over our heads.

And we have forgotten our principles, what living in society means, the fact that Governments are Elected by people, to Represent people and to Protect the people.
And we talk about public debt and deficit and accept all mutilated. This is not new at all. Countries have always had their debt and deficit. It was always like that since we play this game.
Why this panic now? Who benefits?
Who has turned the table down again to keep on eating the fish and the lamb?

They do not water the tree. They do not take care of the tree. They Just shake the tree. Because they know that shaking the tree the fruit ends falling on their hands..
If there are no pears for everybody, it is not their business. They never look backwards.

And we lifted these models .And when we realized we were wrong and we claimed to refund their casino, they refunded to all of us.

When we wanted to burn the market, merchants already had our homes. We could not even light the torch on, we had no time, we smelled something burning and it was our trousers.

Now It becomes essential to Back to simplest principles.

Actual work to produce and sell real things through real markets with clearfaced people. There is a broad real market out there, many needs. Do not close our eyes. Do not drive us crazy.

Choose Productive Investment. Choose sharing resources not concentring them.-

Lets Recover the Value of the Land. Hand on hands.

31
oct

Managing Diversity

Escrito el 31 octubre 2011 por Jesus Guerro en General

Clearly we are experiencing profound changes on People Management and Organizational Behavior within organizations as a result of the incorporation of women into management positions, the aging population, globalization of the economy and migratory movements.
Functional structures proliferate within organizations such as Corporate Services Centers divided into areas EMEA (Europe, Middle East and Africa), Asia Pacific, USA and Latin America or where members coordinate and operate with different teammates sited in remote parts of the world by question of minutes.
Therefore, and due to the existence of a highly competitive global environment, companies are pressured to develop the proper organizational flexibility and dynamism that impact significantly on People Management to foster coordination and responsiveness.
U.S. was a pioneer in terms of diversity and inclusion, perhaps out of necessity and the rest of the world is recently experiencing a growing interest in new management and leadership models that provide coverage to the demands of these diverse teams, as belonging to that new reality of business.
In order to lead Diversity efficiently as an integral and indispensable part of the People Management policies, it must be part of the company’s mission, flowing down from Top Management, and injected into the business processes of the organization, with goal setting, monitoring and evaluation of results.
Diversity policies should increase the satisfaction of both employees and and stakeholders demonstrating  the absence of boundaries and thus banishing concepts like strange or foreign.
Studies in the field claims that diversity brings enrichment of the team as a whole in areas such as: new skills, variety of information and knowledge, experience and culture, contributions that produce very positive effects, such as extending their social network members, the formation of new common values, new working habits as well as styles of communication and teamwork.  Also, Diversity should bring the generation of more creative solutions, increasing the flexibility and dynamism facing the opening of new markets or management of multinational Project Management Offices (PMO).
These new organizational changes at global scope require a plural handling of situations and deep analysis of decision making process that should be more efficient with the participation of diverse teams.
Despite all of this, some experts in People Management think Diversity might be a double-edged sword, becoming at times a powerful barrier that makes inaccessible certain areas of knowledge, put in risk the best understanding between critical departments and slows down the achievement of objectives.
For others, the positive discrimination that often accompanies policies of encouraging diversity may create comparative grievances between employees, organizational discomfort and even rejection.  Besides the fact, these policies could expand the idea that an employee occupies a particular position because of their race, ethnicity or gender and not by his/her strict professional value.
Therefore, and despite well-managed diversity means a source of benefits for the organization, nothing should replace the need to apply equal merit in an environment in order to ensure the attraction and retention of top talent, based on qualifications and appropriate experience.

Within this combination we find the challenge.

16
oct

THE WHEEL OF MISERY

Escrito el 16 octubre 2011 por Jesus Guerro en General

Before going ahead with the adjustment policies someone should take a look at the numbers because they speak by themselves.
By 2000 the Greek deficit was 3.7%. It would also be the last year that the Eurozone was in profit, though meager, 0.1%.
Over the next 5 years and after the birth of the Euro, during the supposed economic boom, the Eurozone annual deficit raised in numbers between 2.5% and 3%, decreasing to 1.4% in 2006 and presenting their best figure of the decade in 2007 with 0.7% still negative. In 2008, the year of explosion of the financial crisis Eurozone closes with a 2% deficit.
In 2009 adjustment policies began as well as deficit reduction intentions by means of spending cutting. Well, in these years the deficit in the euro zone was doubled, increasing to 6.3% in 2009 and 6% in 2010.
The conclusion from these data is devastating. The Eurozone, since the birth of the single currency, has increased its deficit by 33%. In other words, nothing less than a third of its annual GDP. Half of this deficit accumulated in the last two years. Is that the right way?

On the other hand, Greece, between 2001 and 2007 moved between 5% and 7% annual deficit. In 2008 this increased to 9.8% and in 2010 it grew to 15.4% to descend again in 2010 to 10.5%.

If we make the same exercise as in the case of Europe we find that these figures mean that just in a decade Greece has accumulated losses, exceeding a value of One annual GDP.

The behavior of the debt was stable in the euro zone about 70% until 2008. In just one year, 2009, the debt rose 10 points to 80% and additional 5 points in 2010 to reach 85%.

In the case of Greece, the figures are panic. For 7 years the public debt had an average of 100%. Over the next 3 years, It has risen over 140%.

Who cares about this before? No one.

Since European leaders concerned about that,  what has happened? It has gotten worse. Much worse. It is estimated that the Greek debt reaches 190% in 2012. A total Disaster.

In Spain, the same kind of measures has not contributed even a bit to improve things.

The conclusion is brutal. With public debt still well below the euro area average (approx 20 points down), the financial cost of it, that is, only what we pay in interest every year exceeds the Total Cost of Personnel of Central Administration, about 3% of the national budget.

If we continue with policies of investment cutting, fueling a vicious cycle that only leads to dismantle States, damaging public services, depress and ruin their citizens just to pay interest for entities that have moved from doing business with people to do it directly with States. Again a bad idea. They also will fall acting this way cause of default rates..

When Markets tighten to the States, the States drown to their citizens. It is really Dramatic.

And in this way,  the States loose assets, capabilities.., they dilute.., disappear .. leaving people they must protect simply helpless, abandoned.
A lack of political power?

How far can this wheel of misery prevail?

14
oct

Classic Retail is dead. Long live the New Retail.

Escrito el 14 octubre 2011 por José Luis Fernández en Lean Services

Well, maybe it is not dead yet, but it may gradually be in many cases.

I have recently been preparing some material about retailing, and one of the things I have found is that it seems to be following a similar evolution pattern to the one in manufacturing.

The pattern shown in the picture (left) talks about a trip from craftsmanship to mass production, the typical topic could be the car manufacturing and the Ford “T” though there could be many more examples. Scale economies through standardization and process improvements enable the mass consumption as savings can be transferred to customers.

Once reached the top level of volumes for standard products to be offered. Human need of differentiation, increase in competition, development of mass customization practices and leaner approaches to reduced lot sizes, in many cases aided by technological leaps, allow the way  back to some kind of mid volume and highly  customized options at competitive price.

My opinion is that mass retail services and consumption has followed a similar initial path coming from the small and highly customized retail practices based on a reduced and focused product and a specific geographical localization to big formats, department stores, category killers, which could provide high level of customer attraction through enhanced product offer and lower prices. In many cases in detriment of highly customized approaches those small retailers could provide (Old book-store in the film “You´ve got Mail”). Even though, some small retailers have remained alive through hyper specialization or highly customized and valuable service approach in the “Customer experience era”.  

The point is that I foresee (or just see) a rocketing uptrend way back to a highly customized approach. Current technological possibilities and trends in retailing, including the channels reconfiguration due to new entrants configure a new retail which is being reborn.

From the customer standpoint we are in the path of finding it hyper-convenient (anywhere, any media, any time, any form), hyper targeted, hyper customized…but form the classic and not so classic retailer a second wave of hyper competition is about to come..

Which are, for you, the main drivers?

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