Author: Alexander Diduc

Globalisation no more… what is next?


Image source: http://www.chinadaily.com.cn/a/201907/01/WS5d196537a3103dbf1432b248.html

Mark my words, but the situation we have today (as of May 2020) in the economy and politics globally is the end of globalisation as we know it. If you missed somehow in the notion of globalisation, it is, according to IMF 2000 definition, “the increasing integration of economies around the world, particularly through trade and financial flows.” Besides the trade and capital movement, it relates among many others to the movement of people and the spread of knowledge/technology as some of the most important mechanisms for the existence of globalisation. We are about to witness how all of these are going to be trashed or replaced. Replaced with what? Now, this is a good question. To even distantly approach it, we need to see why/what for globalisation exists, what happens now (past years, even a decade) to threaten its existence. Only then we can imagine/fantasise what is next.

Why globalisation exists?

It is almost a common sense that trade is a part of the big geopolitical game and the rules were set to serve the interests of the main beneficiary (-ies). Let me reemphasise: it was assembled by the interested player(s) for the expected benefits of the interested player(s). If someone is good at swimming, it would be naïve to propose to compete at marathon running especially with professional runners. If you are good at swimming, then make everyone swim. The existing global trade system was designed to facilitate trade in those areas, where the western civilisation has a relatively good edge against the rest. The system is designed to support the trade of high-tech products, goods and services, and financial instruments which yield thicker profit margins. The rest of manufacturing, for instance, is considered insignificant and was outsourced to the second and third world countries. No one designed the system for the resistance of the heavy stress conditions, global crisis, major threats as this is not the main strength of the one who sets the rules.

In the post-Soviet era/post-Cold War era, it was considered that the development of the globalisation would secure the leading position of the USA as the main beneficiary. The foreign policy of Ronald Raegan administration brought “the giant” to the knees. The decision was made to ransack the Soviet Union, Russia and the satellite states, benefiting of the abundant resources and relatively unsaturated market of Eastern Europe. Think for a moment about the geographic spread: from Eastern Germany on the west, to Yugoslavia on the south, up to Estonia and all the way to Russian Kamchatka laid the market to consume the manufactured products and resources awaiting for someone to get hold of them. The pie was too big to digest alone so the States brought to the table its Western European allies. At about the same time, China was allowed to get access to the globalisation system. China, at the time, was a huge pool of cheap human resource and outsourcing some of the insignificant tasks made good sense. Then producing more advanced products made equally good sense, since no one expected anything of China. The players made money out of this cooperation, but no one expected that China can win the race. The race was for the white gentlemen to win – not for China. Fast forward to present days, here we are: China is the biggest manufacturer, biggest economy, with the biggest internal market, projecting its influence there, where only the gentlemen were allowed (Africa, Middle East, Europe and even Americas).

What happens now?

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Internationalization strategy: how to go from local to global

Internationalization is a complex process with many scientific articles dedicated to that. Comprehensively presenting it in a format of a short blog post is a task that requires major simplifications. Nevertheless, here is what it takes from a company to consider this major step in terms of market, operation modes and product – internationalization strategy canvas.

Understanding the big picture is critical for strategic decision-makers. Implementation of a decision too early or too late can turn very costly. Especially in the context of internationalization, a right decision in a right time makes an ordinary company extraordinary. The challenge is though how to understand the timing and correctly interpret the operational context of a firm, when external environment is always in a change?

International trade is an “infinite game” (see Carse 1986). Good news is that rules are the same for all players; the pace of the game is different, but stages are the same; the sequence of steps is different, but steps are the same. Each player sets own goals and selects a strategy. As it is common for the games, choices come with a price tag. Once the setup of the game is clear, the action is just a matter of imagination.

Figure 1. Internationalization process canvas

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Uneven braking: How to adjust hand brake

There is a common problem with the hand brake – uneven braking. It is rather easy to start looking for the problem in the brake caliper, worn pads or in the stretched brake cable. I did exactly that on my old, but warmly loved Honda Accord CB3 1991 year model. After trying all the possible solutions, I even consulted with a couple of mechanics, but they could not figure either. The solution was unbelievably simple. Here, I will show how to address the uneven braking by a mere adjustment of the cable tensions on the example of my Honda.

My car has failed car inspection with the abovementioned problem. Only the right rear wheel was locking when the hand brake was applied. I replaced the caliper, but it did not help. I tried adjustment of the brake cables, but this did not help either. The image below shows the brake cables after my attempt to adjust the brakes.

The main problem that I found is in the sequence of hand brake adjustment which is not clearly explained in the owner manual either. I found a video on Youtube that was explaining the proper sequence. If the steps are skipped, there will be no effect. The adjusted brakes will still not work.

The solution was rather simple, but requires the proper sequencing. So, here is the step-by-step guide how to adjust the brakes.

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Difference between Invention and Optimization

Recently, I was a part of Systematic Creativity and TRIZ Basics online class presented by professor Leonid Chechurin from LUT. One of the first questions in the class was to give our own definition of the difference between the invention and optimization. I found it quite interesting especially given the fact that I never thought of that.  The result of my reflections are below.

Optimization – gradual change of an existing system, process or solution by upgrading or downgrading existing properties to a new optimum or, in other words, to a new expected outcome. Thus, optimization is the process of reaching a new optimum or a new balance of interests.

Invention is the process of reaching another level of novelty. Invention is a gradual or radical change of the existing solution by adding, upgrading or downgrading the existing properties until a new nonexistent level of problem resolution is found. Novelty is the distinguishing factor between these two.

These processes are different, thus, call for different mindset, expected result and tools.

What would you say about this definitions? How do you define optimization and invention?

Halo effect: difference between reports and stories

This is a part of quotes and thoughts that attracted my attention, while reading the “The Halo Effect …and the Eight Other Business Delusions that Deceive Managers” by Phil Rosenzweig (Free Press, 2014).

pages 15-16:

It’s useful to make the distinction between reports and stories. A report is above all responsible for providing the facts, without manipulation or interpretation. If the accounts about Lego and WH Smith are meant to be reports – which presumably they are, since they’re written by reporters – then words like  stray or  drift are problematic. Stories, on the other hand, are a way that people try to make sense of their lives and their experiences in the world. The test of a good story isn’t its responsibility to the facts as much as its ability to provide a satisfying explanation of events. As stories, the news accounts about Lego and WH Smith work just fine. In a few paragraphs, the reader learns of the problem (sales and profits are down), gets a plausible explanation (the company lost its direction), and learns a lesson (don’t stray, focus on the core). There’s a neat end with a clean resolution. No threads are left hanging. Readers go away satisfied.

Now, there’s nothing wrong with stories, provided we understand that’s what we have before us. More insidious, however, are stories that are dressed up to look like science. They take the form of science and claim to have the authority of science, but they miss the real rigor and logic of science. They’re better described as pseudo-science.

Halo Effect: difference between illusion and delusion

This is a part of quotes and thoughts that attracted my attention, while reading the “The Halo Effect …and the Eight Other Business Delusions that Deceive Managers” by Phil Rosenzweig.

Preface, p. xxi:

A longtime friend of mine, Dick Stull, explains the difference between illusion and delusion this way. When Michael Jordan appears to hang motionless in midair for a split second while on his way to a slam-dunk, that’s an illusion. Your eyes are playing tricks on you. But if you think you can lace up a pair of Nikes, grab a basketball, and be like Mike, well, that’s a delusion. You are kidding yourself. It ain’t gonna happen. The delusions I describe in this book are a bit like that – they’re promises that you can achieve great success if you just do one thing or another, but they’re fundamentally flawed. In fact, some of the biggest business blockbusters of recent years contain not one or two, but several delusions. For all their claims of scientific rigor, for all their lengthy descriptions of apparently solid and careful research, they operate mainly at the level of storytelling. They offer tales of inspiration that we find comforting and satisfying, but they’re based on shaky thinking. They’re deluded.

Halo Effect: Travel Theorem – enjoyment or learning

This is a part of quotes and thoughts that attracted my attention, while reading the “The Halo Effect …and the Eight Other Business Delusions that Deceive Managers” by Phil Rosenzweig.

pages xxii-xxiii:

…I want you to challenge what I write rather than accept it. One of my role models here is the late Herbert Simon, father of artificial intelligence, Nobel Prize winner in economics for his work on decision making, and professor at Carnegie Mellon University from the late 1940s until his death in 2001. In his memoirs, Models of My Life, Simon described how his service on several foreign fact-finding missions in the 1960s, often time-consuming and very costly, led him to formulate his Travel Theorem, which goes like this:

Anything that can be learned by a normal American adult on a trip to a foreign country (of less than one year’s duration) can be learned more quickly, cheaply, and easily by visiting the San Diego Public Library.

The response? Simon wrote: “People react almost violently to my Travel Theorem. I try to explain that it has nothing to do with the pleasures of travel, but only with the efficiency of travel for learning. They don’t seem to hear my explanation; they remain outraged. They point out that I seem to be traveling all the time. Why shouldn’t other people travel too? After they simmer down enough to understand the theorem, they still attack шею It takes a long time to calm their passion with reason – and usually it isn’t extinguished, but temporarily subdued. Why, they think, argue with a madman?”

Well, I think Travel Theorem is wonderful – not because I agree with it, but because it makes me think. It forces me to ask: What is the real purpose of this trip? Is it for enjoyment or for learning? If the latter, exactly what am I trying to learn, and what’s the best way to learn it? Could my time and money be better spent searching available sources rather than running off to the ends of the earth? Disagree with Simon’s Travel Theorem if you wish, but that’s not the point. The point is to force us to ask under what circumstances it’s correct and when it’s false – and that sort of critical thinking is always useful.

Business Process Re-engineering and Organizational Change

Business Process Re-engineering (BPR) is the process of restructuring the organizational design from the ground-up. It stresses the importance of full-scale recreation of the processes instead of numerous and often continuous optimization of sub-processes. To avoid repetition, one may have a brief introduction in the idea of BPR from the Wikipedia.

Despite of usefulness of the BPR, there were some concerns. In his revision of the Socio-Technical System theory, Clegg (2000) has proposed the 8th principle – core processes should be integrated. The idea of the principle is that “organizations can be viewed as comprising a number of core processes that typically cut laterally across different functions. This contrasts with the more traditional view that organizations comprise sets of expertise-based specialisms that are organized vertically.” Here, Clegg also regretfully mentions the devaluation of application of the principle by the BPR approach in the context of the organizational system design.

This brings to a thought that there is more to what organizations can be than what BPR has to offer. Despite of being a useful tool, it should find its application with consideration of its limitations.

References
Clegg, C. W. (2000). Sociotechnical principles for system design. Applied Ergonomics, 31(5), 463–477.

Чем обусловленно наличие энтузиазма в рабочем коллективе

Нашел этот список на доске объявлений в городской администрации Выборга. На авторство не претендую. Классный список. Есть о чем задуматься потенциальному лидеру.

В РАБОЧЕМ КОЛЛЕКТИВЕ, ГДЕ ПРИСУТСТВУЕТ ЭНТУЗИАЗМ, ЕСТЬ:

ВРЕМЯ ДЛЯ РАЗМЫШЛЕНИЙ

  • Также время для продумывания дел до того, как они будут начаты.

ПОДДЕРЖА НОВАТОРСКИХ ИДЕЙ

  • Новой идее дается шанс, даже если ее успех стоит под вопросом.

ЗАДАЧИ

  • Без задач нет и идей.

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Marketing hypocrisy: customer needs – what firms actually aim to meet

No matter what sweet marketing reasoning says (Levitt, Kotler and alike), firms do not seek a customer per se, as a human, for who customer is with his life, troubles and routine to help him (see profound discussion by Fromm 1994). These issues are left to government backed social care and church at the best. See how many customer needs are ready to be met around the globe and too few companies ready to meet them because there is no financial interest – the customer needs need to match companies’ goals. Firms seek a customer that will buy their product. It is not the customer needs that company aims to meet. Contrary, it is company goals a firm aims to meet by addressing dehumanized customer demands (Fromm 1994). In such context, customer need is of any interest as long as they allow gain opportunities. Just as companies are not interested in customers per se, customers are equally interested in companies only for the reason of a product. The correct stress and priorities changes the tune; it scatters marketing tinsel away leaving crude reality.

And the reality is plain: companies sell products, be that goods, services, know-how, even when they are dreams. Product is the finite outcome of organization’s existence. The transfer of value from firm to customer and from customer to a firm is the blood that runs through the veins of economy. All activities of a firm directly or indirectly support the goal of facilitating transaction of values – money for product. No transfer – no customer. It is “Capitalism 101.” The role of marketing is to convince the fool to trade – the rest is lyrics.

Fromm, E. (1994). Escape from Freedom (repring, r). Henry Holt and Company.