Global business

Over the past two months I have been traveling extensively around the world. Covering a lot of ground in a short time is an educational, if tiring, experience. It is interesting to see that on the one hand many consumer tastes are becoming similar. Young people wear the same clothes, use the same cellphones, and drink the same Starbucks. However, many cultural differences persist. We will make a big mistake if we assume that because so much behavior is the same, that people think in the same way. Cultural sensitivity is key to enjoying and being successful in a new country.

Do companies listen?

In this age of improved communications, they may be getting worse. While technology may have improved the ability to deliver many messages to people and companies, it has not improved peoples' ability to absorb them. We hear about companies saying that customer satisfaction is critical and they are spending more time on it, but then we hear how it is getting worse. As an illustration, I recently had an amusing experience. I received a letter from the leagal department of Time Warner explaining that they were returning my "submission" unread. Now since it was not a submission, but a question, it was clear that they do not read letters carefully!

Each of us has customer service or contact stories to tell from our own lives. We need to assume that our customers can probably tell just as funny stories about us. Funny until we realize that they may cost us revenue and profit.

Class in America - The New York Times

Over the past ten days The New York Times has been carrying a series of articles in a series which examine social class in America. The conclusions are slightly disturbing. Movement between social classes is lower than in some European countries, and is declining. At the same time, the gap between rich and poor is widening. While this has implications of social inequity, it also has implications for the ability of America to best use its intellectual capital. When meritocracy fades, the country will suffer. We cannot continue to import scientists and thinkers from other countries if there are young Americans who are not getting the best opportunities.

We need to encourage greater social mobility by giving poor and disadvanted youth the same opportunities which the sons and daughters of the rich get.

My letter re. Ford & GM published in "The Economist"

I must take issue with the conclusion of your leader on Ford and General Motors (“Deal or bust?”, May 14th). You say their problems lie not in the factory, nor in the design shop, but in the $1,500 per car additional overhead for pensions and health care. However, you also state that both companies offer up to $3,000 per car in discounts. This is roughly $2,000 more than Japanese carmakers offer, yet Ford and GM's sales are still declining. Frankly, I believe that the problem Ford and GM face is that they are producing cars which nobody wants to buy and their marketing is poor—about a third of their sales are to fleets at even lower prices.

Why are more companies using consultants?

Over the past thirty years the consulting industry has grown at double digit rates in most years. In that time more managers have MBAs and companies have brought in better training and evaluation tools. However, business activity has peaks and valleys. Thirty years ago, companies staffed for the peaks, and managers had time to think or create projects. Today, companies staff for the valleys and managers spend more time in meetings and dealing with email, i.e. they spend a higher proportion of their time communicationg. Furthermore, as consulting firms have grown in size and prestige, they have been able to recruit more talented people. So today, a company which never or rarely uses consultansts is probably suboptimizing.

Are most people willing to die rather than change?

The most recent issue of "Fast Company" magazine pointed out that nine out of ten people would die rather than make simple changes. It went on to say that
Bain & Co had found that in a study of 21 successful turnarounds, they had succeeeded by replacing most of top management.

London cabbies have overdeveloped hippocampuses to ma nage the complex geographical knowledge required and flutists have very developed parts of the brain which control fingers, lips and tongue. So do businesspeople have overdeveloped parts of the brain to do what they need to do. When the need changes, the people don't.

Similarly, Otto Rohwedder spent 16 years with strong opposition to perfect sliced bread. The inventors of frozen food, the revolver, Monopoly and the windshield wiper, each had to fight against strong opposition to achieve success. As the environment changes more rapidly, but we live and owrk longer, the need to develop a curiosiy and drive for learning becomes more important. People have to learn and change continually.