Tag: corporatism

  • Cutting the middle management fat

    Cutting the middle management fat

    No-one can say life is comfortable at Cisco when every two years the company engages on a round of job cutting that tends to keep employees on their toes.

    While this year’s job cuts are relatively mild – only 4,000 as opposed to nearly 13,000 in 2011 – it’s notable the focus on culling middle management positions.

    “We just have too much in the middle of the organization,”  the Wall Street Journal reports Cisco CEO John Chambers as saying.

    One of the challenges for businesses is become more flexible when markets are rapidly changing. Having ranks of middle managers makes it harder for organisations to respond.

    John Chambers and Cisco are reducing their middle management head count to respond to that need. Many other companies are going to have to do the same.

    Similar posts:

  • Here’s where the fees go

    Here’s where the fees go

    Becoming a partner of Goldman Sachs is a path to riches and is admission into the highest elites of the Western World’s corporatist society.

    The Guardian looks at the process of becoming a Goldman Sachs partner from joining the company as an ‘analyst’ or ‘associate’ through to achieving the highest partner level.

    What’s notable about the story are the layers of management and their grandiose titles; the position of “vice-president” being a case in point where it is the next step up for associates and analysts rather than the seat of power such a title suggests.

    The sheer number of these vice-presidents and Managing Directors, estimated in the hundreds by the Guardian, is another notable point. The fact there are nearly 500 partner positions in the firm indicates just how fat the fees must be to pay these people.

    If Goldman Sachs and their clients were private companies their fees and remuneration would be their own business. Since the Global Financial Crisis, Goldman Sachs and its too-big-to-fail competitors now are explicitly underwritten by the world’s taxpayers.

    That should make us all concerned at just how much our grandchildren are going to have to pay for the generous lifestyles of today’s banking elites.

    Similar posts:

  • Double guessing the boss

    Double guessing the boss

    Two interesting articles, one from English media writer Nick Cohen and the other from American journalist Eveline Chao, show how effective fear is for driving self censorship.

    Eveline’s story, Me and My Censor, tells of her relationship with the Chinese Government censor appointed to monitor the publication she worked for in Beijing.

    As well as having to avoid the 3Ts – Taiwan, Tibet, and Tiananmen – there were also a range of other delicate issues an active writer could find themselves being censored for as she relates in this conversation with her censor Snow;

    We couldn’t use the cover image I had picked out for a feature on the rise of chain restaurants, because it was of an empty bowl, and, Snow told me, it would make people think of being hungry and remind them of the Great Famine (a period from 1958 to 1961 when tens of millions of Chinese starved to death, discussion of which is still suppressed). Even our Chinese designers began to roll their eyes when I related this change to them, and set them to work looking for images of bowls overflowing with meat.

    Snow had learned the hard way about the power of imagery to upset the party functionaries. Snow explained why when she urged Eveline didn’t illustrate a story with a graphic showing stars;

    I once published, in a newspaper, a picture of a book put out by the German embassy, introducing China and Germany’s investment cooperation. The book’s cover had a big stream on it, half of it the colors of the German flag, half of it red with yellow stars. I decided since it wasn’t a flag it was okay, and sent it to print. Our newspaper office was slapped with a fine of 180,000 yuan [today, around $28,000] and I had to write a self-criticism and take a big salary cut.

    Self criticism and big salary cut – the things that middle managers fears regardless of whether they work in the Chinese Communist Party, the BBC or a bank.

    The same fear of upsetting those in power is discussed in Nick Cohen’s article on the BBC’s disastrous and scandalous decision to pull a documentary exposing Jimmy Savile as a child abuser. Cohen quotes an interview where George Entwhistle, the executive responsible for pulling the program, was interviewed on the matter.

    When Entwistle implied that the editor of Newsnight had no need to worry about his bosses circling over him like glassy-eyed crows, Evan Davis did what any sensible person would have done and burst out laughing.

    Nick Cohen’s point was emphasised to me during the week when a former bank worker mentioned an executive had been disciplined for letting slip the bank was running several instances of a cloud computing service. Apparently the press and regulators could have been in the room where he discussed this.

    Another example is a big organisation I’ve been regularly writing on where staff members regularly say “this is not a place where you question management.” An acquaintance that recently started there had to agree that they wouldn’t mention anything about the organisation, ever.

    The problem with this self-censorship is that it quickly becomes destructive. In the United Airlines dead dog case, staff  subject to arbitrary whims and discipline of management  avoid taking decisions which often escalates situations where common sense would quickly find a simple solution.

    It also means people jump to conclusions. Eviline relates the story of the tourist story;

    One month, we ran a short news brief with figures on the number of mainland Chinese tourists that had visited the United States in 2007, and Snow flagged the number for deletion. We wondered what dirt we had unwittingly stumbled upon. Which government bureau oversaw tourism figures? What were they hiding? Finally, I called Snow, and learned that the numbers we had cited were for the number of Chinese tourists worldwide, not just in the United States.

    So much for the would-be plot. Chagrined, I had to announce to my colleagues that we’d made a mistake.

    A culture of secrecy also creates an atmosphere of distrust with every decision being analysed by staff, customers and outsiders for what nefarious motives lie behind even the most innocuous management decision.

    Eventually those organisations become insular and inward looking with only those perceived as being ‘safe’ allowed to move into responsible positions which further entrenches the culture of secrecy and blame.

    This is not healthy, but it’s where many of our government departments, political parties, sporting organisations and business are today including the BBC, Chinese media organisations and Australian banks.

    For the disrupters, this is another competitive advantage.

    Similar posts:

  • Heroes of Capitalism

    Heroes of Capitalism

    The few times I watch television these days is either when the footy’s on or the rare occasions that I surface from my interweb connected man cave and stumble into a room where someone has a TV running.

    And so it was tonight when I happened to wander out to witness a terrible airport “reality” show – this one being an unoriginal, third rate Australian effort where Tiger Airlines shows how it stuffs around and humiliates its passengers. In Australia, Channel Seven considers this to be prime-time TV “entertainment”.

    What was striking about the show was how Tiger Airlines’ check in staff humiliated a pensioner and her young son who hadn’t printed out their boarding passes.

    The “fee” for not carrying out a basic task which reasonable people would expect would be part of an airline’s service is $25 a head at Tiger Airlines – one could ask what the Australian Competition and Consumer Commission’s position is on excessive fees being used to pad airlines’, or banks’, profits but that would be asking too much of Canberra’s worlds best practice doughnut munchers.

    As result the poor lady was expected to front up with another $50 – money she didn’t have. So Tiger Airlines’ check in staff wouldn’t let her board and Channel Seven’s camera crew gleefully filmed her desperate tears and shocked son.

    Eventually a bystander took pity on her and gave her $60. At least someone in the terminal had some decency and compassion, qualities neither the Tiger Airlines staff or Channel Seven camera crew have in the tiniest way.

    No doubt somewhere in an anonymous glass tower some arsehole has a job as a manager at Tiger Airlines and has a KPI that includes how many poor mothers they can reduce to tears.

    When the arsehole Tiger Airlines manager gets its annual bonus for making the required number of victims passengers weep, it no doubt goes to lunch with the Channel Seven executives – another bunch of arseholes – to slap each others’ backs and tell themselves what great heroes of capitalism they are.

    The question that bugs me is when did it become acceptable to humiliate your customers? No doubt Tiger Airlines think it’s good publicity and Channel Seven think it is good entertainment.

    We live in interesting times when our business leaders think it isn’t good enough just to take customers’ money but that it’s also necessary to humiliate them as the managements of both Channel Seven and Tiger Airlines seem to be rewarded for doing.

    Fortunately in these corporatist days we still can vote with our wallets and turn off the muck we find offensive – that’s why decent people shouldn’t choose to fly Tiger Airlines or watch Channel Seven.

    Similar posts:

  • A world of criminal sheep

    A world of criminal sheep

    Notorious unpaid blogger Michael Arrington recently described his battle with a bank over direct debit charges.

    To overcome a fraudulent recurring charge on his credit card, Arrington cancelled his account only to find the bank moved the recurring charges to the new card, a ‘service’ designed to avoid fraud and save customers the hassle of re-establishing legitimate direct debits after a new card is issued.

    Both of those are noble reasons but the core of this philosophy lies in a contempt for customers which can be summarised in two principles.

    A customer is;

    1. A sheep to shorn of any available cash through sneaky fees and shady business practices
    2. A criminal

    In the 1980s business school view of the world, customers are criminally inclined sheep who have to be regularly shorn to enhance profits and controlled so they don’t go anywhere else.

    Only businesses operating in protected environments can get away with this today and the two obvious sectors are banking and telecommunications.

    The telco industry long soiled its nest with consumers with dodgy charges and a contempt for customers which reached a peak (nadir?) with the ring tone scams where kids had their phone credits pillaged by fees they never knew they had signed up for.

    While those dodgy charges paid the handsome bonuses of telco executives, it proved to another generation of consumers that these companies see their customers as sheep to fleeced on a regular basis.

    Ironically it’s that lack of trust that dooms the telcos in the battle to control the online payment markets – their practices of the 1980s, 90s and early 2000s mean few merchants or consumers will trust them as payment gateways.

    One of the strengths banks bring to that market is trust. Like cheques, credit cards succeeded as a payment mechanism because people could trust them.

    In screwing customers over direct debit authorisations, the banks are damaging that trust as Arrington says “I really don’t think I’m going to be giving out my credit card so freely in the future.”

    That’s a problem for businesses as direct debiting customers have been a good way to ensure cash flow and reduce bad debts but when clients perceive there is a high risk of being ripped off they will stop using them.

    Businesses that insist on direct debits will be perceived as potentially dodgy operators who rely on locking customers into unfair contracts rather than providing a decent service for a fair price.

    So the banks’ position of legal power works in their short term interest and against them – and the merchants using their services – in the longer term.

    While bank and telco executives with safe, government guaranteed market positions will continue to treat customers like criminal sheep it’s something the rest of us can’t get away with.

    The winners in the new economy are those who deserve to be trusted by their customers and users, if you’re abusing your market and legal powers then you better hope politicians and judges can protect your management bonuses.

    Similar posts: