Tag: politics

Are we prepraed to embrace risk?

The world is a dangerous place, can governments protect us?

It’s safe to say the Transport Security Administration – the  TSA – is one of America’s most reviled organisations.

So it’s notable when a former TSA director publicly describes the system the agency administers as “broken” as Kip Hawley did in the Wall Street Journal on the weekend.

 More than a decade after 9/11, it is a national embarrassment that our airport security system remains so hopelessly bureaucratic and disconnected from the people whom it is meant to protect. Preventing terrorist attacks on air travel demands flexibility and the constant reassessment of threats. It also demands strong public support, which the current system has plainly failed to achieve.

The underlying question in Kip’s article is “are Americans prepared to accept risk?” The indications are that they aren’t.

One of the conceits of the late twentieth Century was we could engineer risk out of our society; insurance, collateral debt obligations, regulations and technology would ensure we and our assets were safe and comfortable from the world’s ravages.

If everything else failed, help was just an emergency phone call away. Usually that help was government funded.

An overriding lessons from the events of September 11, 2001 and subsequent terrorist attacks in London and Bali is that these risks are real and evolving.

The creation of the TSA, along with the millions of new laws and billions of security related spending in the US and the rest of the world – much of it one suspect misguided – was to create the myth that the government is eliminating the risk of terrorist attacks.

It’s understandable that governments would do this – the modern media loves blame so it’s a no win situation that politicians and public servant find themselves in.

Should a terrorist smuggle plastic explosive onto a plane disguised as baby food then the government will be vilified and careers destroyed.

Yet we’re indignant that mothers with babies are harassed about the harmless supplies they are carrying with them.

It’s a no-win.

This is not an American problem, in Australia we see the same thing with the public vilification of a group of dam engineers blamed for not holding back the massive floods that inundated Brisbane at the end of 2010.

While we should be critical of governments in the post 9/11 era as almost every administration – regardless of their claimed ideology – saw it as an opportunity to extend their powers and spending, we are really the problem.

Today’s society refuses to accept risk; the risk that bad people will do bad things to us, the risk that storms will batter our homes or the risk that will we do our dough on what we were told was a safe investment.

So we demand “the gummint orta do summint”. And the government does.

The sad thing is the risk doesn’t go away. Risk is like toothpaste, squeeze the tube in one place and it oozes out somewhere else.

While Kip Hawley is right in that we need to change how we evaluate and respond to risk, it assumes that we are prepared to accept that Bad Things Happen regardless of what governments do. It’s dubious that we’re prepared to do that.

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Hubris and risk

Technology brings benefits and risks, we need to understand both

Today is the centenary of the Titanic’s tragic sinking. In many ways, the RMS Titanic described the 20th Century conundrum; a blind faith in technology coupled with a struggle to deal with the consequences of those innovations.

It’s worthwhile reflecting on the hubris of those who believed their technology made a ship unsinkable, or those who believed their shipyards would never close and – probably most relevant today – those who believe the sun never sets on their empire.

Technology can liberate our lives which is shown by the fact the average American, European or Australian lives far longer and better than even kings did two centuries ago. But we should never assume these improvements don’t come at a real cost to ourselves, the environment or the ways of life we take for granted today.

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Building aroung the blockages

Waiting for older generations is a waste of time.

“We have to wait for the baby boomers to get out of the way,” said the Gen Y girl after unsuccessfully trying to change a business culture.

The problem is the boomers aren’t going to get out the way; they are fit, healthy and able to work for at least another decade.

For most boomers, the promised golden age of retirement simply isn’t affordable as property prices stagnate and investment underperform.

The smart ones also know governments can’t deliver the promises of ever increasing aged care services and middle class welfare.

Waiting the boomers to get out of the way also assumes their younger replacements will be any better; the sad reality is many have the same views and 1960s or 80s ideologies of their mentors. Old heads on young shoulders.

For those waiting for older generations to get out of the way so they can start changing institutions or business, it might be time to start building ones to replace stale and increasingly irrelevant incumbents.

There’s been few times in history when circumstances have favored challenging incumbents as technology, economic conditions and social change give us the tools and opportunities to build new businesses and political parties.

It’s hard work, but it’s a lot less frustrating than waiting for the boomers to die off.

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A website can’t save a dying business

Online tools can’t fix an organisation’s structural problems

The last week has seen some interesting changes in the local online business community.

Embattled department store David Jones’ announced they are following Harvey Norman into an “omni channel strategy”.

Harvey Norman chief executive in turn appeared on national television to state the “internet drives no sales.”

In the political field, it was reported the Australian Labor Party are looking at using Blue State Digital tools to counter voter and member apathy.

Each one in it’s own way illustrates how organisations can be distracted by shiny new technology while ignoring much deeper problems.

In the case of David Jones, the department store ignored their core competencies and tried to ape their down market competitors in milking the financial services cow.

This worked fine while they could offer 24 and 36 month interest free deals and as soon as their partners American Express started charging a monthly “Administration Fee” that business evaporated.

One of DJ’s down market competitors is Harvey Norman, co-founder Gerry Harvey has spent his life building a fortune based upon providing cheap credit to consumers.

It was always going to be a mistake for DJs to compete with Harvey’s as Gerry is far better at the business than the well connected, genteel board of David Jones and their snappily dressed friends in the store’s executive suite.

Worse for DJs, the whole strategy alienated their core markets and while management focused on financial services customers went elsewhere to find the quality goods and services that the upmarket department store should be providing.

For both though, the financial services business model is now fading as the 20th Century debt supercycle comes to an end; consumers no longer want to load up on “buy now, pay later” schemes.

So all the talk of “omni-channel strategies” really doesn’t address the underlying weaknesses in both business.

This disconnect with reality is true in politics as well where the ALP is reported to be considering using the Red State Digital tools that Barak Obama used so well in his 2008 US Presidential campaign.

While the tools are impressive, they don’t address the problem that the electorate – and the member bases of the major political parties – have become rightly disillusioned and disconnected from the political processes that exclude everyone except an increasingly smaller circle of cronies and insiders.

The only good thing that will come of using US political communications tools in the spectacular eruption the first time one of the ALP’s factional warlords encounters a grass roots online campaign like The Great Schlep.

Heck, the resulting furore might even see some of the apparatchiks distracted from partying and whoring on their union credit cards for a day or two.

All the frivolity aside, the reality for the Australian Labor Party, David Jones and Harvey Norman is their problems are far deeper than a well designed website and impeccably executed social media strategy can fix. These organisations need major rethinks about how and why they exist.

It doesn’t matter how much money you throw at the web or how effective your social media strategy is – if the foundations of a business are shaky then a nice “omni-channel strategy” aren’t going to fix things.

For some of organisations, a failure to embrace the online world may be one of the causes for their problems, for many though there are far more basic issues they need to address.

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Irrelevance and the media

Real problems are ignored as the big boys play games

It’s a shame we weren’t around when dinosaurs became extinct. Then again, maybe we are.

News Limited business commentator Terry McCrann writes about the “Bleakest of views from the shopfronts” in his Sunday column describing the problems of retail.

All of the problems Terry cited are from big retailers – Woolworths, Dick Smith, Harvey Norman and JB HiFi. To make it clear he was talking about corporate issues there’s even a reference to General Motors.

Nowhere does Terry talk about smaller businesses or those challenging the big guys, folk like Ruslan Kogan or the Catch of the Day team. It’s all about the big end of town.

Terry’s article illustrates the problem of relying on incumbent mainstream media commentary; that it is Big Media talking about Big Business and Big Government.

“Small”, “ordinary” or “average” has no place in their conversation, if you can call the pronouncement of mainstream media commentators a conversation at all.

We can understand this – for a journalist, it’s good for the ego and career to look like a “heavy hitter” in big business. For the politician, small business and community groups can’t pay the speaking and consulting fees paid by corporations to supplement their meagre retirement benefits.

Increasingly what happens in the corporate board rooms or the once smoke filled rooms of political caucuses is out of touch with the real world.

This has become particularly acute since the responses to the 2008 crash proved to the management classes that their bonuses and perks will be protected by government bailouts regardless of how many billions of shareholder wealth they manage to destroy.

In the United States we see this in political controversies being focused on contraception – an issue settled forty years ago – while the country faces fundamental challenges to its economic base and the basic welfare of its citizens and industries.

While in Australia the media ‘insiders’ rabbit on about pointless internal party politics and soothing articles on how everything else is fine, we just need to be more optimistic. Yet the real questions about how we take advantage of the country’s greatest export boom, position the economy for the next 50 years and the nation’s dependence on the Chinese economy are being ignored.

Terry McCrann’s story is emblematic of just how out of touch Big Media, and their friends in Big Business and Big Government, are with the real world.

All we can do is let them get on with it and not take them too seriously.

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When history bites

Our social media past can easily come to haunt us.

In a strange way Peter Watson, the Australian Labor Party election candidate disendorsed and expelled for his homophobic views, is a trend setter for his generation.

Mr Watson was caught out by the unsavoury views he’d posted on Facebook and other online forums. That he defended what he had written “when I was like 14, 15 years old, so we’re talking about four, five years ago” made matters worse.

Our digital footprints – material about us on the web or in social media sites – sometimes show we’ve strayed into places we’d rather admit to.

There’s plenty of others who have posted things that will bite them later when they apply of jobs or seek political office.

It will be interesting to see how society and the media adapt to our histories and the dumb stuff we did as teenagers being freely available, Mr Watson is an early casualty of that adjustment process.

One of the more disturbing aspects of the Peter Watson case is his political party’s failure to do the most basic of checks on their candidate’s background. Something that again illustrates just how out of touch the nation’s political structures are with modern society.

When we talk about disruption, we often focus on the jobs, business and social aspects of that change. One thing we often forget is that social upheaval directly affects political parties.

Political parties who fail to adapt to the needs of their society become irrelevant and fail.

So maybe Peter Watson has, through sheer dumb luck, found himself on the right side of history in being expelled from a political party that doesn’t know how to use Google search.

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Is the problem in the cockpit?

Who is in control anyway?

In the Daily Reckoning newsletter editor Callum Newman uses Malcolm Gladwell’s description of power relationships to draw a parallel between Korean pilots crashing planes into mountains and the economy, pointing out our politicians are like distracted, doomed aviators ignoring the obvious features they about to collide with.

Is that fair though? In a plane the passengers are strapped in their seats and have to take their the pilots in trust, in real life we have control — all of our actions affect the vehicle that is our economy.

Unlike a plane we can jump out and do our own thing, we can refuse to buy one good or service and we can set up a business for ourselves when we see a market that isn’t being serviced.

Where the analogy does work though is our politicians – and many business leaders – aren’t paying attention to major demographic and economic shifts.

The question is “why?” Most of these people aren’t stupid and they have access to better information than most of us, which is one of the reasons they are in power.

Perhaps it’s because we don’t want to hear the truth; that our assumptions about what the state will provide and how our economy is developing are flawed.

In many ways, particularly in a modern Western democracy, our politician are mirrors of ourselves. They tell is what they think we’d like to hear.

The problem isn’t in the cockpit, it’s back at the boarding gate where we’re more worried whether we’ll get a packet of nuts than whether we should agree to embark on a rough journey to a destination we don’t expect.

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