Posts Tagged ‘politics’

Brexit: Now Britain Quits EU What Is Next

Wednesday, March 29th, 2017

Four years ago, I contributed to this International Business Times article on Brexit. The impoverished reporter, Moran Zhang, is now a highly paid equity analyst at a Boston asset manager. Life is good.

http://www.ibtimes.com/brexit-if-britain-quits-eu-what-then-1106522

Unlike most forecasters, I am willing to be intellectually honest about my predictions!

#1 I suggested that there was a 70% chance the UK would be still in a reformed European Union. That reform hasn’t discernibly arrived, and from Wednesday, Britain is formally leaving.

#2 I suggested there was a 25% chance the UK would be part of the “outer rings of the European Union”. That will almost certainly be the end-game in some shape or form.

#3 I suggested Brexit would be a process, not an event. There would be no zero cut-off, which is exactly what is happening. The UK will still have commitments after the formal exit date, which it must or wants to keep, for example, security cooperation.

Where Are We Today? A 20% devaluation against the USD, a more attractive export environment, a stock market near all-time highs and near record low interest rates. Signs of inflation increasingly present in the food we buy at the local stores. By almost all measures, we remain in a largely attractive environment for inwards investment, consumer confidence, albeit productivity improvements are slow to feed through and personal debt levels remain high. There remain sharp geographical distinctions. A city state in London that has abundant foreign wealth slushing around, albeit not so much into £10M+ prime residential property but still seeking a home in private equity via funds or increasingly direct investment.  A robust jobs market. In comparison, some of the provincial towns and particularly in Victorian seaside resorts, where prospects for commercial businesses and the local population are less rosy. High streets (or Main Street, as my American friends love to refer to it), is symbolised by abundant charity shops dispersed between closing down sales. Little or no meaningful investment into new economies and new careers. There is a visible political, economic and social divide.

Where Are We Headed? Does anyone really know? Of course not but that doesn’t stop us hazarding a guess. We are in for a minimum 18 months of fraught negotiation, where I think those in the strongest position (Germany) will push the case for a fair settlement with the UK and those in the weakest position, will stubbornly resist (France, Italy, Spain). Politicians will think with logic and act on emotion. Traditional enmities and grievances will be magnified. Leaving is not going to be easy for those remaining in Europe and the UK. Fault lines already visible in the UK, will become more adversarial. We have to learn not to take what others say literally but to take them seriously. That applies to those outside the political bubble, investors, businesses and those directly affected by the political decisions. It is a boom time for patient private capital that can look beyond the immediate volatility.

Life after Brexit for the UK, is also largely dependant on the speed and quality of the trading alternatives. Can the UK create or rather build powerful interfaces with non-EU members to attract abundant sources of capital, people and innovation? Can it manage that process while adhering to the need to control immigration? Probably so. The UK’s future relationship with US, China, India, Canada and so on, has two forks the public (trading agreements) and most importantly, the private sector, the ability of UK SME and mid-market firms, the largest net jobs creators, to open new foreign markets, to attract new sources of capital, to spur new innovation not simply solve existing problems and so forth. The headlines about large global employers shifting jobs are far less significant, yet the media doesn’t portray that story.

The real story is the skills, behaviours and experience each of us has to thrive in that environment. What are we going to do about it? What are we going to push our employers, employees and investors to do about it? What has got us to where we are today, is in all likelihood going to be insufficient in a post-Brexit UK.

My prediction is that in four more years, 2021, there is a 70% chance the UK is in a more prosperous position than we are today. I think there is a 20% chance that we are in a mildly negative position (period of extended sluggish growth). A 5% chance that we are in a disastrously worse position (serious recession, sharp contraction in spending).

I didn’t vote for Brexit but now we are where we are today. Private polling has shown that there is a “silent majority” (former “Remainers” and “Brexiteers”) determined to make a success of their lives. There will of course be the “Victims of Brexit”. Those who will link the decision to leave the EU to their current and future woes, while consciously disregarding their failure to personally reinvest in their own skills, behavioural traits and experience. Those, who absolve themselves from personal accountability for the decisions that are within their control.

Let’s regroup in March 2021!

Adieu.

© James Berkeley 2017. All Rights Reserved.

 

Are You Thinking What I Was Thinking

Friday, February 17th, 2017
  • In all the nonsense about fake news, are we really saying the audience is permanently stuck second-guessing themselves or the decisions that they are making are not our preferred ones? (Brexit, Trump etc.)
  • Is there anything more unappealing than awards events, where people who have been successful in a singular profession and insulate themselves from the real world are suddenly “experts” on geopolitics, leadership, social issues and so on?
  • No one knows what the Trump presidency will have in store for us but the sun will rise and set each day, businesses around the world will trade with each other and culturally diverse communities will continue to interact. Perspective is more important than ever.
  • Watching the first 10 minutes of Bridget Jones’s Baby is a reminder that gratuitous use of swear words, displays a startling lack of intellect and a sign in neon lights to “move on”. The shame is the movie ending is worth watching but I wonder how many people stuck around.
  • Why do celebrities post naked or near-naked pictures of themselves on their social media accounts? If their objective is to protect their privacy, aren’t they throwing fuel on a fire that they have limited prospect of controlling?
  • Why are we “shocked” when a politician (Andy Puzder), a celebrity (David Beckham) or a business executive’s (Vice-Chair of Samsung) leaked private messages doesn’t caste them in a flattering light? They are normal human beings with the very same weaknesses and insecurities, prone to making dumb decisions.
  • The word “great” in business, science, sport, culture and so forth is so abused when describing individual performance that moments like Tom Brady’s Superbowl climax quickly become yesterday’s news.
  • If Americans needed reminding of why infrastructure spending is a priority take a walk through JFK, LAX or Miami airport and compare the experience with that in London Heathrow, Schipol, Dubai, Hong Kong or Shanghai.
  • Do CEO’s shop their own business on a sufficiently regular basis? Here in the UK, the major banks’ knee-jerk response to internet banking has been to slash the number of branches and make it exponentially more time-consuming for their customers to perform routine tasks (cashing a cheque). It is hard to see how that is in the customers best interest?
  • There is another high street presence, which is on a “life support machine” as societal mores change and the internet disrupts the sector. Thousands of bookies or sports betting shops solely exist on high-stakes fixed odds betting terminals preying on the most vulnerable members of society. In a town of 40,000 people there might be 3 or 4, thirty years ago, today in a deprived square mile of an inner city, there is probably 25 shops.

© James Berkeley 2017. All Rights Reserved.

Interview With Me: The Street

Monday, January 4th, 2016

The Street’s China reporter, Ralph Jennings explores with James: profitable growth and expansion in China, warmer ties with foreign companies and governments, and the future of the politically-sensitive defence sector.

China Privatizes Arms Production as It Quietly Seeks Global Customers

http://www.thestreet.com/story/13409665/2/china-privatizes-arms-production-as-it-quietly-seeks-global-customers.html

Provocative Growth

Tuesday, September 29th, 2015

How many times do you go to an industry conference and you hear a speaker or an attendee turn a belief you had about the industry’s future upside down and explain the requisite behavioural change? They back that up with hard evidence or strong anecdotal information. I’ll bet it is no higher than 1 in a 100 event. With the exception of those operating in the technology or innovation arena, I’d say the odds might be even higher.

When everyone’s default position is to say the same thing and a reluctance to stand apart from the crowd, is it no wonder that the listeners struggle to differentiate between businesses on anything other than price or the pace of innovation is so slow? I have coined a term Provocative Growth to provoke, agitate and move businesses faster towards their profitable growth goals.

I am not suggesting you “poke your colleagues in the verbal eye” (the Bernie Ecclestone approach) or merely “grandstand” on a particular issue to draw attention to your own self-importance (the Donald Trump approach), what I am suggesting is your objective is to get the audience to say “I have never thought about it that way before”. If you want to grow your client relationships, dominate a particular market and be seen as the centre of expertise, you must provide irresistible value, provocation and empathy in the moment with clients.

The easiest way to accomplish that is to ask “where can I comfortably take a contrarian position and intellectually support my position (hard evidence or strong anecdotal insights)?” Incorporate it in your dialogue with clients and prospects, intellectual property, marketing exhibits, speeches, published articles, media appearances and so on.

Here is an example, almost universally senior financial services industry executives will bemoan any new regulations and the impact of compliance on the future cost base of the business and sector. I would argue “it is not the regulations, it is BOTH the speed and quality of your response, which is the real issue. In some cases you are creating a sledgehammer to crack a nut, in others you are defending the indefensible and in a few cases your action is spot on. Here is what I saw at (list example)….. Let’s agree where your response falls into one of those three categories and then consider where you could work smarter (technology, people, organisational structure) with my help to enhance the clients’ experience and the firm’s future while meeting or exceeding the regulator’s expectations.”  

Your are right if you say provocation doesn’t come naturally to me or it is seen as counter-cultural in the firm. Just because you are right doesn’t make it right. You are paid to achieve results and enhance the future health and well-being of the firm and its’ clients. You can idly sit by and keep your head down or you can make waves. Your colleagues, business partners and clients will thank you in the long run for provoking the firm into action.

© James Berkeley 2015. All Rights Reserved.

 

 

 

 

 

An Interview With Me From TheStreet

Monday, September 21st, 2015

TheStreet’s reporter, Ralph Jennings, interviews James about the outlook for foreign companies in China’s infrastructure sector set against a turbulent economic environment. Take a short hop from Hong Kong’s Chek Lap Kok airport to one of Southern China’s bristling industrial cities, and you are instantly struck by how very similar the airport experience is. A modern, cutting edge design, global retail brands and sense of calm excitement. Will this warm welcome continue for foreign partners at the entrances to China’s promised land?

China Still Investing in Big Projects, With Help From Foreign Contractors

http://www.thestreet.com/story/13293251/1/china-still-investing-in-big-projects-with-help-from-foreign-contractors.html

Uncommon Business Integration

Thursday, August 20th, 2015

So you are the proud owner and as CEO, guardian of the new combined business, the hard work now begins, turning the reasons why you bought the business (investment thesis) into an organisational reality.

You assemble the executives and managers in both firms with guidance on the strategic vision, financial synergies, operations, talent and culture. In all likelihood, they have interacted briefly to exchange information in the due diligence, negotiation and closing phases but they have rarely got to know each other on a personal basis.

How each party sees that you handle that first integration meeting in most cases creates an indelible impression for the ensuing relationships, the level of commitment to your objectives and your probable success.

Knowing “what to do” and “how to do it”, is largely a mixture of art and science for most leaders. “Art”, in the sense of gut feel and good judgement in creating a welcoming environment for the newly acquired executives and managers. “Science”, in the sense of knowing precisely like choreographing a play “what” business outcomes must be prioritised, “where” to devote time productively, “when” you must accelerate the conversation (agreed action points) or intervene to bring circular conversations to a close and “why” a chosen integration alternative is appropriate.

Here is seven “integration killers” you want to avoid in that first meeting of the “new” colleagues:

1. Ambiguous and Unclear Meeting Invite. The focus needs to be on performance-based priorities (crystal clear business outcomes) not tasks and activities (“getting acquainted with each other”).

2. Inviting Wallflowers. Peers want to meet, talk and reach agreement with peers or possibly employees who are one grade above. They don’t want to converse with subordinates, who cannot contribute meaningfully and do nothing more than to act as a “posse” or mute cheerleaders for an executive or senior manager.

3. Enabling People Who Arrive With An “Agenda”. Nothing kills an integration meeting like an HR person from the acquiring company, who arrives with an arbitrary alternative (“non-negotiable” policies and procedures) to force the newly acquired employees to comply to their process without first listening to and collectively examining whether it makes sense. The real crime is the facilitator who allows them to make a speech and enables their passive-aggressive behaviour.

4. Leaders Whose Behaviour Precisely Undermines The Meeting’s “Rules of Engagement”. If the understanding is that PDA’s and phones are to be switched off until the scheduled break, there is zero excuse for the leader, who blatantly ignores the rule. What the leader’s behaviour says to the other participants is “this discussion is not my priority”.

5. Kick off at the wrong starting point (integration alternative). Any discussion must start with “what is the desired business outcome?” (rapid reduction in business acquisition expenses), “what are the integration alternatives?” (adopt Company A or B’s sales approach or develop a new approach), “what is the risk and reward attached to each alternative?”, and ends with “what action is required to rapidly and effectively implement the preferred alternative” (next steps). Nothing else.

6. Priorities are given an arbitrary score (“7”) or (“High”). Organise and separate priorities into three headings (“GSI”): “Gravity”, what is the gravity of the issue? “Speed”, how fast does this need resolving or improving? “Impact”, what is the actual or potential impact on the firm’s future? Use actual descriptive sentences not scores.

7. Lack of definitive “next steps” with agreed action points (“I’ll discuss this with the COO when I next see him”). Every action point must have a time, date and accountability given to it with an understanding of the supplementary action to follow.

My observation is that most first integration meetings start with the very best of intentions. Where they go awry is that the meeting chair and participants overlook the importance of speed as well as quality. “Speed” in terms of, for example, identifying decision-making shortcuts that enhance the quality of the results (more impressive financial synergies, happier customers). “Quality” in terms of asking the right questions in the integration meeting to enhance the “speed” of accomplishing the desired business outcomes (ease of implementation, reduced risk).

© James Berkeley 2015. All Rights Reserved.

7 Reasons To Celebrate London

Tuesday, July 7th, 2015

Today London remembers, 10 years on from the scenes of death and destruction. A city that I have called “home” on and off for 30 years. On 7th July 2005, I was at The Snow Ball in Queenstown, New Zealand with a group of friends when images flashed up on a video screen of the carnage across the city. It seemed distant and surreal in equal measure. What was the bombers’ point? The subsequent alert two weeks later and the manhunt when I was back home are a more vivid memory.

The test is what a city and its’ residents do about it.

Looking around London today, London is thriving. A global metropolis that has

  1. Attracted huge swathes of capital from across the globe.
  2. Unprecedented career opportunities for many people.
  3. The most diverse, talented and creative workforce with a global mindset.
  4. One of the most civilised, safe and secure environments to live, work and socialise in.
  5. The most compelling mix of contemporary culture.
  6. Retained its’ status as one of only two true “global cities” (the other being New York).
  7. The most exciting prospects for the next generation to grow up in.

As with all growing capitalist cities it faces distribution challenges. Adequate housing, infrastructure, health and education provision for all incomes.

The “high” security threat is a badge of honour, a reflection that those with incongruent values seek to cut down the tallest of poppies. We must hope that our security forces and intelligence are one step ahead of those who seek to destroy what we have. Can we be certain? Of course not. My memory flashes back to the early part of my career, the IRA atrocities across the city, the daily roadblocks outside my EC3 office and further afield to New York, where several of my former colleagues from my days working on 104th Floor of the World Trade Center perished.

Yet we celebrate the vibrant, innovative and exciting city we call “home” and the fantastic future it provides for our families, friends and colleagues.

© James Berkeley 2015. All Rights Reserved.

Are You Thinking What I Was Thinking IV

Thursday, January 29th, 2015
  • Apple announces record quarterly profits and unprecedented growth in China and news organisations (BBC, CNN, CNBC) immediately fire bullets at the Company’s tax policies rather than celebrate or understand their success
  • 50 years on from Winston Churchill’s death I am hard-pressed to nominate a world leader today who is fit to tie his bespoke John Lobb shoelaces
  • In a era of big data and predictive analytics our ability to predict catastrophes accurately (winter storms in New York, radical Greek political machinations and so on) is still very suspect
  • We rush to judgement on so much that we know so little about (celebrity relationships, diets, climate change)
  • We omit to think about and take action about matters we know an awful lot about (our own behaviour, our state of overwhelm, our time management)
  • There is 256 variables that life insurers apply to determine your life expectancy, at any one time we probably focus on a maximum of 5 health and well-being improvements, why worry?
  • Stock markets and major indices are largely set for another impressive year of growth, all this with a global war on radical Islam, strife in the Ukraine, hunger and pandemic diseases in Africa and the Indian subcontinent
  • Breaking point: Superbowl Sunday 30-second halftime ads are 100 times more expensive (US$4.5 million) and viewership in the US has only tripled since 1967
  • Major cities such as New York, London, Mumbai and Shanghai have invested record amounts in transportation infrastructure, yet the improvement in the time taken to cross the City can be measured in seconds rather than minutes
  • Seven years of quantitative easing while helpful to global trade, has created asset bubbles (London real estate, global art market), where market makers and investors need to tread extremely carefully
  • Award ceremonies (Oscars, Grammys, BAFTA etc.) are more about the participants vanity than the quality of the work created
  • London feels like the centre of the world when nations such as Qatar are now the largest real estate owner and you can walk into a West End eaterie and hear 25 languages spoken on a Wednesday evening in January
  • We are in a period of unprecedented global growth yet the media would have you believe we are stuck in an economic vortex (woe in Europe and US, slowing Chinese consumer demand and insipid Japanese industrial output)
  • 2015 will see an unprecedented level of merger and acquisition activity driven by convergence of capital, distribution and technology leaving few business niches untouched.
  • Businesses are going to have to take up the slack educating and generally readying (on the job training) new entrants to the workforce in response to gaping holes in the quality of public education in North America and W. Europe
  • “Data rights” are going to be as valuable as mineral, land, media or image rights in the next 5 years, and just as contentious, when companies such as Google and Amazon seek to monetise the data in ways we never envisaged

© James Berkeley 2014. All Rights Reserved.

An Interview With Me From TheStreet

Monday, November 17th, 2014

TheStreet’s Taiwan-based reporter, Ralph Jennings, interviews James about the implications for International businesses with China’s rapidly expanding space program:

“Which Aerospace Firm Will Help China Reach The Red Planet By 2020?”

http://www.thestreet.com/story/12929743/2/which-aerospace-firm-will-help-china-reach-the-red-planet-by-2020.html 

An Interview With Me From The Street

Monday, November 17th, 2014
The Street’s reporter Ralph Jennings interviews James which private sector businesses are likely to gain from President Obama’s latest trip to China and the short-term impact on their market presence:
“Obama’s China Meeting to Boost Travel, Helping Hotels and Airlines.”
http://www.thestreet.com/story/12950371/2/obamas-china-meeting-to-boost-travel-helping-hotels-and-airlines.html