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“Confessions” of a Retired Global Corporate Consultant – “Localize Your Economy”
Wednesday, July 3, 2013 5:33
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Dear Editor,
Almost all of your news today is about the economics of politics, war and the unfair distribution of wealth… or “Aliens”.
Inside those those global corporate “monsters” however the business of business is business, which changes and grows without perhaps due regard to who ‘owns’ the companies or how the profits are used and, so far haven’t found any alien markets worth mining.
“The rich get richer and the poor…” well, automation might force that hand, and that’s about to happen: the end of the manual worker’s usefulness.
The corporate mission is to compete. My job was marketing communications, which, of course, needs to be correctly understood.
One of my clients, Unilever (Africa Head Office in Durban, South Africa) is an example of one of the most successful businesses on earth: simple, smart and focused.
Its marketing techniques, strategies and long-term planning are so good that a university graduate taken through the Unilever marketing programme is in higher demand in the advertising and marketing sector than any other – just a quick example here before we rip the Georgia Guidestones…
One of its strategies is to cover all competing product benefits in one product. For example some soaps wash ‘whiter’ while others ‘take out stains’. Some margarines are sold on ‘spreadabitity’ others on taste, others on health.
Unilever puts a product into the market that has all the desired attributes and more, and in so doing invented a thing called ‘forward share’ – “if we have 60% of the soap or margarine market share, then we want 60% exposure on your supermarket shelves”.
‘Naturally’ it helps to have the clout that amount of market share gives you, so you can say, “otherwise 60% of your soap and margarine sales disappear”.
And all the competing brands have to share the remaining the shelf space.
Do you buy the ‘most popular’ or are you stuck on one attribute of a product?
Their biggest-selling detergent – the Brand Leader – has 4% more “Active Ingredient”, soap, than its nearest competitor and in Third World research groups, participants simply put their hands in the soapy water and decide on the ‘slip’ alone (the tactile feeling) whether it’s a Uni product or not.
It knows itself well and modestly says of its core function, “we are just soap makers”.
Adding “But we are also the best soap makers in the world”.
WHAT’S THE CONNECTION?.
Universities cannot teach business management without feedback from the knowledge gained by corporate experiment and experience in the field.
One of the many functions of a University is to examine alternatives to taken-for-granted paradigms that run the ‘real world’, but that can and do change, sometimes rapidly.
It the eighties, ‘Decentralization’ in global corporate structures was a smart and even fashionable innovation in the world of corporate management. The introduction of Independent ‘Profit Centers’ within global financial management hierarchies originated at Harvard.
Supply Chain Management by ‘profit’ centers was the brainchild of a Canadian university.
Total Supply Chain Management Control is another story brought about in the business world, the means of which have yet to arrive back in the academic – Supply Chain Management is taught at MIT, say, but not Total Supply Chain Control… that would be Macy’s telling Gimbles (which rather dates me!)
In the early eighties, after years of time-and-motion studies and ‘efficiency’ experts moved in because of a slowdown in the number of consumers, “Flattening management” became corporate fashion when computers generated complete productivity data (inventory, orders, sales & supply forecasts) 24/7 – beating by miles the quarterly reports of middle managers. It was best described by a Unilever CE in Europe: “There used to be seventeen people between me and the lowest factory sweeper in Hong Kong; now there are three”.
In the late eighties, some ten million middle managers were discarded by corporate America.
I believe they are the glue holding SMMEs together today, another form of ‘localizing’ part of an economy.
While I did not attend the Harvard School of Business my involvement with business innovation began with one postgraduate course at that institution in the ’60s which explored the implications of the “Acceleration in the Rate of Change’ over every aspect of the human condition based on the number of people born each year from around 1890, when the ‘population explosion’ began.
This explosion influenced everything from the number of scientific journals published, to the increasing number of patents applied for, increases in overall production and consumption – everything.
Today I would include the differentially expanding Internet Revolution as an asymptotic line approaching infinity in change, and the ‘info overload’ syndrome.
At the time, the study was aimed at learning how to create tools that could be used in building model solutions to problems related to rapidly changing environments in global commerce including the business of war which had reached a point in Viet Nam where the number of veterans’ suicides exceeded the number of battle mortalities, indicating a failure of the ideologies behind military expansion, but not of any faith in profits by its practitioners and from thence another moral hazard emerged in addition to usury and derivative trading.
The course was packed as it suggested so chaotic a view of the future, “if everything is in a naturally and rapidly accelerating rate of change, everything will eventually ‘peak’ or reach its own saturation point” begging an immediate answer to the question, “But how soon?”.
Three Horsemen of the Modern Apocalypse (A Greek word meaning “a lifting of the veils” between Man and God), Nuclear Annihilation, Overpopulation ande Environmental Destruction were only then being seen on the horizon.
The Fourth was the proximity of that horizon – how soon?
The irony then – and a conclusion drawn from the course – was that all those saturation points looked like they would be reached at the same time in the very near future – today, the so-called End Times (of religious ideologies), when other, larger cosmic changes are about to reach a peak, particularly the time of an Earth Crust Shift, Planet Nibiru and Alien observers waiting to see how we do.
One man declared that this period of human existence is “The End of History”, although for other reasons, but it’s a great phrase.
At that time certain saturation points, “peaks” were already being pinpointed by various universities and other think tanks as people came to realise that everything comes to an end eventually and ‘finite’ resources must run out even though the earth, being a sun-energy driven closed ecosystem means its components can be rearranged forever unless they are hoarded.
“Peak oil” for instance or peak anything that we totally rely on – phosphates, coal, molybdenum or access to water – is the point beyond which, as population grows, we go into the second half of the ‘finite’ resource at a highly accelerated reduction in the amounts available and that half runs out many times faster than the ‘first half’ did… but long before that, the system collapses.
Imagine a severed human artery. Blood spurts out very quickly at first, but long before even half of it is gone, its ‘peak’ amount – about 15% or so – the remaining blood cannot sustain the system and it shuts down
Now imagine a growing global economy running on 85% (and declining) of its current energy use.
Of course, resources like food are sustainable recombinants of energy in a closed ecosystem, using (converted) energy from the sun.
When change becomes so rapid that physical realities like empty supermarket shelves hit and no individual, group or ideology can keep up, most social, politica and economic disciplines have slipped into short-term chaos – religion perhaps holding on until the last breath.
New Orleans was an example and the chaos after earthquakes or saturation bombing are others.
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Montgomery, NY, Supermarket Sheves emptied of bottled water on the eve of Hurrican Sandy. Picture by Daniel Case, shared under Creative Commons.
Of the two major energy-consuming powers on the planet today the Anglo-US (NATO) military bloc is using huge amounts of ‘Shock and Awe’ energy to expand while China uses trade and aid… and less physical energy (in its expansion, not in general energy consumption).
The panic is in the west’s accurate observation that the world’s economic clout is shifting east in spite of its ultra-sophisticated weaponry.
The west has simply refused to understand or is in denial that Hiroshima and Nagasaki ended any argument for sustainable armed conflict except for war profiteering, which it has blindly pursued at considerable cost to the environment, economies and the Human Condition itself: I do not think that perpetual war between ‘armies’ of people believing in identical “One God” ideologies is natural to the human state; it is a contrived and unacceptable condition.
Politics today is focused on achieving a single global governance when it’s made to appear that no one agrees with anyone anywhere, economics has been reduced to globalization and a quest for a universal, possibly still debt-based single currency under that governance and a monopolistic control over the exploitation and hoarding of resources – diamonds are a good example of economic hoarding.
The total indifference to conventional warfare’s damage in terms of human ‘collateral’ is another disregard of the chance for any real distribution of wealth and is driven by identical ‘there is only One God’ ideologies that continue to be used as divide-and-rule tools.
But control over an infinity of change may be infinitely difficult.
IS THERE A SOLUTION?
One survival strategy is for the common man to localize his economy and become food secure as soon as he can.
This is called ‘thinking global but acting local’, the latter being much more productive in that thinking local could avoid some of the temporary downsides of a large socio-economic disruption.
“Localize your economy”!
Another wonderfully succinct phrase pregnant with opportunity!
How close is the ‘fiscal cliff’?
Briefly, a nation’s Debt-to-GDP ratio indicates its proximity to the edge, over which lies National bankruptcy, defalt to foreign banks and the foreclosure on National Assets like, say Yosemite National Park or the fabled Greek Islands… or the Kruger National Park.
Most western nations (including the US since the second quarter of last year) are well over the 100% Debt-to-GDP ratio and their governments have been blatantly both robbing the public purse and borrowing expensive fiat money in a ‘futile’ but profitable effort to push the edge further into the future.
There comes a point at which all National GDP revenues will be used for ‘debt servicing’ rather than maintenance of basic infrastructure and at that point lights and water, roads and bridges, food and other distribution systems must start down the road to eventual collapse… in fact, they already have .
Before that happes is when localized economies not only work but beat submission to any ideology – some farmers for instance have stopped waiting for the state to do it and been repairing their rural road systems for years.
It goes without saying that if Maslow’s Hierarchy remains the simplest outline of steps to any human fulfillment, then the satisfaction of bodily needs – air, water and food, followed by clothing and shelter – must necessarily be in place before any further ascent up the ladder to spiritual inter-connectivity can even be considered.
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This is why most religious ‘prophets’ and ‘messengers’ insist that people grow their own food, for “he who controls the granaries, controls the people”, a phrase not bandied about by the ruling elite, holding today’s Monsanto-cut keys.
There are very few socio-political structures existing on this planet today that include either an even distribution of wealth or act with fairness and honesty in their dealings but there are plenty of working models in the past to draw from including the Roman Empire before it succumbed to the same banking system that destroyed the Commons and is destroying our social systems today.
There are myriad examples of small communities not just surviving but living in real prosperity during past ideological conflicts and even tyrannical rule – the pre-Industrial Revolution Commons and the original Commons-based American Colonies are probably the best examples of resource availability in terms of production exceeding demand, particularly of food, which should be our major concern.
North Dakota, most recently Iceland and some African and South American states today, all of which control their own central banks, can be used as models.
With a political will based on just a modicum of awareness about our potential situation relative to the extended ‘global financial collapse’ going on to cover up a Grand Theft of planetary proportions, everyone has more than enough resources in hand to create a powerful, independent and prosperous individual communities.
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The human race has survived till now on its ingenuity, flexibility and creativity.
Now is just another beginning.
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Tom Dennen
Great article – thanks…