Friday, October 28, 2005

General strike in Belgium

TheaterBelgian unions are organizing a national strike on October 28th to protest against the reform plans calling for a broad review of the social security and pension system. During the same time China's major metropolitan areas (Beijing, Shanghai, Hong Kong...) will produce as much GDP as that forgone by Belgium... Europe's welfare systems cannot continue operating the way they do and at the same time we have to acknowledge how absurd the financing of our states is: selling shares will cots you 1% in taxes, while selling a house will cost you 17% in taxes... and last time I looked the financial flows represented over 75 times the flows of the real economy. As an example, in 2003, the average value of about 350,000 transactions going through the CRESTCo clearing and settlement system was  620 billion Euros PER DAY represented a value of about , i.e. almost 3 times the ANNUAL GDP of Belgium, a country of over 10 million souls!

This means that there are ways to finance activities that must remain in the hands of the public sector (the Tobin tax would be interesting to have as a basis for discussion). At the same time, this country needs to rationalize government because a country of 10 million people cannot possibly afford 4 or 5 governments to accomodate indescribable egos,  cultural integrism, personal ambitions and political agendas.

And of course, this strike is an ill-adapted reaction triggerred by people who still think along the lines of outdated ideologies who will not solve anything. Of course, the strike costs nothing to employed people while it causes direct financial damage to entrepreneurs, small business owners and freelance people. Of course, the strike happens on a Friday that is forecast as a sunny day... and guess what? It starts at 10:00 because we don't want to wake-up too early for a protest and it finishes at 14:00 because everybody wants to have an extended weekend.

Tuesday, October 25, 2005

Freelance economy & the European challenge

2caps_01_12caps_02_12caps_03_1Slightly less than a decade ago I came across the first of a series of interesting articles (The Dawn of the E-Lance Economy,  Being Virtual: Character and the New Economy, Paradox in Project-Based Enterprise: The Case of Film Making) published in the Harvard Business Review describing how the way we structure labour relationships would be transformed in the future. The articles made a very convincing argument in favour of an economy in which companies and individuals would hire talent for the duration of one or more projects for which their contribution was necessary. At the same time, they highlighted the challenges of such a "market-driven" organization of work and business, in particular as regards strategy and critical work on the core of a business that often requires a level of commitment that external subcontractors rarely provide. A decade ago (circa 1993) was  the time when the Balanced Scorecard was first presented in the pages of the HBR and that too seemed like a great idea (which I think it is if implemented with a bit of common sense rather than dogmatic commitment to theoretical orthodoxy). That triggered the current fashion of measuring and quantifying everything (and often the qualitative aspect and the analysis of what these heaps of data actually mean is lost in the process producing indicators). So the combination of these two trends made some researcher go as far as to suggest that individuals would
have their quote on a free market, a bit like the stock market.

I was immediately attracted by the model both because I felt it was the best way to allocate resources in a fair and unbiased manner to achieve optimal performance in the face of a challenge that was already apparent (emerging economies of India, China, Brazil). The fact that established companies of the Western world seemed not have much trouble of conscience laying off their people (a.k.a. "our most important asset" in their annual reports) by the thousands strengthened my belief that the best way to operate was to be a freelance professional. So that's one of the things that made me start working under that model, which provides no security whatsoever other than the satisfaction of the customer. At the same time, I do not consider myself to be a mercenary and I take pride in sharing a number of values with my customers. My ambition is to combine the freelance model (the way of Reason) with a genuine interest in making things work out for my customer to contribute to their success (the way of the Heart).

Of course there are important limitations that must be taken into account if this way of carrying out projects is to be used on a large scale to improve flexibility:

  1. this model is not for everyone : type of job, psychological profile, considerations of general interest and impartial government at the level of society...

  2. markets are not perfect (my sincerest apologies here to my former professor of finance) and are not necessarily driven by "objective" considerations because markets are made of humans and humans are not robots (at least not everyone and not all the time).

  3. the satisfaction of a customer is often more a matter of individuals rather than a matter of institutions: what does speaking of the satisfaction of company XYZ (the customer) really mean when one is a feelance professional?

  4. this model may not be for all the stages of a person's life: there is value in being part of an organization and sharing more than project objectives with colleagues at certain stages and that is in the interest of both the company and the individual (beginning of career and for very senior positions whose personal welfare should be more tightly linked to how the company they lead fares in the medium / long term and not to how golden the parachute will be when they are fired having achieved no results).

  5. the collective and individual capabilities of people are seldom managed as core business assets in large organizations and they often neglected for lack of awareness in smaller organizations. Therefore, the drive to get the most appropriate resources possible (that can be afforded) on a project is sometimes weak. Human resource departments often need to be restructured, starting from their name (I am not a "human resource", are you?), to become effective partners of the business who understand the organization's activity and can make a genuine contribution to getting hold of the most appropriate people regardless their status from the standpoint of labour legislation.

  6. in many cases the act of putting together a team of freelance profesionals is limited to the tasks required to identify and hire indivudal experts, without much attention being given to the dynamic of the group nor to the building of a team: who wants to invest in people they will not keep in the long run?

  7. the freelance model works very well for very focused experts and slightly less well for general management professionals, although the exposure of managerial profiles to a variety of situations in very different business environments is, in my opinion, one of the best ways to develop and mature their management skills.

Still this way of organizing entire chunks of a company's value-chain needs to be developed in Europe if we are serious about dynamism and growth. At the same time, the framework of welfare state that was developed during the last century, public service managed by democratically elected governments and heavy public investment in education and research must be preserved. We don't need to be as extreme in removing government from business as neo-conservative americans are (a fact for which neither the victims of Katrina, nor the working poors of America thank them), nor as rigid as the french socialists can be when it comes to making things easier for business.

Who can solve this equation?

Wednesday, October 5, 2005

Tribute to a modern humanist

Gardenia_oct2005I'd like to tell you a few words about  an exceptionally talented individual I am very proud to call a friend. I think of him as a genuine representative of an open and creative world. He is somebody I met well over a decade ago during as we were both somewhat anxiously expecting our turn to take an exam in civil law at the business school.

His name is Roberto Ostinelli and he is one of those multi-faceted personalities who are able to achieve excellent performance in a variety of fields. Roberto graduated from a business school and got an MBA, but to him that was just one facet of life. Aside from that was his strong interest for developing software, excelling in electronic games and crucially his passion about music. Back at university he was already performing on a very regular basis and I was lucky to attend a few of his concerts. Roberto recently wrote some great new songs a couple of which are available for download here. One thing I can tell you is that I had hard time selecting only a few!

Roberto is the type of person one has big trouble fitting into just one category, which is what most people do today as our world is one of extreme specialisation, accelerating pace of living and scarcity of independent analysis and judgement. Roberto's example is an invitation to look closer, to be more curious and to remember that the greatness of European civilisation was achieved thanks to Renaissance Humanism. A period of civilization in which his countrymen was pioneers and which gave us people of exceptional openness and versatility like Leonardo da Vinci. Roberto is a worthy successor.

Enjoy his music!

Track 1 - Date
Download 01_date.mp3

Track 3 - Il volo degli Dei
Download 03_il_volo_degli_dei.mp3

Track 8 - Vale
Download 08_vale.mp3

Monday, October 3, 2005

Music for an open world

HdcoverHarvey Danger is a music band based in the USA (in Seattle I believe) and they are making their latest album available for free download from their website . A recent post on Slashdot prompted me to take a look at this unusual although not unique initiative.

Their music is really very enjoyable and I find it great that they chose to distribute their creation in a daring and bold manner. They offer their music and leave it to the consumer to decide whether and how much they want to pay them for having the opportunity to listen to and to distribute freely and without limitations Harvey Danger's latest work. In essence they trust you and me to be fair to them. This is so excellent! These guys deserve as much support as they can get.

Did you know that when you and I buy a book or a music album for 15 € the artist actually gets only 10%-15% of that amount. 1.5€ to 2€ on total turnover of 15€... Where does the rest of the money go? Intermediaries: producers, managers, record company, lawyers, distributors... all of whom have not created anything, but occupy a key role in the chain going from the creator to the end consumer. The percentage can get slighlty bigger and the terms of business a bit better for known artists, but still isn't this a rip-off?

Harvey Danger is actually doing what may be the biggest nightmare of the music industry: they use the Internet to go direct and give power to the consumer. No recording companies, no DRM software, no expensive (and mostly useless) copy control mechanisms, no lawyers, no useless intermediaries... Just a direct deal between the creators and the users.

Here is a copy of their press release where they explain why they are doing this: Download HD_LBL_relase.pdf

Now let me tell you another little thing coming from the IT business: a product / software /service works better when the creators are in direct contact with the users even if there is a need for good (excellent) analysts and project managers to make the whole thing flow. Direct business, no useless intermediaries, maximum clarity, transparent pricing, decent commercial proposals, fair deals... That's what an open world is about.

An open world is a matter of quality of life for all of us and for your kids; whether this seems a bit far fetched or not, I don't care and I won't make this article longer by going into the rationale of my assertion. Just go download this excellent piece of musical creation and give Harvey Danger your direct support. In good Euros please.