Diary of an Academic Entrepreneur

Smörgåsbord? No, Thank You!

2006-12-06T02:27:00.000+01:00

A few years ago, I had the questionable pleasure of experiencing a Christmas-time ferry from Stockholm to Helsinki. The main dining-room on the ship was crowded with grown-up men and women that all looked like starving drunkards who were prepared to fist-fight for an extra piece of eel to pile high on their already overfilled plates. Within minutes, I was prepared to board the life boats! Lucky enough, a kind stewardess helped me to my cabin where I stayed until entering the port.

The question is if I’m the only Swede who gets filled from looking at a smörgåsbord rather than eating it? Reading ad's and mailers about the mushrooming establishments marketing the abnormal feasts at Christmas-time, this is probably the case. Classy and normally low-keyed home-cooking restaurants are suddenly transformed to factory entities. Volumes of all kinds of herring, smoked and cooked salmon, stockfish, liver pates, pork-ribs, ham, turkey, hotdogs and meatballs, and God knows what-not, are assembly-produced with a Scientific Management perfection that even would have good old Mr. Taylor stare in wonder. The leader of the pack, in the wining-dining capitol, claim to serve a smörgåsbord of 365 dishes, like if the ultimate culinary experience would be to eat what you normally do during a whole year in a single gigantic scoop.

Now, where do all these calories, sugar and fat go, when Christmas is all over and everyone have sobered up from New Year’s Champagne? The answer is of course to the waistline, enhancing one of the only growth sectors in the otherwise mature food industry. The food market segment that is focused on reducing the same waist line!

Not much paper and ink have been expended by the dietary pundits on the mystery of why the Mediterranean peoples, with their love of rich food, wind up with a lower casualty rate in the cardiac department than us gastronomically athwart up here in the Polar north.

I think, I have the simple answer. We eat too much! So, leave the smörgåsbord alone. Skip the glögg, beer and schnapps, and go for "hearty" red wines instead.

And, live well! It’s Christmas time, you know!

Cuba Libre

2006-12-05T14:03:00.000+01:00

Did you know that Cuba Libre is one of the world’s most popular drinks? It all started during the Spanish-American war. A group of American soldiers had gathered in a bar in Old Havana for drinks. Suddenly, a Captain arrives and his voice calls for rum and coke (actually it is 6 cl light Bacardi rum and 18 cl Coca Cola), with ice and a twist of lime. More soldiers are entering the crowded bar. Suddenly, the Captain proposes a toast; “Por Cuba Libre” to celebrate the free Cuba. At that moment, the drink Cuba Libre is born.

Cuba has also been one of the most admired nations among communists and socialists, and other Anti-American groups. And still is, it seems, even though the Libre part is long gone and forgotten in Cuba, with now fifty years of communist dictatorship rule.

One of the sternest supporters of Castro’s dictatorship, and communist Cuba, was the former Swedish Prime Minister, Olof Palme. He and his fellow socialists in power during the 60’s, trained and organized herds of leftist journalists that would dominate Swedish media for a generation and beyond. Hence, it was no surprise to me that the Swedish public service television provided a full evening show about the great Castro for the ignorant populace last Saturday. The old man is 80’ish and has been in power 50’ish, you know, and that calls for a public celebration to show-off the very special Swedish form of third-world solidarity!

No embarrassing critics were allowed to contribute a second opinion, of course. To claim that Castro has a track record of human harassments and murder that makes even Chile’s former dictator, General Pinochet, seem tender-loving, is nothing but right-wing and American propaganda. That Castro has collected billions of dollars outside of Cuba is, of course, only for the good of the people.

As Honore de Balzac one time said: “Behind every great fortune there is a crime.”

Bob Geldof and I

2006-12-04T16:23:00.000+01:00

Do you remember Bob Geldof’s song “I Don’t Like Mondays”? It is the only song I remember The Boomtown Rats succeeded with, back in 1979. Geldof turned out to be more of an administrator and marketer, than song-writer. Nothing wrong with that!

Now, like Geldof, why do I dislike Mondays and why is writing on Mondays so cumbersome? But, I hear you say, you often don’t submit a single line on Sundays, so what’s the problem? Well, the Good Book says that thou shall knock off the work-bit on that particular day. The fact is that I’ve never been able to comply with such sound advice. Personally, I find Sunday evenings to be marvelously productive, while Mondays, frankly, sucks.

Of course, modern web-diarists are under no obligation to fill in every day with their obscure thoughts. Even the diligent monks who wrote the Anglo-Saxon Chronicles would take their eye off the ball occasionally. For instance, in 509 AD, they only made a single entry for the entire year: “St. Benedict, the abbot, father of all monks, fared to heaven.” I suppose they must have spent a lot of time pondering that year, especially with the abbot out of the way.

As a result of my Monday day-dreaming, Tuesday mornings become nothing but frenetic, as I have to rush to get the sour backlog cleared. By the time I have finished, the muse of inspiration has packed up and gone to bed. Hence, I prefer travel and meetings from Tuesday afternoon until Friday. Saturday is family-time and, as a consequence, the big ideas come on Sundays!

The sorry fact of life is that without some quiet thinking time, no researcher can ever accomplish anything really worthwhile, adding to what is already known. And, without some peaceful contemplation, where would there be any serenity in life? Outside of Church, for us agnostics?

From my rusty home town, Sandviken, I remember the old story of the crippled steel worker, sitting and smoking on a bench outside of the rolling mill, when the young and ambitious engineer comes running and, rather upset, he asks:
“Are you sitting here, all the time, doing nothing??”
The old man takes out his snug from the mouth.
“No, Sir! At six o’clock, I am relieved!”

A 2nd Note on Global Warming

2006-12-03T15:04:00.000+01:00

It may not come as a surprise to some of you, but now it has been confirmed that in order to reduce the risk for global warming, we have to invest in more nuclear power. Whether we like it or not! This opinion may not be particularly interesting if it merely was my own, but when it for the first time in its history comes from the International Energy Agency, there are reasons to raise eyebrows even for the most green-blooded fanatics.

Although several countries, including India, China, the US and France, are already planning more nuclear plants, and others such as the UK are in the early stages of backing new reactors, many countries still oppose any addition to nuclear capacity, including Germany, Spain and Sweden, of course.

Now, IEA claim that: “We need a decision almost tomorrow if we are going to act before we reach a point of no return in climate and security of supply.” This means that politicians need to persuade reluctant voters that nuclear power is safe and necessary. In order to bolster energy security and combat global warming, i.e. to save the environment!

The agency find modern nuclear power to be cost competitive with coal and gas, its main rivals, and concludes that there is enough uranium deposits to meet renewed demand. The $17.000 billion energy investment needs until 2030 has risen significantly and the world is “on an energy path that is vulnerable, dirty and expensive.” The goal is therefore to “prepare an alternative path ... to a cleaner, safer, less costly system”, which requires nuclear power investments, but also greater energy efficiency, new technology developments in renewable energy, especially bio-fuels for transport and wind for power generation. But, a development without nuclear energy is no realistic alternative! Wind and solar power have their place, but because they are intermittent and unpredictable they simply can’t replace big base load plants such as coal, nuclear and hydroelectric. Natural gas, a fossil fuel, is too expensive already, and its price is too volatile to risk building big base-load plants.

Given that hydroelectric resources are built pretty much to capacity, nuclear is, by elimination, the only viable substitute for coal. It’s that simple.

Today, the United States have more than six hundred coal-fired plants that emit nearly 2 billion tons of CO2 annually, which is the equivalent of the exhaust from about 300 million automobiles. In addition, the Clean Air Council reports that these coal plants are responsible for 64 percent of sulfur dioxide emissions, 26 percent of nitrous oxides and 33 percent of mercury emissions. These pollutants are eroding the health of the environment, producing acid rain, smog, respiratory illness and mercury contamination.

Meanwhile, the 103 nuclear plants operating in the United States effectively avoid the release of 700 million tons of CO2-emissions annually, the equivalent of the exhaust from more than 100 million automobiles. Imagine if the ratio of coal to nuclear were reversed so that only 20 percent of the Americans electricity was generated from coal and 60 percent from nuclear. This would go a long way toward cleaning the air and reducing greenhouse gas emissions. Every responsible environmentalist should support a move in that direction, not the least for China, where the emission growth in the world is highest.

The core problem with nuclear energy is its associated myths that are extensively exploited by the green lobby activists. The first one has always been that nuclear energy is expensive, all cost taken into account, while the fact is exactly the reverse. In 2004, the average cost of producing nuclear energy in the United States was less than two cents per kilowatt-hour, comparable with coal and hydroelectric. Advances in technology will bring the cost down further in the future, while nobody can forecast the price of oil and gas anymore and the indirect environmental costs of CO2-emmissions are potentially mind-boggling.

The second issue concerns safety. Although Three Mile Island was a success story, the accident at Chernobyl was clearly not. This early model of Soviet reactor had no containment vessel, was an inherently bad design and its operators literally blew it up. The multi-agency U.N. Chernobyl Forum reported last year that 56 deaths could be directly attributed to the accident, most of those from radiation or burns suffered while fighting the fire. Tragic as those deaths were, they pale in comparison to the more than 5,000 coal-mining deaths that occur worldwide every year. The fact is that no one has died of a radiation-related accident in the history of civilian nuclear reactor programs in the Western world. Although hundreds of uranium mine workers did die from radiation exposure underground in the early years of that industry, this problem has now been corrected.

Nuclear waste is another big issue and the claim that it will be a societal danger for thousands of years. The fact is that within forty years, used fuel has less than one-thousandth of the radioactivity it had when it was removed from the reactor. And it is also incorrect to call it waste, because up to 95 percent of the potential energy is still contained in the used fuel after the first cycle. Now that the United States has removed the ban on recycling used fuel, it will be possible to use that energy and to greatly reduce the amount of waste that needs treatment and disposal. Several countries are now entering the nuclear-fuel-recycling business.

The recent major concern has perhaps been that nuclear reactors are vulnerable to terrorist attack. The fact is that the six-feet-thick reinforced concrete containment vessel protects the contents from the outside as well as the inside. Even if a jumbo-jet did crash into a reactor and in the unlikely event of breaching the containment, the reactor would not explode. In fact, the normal extraordinary safety measures of nuclear plants also increase safety from a terrorist attack. Instead, there are many other types of facilities that are far more vulnerable to terrorist attacks, including liquid natural gas plants, chemical plants and numerous other political targets.

Nuclear fuel can be diverted to make nuclear weapons. This is the most serious issue associated with nuclear energy and the most difficult to address, as the examples of North-Korea and Iran shows. But just because nuclear technology can be put to evil purposes is not an argument to ban its use. The only practical approach to the issue of nuclear weapons proliferation is to put it higher on the international agenda and to use diplomacy and, where necessary, force to prevent countries or terrorists from using nuclear materials for destructive ends. Rather, increased safety shall be a motivator for new inventions and solutions. And new technologies such as the reprocessing system recently introduced in Japan, in which the plutonium is never separated from the uranium, can make it much more difficult for terrorists or rogue states to use civilian materials to manufacture weapons.

In 1979, Jane Fonda and Jack Lemmon produced a frisson of fear with the blockbuster movie; “The China Syndrome,” a fictional evocation of nuclear disaster in which a reactor meltdown threatens a city’s survival. Less than two weeks after the opening, a reactor core meltdown at Pennsylvania's Three Mile Island nuclear power plant sent shivers of very real anguish throughout the world, not the least in my home country. Because of this double entendre nobody noticed that the Three Mile Island was in fact a success story. The concrete containment structure did just what it was designed to do; to prevent radiation from escaping into the environment. Although the reactor itself was crippled, there was no injury or death among nuclear workers or nearby residents. Three Mile Island was the first and only serious accident in the history of nuclear energy generation in the United States, but under heavy fire from Hollywood, it was enough to scare away any further development of the technology and new plant investments. In Sweden, we even made it unlawful to improve nuclear technology.

Is it not outlandish and somewhat bizarre that, in retrospect, when the facts are known, it turns out that the pro-nuclear or rather least negative nuclear “Linje 1 – voters” in the public Swedish referendum, 1980, turns out to be the ones who were most environmentally friendly?

Perhaps, the green lobbyists and “Linje 3 – voters” were too much under influence of Fonda and Lemmon than doing the homework on technology and environmental facts?

A 6th Note on Cevian and Gardell

2006-12-01T18:12:00.000+01:00

After being asked by many readers to comment upon Cevian, sometimes being called a hedge fund and, now and then, a private equity firm and their differences to the old day’s typical conglomerate, I will in this note make some comments as regards the financial business concept of hedge funds.

According to their own presentation, Cevian is a private investment firm that acquires significant minority ownership positions in undervalued Nordic public companies where there are opportunities to enhance value through active ownership. Like a typical hedge fund and private equity firm, Cevian invests capital for a number of institutional and accredited investors organized as an offshore formed limited partnership. The difference to the standard hedge fund is that Cevian does not, merely, act on negative control, i.e. the active buying and selling of securities. They believe in governance participation, which is something that divides hedge funds. Some does it, many don’t.

According to my knowledge, Cevian does not involve themselves in the practice of using complex and short-selling financial instruments like the typical hedge fund. But, like with all of them, this we don’t know as observers from the outside. Hedge funds are relentlessly secretive with their trades. Therefore, Mr. Gardell’s active pursuit of becoming a media darling in Sweden is a somewhat atypical behavior for a hedge fund front figure. At the same time, there are examples where hedge fund manages in search for a quick exit, would speak-up the share and be the seller, at the same time. Didn’t Mr. Gardell do that with Lindex? And, why is he keeping up so many journalistic relationships? Do you really think he does that for no reason?

The questioning of hedge funds as important players on the equity markets and in the power struggle of corporate governance is increasing and, recently, includes such different institutions as the US Senate Juridiciary Committee and the European Central Bank. Coming under heightened scrutiny primarily as a result of the failure of the Nobel Prize winner led Long-Term Capital Management in 1998, which necessitated a bailout coordinated by the US Federal Reserve, hedge funds have still grown substantially since then and primarily because of the lack of control financial authorities can assign upon them due to their offshore locations.

Critics have charged that hedge funds pose systemic risks for financial stability, which warrants close monitoring despite the essential lack of any possible remedies. This risk is further magnified by evidence that broad hedge fund investment strategies have also become increasingly correlated, thereby increasing the potential adverse effects of disorderly exits. It is to be noted how Mr. Gardell, frequently, speaks about his “network”. The European Central Bank, therefore, sounded a note of alarm over the possible repercussions from any collapse of a hedge fund, or group of funds. The unthinkable, for example, could be a collapse of GM and/or Ford in the US, with severe effects upon the Volvo share and, subsequent, requirements for Cevian et al to liquidate their major positions.

In 2005, Princeton University professor Burton G Malkiel published a "heated" paper that presented how hedge funds systematically under-perform the market averages. He also argued that hedge fund indexes were often statistically faulty and overstated their real performance. Clearly, recent evidence suggests the myth of good performance in all markets is somewhat shaky even for fund of hedge funds. Adding the track-record of these funds, from their own prospectuses, together; they would already have taken over the world!

The fact is that also hedge funds may simply bet wrong, and the problem is that they do this with a high degree of leverage. For example, in September 2006, the US hedge fund Amaranth Advisors lost roughly $6 billion of its $9 billion assets on a series of ill-timed trades. So, you must realize as an investor, continuous track-record of beating the market, through leverage, takes you closer to bankruptcy at the same time. A simple lesson that, obviously, even Nobel Prize winners can forget!

The Act of Contemplation

2006-11-30T11:25:00.000+01:00

Yesterday, I got the question; how do you decide what to write about? And, embarrassingly enough, I could not enlighten the interrogator on that fundamental question. It is a question of pure chance and other things not under my control, I guess. Or, maybe, I’m just an insignificant part of the normal media buzz. Business, politics and society trends come and go, and there are a few notes from my pc-pen.

Spending my prime time thinking about wireless Knowledge Automation applications, creating new management technology and conducting organization theory research, requires a lot of contemplative time, so I use a good deal of darkened hours this time of year searching for the muse of inspiration to help in the development of new ideas. This means that while I’m not reading or writing, I spend a good deal of horizontal time in my favorite Scotch-checkered sofa and sitting in my old Chesterfield armchair, staring into the voids of my harbor view with some soft and inspirational music in the background.

“What is this life, if full of care,
We have no time, to stand and stare?”
……wrote someone whose name I can’t recall. It is, actually, a very important activity that many professionals skip from their overflowing agendas, from dusk to dawn and dawn to dusk. God bless them and thank you, whoever you are, for freeing my soul from these unrelenting reins.

A 5th Note on Cevian and Gardell

2006-11-29T11:25:00.000+01:00

Mr. Gardell’s recent comments in Affärsvärlden on the weak corporate governance in Europe must take a firm top position on the short list of most pathetic statements by a Swedish financial investor. Without any form of substantiation, he bluntly claims that Sweden is ahead of the pack and everyone else is lagging behind. So, Europe, here I come, he clarifies to the bewildered reader. Renounced of experience from foreign corporate governance, himself, Mr Gardell shall now teach the financial communities in Frankfurt, Paris, Amsterdam, Milan and the City of London, how he turned around Lindex by changing CEO and appointed Emma Wiklund as front figure for a successful ad campaign, before Cevian sold out.

I’m sure they will be impressed and scared to the bones.

For my readers of younger age or constrained by a short memory, I come to think about the last time I heard of a similar idea, equally delightful and lunatic. It was little more than ten years ago and another Swede; Mr. Anders Lettström. The company was Reinhold City. Like in the Gardell case, Mr. Lettström thought that capitalizing upon the appreciation of real-estate values in Stockholm at the time, would make him an equally superior investor in all major cities in Europe. Hence, he invested in prime property in the best metro-locations all over Europe, arguing how valuable his properties were given the extreme premiums he was forced to pay. While the European real-estate broker community was shaking their heads, in wonder, about the strange behavior of the unheard of Swede, Reinholds City’s finances went from billions in cash to financial meltdown in less than two years.

One Dutch banker involved in the liquidation of Reinhold City’s assets commented to me; “Swede’s believe they are superior investors, when they actually only take greater risk than what’s good for them. They leverage their houses not only up to the chimney; they also finance the smoke!”.

I think the Gardell-Lettström parallel is quite significant. So, if you are impressed by Cevian, find out how leveraged they are with “Other’s Peoples Money” in their minority investments in Sweden and elsewhere. Thereafter, you take the same leverage on your own hard-earned cash, buying for example Volvo or Telia shares, and hope for Gardell’s salvation when he becomes appointed as a non-executive director. If you make it, your return on investment will be higher than his. You don’t have to pay him, you know! So, you must be smarter than he is!

If, on the other hand, “the random walk on Wall Street” goes against you, and you have problems sleeping at night, when the bank makes those ill-willed margin calls, don’t forget that you have been warned, reading this.

In Defense of The Blog

2006-11-26T02:58:00.000+01:00

“You have a blog?” a friend of mine exclaimed. For a second, I wasn’t really paying attention and I missed the interrogative inflection. It, actually, sounded a bit nasty, like he was talking about a new social disease. “You know, it’s one of those on-line diaries. Everyone has one!” I tried to defend myself.

He is a straight forward intellectual, with neither red nor blue color and, usually, he got his facts straight, but here I knew he was dead wrong. "Blogs are, as a matter of fact, changing the world!" I argued and there was silence on the other side of the line.

Afterwards, it struck me that maybe he was rather referring to me, as a person, rather than the blogging activity as such. Amongst friends and foes, I’m known privately to be a couple of light years behind on fashionable and domestically high-tech matters, in spite of having spent a great deal of my professional life on new-technology innovations. Therefore, it may have seen a bit awkward to him that I was looking into and embracing the blogging business!

Anyway, a bit of rattling around on the net and I saw that, although he was somewhat adrift with his opinions about my new life, practically everyone of importance in society, and the populace in general, seemed to be blogging. Once again, I reviewed a few samples, I’d never visited before. Some were quite incomprehensible, primarily because of age-group differences and I quickly gave up on those. Others were so specialized, banging on about hip-hop music, decadence, extreme politics or secular religion that I found them of little interest. At the same time, there were some, mainly those that dealt with the everyday facets of life that I found quite fascinating. They offered a “window” into their personal lives, thoughts and opinions without being an invasion of privacy as, here, the blogger is at liberty to reveal or conceal exactly what he or she wishes, without having to pander to anyone else. It’s true literary freedom! For the first time, in civilization!

When I started to write my own blog, now two months ago, I appreciated that I am, by nature and inclination, pretty idle a few hours a day and that given some self-imposed discipline, I could make a contribution both to my mental well-being and, best case, a few others. Making it an “as and when” diary was perhaps going to work – so I elected to try to produce an almost daily version, whenever I was in the office and in need of a cognitive break. Since, if you did not know, I knock this effort out usually in the small hours and it tends to be an “off the top of my head” affair. Subsequent revisions are an unaffordable luxury. So, it comes out with “warts and all.”

But, I suppose blogs and blogging soon will be on everyone’s lips and incorporated into the dictionaries of this world. My present old Oxford version has nothing listed between block and bloke, but I’m sure they’ve already rectified that omission by now. Personally, I do feel that it’s a wonderful development. For in a globalized world that is so overshadowed by that menace to civilization, I’m speaking about television, I think it’s marvelous that so many are actually doing something creative. Whether in Cyrillic letters or not, blogging is a mental effort about meaningful personal thoughts, available to each and everyone of us.

Perhaps, the only downside is that it is all being preserved in that most transient of mediums, the internet, and few will be bound up and preserved for future generations. It may become a growing social disease, I agree, but this time an admirable one.

Let’s hope nobody finds the antidote.

Blathering about Politics

2006-11-23T07:45:00.000+01:00

Why, you may ask, have this old fool been blathering about politics for a number of days, lately, when he obviously knows nothing of the subject? Well, when I read the papers, as it behooves anyone to do who has an interest in world and domestic affairs, it sparks my interest. And, as an entrepreneur, I am an action man!

Now, my understanding of democracy, as applied to Sweden, was that the government is appointed to oversee the well-being of the populace on a pro bono publico basis, not merely to indulge in verbal fisticuffs with the opposition. Therefore, in my view, the initial period of the Alliance seem to have missed the whole point of the exercise. I see as little concrete action from the newly appointed “executive” ministers, as in the appointment process of a new opposition leader. "Keep the eyes on the ball!" a football coach would have commented the situation!

Not having had the experience of living in Sweden for more than a year, this time around, perhaps I look at the domestic political situation a bit differently than the average man or woman on the street. I think it was the famous Mr. Disraeli that once remarked about his combatant that: “It would be a tragedy if anybody were to push Mr. Gladstone into the river – and a disaster if anybody should pull him out.” But surely, the government should be taking care of business first? And, be allowed to do that by the media, not to forget! The clock for the next election is ticking fast and the opinion polls are not in favor of an inactive government with mostly unpopular short-term actions being spoken about, for greater long-term effects that are less and less likely to be realized before too late.

So, now you understand that my interest in politics is only aroused when forced upon me by the morning’s headlines of something’s new and better being done.

Personally, I have never lusted power, but I do have some measure of sympathy for those that find themselves in the business of politics and at the head of a nation. And, having reached the top, all you’re going to wind up with is a load of grief, usually from those who helped you to get there in the first place, it seems. Ask Mr. Persson, for example!

Politicians, actually, remind me of that old adage concerning schoolteachers: “Them as can, do; them as can’t, teach.” One could paraphrase this to read: “ Them as can’t boss a business for themselves, should go into government to boss everybody else!”

Exploring Taxis in Torekov and Skåne

2006-11-22T15:42:00.000+01:00

The 4th of November, I wrote about taxis in Cardiff and how the taxi-system works and don’t work, resembles each local society. Today, I have reasons to make a second contribution to the thesis, based upon some recent experiences here in Torekov and Skåne.

The market for taxis in our small Båstad commune is fragmented into a small network of co-operating private companies, with self-regulatory prices that I have experienced to be oligopolistically expensive, but at least you can be confident of not being fooled. Not like in our Skåne county’s only metropolis, Malmö, where the number of times I’ve got that feeling is greater than I care to remember. Each time, I have of course started an argumentation, but then quickly paid what was demanded on the obviously re-programmed meters. Given the musky driver’s reactions, the only alternatives at my disposal were if I would like to be threatened by knife or gun. Leaving the movie blockbuster-like scenery with great relief, the thought always comes to mind; no wonder Malmö is a city of violence, if I can experience this in what at least appeared to be a non-black taxi.

On the Bjäre peninsula, Båstad taxi-drivers are much friendlier. Calling for one a few days ago, bringing my wife to the hospital in Ängelholm, a trip of about 35 kilometer, I was informed that the regulatory fixed price was 650 crowns. Raising my eyebrows, but realizing I had no possibility to negotiate or finding a different price, off we went! For the excellent service at the Ängelholm hospital, with at least ten people being directly involved during more than seven hours of analyses, my wife got a bill for 300 crowns. At the time of departure, I was told that she could call for a special taxi-number and the cost back to Torekov was 100 crowns!

Now, yesterday, I went through some of the bills my wife has got for renovating her house. Then, I noticed how the plumbers and electricians had invoiced for travel from their office-locations to Torekov, regardless if they actually came from the house next door. A ruff indication also showed that they had overestimated distances of about 20-30 %. Then, they included their own time costs for driving the car! In effect, the total cost of bringing a person to do some work at the house was averaging about 1.000 crowns plus 25% VAT, before any kind of work had even started.

Speaking with one of the firms about what I felt was a clear case of robbery, I got the cynical comment: “If you want to buy services white, you have to pay this! Try to sue us if you want! We will only refer to our collective agreements with the Employer’s Federation. And, you don’t stand a chance!”

Desperately, I searched for arguments. “But, how many other people, in our society, can invoice such costs and for their own time, driving to work?” The answer came, straight forwardly: “We have better unions!”

The Swedish construction industry unions have, obviously, created the most expensive taxi-service in the country, monopolized for their own members, at their customer’s expense. And, at the same time, put a lot of fuel on the black economy they claim to be working against!

Politics? Yes, Please!

2006-11-21T16:41:00.000+01:00

The euphoria I suffered from the initial comments on my lack of interest in the practice of politics, took a turn for the worse as I got a personal email yesterday that claimed “all men should be honest enough to take responsibility for the fate of our nation’s well-being”. Well, what can I say? What would you say?

Personally, I thought long and deep about the seemingly insolvable proposition, in retrospect more as it was a crossword quiz than seriously meant. Then, for some obscure reason, lightening struck me hard and uncompromisingly, just as the forces of political hegemony in Sweden had gone astray. I should, of course, apply for the job as the new leader of the Social Democratic Party!

Think, about it! It fits well; the post is open for grabs, I’m a middle-aged man and the competition is limited to a group of Mr. Göran Persson’s closest jay-sayers. Of course, should the party come forward with a female candidate; I can always withdraw on the moral basis of improving gender statistics. They are half of the population, don’t forget that! But, the likelihood is not that great, the army-headquarter at Sveavägen 68 don’t listen to their footsoldiers. They still rule like a Swedish version of the Kreml. Instead, the most likely combatant is a bore like, well, you know who! Suddenly, I can feel my self-confidence rising!

Gone on a different cloud, a new aspect comes to my mind; but, I’m no Social Democrat on ideology and never have been! I can feel a slight shiver as I realize that my spontaneous thoughts had been populist and that, in the end, I could be forced into a sport of political policy where you, in principal, change shirt like Zlatan if the transfer-price is high enough.

But, on the other hand; what is wrong with populism? To serve the people what they want! Isn’t that what public service, media and culture is all about? Isn’t that what all commercial businesses are trying to achieve and the profit is a measure of the success? And, isn’t that what the public sector ought to be doing, but often fail, because the politicians setting the stage many times don’t know what the public wants and sometimes even don’t care?

Forget political science for a minute; what is modern democratic politics really all about?

It is of course the art of influencing policy on the basis of discounted future votes, whatever the obstacles or ideological b.s.. Ergo, I must make a greater difference in The Social Democratic Party than any of the others!

So, Ms. Marita Ulvskog! Please, send me an email and I will promise to transform your party into something modern and better, both for your voters by reflex and the country as a whole. I’m willing to take responsibility! Do it, ASAP, because I’m an ambitions man and want to prepare well in time for the party convention in March!

You will hear a speech, you’ve never heard before!

Politics? Let's Try Something New!

2006-11-20T12:32:00.000+01:00

After a fall with important elections both in the US and here at home in Sweden, I have decided to support a new First Law of Politics. It goes as follows: After a maximum of eight years, all governments stink. They start sinking into a morass of intellectual, financial, ethical and/or sexual corruption. That is the nature of political power. It applies in Washington, London and Paris as it does in Sweden.

True democracy requires the purgative effect of change. The 22nd amendment to the US constitution, restricting presidents to a maximum of two terms, should therefore be regarded as an act of genius. If I had my way, I’d reduce it to one. The Swedish Social Democrats under the arrogant leadership of Mr. Göran Persson had ruled for more than twelve years and the last three British prime ministers have served an average of nine years plus. And, so has the majority of the medicine-men and executioners around them.

The First Law of Politics applies every bit as much – or more – on individual congressmen and parliamentary members, “riksdagsledamot” as we call them in Sweden. Why is that? Because most of them expect a job for life or, worst case, a hefty early pension or a promotion to a safe retirement as Ambassador or another prestigious position within the grand public sector.

The perversion of this system has led to increasing public complaints, as if it was a conspiracy by the political class against everyone else. We get the governments we deserve! Don’t forget that and, next time, vote for the ones that support the First Law of Politics!

The 1st Note on Global Warming

2006-11-18T01:26:00.000+01:00

I am sure you have not missed it; the recent world reactions to the phenomena of global warming. Suddenly, everyone seems to care and, more and more, speak up about changing life styles. I am sure it feels good to be part of this newly assembled world collective of media-sensitive movie-stars, pop-singers and retired politicians!

For those of you who will vote against my propositions, on this and a number of forthcoming notes, I would like to state already here and now: I care too! But, I am not part of your co-op, because you only deal with the symbolic and not the material issues involved! I think the core of the problem has nothing to do about a need for more publicly posted cries of care about the environment. Have you ever met a person who does not care about it? In today’s world, the key issue is rather what, concretely, to do about it and, perhaps more importantly, what not to do about it! And, it is on such policies the co-op and I disagree.

In retrospect, one can conclude that rarely has a report with so many charts and equations in it caused such a stir as the Briton Sir Nicholas Stern’s review of the economics of climate change. It was published over a month ago or so and is, still, debated on a global scale. The figures have been splattered all over the world igniting latent human character and societal forces. Suddenly, something has to be done. For those of us who has experienced doomsdays prophesies before, it felt like a déjà vu.

This does not say that the review has done any harm. On the contrary, it is always good to discuss difficult problems in public, on the web, like in this blog. At least, as long as the facts wins the debate, in the end. Or, if it can be established that requisite knowledge is lacking, no harmful decisions are made to the economic and social well-being of mankind. Globally!

My personal starting point in this limited series of notes, looking at the phenomena as something dynamically inter-related in parts and as a whole, is to be guided by matters of greater priority. We must, therefore, focus on things that are more important and matters we can do something about. The rest can wait! If they, for whatever reason, disappear from the agenda, no harm done.

Without being able to rank priorities, I claim in this note that the economic and social development in China is a key factor to global warming! And, something can in fact be done about it. Let me try to explain below.

If, as the majority of the “green-lobby” thinks, greenhouse-gas emissions are at the core of the problem, the centre of attention and focus on actions shall in fact be on one single nation; China. The projected global growth in billions of tones of carbon equivalents until 2025 is, bluntly, a Chinese “contribution”. Of course, there is growth in other parts of the world as well, but they are dwarfs in comparison. During the next twenty years, according to World Resources Institute, China will in fact produce more of the emission-increase than the US, EU and the former states of Soviet Union all together!

The extraordinary growth of Chinese gas-emissions has many important repercussions. First of all, the awareness of environmental issues in China must be strengthened to the level that its government copes with the relevant issues and on the scale required to make a difference. It is doubtful that this will ever occur without strong international pressure and, also, active support. The Kyoto Protocol was, clearly, insufficient in coping with this priority issue. Something, the Americans correctly have pointed out.

Secondly, China must be developed much further economically, in order to afford managing their domestic energy production and consumption. This, in return, requires a strong economic development, which is among all dependent upon continuing positive development of world trade. The likelihood that China will invest in environmentally friendly technologies, if they can’t even feed its people, is zero. The likelihood that China will exercise all its power, to try to gain control of foreign energy sources, if they can’t meet domestic demand, is hundred percent. Remember Japan in the 1930’s? Hence, this Chinese economic-political dimension must not be underestimated. It must be, actively, managed by the world community and of course the US, in particular.

As far as I am concerned, the gravest danger for the environment until 2025 is, therefore, a collapsing world trade and increased protectionism on a global scale. All actions that lead to such consequences are, therefore, like shooting yourself in the foot or peeing in your pants. Regardless, if they may have incrementally positive environmental effects. The budgetary cut-downs caused by protectionist series of events are doomed to be paid in terms of increased environmental costs. Some, perhaps even irreparable.

Let us all pray that “the environmentalists” learn to understand that the environment, in all its facets and dimensions, is contingent with economic-political and technological development. Environmental policy can never be isolated to a set of regulatory rules. And, that also the reactionary “green-lobbies” start to support and enhance a liberal and capitalistic trade-friendly development of China and the world, in order to save the environment for future generations.

There is no other way out!

The Free Lunch

2006-11-17T00:18:00.000+01:00

In the popular management literature, there is a well-known saying that “there is no free lunch”. Still, in the real world of businessmen and women, you more frequently than seldom find people who are constantly looking for it. In order to avoid honest hard work, they act like they were in search of the Holy Grail.

As always, in both theory and practice, there are of course exceptions to the lack of free lunch rule; some not so obvious and more devious in character, such as exploiting friendship and trading on insider information. Others are more to the point. Being a restaurant critic, for example, is a job which always has struck me as being something out of the ordinary. Probably not too good for the waistline, but really a delightful source to a free lunch.

Just think about it; you get to visit the sort of culinary palaces that you were never able to afford, without the largesse of your employer, rich friend or family savings. You could work your way through the delicate menu with an easy conscience, select from the wine list with nary a glance at the discreet price column.

When it is all over and you are truly replete - full of the chef’s exquisite creations, the ambiance and services in equal amounts - you could summon the, by then, very nervous maitre of the house. Calm, but looking anxious, you would in well chosen words explain to him just what an inferior establishment he was running. Item by item, you would tick off the failings of the chef, the wrong tempered wines, sloppiness of the service, the unfit music noise in the background and the disastrous décor of the place. The coup de grace would be to point out that, if he wasn’t paying more attention to detail, he would soon be able to read all about it in the papers.

After the palaver, and as expected, the red-faced maitre would be kind enough to invite you back in the near future, in order to experience all the necessary improvements. On the house, of course! And, then, you could burp quietly and leave, content after a day’s job well done.

“Anything, to feel good about a free lunch...”

Man's Best Friend

2006-11-16T00:15:00.000+01:00

Sometimes I feel sad, in the true sense of the word. Often, when it happens, it is because I think about one of my oldest and best friends. He and I were together for more than ten years, without a cross of neither word or difference of opinion. He was a true gourmand, a silent philosopher and he had a will of his own that many visiting my home learnt to appreciate, in wonder.

He was, of course, my dog.

Peter the Great didn’t have many good things to say but he did state that “Now that I know men, I prefer dogs.” And in this, he was perfectly correct. Aladdin (for that was his name) came into our lives by happenstance. It was a cold day in April when I picked him up at a shabby kennel remotely located in Mid-Skåne, where he was the last remaining puppy that year. As soon as I saw him, I noted that he was different. His approach was careful and observing, like a true skeptic character enclosed in the appearance of a dog. The first waggle took several seconds after my first caring touches. That very first night together, Aladdin slept trembling on my breast under the winter-cold sheets, alone in our summer-house outside of Ystad. The next day, we traveled by car, ferry and airplane, and he arrived, completely exhausted, to his new home in Waterloo, Belgium, where the whole family stood prepared to start cuddling with him.

Like most golden collies, Aladdin was proud, always kept his head held high, and was genuinely friendly. Some even claimed that he was spoilt; one of the few dogs that did not believe life was all about barking, food and sex. Sleeping at my feet in the library, I could feel how he harbored a sixth sense of my inner thoughts, always lifting his white and golden head and meeting my eyes with his natural calm, when I was tense or stuck on some apparently unsolvable problem.

Aladdin’s ability to adapt to his family eccentrics made him the only dog I’ve met that could stand my pipe and cigar smoking and, in the neighborhood we lived, he was the only dog that preferred staying up late at night and to long-sleep in the mornings. Just like the rest of us! He managed his small heard by motivating us to spend more time together than to split-up in different parts of the house. He seemed most content during dinners, not from the actual eating, but that we ate together in the dining-room and he could observe us all at the same time.

Moving back to Stockholm, Aladdin’s territory grew to more than two acres. Envy met him from aggressive male dogs on the other side of the fence. Aladdin soon learnt to bark towards them and became an implacable hunter of rabbits on our grounds, although we all knew he never wanted to catch one. His primary times, though, were together with my understanding father, who took him on longer and more frequent walks on the adjacent golf-course and archipelago shore-lines than anyone else. The favorite place of his was the front-seat of my private driver’s Cadillac. Aladdin truly adored him and loved to keep look-out while traveling in style, when I was reading or sleeping in the back.

Aladdin’s last time was in a townhouse inside Wiesbaden, Germany. With cancer in the leg, he suppressed the pain into what I mistakenly thought was a depressive mode caused by the move from his former “dog’s kingdom”. Too proud to complain, the treatments came much too late.

My dog is sadly missed and I will never forget the silent moment I saw Aladdin’s brown eyes for the last time and, without a sound, he bow his white and golden head, turned around and limped away with the angel-clothed female vet.

Politics? No, Thank You!

2006-11-15T00:30:00.000+01:00

I am certain it will come as a great relief to those of you who are Swedish, and especially if you belong to the Skåne County Council and, in particular, if you are living in the Båstad commune, to hear that I harbor no political aspirations. Although, I may be equipped to discuss politics with friends at private dinners, and I like to agitate on policy about matters from A to Z, I still cannot see myself involved in the practice of politics. In fact, my interest in being mesmerized by the democratic process-dysfunctions of party politics and hoaxing coalitions is zip.

Even though I attended courses while at University that had “political science” in its title, I still have no idea what that means in reality. I, simply, don’t see much science in politics at all. Perhaps that is also why I have never been a political party member. And, as far as I am aware, my fellow academic and business colleagues who know me well enough, have always claimed that I am a typical contrarian, from all ideological perspectives and political angles, left or right.

My only official political appearance has been one time in the mid-80’s, when I was attending a conservative party conference on how to improve the efficiency and effectiveness of the Swedish health services. The conference was conveniently located at a castle in Denmark, in order to enhance the well-being of the seemingly “worn out” attendants. After some introductory party-politic gossip and compulsory jokes about the social-democratic combatants, a few leading members and economist Professors made abstract speeches about their more than far-fetched ideas, leading absolutely nowhere concrete in my view.

When it was my turn to try to make a contribution, based upon my management consultancy profession at the time, I started by asking the audience; “What is the role and task differentiation between administration and politicians?” A soft murmur could be heard in-between the rows of surprised party fellows. One courageous and pompous man, from Stockholm, finally stood up and explained; “The hospital administration forwards suggestions, the politicians decides and the administration implements.”

“That sounds great! Like a perfect system!” I commented, in a cynical tone of voice, and noticed to my great surprise a number of approving nods. “How many decisions do the politicians make, per year, let’s say? Governing, for example, five hospitals?” I, then, eagerly continued.

Suddenly, there was absolute silence in the auditorium and many faint-hearted felt aghast, I was told afterwards. With no apparent reaction, I resumed and presented overhead copies of Minutes of Meetings from one County Council and its Hospital Board’s from the year before. The acting politicians from that County Council stared at me, in horror, when I swiftly concluded that they had taken less than one formal decision, per month! And, that very few of these resolutions had any material content in relation to the services provided by the hospitals involved what-so-ever!

In the evening, after a few introductory drinks, I was flatly accused by several party old-timers of being a communist in disguise! Probably, for the first and only time in my life! Around midnight, when the alcohol had everyone including the most hard-nosed right-wingers loosen up a bit more, I was told that my critique in fact was well-founded, but at the same time that they had no clue what to do about it.

At the time, lecturing management theory and advising on practical organization change processes to a group of drunken politicians felt like mission impossible, so I refrained and quietly left the “party” and went to bed.

The first, and only, time I was invited to a political party conference was over.

Governments, R&D and Innovations

2006-11-14T00:15:00.000+01:00

Lately, I’ve read in the international business papers how Europe is continuously falling behind the US and Asia on R&D spending, and the EU is now worried and so is the Swedish government. They have reason to be, but for very different reasons. Their reflex conclusion about corrective measures, i.e. to increase governmental R&D spending, is both wrong and ineffective. Why? Because, it does not cope with the fundamental problems of innovation processes and the role governments can play in them.

To begin with, it is true that innovation is the engine of long-term growth in the economy, but it is much more than the product of measured spending on research and development. Indeed, there is, believe it or not, no empirically proven causal relationship between R&D spending and profitability. Still, most governments compete to increase R&D “investments”, as if it was politicians that created the new bright ideas.

Now, what is the problem with more well-meant government support? Well, there are several important issues involved. First of all, comparative analyses on R&D, and marginal productivity on expenditure, are only relevant within sectors of the economy. Percentage differences in R&D-expenditure between nations are, therefore, meaningless averages that say little about relative innovative capabilities and competitiveness. If one would like to compare between nations, it is in fact more relevant to compare the number of filed patents, differentiated by categories, such as corporate, research institutions and private individuals. And, to increase the filing of patents is much more a cultural change process than a question of expenditure per capita.

Secondly, new ideas transformed into patented inventions are not isomorphic with innovation. Innovation, defined as something technologically defendable and commercially successful, is in fact a truly random process with a lot of luck and parallel processes involved. For example, the institutional structure of regulations, taxation, industry and capital markets are important factors and conditions for inventors to be able to develop a patent to a complete product, and take the product to market, and thereafter to reach a commercial break-through. This means that government must focus on its role in the economy, what in reality it can influence and avoid spending where the likelihood of a positive result is meager at best.

Throwing money on R&D, ceteris paribus, will never make Europe more competitive. Instead, the EU and its member state governments ought to focus on enhancing institutional structures and leave innovations to industry, and they should support private inventors as small business entrepreneurs by reducing income tax and bureaucratic reporting to the state.

A 4th Note on Cevian and Gardell

2006-11-13T00:21:00.000+01:00

The apparent change in the public perception of the private equity firms and funds like Cevian, is that they no longer are financial engineers. Now - in a whim – the pubescent financial analysts have become superior managers and benefit all shareholders by building better businesses! At least, this is how Mr. Gardell and others actively, with the help of client-hungry pr-firms, try to re-position their stacks of committed cash towards the market of corporate governance. And, God knows, they may even believe it, themselves!

My view is, therefore, that warning lights should be flashing on broker’s and investor’s computer screens and for several reasons. The credit circle for leveraged loans, on which private equity firms heavily depends, has not yet turned, but is likely to do so in the near future. Increasing interest rates does not only squeeze home-owners and is almost always combined with a credit crunch. Does anyone remember what happens to leveraged short-term investors, when refinancing comes dear or becomes virtually impossible? If not, please read a bit of finance history and take the money and run, while you still can.

The only problem is that the investors in Cevian funds can’t sell out. The institutions and any other fund owner must sweat it out, one way or another! My question is how these institutions can invest in a business concept which is contrary to their own investment criteria of secure long-term returns for our pension funds? That simply does not make sense!

Now, the trend for private equity funds, internationally, is to try to go public, in the hunt for more cash. In other words, the brainy idea is for the funds to take their target companies private and go public themselves!! That surly don’t make sense, either, to a simple man like me. Reputable private equity funds like Carlyle and Blackstone have already tried and for obvious reasons, failed. As far as I know, KKR is the only one, so far, who has succeeded. The question is why they want to do this? The simple answer is that the market for “dumb” institutional capital is maturing. Increasingly, institutions are fully invested. Now, the greed makes private equity funds go after the “dumb” small-cap and private capital instead.

For example, in Sweden, the commercial banks are now preparing to help Cevian and others to raise more cash, most likely in order to safeguard their own leveraged-loan portfolios. They want to bundle small-cap together and enable investments in non-public private equity funds. That seems like a brilliant Ponzi-like idea. Just what is required, for all the parties already involved and stuck.

Perfect for everyone but the naïve individual private investor, who is predestined to become the last man entering the game.

Are You Man Enough for Burger King?

2006-11-11T12:23:00.000+01:00

The news when Burger King broke the hamburger size barrier with their new “Monster Whopper”, did not take the gastronomic world by storm. Instead, this advanced American product development was hailed by all those who feel that the world is grossly overpopulated. Don’t count me in, but given the declining competition from the tobacco industry, Burger King is now, obviously, at the forefront of the driving forces to reduce the overabundance of mankind. The grand strategy is to radically increase the frequency of heart attacks and similar diseases, caused by obesity.

Burger King’s advertising slogan for their new innovation in death is “Are you man enough?” Can you believe it? The reason is, of course, that this interrogative slogan is liable to be abused by the wits from cunning minds that delight in thinking up derogatory answers to the rhetoric question. The advertiser’s ingenious assumption is “you talk about it, then you eat it”, meaning that people in common not only lack wit but are plain stupid.

In the “less people is beautiful” view, public health authorities around the world should now be eager to embrace this outstanding American population-control product, perhaps offering discount coupons to those who regularly indulge in obscene eating at Fast-Food establishments. Quick death in younger ages does improve statistics, you know! There would, therefore, have to be a caveat to such a “whopping” marketing campaign that the discount only apply in the case of instant death, and not from one of those lingering diseases that occupy a hospital bed (if one can be found) for any non-defined length of time.

The introduction of this new Monster Whopper weapon into the armory of American world population-control is, in fact, about the equivalent of the effects from another of their deadly innovations - the A-Bomb – all other standards are rendered obsolete, here. If widely adopted on a global scale, Burger King’s Monster Whopper surly will have a similar if not outperforming casualty rate.

The only marketing mishap with the Monster Whopper product is that, unfortunately, it is much more geared towards the sugar-sweet taste of “the great American family” than Muslim extremists, even though the Al Qaeda men may be “man enough” and they also, like the Burger King mainstream clientele, prefer to eat with greasy hands instead of knife and fork like in more civilized culture’s eating habits.

Perhaps, once again, the Americans have shot themselves in the foot. The A-Bomb, Vietnam, Iraq and now the Monster Whopper!

International Entrepreneurship in Wales

2006-11-10T14:25:00.000+01:00

The 29th Annual United Kingdom ISBE (Institute of Small Business & Entrepreneurship) conference in Cardiff, I attended last week, was typically British; very well organized with a splendidly documented and extensive program of both curricular and social activities, lots of speeches and hoorays, of course, and name-badges hanging like medals around the necks of all the more than five hundred delegates.

During the formal gala dinner, we were served examples of Welsh dishes you had never tried before, or promised yourself in the past never to try again. During the breaks, we had the classic sponge-like and three-cut sandwiches, with buttered biscuit snacks to go with the brownish coffee. Walking around the premises, you could study posters and marketing gimmicks from the wide range of corporate and local governmental sponsors. It felt like a real deja vu for all I talked to who had attended a British research conference before, and including a foreigner like myself.

On our way back to Sweden, my accompanying wife chirped that she really liked the conference and, especially, how she had met so many both socially and intellectually interesting people. “Hu hum”, I murmured. Personally, I found the conference to be, academically, far off the mark and for several reasons. First of all, out of the more than five hundred delegates, not even ten percent were non-British. I counted to less than ten Scandinavians. Typically, the majority of foreigners were from former British colonies. There was only one American.

The conference topic focus was, supposedly, on the research and practice of “international entrepreneurship”. In reality, this was a false label. Only a selected few of all the presented research and development papers touched upon the relevant topic. Instead, the vast majority coped with issues confirming qualities in government support programs to small businesses, or suggesting requirements for further research in order to reach the same conclusion. Many papers, claimed to be “research”, were rather descriptive presentations of regional or local consultancy projects.

To deny contributors to present their papers for lack of relevance to the topic of the conference is, perhaps, difficult for the organizers. You, probably, rather flop on relevance than a lack of papers. But, in this case, the result was not merely a duff. It was a shank that went out-of-bounds. Reading through all of the research papers of the conference that were nominated and received rewards for best papers, in a number of ambiguous categories, I did not find one single contribution that caught my interest as something that enhanced the academic knowledge framework on International Entrepreneurship. As a Scandinavian colleague sitting at our table during the gala dinner bluntly put it; “What did you expect? ISBE don’t know what blind peer reviews are. This is not about academic rigor. This is a jamboree! To get a reward, here, you must write what the sponsor of the reward likes to hear!”

My conclusion is that ISBE must shape-up, when the circus is moving to Scotland, next year. Otherwise, international participants with an academic interest in International Entrepreneurship are likely to be extinct.

On the other hand, my wife thought the colorful brochure on, ISBE Glasgow 2007, looked very nice…

American Election Razzmatazz

2006-11-09T11:44:00.000+01:00

Today, I had planned to come back to my Cardiff experiences but, in view of the mid-term elections in the United States, you’re just going to have to wait. The thing is, I doubt whether anything excites the human mind more than politics. In general, I’m all in favor of keeping one’s personal counsel in such matters, but when blogging almost daily, it’s difficult to ignore the razzmatazz of an American election. They are the only real world Superpower, aren’t they?

In contrast to the way Sweden and Europe goes about such matters, American elections looks to most outside observers more like bare-knuckle boxing or all-in wrestling with no holds barred. And, yesterday’s example of the political art was no exception. It’s fair to say that, if you happen to be a sensitive soul, US politics would best be avoided.

As we all know, Americans may be a bit loudmouthed, but in general they are peaceful, friendly and tolerant – tolerant, that is, until it comes to election time. Suddenly, character assassination becomes a national sport and appalling amounts of money are frittered away in the worthy cause of trying to blacken competitor candidate’s images. It is easy to be sniffy about this special form of Americanism, but it is in fact a sign that its democracy is thriving, unlike in many other countries where the populace show little if any spirit and supinely go along with whatever policies are spoon fed to them.

Yes, the convolutions of American politics are baffling to many, including myself sometimes. With its obsession with checks and balances, it is a wonder anything gets accomplished and sometimes you may even have the majority votes and still you don’t win. It’s imperfect and expensive, alright, but, in the end, it does express the voice and wishes of the people, and is probably the only way in which such a large and diverse nation could manage its affairs, other than under a dictatorship.

The strengthened checking of the powers of its present White House incumbent will therefore be most welcomed; the leadership of someone who believes America has been empowered by God is hardly the sort of thing a democracy needs. Moreover, the President’s open pre-election statements that he intends to follow his course, even if he is supported by only his wife and his dog, makes a mockery of any democratic principles he might espouse.

The election results in America should be a reminder, not only to Mr. Bush & Company, but to all other democratically elected administrations that they are there to serve the people, not merely to secure themselves a dusty place in the history archives.

A 3d Note on Cevian and Gardell

2006-11-07T12:36:00.000+01:00

An important issue related to the recent discussions on private equity funds like Cevian and Mr. Gardell is financial leverage. Cevian’s robber baron value creation formulae, beyond “speaking-up share price expectations”, is to increase leverage. First of all, by changing the capital structure of their target firms. Debt comes cheaper than equity and with a short-term perspective on corporate governance; cash is always burning in the pockets of target corporations. So, the assumption is that one time dividends is good for shareholders! At least for the ones who want to sell out and refrain from long-term shareholding.

Secondly, private equity funds leverage their own funds, capitalizing upon the fierce competition of commercial banks. According to the UK financial authority, SFA, the leverage in private equity funds has now increased to the limit that it is likely that they and/or their holdings go bankrupt. At the same time, the price of target firms has increased from price/earnings multiples of 11 to 14, only during last year! Then, in order to reach their extraordinary high return on investment targets, these funds only have two remaining action repertoires, either to increase their short-term orientation or to increase leverage even more. Or both.

In academic financial theory, value is independent of financing. In practice, value is created or destroyed by shareholders, appointing directors that govern corporations. Think about it; does anyone really believe that private equity funds are excellent governors of industrial assets? When most of their fund managers have only seen industrial corporations in Annual Reports? When their fund managers have been appointed to reach IRR’s that, since the founding of the world’s public capital markets, has been proven unsustainable?

Can you see any difference between Mr. Gardell and a “buy and hold” financial value-investor like Mr. Warren Buffett?

Assymetric Retailing in Torekov

2006-11-06T01:56:00.000+01:00

Most management researchers love boxes. Not to put things in, but concepts. The generic idea is that the common characteristics within a box are greater than across boxes.

This idea put into a theory framework is called segmentation. The concept of segmentation is applied in all the competitive advantage theories of strategic management. It is, also, the foundation to most if not all classical marketing models and methods.

The only problem with segmentation is when reality doesn’t fit with the pre-determined boxes anymore; when comparisons between boxes have little or nothing to do with business reality. Looking at the current simultaneously global-local economy, this is more and more the case, I’m afraid. The Internet has made both business and organizations more permeable in both horizontal and vertical dimensions than ever before. Nation statistics and SIC-codes no longer correctly reflect the agglomerations of commercial transactions. Segments of business are, increasingly, asymmetric and it is often virtually impossible to squeeze in a firm or corporation into one or a defined set of boxes.

The business reality of retailing in my village is another proof of this fact. Torekov cannot support specialized retailers. Our population is too small. Instead, the basic needs of products and services are uniquely combined into boxes that I’m sure cannot be found anywhere else. For example, we have a boat-sale company that also sells and repairs bicycles, and has taken over the local post office services. In addition, this company has catalogue sales and distribution of alcoholic drinks for the state monopoly! A women’s clothing retailer also carries a small assortment of electric and hardware products. And, they both give a good service to their local customers.

In segmentation theory, such firms cannot survive and does not exist long-term. In practice, the unique cross-selling they practice is the only way for them to survive in our small local market. They must go for any possible added contribution they can find, to service fixed costs. In many ways, they utilize the same logic as modern e-businesses; the competitive advantage of a branded location, being a well-known website or conveniently located store.

When IKEA is peddling Swedish meatballs and candy around the world and Amazon.com is enlarging its assortment beyond books, they basically behave like our local retailers in Torekov. And, they all contradict the theories of segmentation.

The Business of Gloom and Doom

2006-11-05T02:28:00.000+01:00

It is long since I gave up the notion that my personal opinions would have any influence on world affairs, but for whatever reason I still like to keep abreast of matters in the daily news. So, every morning I read the Swedish papers and a selection of the world press, courtesy of the Internet, hoping against my own experience that somewhere out there will be a nugget of cheerfulness in the slough of despond that always seems to surround us news freaks. But, I seldom find what I’m looking for and, therefore, the morning news tends to make such a depressing start of the day.

Actually, I’m glad I never had to work for a newspaper or TV-channel, to produce all this gloom and doom. I mean, it must really be a terribly depressing job for someone with an in toto positive outlook on life to be a journalist. Once you manage to sniff or dream up a devious plot and ask for the editor’s opinion:”Of course we’re leaking it”, he would exclaim. “I mean, it’ll be an even bigger story when all the other blood-hounds get after it. And, not the least, if it finally end up in the courts. This is the sort of stuff we want! Don’t you understand? Not any happy rubbish!” Listening to the editor’s constant bashing for stories with tax evasions, sexual harassments, nasty divorces, murders and rapes, preferably with a bit of pedophilia thrown in, day after day, must turn any normal character into a murky and obsessive sole.

But, if a journalist can’t stand such a sleazy professional life, you can of course also creep away despondently and take up another profession, such as being a spin doctor for any of the Swedish Labor Unions or the Social-Democratic party, where they anyway refuse to listen to their foot soldiers. Or, maybe become part of any other society or organization with an absolutist world view, where they only want to hear fabricated “good” news!

Looking at the bright side, perhaps I instead should altogether give up CNN, BBC and reading the papers in the morning! What a change that would make and how much more productive I could be! And, I don’t suppose it will make a scrap of difference to Bush, Blair, Putin or any other ignoble politician and all their advocates, who always make my start of the day so depressing by creating all this misery and mayhem.

You see, no news is really the only good news.

Exploring Taxis in Cardiff

2006-11-04T05:12:00.000+01:00

Coming back from Cardiff and the ISBE conference on ”International Entrepreneurship”, I concluded two things. First of all, how important it is not to mislabel facts and figures. More about that in a few days.

The other more personal thing was how you in fact can characterize a city by its taxi-service, or in many cases the lack of it. The reason is that the first and last thing you remember of a city, as a traveler, is the trip from the airport and back again on the way home. Arriving in Cardiff, balancing bags in all sizes on a crummy old cart with three wheels, my wife and I desperately looked for a traditional London black cab. This was Britain, we naively thought. It turned out that in the Wales capital, taxis was a rare breed that required more than a bundle of administration.

After being shoved through a crowd of short and rugby-looking Welshmen teenagers towards a shabby cabin outside of the terminal, I was told by some equally frustrated Americans that I had to stand in line to get my name scribbled on a waiting-list and hope for the best. When I, then, pushed myself through the crush of irritated arrivers and at last managed to talk to the lady sitting behind a counter, I realized that they were right. The woman in power looked skeptical at me, like she thought I would not pass her test for receiving the privilege of a Cardiff taxi. “How are you, today?” I said, but received nothing in return. And, definitely, not a taxi.

When we after an hour or so finally managed to reach the top of the power-woman’s list; she made another phone-call and ten minutes later the taxi came. The stodgy driver looked cagey at our luggage and since I had big problems keeping my temper, I gave a forced smile and took the initiative to open his Japanese car’s trunk. “This is no problem! My wife is traveling light on this trip,” I said and he mumbled something peculiar in what I at the time did not realize was Welsh. After joining forces with me, in a not so well-disguised protest, we at last managed to squeeze in all the necessities my wife had brought with her.

The city life of Cardiff turned out to be almost renounced of taxis. One could not even find any taxi-poles or marked taxi-parking spaces, let alone any taxis driving around to find a customer in search of service. When asking the concierge at the hotel, I was told that there are plenty of cabins tucked away in alleys and backyards around town, and there you have other power-ladies making calls to a Higher Court to send for a transport service. It turned out that I preferred to walk the thirty minutes or so to the City Hall, where the conference took place. Lucky enough it was the first couple of days this fall, with no rain.

On the way back to the airport a talkative and English-speaking driver told us a story about a fellow driver that had died and went to heaven at the same time as his best friend, who happened to be a priest. “St. Peter was at the Pearly gates waiting for them”, the driver explained. “Come with me”, said St. Peter to the taxi driver and he followed St. Peter to a great mansion. “Wow, thank you”, said the upbeat taxi driver. Next, St. Peter led the priest to a rugged old shack. “Wait, I think you are a little mixed up”, the priest complained. “Shouldn't I be the one who gets the mansion? After all, I was a priest, went to church every day, and preached God’s word.” “Yes, that’s true”, St. Peter explained. “But during your sermons people slept. When the taxi driver drove, everyone prayed!”

Then, our taxi driver laughed heartily and I longed for a quietly throbbing London black cab, where you can stretch your legs and take a nap on the way to Heathrow.

19th Century “Born Globals” in Wales and Sweden

2006-10-30T01:20:00.000+01:00

Today, I am going to Cardiff in Wales on a conference on "entrepreneurship", and I'm presenting a paper on the growth and internationalization of the e-business firm. I am looking forward to this for several reasons. Not the least, because Cardiff and my home town in Sweden, Sandviken, both have a history dependent upon entrepreneurial forces within the iron & steel industry and about at the same time in history.

The Normans build Cardiff Castle in the 12th century, but Cardiff was a relative small and unimportant town until the 1840’s. What made the difference for Cardiff were three things. First of all, the new Glamorgan Canal that linked the ironworks and coalmines of the Merthyr Tydfil district with the docks of Cardiff, on the coast, increasing the amount of trade taking place there. Secondly, the growth of Merthyr Tydfil made it the largest iron producing area not only in Great Britain, but in the whole world. Its competitive advantage was the combination of coke and iron, energy and raw material, in the same location. Its only relative disadvantage was transportation costs.

Thirdly, two of the more entrepreneurial owners of these ironworks, Mr. Josiah Guest and Mr. Anthony Hill, then joined forces to form a railway company that reduced the transportation time to Cardiff to less than an hour. Later, branches were built to link the mining valleys with Welsh ports and England's fast growing industrial towns and cities. The railway network reduced transport costs so much that it was now profitable to export Welsh coal to countries as far away as Argentina and India. In twenty years, Cardiff’s population grew by a tenfold and reached over thirty thousand, making Cardiff the most important town in Wales.

The Swedish Bergslagen region also had local supply of energy and iron, problems of transportation that was reduced by building canals to the coast and new railways. Sandviken was founded in the 1860’s on the location of the new iron and steel works owned by the internationalist and entrepreneur Mr. Göran Fredrik Göransson and based upon the new Bessemer process license Mr. Göransson purchased in the UK.

The common denominator between the Merthyr Tydfil iron & steel producing firms and Sandviken was that they all were “born globals”. All of them had an international perspective upon their business, right from foundation, and none of them could survive by only producing to the local market.

The works in Merthyr Tydfil had several competitive advantages to Sandviken in the middle of the 19th century. They could easily piggy-back on the British Imperial networks, which was covering major parts of the world. This had two effects, the Welsh iron & steel firms remained production oriented and they looked upon exports more or less as a captive market. Sandviken, on the other hand, had nothing to start with. The small management team of Mr. Göransson was forced to establish Sandviken, internationally, via selecting and developing own sales agents, distributors and with own foreign sales and later also production subsidiaries. This had several important learning and corporate cultural effects. From its founding, Sandviken developed a strong entrepreneurial spirit within its export sales organization. International growth and competition also lead to pressure to continuously improve product and process technology in order to enhance its marketing efforts. A market oriented and high-quality R&D became the hallmark of Sandviken.

Over time, Sandviken became Sandvik corporation and grew to become a world leader in steel and hard-metal materials-technology. As far as I know, there is no steel production in Merthyr Tydfil any longer.

A 2nd Note on Cevian and Gardell

2006-10-29T13:24:00.002+01:00

I’ve had a lot of positive reactions on my Thursday’s blog on the pirate business of the Cevian fund and Mr. Christer Gardell. At the same time it is clear that the public is divided on the issue of his potential greatness. My opinion of Mr. Gardell is not personal. To me, he is just another example of a certain breed of financial investors. His ego seems stronger than most, though, claiming to Affärsvärlden that Private Equity fund-managers, in general, are smarter than corporate executives. Perhaps! I wouldn’t know, but let me be a bit skeptical about financial machos without an industrial track-record.

What many commentators I have read seems to miss, on the material issue of short-term pirate funds competitive advantages, is something completely different and I think more fundamental. First of all, Cevian’s business concept assumes that there is a constant flow of under-priced major public companies on the Nordic stock-markets, i.e. Gardell knows more than the market. Secondly, that there always are suckers out there who are willing to buy Gardell’s over-priced assets, when he wants to jump ship. And, he must sell! Otherwise he can’t reach the returns that he has promised to his investors, if he is not merely increasing their financial risk through leveraging the fund’s investments. Regardless, over time, the results of Cevian’s portfolio, by definition, will close in on and reach the market index return.

The point is that without these two not all that self-evident conditions in a small pond like the Nordic market, the “arbitrage” concept to buy minority positions in public household stocks of the Cevian’s fund is dead. Why, you may ask? Because the transaction costs of the fund business is much higher than buying direct in the market! Somebody has to pay Gardell as well and, as he rightly put it himself: “Fund-managers don’t come cheap!”

High-flying Thinking

2006-10-28T00:45:00.000+02:00

The other day, I was asked by a friend how I could survive living “out in the Boondocks”, so far away from the energetic pulse he knows I have been addicted to, after thirty years of metro-living and extensive international travel. My immediate answer was not “a change in life-style”, “a mid-age crisis” or something else crisis-like on a personal level. The reflex rather said “technology”!

Without the web, my up and running “Think Tank” would have been forced to “think” somewhere else, in terms of location, and definitely much closer to a selected metro-area's agglomeration of cognitive disturbances. The point is that the results from our "Think Tank's" creative endeavors would certainly, then, be very different. It’s not only the notion you frequently read about in the papers, “you are what you eat” that is true. My experience is equally that "your thinking is influenced by your physical location". And, Torekov, still not more than one and half hour from Copenhagen Airport, is for me a great place to think!

Talking about airports, the very best ideas on how to refute old theory and generate new conjectures for conceptual models in strategic management and organization theory, I’ve actually had when I've been flying, believe it or not. In fact, I can’t think of how many other business problems that I've managed to solve in airplanes. Strangely enough, I get the same kind of contemplative feeling when flying, as when I’ve had a reasonable amount of red wine, while sitting alone in my favorite library arm-chair, watching the Torekov harbor bristling with life in the summertime or breathing a fog of melancholy calm in the winters.

So, flying makes me much more of a free thinking sole, it seems. Seated in a jumbo-jet First Class cabin, I feel no longer bound by the contra-productive thinking conventions modern society so frequently provides us with. When all other psychological mind constraints finally have settled down, tacit knowledge and the idea generating machine I’m so dependent upon in my kind of work, slowly surface in the back of my mind. And, it feels like the jumbo is closing in on thinker’s heaven.

The only thing I can’t stand, when flying, is when I’m sitting next to a person who has the ambition to small-talk his or her way through the flight. Quite often this may happen, I’m afraid, especially when flying Economy or Ryanair and the like. Then, I get frustrated to bits! The only solution I have found, when in such dire straits, is to play a rude son-of-a-bitch, motivating the blabber-woman (I’m sorry, but it is usually a woman) to stop her monologue. Therefore, on long-haul flights, I always reserve a window seat and put on the headset to listen to the most likable music channel, as soon as we’re off the ground. If she still refuses to stop, I increase the volume and only return a grim eye-contact, as soon as I can see her open the mouth. With a frustrated look on my face, I then empty a quick series of double-whiskey, to avoid any possible form of unnecessary and meaningless conversation.

Worst case, I forget about thinking and simulate sleeping, instead, until the alcohol finally does the job.

Halloween: Marketing Trick or Treat?

2006-10-27T00:37:00.000+02:00

For the first time this year, I was yesterday reminded about Halloween, forthcoming on Tuesday next week. It was actually my seven year old, demanding that his mother should redecorate the house and in bright orange colored materials, for different sized candles and plastic flowers, paper clots and napkins, pillows, fake pumpkins and God knows what. Coming back to the house after a brisk walk in the soft drizzle from what is supposed to become a heavy storm tomorrow, I was flabbergast and the new orange sight struck me like lightening. Covering the eyes, I bow my head and quietly asked myself if any grownup can appreciate such awful tackles, with the exception of Dutch football hooligans, perhaps.

Thinking about my exchange-student high-school year in San Francisco Bay Area, back in 1972, I remembered how the father in the family I was staying with, suddenly in the spring said: “Let’s grow some pumpkins this year, boys.” The decision went unnoticed until the sea-fog began rolling over the sunburned hills in the mornings, the signal that autumn was around the corner, when my friend and I were beginning to regret the pumpkin decision. We were delegated joint responsibility for the gruesome gardening work that, normally, involved cleaning the pool, picking all sorts of tomatoes and watering the brownish lawns and endless beds of fainting flowers. Coming home from school, we were now stuck with these yellow-orange monsters that even had made it to Hollywood and its range of absurd scare-movies.

The practical problem was that there were only a few friends and neighbors you could fob off with one of these monstrous veggies that, in real life, only can be interesting to genetic researchers in search of the reasons to abnormal growth. “What you cannot give away, we have to eat” the father said and my eyes darkened. “How much pumpkin pie and pumpkin soup can a human absorb, before assuming an orange glow?” I thought and dropped another bite of the pie on the floor in protest. The old German Sheppard lying at my feet sniffed on the piece for a sec, slowly got up and left the kitchen.

From these old times in “flower powered” California and until this very day, the only connection I can see between superannuated pumpkins and the pagan festival of Halloween is that they both are going to haunt you until the veggies finally dissolve into rotting heaps of mush.

One time an English good-humored friend of mine ventured to explain how it, actually, fit together. He claimed that an all-important US Confederation of Pumpkin Producers, desperate to increase sales volumes to cope with the exploding growth in crops, came up with the concept of scooping out the middle, cutting some slots to resemble a face and putting a candle inside. Then, this “lunatic” product and marketing idea was born. It was catered for the childish part of the American population and quickly it spread amongst parents and kids throughout the country like the plague, and soon thereafter to their fellows elsewhere in the world. The fact is that Halloween was foisted by the Americans on an unsuspecting world, he claimed!

The real story of Halloween, according to the English, is that it marks the end of the Celtic and Anglo-Saxon year and I am perfectly content to let it remain that way. Back in California, 1972, before realizing the pumpkin connection, I was for the first time reminded of this odd fact, when a red haired girl with a lot of freckles for no reason started to tell ghost stories while we were partying, during what she claimed was Halloween night. “Ho-hum”, we less than impressed foreigners mumbled, “Pass the bottle, will you?”

Nowadays, children in Sweden also run around the villages and suburbs, knocking on doors and demanding cash or candy with menaces. Trick or treat? American consumer marketers are the root cause of all this nonsense; creating a culturally degenerated, but nevertheless commercially successful export concept. Over there, Thanksgiving is promoted as a great time “to spend”, as they call it. No sooner have they flogged all their Halloween junk, then, they are at it again. Christmas shopping starts “the day after the turkey”, as far as they’re concerned, and I suppose it might as well, since no-one has any idea if they’ve got the date for the birth of Jesus Christ right anyway. Not even the good old “Three Wise Men”, as far as I remember.

So, wherever you are, if you get a bunch of kids on your doorstep on Tuesday night, invite them in for a treat. Sit them down, shut the “telli” and dish out some old candy leftovers. Then, you proceed to give them a boring lecture on ancient Celtic customs and the influence of Anglo-Saxon culture upon modern day living. Keep on for an hour or so and follow-up with a question session, to ensure that they were paying attention.

The good thing is that you probably won’t be bothered, next year. Word gets around in the kid’s world, nowadays, you know. Chatting on the net, SMS and all that!

Last, but not least, you could always sneak a pumpkin or two from the house, if your wife’s not paying attention, and give the embryonic mobsters to take home...

Gardell: A New Swedish Financial Pirate

2006-10-26T01:20:00.000+02:00

Today, I was asked what I think of Christer Gardell? Well, I don’t know him, personally, but he is obviously the name of an up and coming financial pirate on the pale and narrow Swedish capital market horizon. Backed by the very same institutions he wants to rob, his Cevian Nordic fund has recently invested a number of billion crowns in the Swedish household stocks of Volvo and the telecom operator Telia, and now he expect to take a seat on their respective Board of Directors at the next annual shareholder’s meetings. Consequently, many observers and shareholders rightly asks if his personal experience, and open intentions, can motivate such a formal position of competence and integrity; taking full responsibility for the company towards all shareholders. As the Financial Times quipped in a typical dry-Martini tone: “Perhaps remarkably, Mr. Gardell’s only experience of working outside Sweden has been a one-year stint at McKinsey’s Sydney office”. From the long-term investors in Volvo and Telia’s perspective, the blunt answer to Mr. Gardell and Cevian, given both his personal background and known intentions, should simply be a roaring; No way!

A few days ago, on television, Mr. Gardell claimed that “long range” is the most muddled concept in Swedish industry. My first reaction was; is he a fool, as well? With some afterthought, I concluded that this immature statement, albeit a typical blooper, is hardly a reason for hiccup to the institutions backing him. They are fully aware that he has promised them to substantially beat the market and anyone who has passed through “Handels” knows that the only way to outperform, short-term, is either by increasing risk or the redistribution of value. And, as a high-flying and verbose pirate with no real enemy in sight, Mr. Gardell distinctly prefers the latter.

In fact, the media-savvy, Mr. Gardell, has helped foster an increasing fascination in Sweden with the Cevian fund, like he was a real Midas and not merely a media-darling wannabe. Speculations that the Cevian’s business concept, bottom-line, is only to sell out Swedish industry’s “crown jewels” for a quick buck, is now out on the streets of the finance triangle in Stockholm, upsetting the usually so consensual style of its business community. Everyone flocking around Stureplan, after hours, knows that forcing Volvo to substantially increase dividends or making a one-time major payout (reducing Volvo’s future growth investments and increasing their financial risk, at the same time) and to break-up Telia, does not create any sustainable shareholder value at all. It only redistributes them to the pirate! The idea is by no mean new, not even in my conformist home country. I don’t know how many times I’ve seen other prospective and real pirates crunching the same numbers and dreaming about stripping Volvo to the bones.

All that being said, from an outsider’s view, the real problem is not the shortsighted view of Mr. Gardell, nor Cevian’s vanilla-tasting business concept of media-influenced minority investments in public stocks. His fund is clearly short-term and he likes to “speak up” the share price; the pirate breed’s own special form of value creation. Still, like in a “Black Pete” card game, this can make financial sense in a capitalistic economy and imperfect capital markets, as long as the pirate is within the law for example on insider information. The problem, or rather luck I should say, is that pirates seldom stay within the law, longer term! History from around the world has, time after time, shown how greed always kills them all, in the end! Remember that even Michael Douglas Wall Street movie-character from the 1980’s, Gordon Gecco, claimed that “Greed, for lack of a better word, is Good”! With that sophisticated double-entendre, Gecco got it right!

Now, the root to the problem, in this special case, is rather something else. This new short-term focused pirate is in fact backed with long-term institutional capital. In other words, a classical conflict of interest! These backing institutions contra-productive and sheep-like behavior, when they are investing in his pirate fund and are direct and long-term shareholders in Volvo and Telia at the same time, is cockamamie if anything. Let’s say for arguments sake that Mr. Gardell succeeds in emptying the pockets of Volvo and dividends out the one-time win to his investors, taking a hefty cut for a job well done. What shall these chronically ill-managed institutions, now playing cards both with Swedish industry and our public’s pension funds, do next with their new cash? Reinvest in Volvo, perhaps?

Anyone that remembers reading about real one-eyed pirates with wooden legs, as a kid, knows that the only way to beat them is for the Captain to take full charge and make bold decisions; arm and guard the ship well.

And, to kill the pirates before they kill you!

To Create Things that Don't Exist

2006-10-25T00:39:00.000+02:00

During my professional lifetime, I have dreamt about and created innumerable ideas on strategic management and organization theory that have lingered on and then died, as the entrepreneurial driving force once again has struck me hard and uncompromisingly.

The unfinished models and theories are filed away in a drawer, positively marked “To Do,” and awaiting a resurgence of interest to have another go at finishing what one time was naively started. Naturally, this is short to impossible during the summer months here in summer-jolly Torekov, but now, as the evenings shorten and the roaring wind from the sea keeps most people living in the small villages on the Swedish West-Coast safely in-house, old conjectures might have a chance and I may take them out and dust them off.

So, as the wicked and harsh Skåne winter draws on, I can look forward to an increase in creativity, with the logs crackling in the fire and a pleasantly fudged up atmosphere around our Harbor-Captain home. As soon as the kids are in bed, I put on the stereo in the library and when a sonorous Beethoven piano concerto is sounding from the speakers, I head to my laptop companion. It’s a remarkable intellectual cure, especially when combined with a glass or two of a well-tempered and mellow Barolo, but is, I suppose, only applicable to those of us who earn our crust by creating things that do not exist and find any kind of living short of this somewhat bizarre starting point as nothing but a bore.

Now, from where comes the concept of natural driving forces in business organizations? What are they and how do they relate? And, are there such forces in reality, independent from human actions? I better light my favorite pipe, to have a go at this…

Management Research in Theory and Practice

2006-10-24T01:10:00.001+02:00

A couple of days ago, I was reminded about the old joke, when a man lost in New York stops a passer-by, obviously a musician, carrying a cello in its case and asks him how to get to Carnegie Hall. The musician looks at him thoughtfully and says, “Practise, my boy. Practise. It’s the only way.”

And I think that’s the way it is with research as well. I always marvel at candidates who do management research with shining MBA diplomas and dreams of a Doctorate, while completely renounced of business practice and organization experience. It must be terribly hard work, mining those ideas from a deep seam, if you haven’t done a bit of opencast shoveling beforehand.

I’ve always thought I could do management research and even the differing opinions of multiple academic relationships (some extraordinary professional, others merely professorate) have never dissuaded me from repeating the exercise. After founding my own Think Tank now two years ago and fostering new academic relationships around the globe, I more and more realize how relevant method and theoretical paradigm is a sine qua non also for a management researcher. The problem is that within the academic community, there is a common misunderstanding about the contingencies between theory, empirics and practice. The mainstream opinion is that crafting theory is an academic “desk job”, while empirical research is (almost) being out there in reality. Nothing can be more dangerous for genuine knowledge development, in my view. The range of absurd, naïve and tautological empirical studies can sometimes be mind-boggling for someone skeptical and contrarian like me; coming from practice and now observing academia too see what possibly new can be learnt. And, the reason for this “empirical syndrome” is twofold; a general lack of domain experience among the researchers and inadequate theoretical foundations for the empirical efforts.

While, I cannot influence the weaknesses of institutional behavior, I hope to make a small contribution to the latter problem. As the famous organizational psychologist and action researcher Kurt Lewin one time said: “There is nothing so practical as a good theory.”

Starting my own new Blog

2006-10-23T02:44:00.000+02:00

Did not think it was so easy to get started, actually. Almost as easy as reading others blogging efforts. In fact, maybe it is like most things in life. It's not too difficult, if you simply try and fail a few times. Then, for some reason or another you, suddenly, have made it. And, to everyone's surprise, you're now an expert. But, if you never try, you're bound to remain a mere novice.

Actually, this is the situation with Expert System applications as well. Anybody can force himself or herself to structure knowledge and experience. It is a forceful way to fill the gaps and gain new insights from adding missing links. The road to a coherent understanding of a subject domain is always a refreshing journey, full of surprises and new ideas. I have spent a lot of time, recently, on the issue why academic research is so different in its knowledge development efforts than how common sense is enhanced by learning in practice, like with Knowledge Automation. Unfortunately, I have no ready answer on the issue, even though I've read more than enough books on epistemology. Perhaps, the problem is like playing soccer with a rugby football. Concept and context are as intertwined as a left and right foot, and that's even more basic than the rules of any sport, the shape of the football, or the selected methodology of an academic research effort.

Now, did Real Madrid really win the El Classico tonight?