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Thursday 20 May 2010

The Sustainability Gene

The CBI published a report entitled "The shape of business - the next ten years" in late 2009.

The authors identified 5 key drivers affecting the business environment, namely:

1.  Changing finance and capital conditions,
2.  The decline of trust in business and markets,
3.  A less benign macroeconomic environment,
4.  Social and demographic change where the recession will have a major influence,
5.  Sustainability and resource issue.

We pick up our cue from the fifth driver being Sustainability for today's post.

Our comment serves more as an aide-mémoire to return to in more detail in future articles.  This post also does not serve as a commentary on the CBI's report, but rather as a general opinion on the nature of sustainability and human a nature and is therefore pure conjecture.

We believe that sustainability as understood to mean the impact we have on the planet and the resources we consume, is not a natural human phenomenon, in the face of self-interest (as per the economic definition of the term) and competition for scarce resources.

In other words sustainability flies in the face of human kind's natural tendencies to compete for resources, either by war and confiscation, or by trade and exchange for those scarce resources.

We therefore contend that as human actors interacting with and through the free market mechanism, we do not naturally possess a 'sustainability gene', but instead have to develop a new model and framework for ensuring that this objective is effectively pursued and becomes part of the underlying psyche of being in business and discharging our fiduciary responsibilities.

Linking to our previous post ‘The Markets do not need certainty’, we contend that it is structure that helps shape markets and creates the conditions conducive to the effective operation of those markets.  Other factors will ultimately affect the efficiency of the markets and some of these factors include Innovation and such like.

In conclusion, let us wrap up with a few quotes on sustainability:
·         You can never have an impact on society if you have not changed yourself.  Nelson Mandela
·         The very process of the restoring the land to health is the process through which we become attuned to Nature and, through Nature, with ourselves.  Chris Maser
·         We can learn whatever we need in nature because we are part of nature.  Human beings are part of Creation.  We live by the same laws as all of nature.  Anne Wilson Schaef
And in the final quote above we possibly see a glimmer of hope for a possible answer to our ‘Sustainability Gene’ deficiency.  Somehow Adam Smith’s ‘self interest’ and the modern free(ish) market system require an injection of nature law and justice. 

Whatever that shall be.

Friday 14 May 2010

End to End or Integrated systems and thinking processes


We hear this management buzz word quite often touted in office settings, and conferences in the media, etc.

We argue today that silos are cultural norms.  They are national cultural models possibly endemic of certain national cultures.  We certainly have no empirical evidence for this, so this is pure opinion and conjecture on the part of theMarketSoul contributors.
In our previous article titled Increased Friction Costs we briefly touched on the issue of processes being back to front in Britain.  Processes are very much driven by the national ‘Carrot & Stick’ approach, rather than an enablement, ‘build and they will come’ approach where solutions are found and embedded then suitable and profitable markets are found for those solutions.

Now we can argue that in a very narrowly defined risk management culture and faced with the reality of reduced opportunity to obtain and procure financing to ‘build solutions on speculation’, we just cannot afford to change our exiting disastrous management and control processes.

But this is exactly where we have to stop the train as quickly as possible and change direction to ‘climb the hill ahead’ so that we can experience the potential and opportunity to ‘see the view from another mountain top vantage spot’…
We are in a tight spot.  That is a fact.  However, we are being held to ransom at the moment by a ‘political’ system and governing party trying to string out the last days of their tenure in power.  [This article was initially written before the General Election in Britain].

There is hope, there is a sliver of light and opportunity on the horizon.  However, we will need to learn to deal with some pain, as we readjust the ‘crowding out’ of growth by the public sector and debt burden.  However, we need to recognise that we will have to apply a bit more ‘market discipline’ to finding, scoping, building and implementing solutions to our problems.

Small and localism are in fact parts of (but not the entire) solution, where small providers (entrepreneurs) are incentivised and tasked with coming together to experiment and create solutions, that hopefully mitigates the risk of large scale failure, but at the same time find scalable solutions that can rapidly be deployed to solve some of the challenges we currently face.

In IT deployment and development projects they call this kind of rapid, ‘low hanging fruits’ approach to development work Agile Development or AD for short.  Maybe this together with the professional service chains and clustering we will touch on in subsequent articles is the way forward.

theMarketSoul © 2010

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Wednesday 12 May 2010

The Markets do not need certainty

There has again been a short period of drift and volatility in 'the markets' recently.

And yet again we have hears the old refrain:

"Markets hate uncertainty".

This we assert is yet again a misplaced turn of phrase. It is not uncertainty that markets hate, because inherent within market processes and market operations is the principle of uncertainty. This is the also known as -Information Asymmetry.

So, if it is not uncertainty that markets hate, then what is the missing ingredient that delivers these periods of volatility?

We believe what markets require above all else is:


Yes, structure and clear operating parameters, in other words a framework within which to operate is the key.

Whether that structure and framework is delivered via regulatory mechanisms or liquidity or a political landscape that sets the parameters in terms of policy guidelines and fiscal and monetary controls, it does not matters.

Remove the nebulous shifting and drifting borders and put in place a framework that sets the framework and outline of the playing fields and markets respond positively to these signals.

Refrain from doing the work of 'framework establishment processes' and markets and their participants become 'restless souls' aimlessly drifting within the 'nebulous fog' of uncertainty, clearly waiting and anticipating the regularity that structure delivers to the 'Market'

theMarketSoul © 2010