Saturday, 26 January 2008

Economic Insanity

ESPECIALLY to the younger ones among us, the events of last week must have been one of the worst in their living memory – in economic terms, that is.

All around the world, going around the time zones like some dark and insidious plague, stock markets plummeted to their lowest levels in years, with each successive opening spooked by the results of the one before it.

Billions of dollars in market value were wiped out in a matter of minutes.

But then like some white knight to the rescue, the markets of the Far East sprung into action, buoyed partly by the response of the U.S. Federal Reserve, as well as confidence in their own economies to withstand the possibility of an economic slowdown in the West. And from that wellspring of optimism, a reversal of sorts took place in the major markets, recovering most of the value they lost in that single day of pandemonium. By week’s end, though still fragile, much of the damage seems to have been repaired, at least momentarily.

Difficult to explain sometimes, the financial markets. But perhaps not so strange when you think of who’s behind this amorphous thing called the “the market.”

That’s we, the people, of course.

No wonder then that markets act so strangely sometimes –- being the collective sentiment of thousands upon thousands of individual sellers, consumers, financiers and financial intermediaries interacting with one another in all sorts of ways.

It’s hard to explain the reasons behind these movements most times. If we really think about it, nothing much seems to have changed in our world from, say, a couple of years back. The planet is as populous as ever, climate change is still a major challenge of our time, and peace in the Middle East remains as elusive as it has always been. So why the sudden shift in our economic prosperity between then and now? What has happened to the world that has made us collectively poorer than we were a couple of years ago?

In tangible terms, perhaps nothing much has really changed. But our sentiments have shifted significantly. With the war in Iraq dragging on with no end in sight, worries have started to creep up concerning the future supplies of oil, thereby pushing prices up and putting pressure on costs for all manner of businesses, as well as ordinary consumers.

In response to rising costs, businesses reacted by slashing their organizations, or else exporting parts of their businesses to lower cost overseas locations, displacing thousands of their employees in the process.

Of course, the possibility of losing their jobs has unsettled a lot of consumers, causing them to hold back on their spending in order to prepare for an uncertain future. And guess what? Less consumer spending means lower corporate earnings, which lead to more rounds of layoffs, which lead to even lower consumer spending, ad infinitum.

The global economy is into a deeper and deeper spiral of despair, with no one seemingly able to pull it away from its downward course.

It is safe to say that if the economy were a person, it would have committed suicide a long time ago due to a severe mental disorder, or perhaps it would have already been interred into an asylum for the mentally deranged, for which person could afford to live with the ups and downs that the global economy undergoes every now and again?

The truth is that no person could live a life with the ups and downs of the world economy. But like it or not, we all have to live with the consequences of such seemingly insane economic behavior.

Published in the Sun Star Daily, Saturday, January 26, 2008

Saturday, 19 January 2008

The Covenant

THESE days, it is difficult to turn on the television in Britain and not hear anything to do with gang violence.

Just this morning when I was getting ready to work, I was greeted with the heartbreaking scene of a widow crying to reporters outside the courthouse where her husband’s teenage murderers had just been sentenced for their crime. In some areas, things are supposed to have gone so bad that a number of schools have had to resort to American-type screenings for schoolchildren entering the premises, looking into their schoolbags for everything from knives, guns and an assorted array of deadly weaponry.

From all indications, it seems that the tendency for youths to join gangs has been on the uptrend, alarming authorities in the country, who appear to be helpless to stop the phenomenon.

In one informative program that I saw on the issue recently, one commentator expressed a view that seemed to me to hit the nail right on the head vis-à-vis the reason for the uptrend.

He said that youths turn to gangs as a proxy for the sense of belonging and affiliation that they do not receive in their own families.This, in a sense, is very true.

In modern day Britain, in most of the Western world, and indeed even in growing economies like the Philippines, families are becoming more and more fragmented. Either because of changing family values, the pressures of work or a combination of any of the other stresses of modern-day living, the family is losing its cohesion. Even in matters of discipline, parents have now outsourced this to schools and state authorities, conveniently blaming everyone but themselves for the problem.

In a perverse sense, one can understand why youths are drawn to their gang affiliations. Albeit in a very distorted sense, gang members have a deep sense of unwavering loyalty to each other, pledging total allegiance to the group, whatever the consequences. More than anything else, it is the sense of loyalty for each other that bind them together, and make gang life so attractive for disenchanted young people.

Commercial organizations can learn from this in a very significant way — not the violence mind you, but the impact that the perception of total loyalty has in terms of galvanizing groups into action.

Many of today’s organizations have lost the loyalty of their employees, because they have been unable to provide the assurance of total loyalty to their staff. Just as respect begets respect, loyalty to employees begets loyalty from employees.

Sadly, these days this is no longer the case.

As Scott Adams’ cartoon character Dilbert says in a famous cartoon, employees’ are no longer the company’s greatest resource. They are now seventh, right behind carbon paper and paper clips.

Behind the gallows humor is a painful truth. Too often, companies do what they do without regard for the potential impact these decisions may have on their employees.

Information about important and life changing situations like mass layoffs, business closures and job redundancies are kept well away from employees until after it is too late, rendering them unable to take the necessary steps to look after themselves.

Is it any wonder then that in today’s climate, employee loyalty has become a scare commodity to come by?

Published in The Sun Star Daily, Saturday, January 19, 2008

Saturday, 12 January 2008


FUNNY how these days, it is not easy to talk about workplace matters with your colleagues anymore. I used to remember a time when people were more open about their thoughts and opinions about work, and how stories around the “water cooler” or the “coffee machine” were seen as the real pulse of the organization.

Due to the uncertainty that tends to accompany the modern working environment, a lot of talk these days tends to be sanitized and neutral, and doesn’t tell you very much about what people are really thinking.

It was, therefore, somewhat of a surprise when a colleague of mine, who I am very cordial with, but with whom the topic of conversation tended to be limited to football most times, suddenly remarked to me on our walk from the car park that he felt “the culture of the company was changing, and changing too fast.”

This was the cue that I was waiting for, in terms of probing what he actually meant by that declaration. And taking my probe as his cue, he in turn started telling me his real thoughts on what he perceived was really happening.

It turns out that he was feeling what everybody else was feeling — a sense of alienation and neglect over the things that were clearly happening for everybody to see, but yet were not discussed honestly and openly with everybody else.

Change is certainly a feature of the modern-day workplace. This is something that cannot now be reversed. Even the Japanese have now moved away from the lifetime employment practices, and the French have started to adapt to the Anglo-American way of doing things as well.

It is therefore not the change itself, but the way that it is communicated to the people within the organization, that is critical. After all, it is people who make up an organization, and it is perhaps only proper that they know exactly what is happening to them.

There is something to be said about keeping things open and transparent. Even the nuclear family itself is adapting to this reality, and it is now not uncommon for family members to vote on issues of mutual concern — with Mom’s and Dad’s votes counting just as much as Junior’s.

Organizations, however, seem to be reticent in being as open with their affairs. But then, they live with the consequences of this choice.

In the military, where we know the overriding importance of loyalty and trust under fire, soldiers consider themselves comrades-in-arms, and are therefore sworn to look after each other’s backs and to leave no one behind.

It is this sense of assurance that allows them to be a cohesive unit, with each one knowing exactly where they stand.It is not probably quite as life-and-death in most organizations as it is in the military, but the principle remains the same. When people know exactly where they stand, they will give their all, and then some. And this, of course, is the most important – secure people are productive individuals, who will eventually contribute to the achievement of the organization’s goals.

The reverse is true as well.

If an organization sends the message to its workforce that their views do not count, and that they should just sit tight waiting to be told when the next sequence of events is going to unfold, they are clearly not going to be as committed and as dedicated to the organization that does not treat them with the total honesty and openness that they deserve.

Published in The Sun Star Daily, Saturday, January 12, 2008

Saturday, 5 January 2008

A Brave New 2008

THERE is a comforting sense of familiarity that accompanies each passage into the New Year.

Allowing for certain local variations, people everywhere tend to celebrate it in almost the same way, invariably to the rousing revelry and merrymaking that accompany the last moments of the year past, and the first of the year just come.

2008 was welcomed with no less enthusiasm-–what with most people having been hit by crisis after crisis in 2007 desperately trying their best to get the old year out of the way as quickly as possible.

And who could blame them? No place in the world, it seems, was spared from some of last year’s most difficult moments.

The lingering uncertainty over peace in the Middle East continued to hold sway over oil prices, which during the first few days of this new year traded at historical highs of over $100 a barrel.

The ever volatile Middle East remained fractious and divided, with even the Palestinians themselves not agreeing on how to deal with its perceived common adversary-–Israel. And the Israelis themselves were no more united in their approach to solving the peace problem than the Palestinians were.

The rest of the world remains as polarized as ever regarding the issue of global security, with countries either taking the hawkish stand of the United States, or the equally belligerent attitude of those opposed to the American solution.

This lingering geopolitical uncertainty consequently spilled over into the economic arena, with record oil prices taking their toll on business costs, as well as dampening the already fragile confidence of consumers everywhere.

To say that 2007 was a very difficult year for most of us would be understating the enormity of the problem.

But will 2008 have us faring any better than the year before?

Most signs say that things are going to get worse, before they get any better.

No one knows for sure how high oil prices will still rise in the new year. Nor is anyone certain just how deep the current credit crisis—precipitated by the collapse of the US sub-prime mortgage market—is still likely to drag the world’s financial markets down too.

And yet as daunting as all of these sound, the sense of optimism that always accompanies the coming of each new year cannot but let us see that it is not all dark clouds ahead.

For the first time ever in our lifetime, our world is coming ever closer to a global consensus on what is perhaps the greatest problem of our age-–climate change.

People’s attitudes everywhere are changing, in ways that we would never have thought possible before.

With the impending regime change in Washington this year, we may yet be closer to solving our common concerns over global peace and security, than at any time in almost a decade.

And while economic prosperity has continued to elude our nation while everywhere else progress seems to be the fate of most of those around us, there are hopeful signs at last that we may finally benefit from the fruits of globalization that seem to have blessed everyone else but ourselves.

And so, as we always have in new years past, let us go forth with prayer on our lips, and hope in our hearts, and make this 2008 the best year yet.

Our warmest New Year greetings to all our readers!

Published in The Sun Star Daily, Saturday, January 05, 2008