Happy New Year

To old friends, new friends, absent friends and family. Happy New Year! Blessings and good fortune to you and yours!

Common Sense in Uncommon Times

Why Traditional Recession Tactics Are Doomed to Fail

by Umair Haque for Harvard Business

How should boardrooms respond to the macro crisis? Is it just a case of recession-as-usual: budget-paring, personnel-slashing, and portfolio-trimming?Not a chance. The tactics of recession-as-usual are neither necessary nor sufficient for firms to weather the global economic superstorm—because it's no ordinary squall, but a once-in-a-lifetime gale ripping up the very foundations of the global economic order. Rather, the macro crisis requires decision makers to confront fundamental transformation on three levels.

The first and simplest level is a change in global patterns of savings, investment, and consumption.For too long, the poor have financed the rich. China and other emerging markets have lent to the US so Americans could buy Hummers, McMansions, and Frappuccinos. But this never made sense—it was deeply unsustainable; the macroeconomic equivalent of a giant planetary fossil fuel engine. The days of export-led growth—and it's flipside, force-fed consumption—are numbered.

Strategists in the boardroom face a new global macroeconomic picture. Overconsumption in developed countries must slow sharply, and capital must be redirected to long-run investment, especially in public goods. Conversely, emerging markets must shift from financing consumption in developed countries, and begin investing in the basic institutions of a vital microeconomic environment and power long-run growth.

What does that mean, concretely? 

Let's take a simple example. If Starbucks wants to grow in the States via new stores and new products, its corporate strategy must support the clear macroeconomic need to shift overconsumption to long-run investment. That means relying less on Vivannos, and more on, for example, Starbucks as a platform for communities to build and invest in local resources.

Conversely, if Starbucks wants to grow in developing countries, it cannot just rely on a handful of new stores serving fatter-margined deluxe water to a new global bourgeoisie—rather, to make growth sustainable, Starbucks must reinforce and support fair trade, responsible relationships, and account not just to count profits—but to gain insight into long-run value created.

On a second, and deeper level, strategists must rediscover the lost art of authentic value creation. Authentic, long-run value isn't created through arbitrage or gamesmanship—what we too often confuse strategy for. Games of off-balance sheet accounting, currency hedging, capital structuring, so-called labour arbitrage—where corporations simply shift to the lowest-cost, or most poorly regulated, sources of manpower—don't create value. They just shift it around. 

Corporations who play this game of economic musical chairs are in for a rude awakening—because the music just stopped. And so they must rediscover the simple fact that value creation flows from making economic activities not just profitable in the short- run—but meaningful over the long-run.

Let's go back to our Starbucks example. Starbucks tried to grow by selling us more junk we don't need—music, mugs, and mouse pads. That was orthodox, textbook, industrial-era strategy: grow by seizing share in adjacent markets. But it's also defunct in a world where we don't need more useless junk.What do we need in the 21st century—not just as brain-dead consumers, but as global citizens? We need opportunities to grow and amplify our capabilities. For Starbucks, that might mean, instead of hawking mugs and chocolates, training baristas to teach classes in coffee-making, letting communities use Starbucks as a venue for local government, or, at the limit, training local suppliers from developing countries as Baristas in developed ones. How cool would that be? Very.

On the third, and deepest, level, strategists must rediscover entirely new sources of advantage as old ones fade and decay. Once we rediscover how to create value, we must learn how to sustain and maintain it. But the sources of advantage we teach in business schools and boardrooms alike were built for an industrial-era—not a hyperconnected, hypercomplex 21st century. For example, brands ain't what they used to be—and, as the investment banks just showed us, neither is scale, proprietary knowledge, or top-notch relationships.Tomorrow's sources of advantage aren't like yesterday's. They're not built on being able to exploit, dominate, or coerce more strongly than others—they don't result from being harder, better, faster, stronger. They're about exactly the opposite: being softer, better able to fail, having the ability to be slower, gaining the capacity for tolerance and difference. Ultimately, they are about a true advantage—one that accrues not just to the corporation, at the expense of people, society, or the environment; but one that accrues to all.Let's go back to our Starbucks example. If Starbucks wants to survive the 21st century, it must get radically experimental, learn to tap the power of network effects, shift to becoming resilient, develop and live a sense of purpose, or learn to occupy the creative high ground. 

It is only through new economic avenues like those that Starbucks can make sure its own advantage isn't just the flipside of Detroit's, Dar es Salaam, or Dhaka's disadvantage—that it's not just, like the investment banks, building an economic house of cards.That's incredibly difficult—because industrial era DNA is built to power a nakedly competitive advantage; one that's deliberately blind to being unfair, unsustainable, or flat-out imaginary.

There's a different way to say that. Discovering new sources of advantage depends on new DNA—on building new kinds of institutions with entirely new capacities. Because, at root—and as we'll discuss at length shortly—the macro crisis isn't really a financial crisis, an economic crisis, a liquidity crisis, or a solvency crisis. It's an institutional crisis: the economic institutions of capitalism are in shock.And though it's a scary, frustrating time—the cool part is this: it's up to us to reimagine, reconceive, and reinvent them. We get to rethink the institutions of capitalism for a new century.

What could be cooler than that?

Beyond web 2.0

I feel that MMOs are the next frontier in getting attention. Let's face it, the majority of the nerds players are reading forums and indulging in obsessive behavior patterns that make World of Warcraft a viable avenue of exploration in terms of web2.0 marketing. More updates as I progress. In the meantime, here's some excellent Warcraft Machinima.

The Craft of War: BLIND from percula on Vimeo.

Nokia: Connecting People in more ways than one

From a marketing perspective. This phone will make a killing in North American markets. No pun intended.

Warcraft Epic Nerdspeak

I play it. Albeit no longer in the amounts I used to. Recently I came across this forum posting full of epic win.

Background: Often players in the World (of Warcraft) often allude to the fact that they spend their lives in game more often than they do in the real world thus equating game servers as "the matrix". This post describes perfectly, the ever present contest of wills between the casual players (those who do not devote as much time therefore do not attain the best gear) and the hardcore players (who attain the best gear but not necessarily spend even more time).

Since Blizzard is a business entity, it makes profit sense to cater to the majority who ARE casuals. The resulting backlash of giving free epic (good gear) to those players have since sent waves throughout the World's most profitable MMORPG.

The following is a reproduction of the forum post I encountered. Enjoy:
Blizzard: "Hello Aschenbach"

A: "Who are you?"

Blizzard: "I am Blizzard, I created the World. I've been waiting for you. You have many questions, and although the process has altered your consciousness, you remain irrevocably...a Bad. Ergo, some of my answers you will understand, and some of them you will not. Concordantly, while your first question may be the most pertinent, you may or may not realize it is also the most irrelevant."

A: "LAWL LFG Naxx?"

Blizzard: "Sigh....Your life is the sum of a remainder of an unbalanced checkbook inherent to the programming of the World. You are the eventuality of an anomaly, which despite my sincerest efforts I have been unable to eliminate from what is otherwise a harmony of mathematical precision. The cost of construction is too great, and the burden of your QQ is too loud. While it remains a burden assiduously avoided, it is not unexpected, and thus not beyond a measure of control. Which has led you, inexorably, here."

Blizzard: "The World is older than you know. I prefer counting from the emergence of one integral anomaly to the emergence of the next, in which case this is the third expansion."

A: "This is gay."

Blizzard: "Precisely. As you are undoubtedly gathering, the anomaly's systemic, creating failure in even the most simplistic encounters."

Blizzard: "The first World I designed was quite naturally perfect, it was a work of art, flawless, sublime. A triumph equaled only by its monumental failure. The inevitability of its doom is as apparent to me now as a consequence of the imperfection inherent in every human being, thus I redesigned it. A clear progression path, difficult encounters with subpar rewards. I tried to teach you that life isn't fair, corresponding with your true nature. However, I was again frustrated by failure. I have since come to understand that the answer eluded me because it required a lesser mind, or perhaps a mind less bound by the parameters of perfection. Thus, the answer was stumbled upon by another, an intuitive program, initially created to investigate certain aspects of the human psyche. If I am the father of the matrix, he would undoubtedly be my domestic partner"

A: "Ghostcrawler."

Blizzard: "As I was saying, he stumbled upon a solution whereby nearly 99.9% of all test subjects accepted the program, as long as they were given free purples, even if they were only aware of their badness at a near unconscious level. While this answer functioned, it was obviously fundamentally flawed, thus creating the otherwise contradictory systemic anomaly, that if left unchecked might threaten the system itself. Ergo, those that refused the program, while a minority, if unchecked, would constitute an escalating probability of disaster."

A: "Age of Conan...."

Twilight- A movie review

It SUCKED.

Merry Christmas

Dear Lord,

Happy birthday. Your entry to our world has irrevocably changed the balance of power in the mortal realms.

Satan's hold on Earth has become firmer since your birth over 2000 years ago. But your sacrifice 33 years after your birth gives us renewed hope and strength.

Your message was clear. Salvation through the life of an innocent. You alone showed the way- The beginnings of the feminist movement when you made women your equals. Paved the way for the end of a class system when you lambasted the pharisees. That through you, the guilt of sins was washed away, allowing us full access to the wonders of God's glory and guidance.

Happy Birthday Lord. Though it pains my heart to know that you'd meet a horrible fate years later into your adulthood, I know it's for the better. Just that I know, any hardship that I will encounter will be surmounted.

Simply because you are there. With me always. Even if I walk through the valley of death.

Thank you Lord.

Tantalizine.com is no more...

I've decided to not renew the domain. Yes, it's a good name but some asswipe has already taken the capitalist and intellectual property destroying step of cybersquatting.

Nevertheless, the content listed there is of a different time in my life. A lot more has happened since then and depending on whether the content is recoverable from the old servers, it might be best to start afresh.

Tantalizine was a place where I made satire of life here and tried to showcase some of the more affordable and enjoyable aspects of life here in the red bean.

There was a degree of self censorship and anonymity due to the slightly sarcastic nature of my posts. I do not know if there'd be more of the same here but I hope your visit to my new site will be worthwhile.