n-co technology management

a side-trip to the human park

Latest Posts

Motorcycle Myopia

During the 1960s, BSA was the leading motorcycle manufacturer in Britain (Triumph, BSA), while Harley-Davidson was the leader in the U.S. Both markets experienced increased import penetration from Japan. Given the emphasis by Honda, Suzuki, and Yamaha on smaller motorcycles, the Japanese challenge was largely underestimated. Eric Turner, chairman of BSA Ltd., commented in 1965:

The success of Honda, Suzuki, and Yamaha has been jolly good for us. People start out by buying one of the low-priced Japanese jobs. They get to enjoy the fun and exhilaration of the open road and they frequently end up buying one of our more powerful and expensive machines.

Similar complacency was expressed by William Davidson, president of Harley-Davidson:

Basically, we do not believe in the lightweight market. We believe that motorcycles are sports vehicles, not transportation vehicles. Even if a man says he bought a motorcycle for transportation, it’s generally for leisure time use. The lightweight motorcycle is only supplemental. Back around World War I, a number of companies came out with lightweight bikes. We came out with one ourselves. We came out with another in 1947 and it just didn’t go anywhere. We have seen what happens to these small sizes.

By the end of the 1970s, BSA and Triumph had ceased production and Harley-Davidson was barely surviving. The world motorcycle industry, including the large bike segments, was dominated by the Japanese.

[Sources:
Pascale (1983) Honda (A), Harvard Business School Case No. 9-384-049
Advertising Age (1965) Issue December 27
Forbes (1966) Issue September 15]

You get what you focus on – so focus on the positive!

  1. Stated in the positive: What do you want?
  2. Where do you want this outcome?
  3. When do you want this outcome?
  4. With whom do you want this outcome?
  5. What would be the evidence that you had achieved your outcome?
  6. How would you know if you were getting your outcome?
  7. What would you be doing to get it?
  8. What would you be seeing and hearing?
  9. What would you be feeling?
  10. How would your represent this?
  11. What would be a demonstration of it?
  12. What resources can you activate to get this outcome?
  13. What resources can you acquire to get this outcome?
  14. What can you begin to do today?
  15. What can you continue to do?
  16. What would happen if you got this outcome?
  17. How will getting this outcome affect other areas of your life?

“But we must add ‘in a complete life’. For one swallow does not make a summer, nor does one day; and so too one day, or a short time, does not make a man blessed and happy.” [Aristotle, The Nicomachean Ethics, I, 6]

Should we Own a Home?

It was the anglo-saxon world’s favourite economic game: property. No other facet of financial life has such a hold on the popular imagination. In the English-speaking world and also increasingly in other countries, it has become a truth universally acknowledged that nothing beats bricks and mortar as an investment. But should you really own a home? Unless you have 20 million bucks in the bank, in cash, you have no business buying a house.

People think the only way to save money is to buy a house. Maybe you will get your home paid off when you are old. But who wants to wait until they are old to have money? A home is not an investment because it doesn’t pay you every month. In fact, you have to pay it every month.
That is why a house is not an asset, it is a liability. Nothing is a good deal if you have to feed it constantly.

People ask, “Why would you pay rent when you could buy?” Because you cannot leave. Who wants to go to jail for 30 years? You can be mobile and nimble if you rent. Mobility is a great thing in today’s world. Why settle down? Invest the money in yourself or your business. If you want a great opportunity to create income for yourself, realise that America is becoming a nation of renters!

The house, much like a college education, has been fed to us as the bourgeois dream. It is a middle class myth perpetuated by outdated thinking, politicians and mass media. The English-speaking world’s passion for property has also been the foundation for a political experiment: the creation of the world’s true property-owning democracies (the EU included).

Buying a house may have worked for previous generations but old ways of doing things are not viable in 2016. We are not in the 1950s, things have changed and people refuse to adjust. There are three considerations to bear in mind when trying to compare housing with other forms of capital asset (Ferguson, 2008):

  1. The first is depreciation. Stocks do not wear out and require new roofs; houses do.
  2. The second is liquidity. As assets, houses are a great deal more expensive to convert into cash than stocks.
  3. The third is volatility. Housing markets since WWII have been far less volatile than stock markets.

The Black Seed of the Wahhabis

Out of the poison cabinet of intellectual history: The reign of terror

“Saudi Arabia takes action against the IS but at the same time supports its intellectual paradigm” was an article I came across in the Neue Zürcher Zeitung. In the translation below, the article states that there wouldn’t exist any IS without a Wahhabi state doctrine.


Saudi Arabia not only raise the sword in their flag, but also against their own people: In 2015 the country chopped off more heads than the IS.

It was in the year 1801 when Saud ibn Abd al-Aziz ibn Muhammad as-Saud attacked the Iraqi city of Karbala with a mounted army and slit the throats of some 4000 people. The sacred sites of the Shiite inhabitants were destroyed, their houses raided. One year later, as-Saud conquers Mecca and Medina, his band of horselords devastates supposedly ‘heretic’ constructions in order to ‘clean’ the sacred sites of Islam. The defeated are not allowed to smoke any more, to make music, to wear eye-catching clothes, or to neglect prayer. Violators are whipped, mutilated, or put to death. Not by chance, it is a dominion that brings to mind the ravage of the IS two centuries later: Welcome to the first State of the Saudis built on terror.

In the year 2015 Saudi Arabia is still an absolutist ruled kingdom. The Saudis can do without raids meanwhile, because they are among the 20 most important economies in the world. They flood the globe with oil and a very special model of Islam (sometimes called Petro-Islam). They claim a leading role in international diplomacy, but execute their own citizens by the sword. They punish theft by chopping off the right hand, adultery by stoning, and homosexuality with 7000 lashes of the whip. The Saudis still destroy cultural heritage in their own country, consider the Shiite as apostates, despise other religions, and degrade women as second-class humans. Saudi Arabia imports Western technology, builds impressing glass towers, and treats modern age as a shopping experience: Welcome to Saudi Arabia of the 21. century. Freedom of faith for everyone? Felony!

In what way did the religious culture change since the devastation of Karbala in 1801? It did not. Preachers like Abdallah ad-Dosari call the shots. He proclaimed the recent pilgrim accident in Mecca with hundreds of Shiite fatalities as God’s gift to the world. The Saudi grand mufti Abdelaziz bin Abdallah appealed for the destruction of all churches on the Arabian Peninsula. Salah Bin Muhammad al-Budair, a current imam of the Grand Mosque in Medina and a judge of the high court, pulled the trigger of the howitzer himself when inspecting Saudi troops at the Yemen border. Reformation of Islam may come from outlying areas or the West, but for sure not from Saudi Arabia, which 2015 chopped off more heads than the IS. The Saudis preserve an extreme regressive, intolerant, and sectarian interpretation of faith, and even worse, export it throughout the world.

Their doctrine is also known as Wahhabism. The followers call themselves the ‘Muwahhidun’ (Unitarians). Wahhabism is named after an eighteenth-century preacher and scholar, Muhammad ibn Abd al-Wahhab (1703–1792). He started a revivalist movement in the remote, sparsely populated region of Najd, advocating a purging of practices such as the popular ‘cult of saints’, and shrine and tomb visitation, widespread among Muslims, but which he considered idolatry, impurities and innovations in Islam. Wahhabism is causing disunity in Muslim communities by labeling Muslims who disagreed with the Wahhabi definition of monotheism as apostates (takfir), thus paving the way for their execution for apostasy – the equivalent of a death sentence. It is no coincidence that today’s Salafi movement makes good use of the verdict in order to justify the murder of their fellow Muslims – a form of a Muslim Ku Klux Klan.

Eventually Abd aw-Wahhab formed 1744 a pact with a local leader Muhammad bin Saud, offering political obedience and promising that protection and propagation of the Wahhabi movement would mean ‘power and glory’ and rule of ‘lands and men’ – a pact that persists down to the present day. This duality of sword and Islam has been eternised on the Saudi Arabian flag, and the alliance between followers of ibn Abd al-Wahhab and Muhammad bin Saud’s successors (the House of Saud) proved to be a rather durable one. The house of bin Saud continued to maintain its politico-religious alliance with the Wahhabi sect through the waxing and waning of its own political fortunes over the next 150 years, through to its eventual proclamation of the Kingdom of Saudi Arabia in 1932, and then afterwards, on into ‘modern’ times. Today, Mohammed bin Abd Al-Wahhab’s teachings are state-sponsored and the official form of Sunni Islam in 21st century Saudi Arabia. Open critique on the theocratic alliance are prosecuted – a fact that dissidents like blogger Raif Badawi learn the hard way. He demanded equal treatment of Muslims, Christians, Jews, and atheists. For the Wahhabi judiciary, Badawi’s contravention was worth ten years of confinement plus 1000 cane strokes.

After 9/11 many political scientists asked for change in the Saudi Kingdom – the renunciation of institutionalised hatred on Shiite Muslims, Jews or the West, coined in Schoolbooks of even first graders. But nothing changed. The world wide Wahhabite proselytisation was pursued consequently like in earlier decades, financed by Saudi petro-dollars and brought forward by mosques, preachers, schools and charities who also supported terror organisations. Today, with the appearance of the IS – the other small Islamic state – the Saudis see themselves confronted with the same inconvenient questions.

In order to illustrate the unholy alliance between petro-dollars and radical thinking, Bernard Lewis (2004) suggests to imagine that the Klu Klux Klan took absolute power over Texas and started to proselytise with support of oil capital. The 20 November 2015 issue of the New York Times featured an Op-Ed Opinion piece by Algerian writer Kamel Daoud with the title ’Saudi Arabia, an ISIS That Has Made It’, where he warned that one has to live in the Muslim world to understand the immense transformative influence of religious television channels on society by accessing its weak links: households, women, rural areas. The Saudi royals are caught in a perfect trap: Weakened by succession laws that encourage turnover, they cling to ancestral ties between king and preacher. The Saudi clergy produces Islamism, which both threatens the country and gives legitimacy to the regime.

[…] As an ally of the US in its struggle against terrorism, Saudi Arabia has to restrain its revolutionary children of Wahhabism. Riyadh even created an ‘Islamic coalition against terrorism’ but left it totally open to interpretation how they look at ‘terror’ or how this coalition would ever take action. In order to draw a line towards the IS, Saudi clergy produce doubtful arguments. They state that for hundreds of years the Khawarij were a source of insurrection against the Caliphate and that they are responsible for the terror. In contrary Islam of Saudi Arabia, goes the argument, is renowned for its purity and peacefulness – could it be more ironic? Maybe a moderate Wahhabism?

So far the article in the magazine quoted. Daoud observes that the West’s denial regarding Saudi Arabia is striking: It salutes the theocracy as its ally but pretends not to notice that it is the world’s chief ideological sponsor of Islamist culture. Once more, the world is suffering from US foreign policy.

We’ll be Run by Morons Pretty Soon!

“You look at the active value of the companies that you buy the stocks in. And it becomes a little more complex, but basically you look for a company that is cheap and the reason that they’re really cheap. And the major reason is often and usually very poor management.”

“So in a sense, it’s like an arbitrage. You go in, you buy a lot of stock in the company, and you then try to make changes at the company. […] We’re trying to get them to change the structure of the company. We think the board is very poor, and we’re trying to change what happens. The thing about corporate America is that most people in America don’t realize how poorly most of our companies are run in this country. With many exceptions. And when you get inside the companies, you realize it. The real reason is, there’s no accountability, there’s no corporate democracy. And I’ve been saying that, proselytizing it, writing about it. And the reason that we can make so much money when we go into one of these companies is – I’m not even a manager. I never took a course in management and I wouldn’t profess to really know much – but I don’t micromanage. I put in a very good manager. They cut the heck out of cost, but they changed the structure of the companies. And this is the problem in America today, in my opinion:
That we are basically under-managed. We can’t compete, because the best and the brightest don’t get to be at the top of the corporate ladder. And I, I have a sort of a metaphor that’s a little facetious, but not completely: I call it anti-Darwinian. And that means a guy goes to college and he’s the guy who gets to be the CEO. And he’s the kind of guy that was the president of the fraternity. Now all these presidents of fraternities aren’t bad guys, but basically, the normal guy that I remembered at college was always there at the fraternity of the eating club. And he’s always there to be there, if you have a bad day, you walk over to the club. And you’re feeling bad, your girlfriend left you, you did bad on a test score, or whatever. And you go over there, he’s always there. He buys you a drink, and you sit around with him. He commiserates with you. You play a little pool, or whatever. And he tells you whatever it is, yeah, my girl left me, yeah well, they’re all no good, usual conversation back and forth. And what would happen would be you liked the guy, you can’t help but like him. You used to wonder a little bit, when the hell did he ever do any work? But you know, he was always there for you. And he never made many waves. He would never said anything too obtrusive or he never showed too much intelligence. But he was a good guy. He goes, that same guy, out into corporate America. And he’s politically, he’s astute. He knows how to get along with people. And it’s he never really rocks the boat. He never comes up with any great ideas. He’s not a threat to his superior. And as a result, he moves up the ladder because in corporate America, there’s really very little accountability. So he moves up that ladder.”

“There’s a good show “How to Succeed in Business” that was out many years ago – that sort of sums it up. If a genius has an idea in corporate America, they give him an idea to resign.”

“And so the guy moves along the ladder, and he gets up slowly to the top. And he has three attributes: He’s likable, he’s politically astute, and he’s a survivor. And he knows when he’s threatened. These are the attributes of today’s CEOs for the most part, with exceptions. You know, he doesn’t ruffle feathers, he doesn’t get the board upset. And as he moves up the ladder, he finally gets to be number two to the CEO. Now the CEO has the same same attributes where he doesn’t want to be threatened and is a survivor. So the CEO will never let anybody be number two who’s smarter than he is. By definition, the assistant of the CEO is a little dumber than the CEO. Now this guy now is the assistant, and the board likes him. The CEO eventually retires and they make this guy the new CEO. The fraternity president we’re talking. Now he’s the head guy. And he’ll bring in a number two guy that’s a little dumber than he is, because he doesn’t want to be threatened. So by definition, we’ll be run by morons pretty soon. And we’re not too far from that point right now in our economic history.”

[Carl Icahn, 2011]