Archive for the ‘Turbulence’ Category

US-Sino Trade Dispute Highlights Deeper Issues

By John Caslione in Turbulence at September 27th, 2009

In Chaotics we identify “The Rise of the Rest” (BRIC nations - Brazil, Russia, India and China) as a key cause of Chaos with regards to global economic and political stability. For example, China’s low cost manufacturing has put great pressure on non-BRIC countries to compete in terms of price.

In mid-September, the US unexpectedly imposed emergency tariffs on Chinese produced tires and poultry.  It should be noted that here the turbulence here is being generated by the US, relatively developed nation, in response to the relatie new comer, China.  This is is often the case.  It is not in China’s best interest to directly cause the turbulence but rather more tactfully to point out that the US was the one breaking the WTO rules.  Beijing immediately accused Obama of “rampid protectionism” with the China’s minister of commerce Chen Deming saying that it “sends the wrong signal to the world”.  These are Turbulent times indeed.

To understand market turbulence and its effect on business, it may be helpful to review concepts of turbulence in nature as well as in science and physics. Turbulence in the natural world is characterized by violent or agitated behavior. Think of hurricanes, windstorms, tornados, cyclones, and tsunamis. Their defining characteristics are violence, randomness, and unpredictability.
(Chaotics Chapter 1: The World Has Entered A New Economic Stage: From Normality to Turbulence)

The increasing familiar Sino-US war of words over trade exemplifies the changing balance of global power.  They mask the deeper forces at work.  Beijing has show increasingly sophisticated legal strategies in dealing with trade disputes, maximizing political effect while minimizing economic downsides.  The US has a weakening hand in the game that is global politics, something that is increasingly clear to all.  The US is going to need to raise it’s game In order to continue to compete in this Age of Turbulence.

Wal-Mart CEO cites “New Normal”

By John Caslione in Chaotics, The New Normality, Turbulence at June 8th, 2009

In June 6th’s Financial Times article entitled, “Wal-Mart finds turmoil brings more opportunities than ever”, Wal-Mart CEO Mike Duke states, “there is a ‘new normal’ in which people want to save money and are getting smarter about saving money.”

Wal-Mart now also recognizes that fundamental behaviors must change (both their own and their consumers) in the “new normality”, which will be with us for many years into the future.

EIU Report Mirrors Chaotics as Formula for Success

By John Caslione in Business strategies, Chaotic Strategies, Climate Change, Economic Analysis, New Normality, Recommendations, Turbulence at May 28th, 2009

I was so pleased to read a brief just released by Economist Intelligence Unit http://www.eiu.com/site_info.asp?info_name=orgagility&page=noads&rf=0.  The brief mirrors our own Chaotics formula for success stressing organizational flexibility as key to navigating troubled waters.  Organisational agility: how business can survive and thrive in turbulent times examines the challenges and rewards of organisational agility, particularly in tough economic times. Their major findings are:

  • Organisational agility is a core differentiator in today’s volatile business environment… 88% of global executives surveyed believe that organisational agility is critical for global business success. One-half of all chief executive officers and chief information officers polled agree that rapid decision-making and execution are not only important, but essential to a company’s competitive standing, particularly in these times of economic uncertainty.
  • …Yet most companies admit they are not sufficiently flexible to compete successfully. Although the overwhelming majority of executives view organisational agility as a competitive necessity, actual business readiness is more mixed. More than one-quarter (27%) of respondents say that their organisation is at a competitive disadvantage because it is not agile enough to anticipate fundamental marketplace shifts.
  • Internal barriers hamper agile change efforts. More than 80% of survey respondents have undertaken one or more change initiatives in order to improve agility over the past three years, yet 34% say they have failed to deliver the desired benefits. The main obstacles to progress are slow decision-making, conflicting departmental goals and priorities, risk-averse cultures and silo-based information.
  • Technology can play an important supporting role in enabling organisations to become more agile. Technology should function as a change agent in the use and adoption of best-in-class knowledge-sharing processes, so companies can improve their use of critical data.

You can download the full report on the EIU website.  It is a worthwhile read and reinforces the principles we have outlined in our book.


G20: The Need for an Early Warning System

By Chaotics in Chaotic Strategies, Chaotics Early Warning System, Globalization, Turbulence, Uncategorized at April 13th, 2009

g20-leaders

Addressing world leaders at the G20 Summit, British prime minister, Gordon Brown, said:
“The world lacks a proper early warning system…we have never given anybody sufficient teeth so that their views are treated so seriously that people will immediately have to act when that early warning is given.”  Mr. Geithner agrees: “I am skeptical about the ability of central banks and regulators to provide early warnings of crises. We need to build a system that is safe against uncertainty, against ignorance, against the failure to identify the future source of crisis.” Look no further chaps.