Position Power vs. Personal Relationship Power

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The recent years saw the quick raise of the so-called “Personal Relationship Power” into prominence to the point where some people preach that it is the only thing that matters. I heard some American and Japanese colleagues actually teach the young and hopeful managers that the personal relationships are the only thing that works and that any manager worth his salt will be able to do whatever he needs with just that – the power of personal relationships – without the need to rely on position power.

As is often the case, this is not entirely untrue, so it sounds believable. On the other hand, it is not entirely true either, so it sounds suspicious if you stop to think about it. What is the deal here? The statement contains part truth and part lie, so in essence, it is false in its entirety but it contains enough truth in it to sound true.

Personal relations cannot replace position power, that is a simple fact. Try imagining that your manager does not have any power whatsoever over you but has to convince you to do your job as a favor to him every single day. Yes, you would probably like …
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People of Japan, what are you waiting for?

Seeing pointless abuse, injustice and absurdity, do not rush to explain it with stupidity; first try to to explain it with vile shrewdness.

Japan is officially in recession after seeing its economy shrink for the second consecutive quarter. This comes as no surprise at all when you check what the economy is based on, how it develops and what the infamous Abe did to it. I, for one, am happy to see it work this way, seeing the Japanese economy react in obviously bad ways to the dirty manipulations of its government. It would have been much worse if the so-called “growth” continued yet for a longer while and then would come crashing hard. People suffer first, so this gentle decline is much better than a hard landing for the Japanese economy. But, again, what is happening?

Rupert Wingfield-Hayes, BBC’s guy in Tokyo reports:

In the spring of 2013, Prime Minister Shinzo Abe launched an ambitious growth strategy that rapidly became known as Abenomics. Its aim was to drag Japan’s economy out of 20 years of deflation and put it back on the road to growth. Billions of dollars were pumped into the economy through stimulus spending. The Bank of


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Japanese “new economy” fails … because of rain!

torrential-rain

Sometimes it is just hard to believe news. Reuters reports that the Japanese government seriously blames the weather for the failing economy. To this, the only response I have is “you must be joking”. But, no, they are serious. The Economics Minister Akira Amari announced that “heavy rain has probably pushed the GDP down by 1.6 percentage points on an annualised basis in July-September“.

What kind of economy is it that can lose 1.6% because of rain? Mind you, the rain happens every year in Japan, it’s sub-tropical. Anyway, this only looks like a feeble “it’s not my fault” outcry from a naughty child. Instead of accepting the fact that the “abenomics” is destroying the economy and causing the country to fail, it is, of course, much easier to blame the weather for the absence of the much touted economic growth due to the so-called “stimulation”.

The article notes that “some economists worry that declines in real wages are the bigger factor behind weak consumption” and I am glad to see that at least some see the situation for what it is. Next, we will see failing consumer confidence and after that – the government will …
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Open Letter to the Emperor of Japan

Kinkakuji_Winter_postcard

Dear Tenno Heika,

Japan is an amazing country. Having lived there for a few years I learned a little about people and their beliefs, the way they do things. Japanese are a smart and enterprising bunch of people. Japan has built a perfectly stable economy within an incredibly stable society that is healthy in all possible ways and could be used as a textbook example of how to do things right. It pains me to watch this great country being destroyed now. The last two years are playing out as a really bad disaster movie or a nightmare that is impossible to wake up from. I feel my heart tearing apart every time I read the news about more economic atrocities from Shinzo Abe and his minions.

Why do I say Japanese economy is perfect?

Japan has achieved through hard labor what many people in so many countries dream about: the economic stability coupled with development and progress. There are many ways to define the “good living” but we would be wise to look at how well people do that live in the country now. Let’s look at some figures and compare with the subjective perception of the situation in …
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The story of economic sanctions as told by PMI

Manufacturing PMI August 2014

While the world is watching the civil war in Ukraine the European economics is sliding into oblivion. The Manufacturing PMI tells a story that should scare the hell out of the politicians of EU – so bad the business dynamics in manufacturing looks.

In August, out of 26 countries, only 9 reported improvement in the index, 15 recorded a slowdown in the two countries has not changed. In fairness it should be noted that 21 countries report PMI is still above the level of 50 points, and below only 5. But it is not so important, because the dynamics is still downward. There are those who are moving in the right direction: in Greece and Turkey business activity index in August was able to finally overcome the mark of 50 points. The rest of Europe presents a serious reason for concern, whether peripheral or central: everywhere there are signs of a serious recession.

United States, on the other hand, sports the best activity indicator in the world. PMI index has reached its highest level since April 2010 and reached 57.9 points. In case of U.S., the export orders component grew at the fastest pace in three years, and the employment …
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Externalities are crucial for the software industry

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Externalities exist in any business. We are very familiar by now with the externalities of the manufacturing industries – air and water pollution, noise pollution, depletion of resources etc. But what about the software industry? How bad is the industry’s addiction to the externalities?

In economics, an externality is a cost or benefit which affects a party who did not choose to incur that cost or benefit.[1]

For example, manufacturing activities which cause air pollution impose health and clean-up costs on the whole society, while the neighbors of an individual who chooses to fire-proof his home may benefit from a reduced risk of a fire spreading to their own houses. If external costs exist, such as pollution, the producer may choose to produce more of the product than would be produced if he were required to pay all associated environmental costs. If there are external benefits, such as in public safety, less of the good may be produced than would be the case if the producer were to receive payment for the external benefits to others. For the purposes of these statements, overall cost and benefit to society is defined as the sum of the imputed


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Microsoft strategy success: Nokia no more

R.I.P. Nokia

Now it should be painfully obvious to everyone that the long-term strategic plan of Microsoft to bring down and absorb Nokia worked. Many years of hard work by high-profile managers and large investments are finally set to bring home profit for Microsoft.

Now that Nokia is bought by Microsoft, Microsoft can finally make the mobile devices that are, well, mobile devices. They will have the technology, the market, and the people. Unfortunately, they still have to make it all work. They still may run this very successful business of Nokia into the ground. And there is a high chance they will.

There was a time when I was wondering if it was just a Microsoft venture, or a joint venture by Microsoft and Samsung. Actually, no, I would not go as far as to say it is all clear now. We will see how things pan out.

The hole in the market remains though and the market share of Nokia is still up to grabs. The biggest problem is really the patent pool. This is the time when you wish there were no such things as patents. The market could flood with new and exciting mobile phones now if …
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Insourcing – a new fashion trend

Outsourcing-vs-Insourcing

There is a new trend, a new fashion in the high-tech industry. They already coined the most natural term for it and it is called “insourcing”. A recent article was called “Insourcing QA to gain more control over the resources”. Yes, indeed, so outsourcing has outlived its hype by far and we need a new something for the managers to get bonuses about.

Not surprisingly, the new trend is a direct reversal of the previous trend. So, there is nothing new there really. In a decade or so we will be high on outsourcing again, so the Indians and others should just hang in there for a while and we’ll be back.

Reality is that neither outsourcing nor insourcing are the ultimate answer to anything. No magic bullet is going to cure an ineffectively managed business. The best one can do is ignore these fashions completely. Unless you are a consultant of outsourcing, of course, because now you will be consulting with equal vigour on insourcing.

 …
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Negotiations and Expectations

business people at boring meeting

Some negotiations are like sailing in and out. Others – not quite. Why do so many negotiations fail and other, while successful, still present a thorny winding road to the participants? Why should people suffer through negotiations instead of just talking?

While there may be many reasons for not actually getting what you wanted in the first place in the negotiations and feeling frustrated about the results, should we actually make our lives harder than needed? What is the reason that many people think negotiations are a hard job? Why do they get drained out in a course of a short two hour business meeting that happens to be labeled “negotiation”?

I have a theory. It all has to do with expectations. Should you come to the meeting without particular expectations, you would be fairly objective and could actually follow the logic of the arguments on both sides, see compromises, do your job. But what happens when you come to such a meeting carrying expectations?

Expectations can never be met. It’s a rule and it is dead simple. We are all different people and different organizations. It is extremely unlikely that we think in entirely similar ways and will form …
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Strategic direction: security ebb

fuggedaboutit-375x360

Something quite prominent happened in the security field over the last week. It is a strategic move so I am going to talk about it here rather than on Holy Hash! although it would be interesting to the security folks too.

So, what happened, you ask? Ah, nothing so spectacular that TV shows would interrupt their evening program for but so momentous that I wish they would. It all started with the little exercise at RSA Conference where a couple of so-called “security leaders” declared that security is the territory of really large companies and anyone smaller should just forget about it. I already wrote my opinion about the basic idea of ignoring risks in an area where an incident, according to Coverity, runs on average to 7 million dollars but can easily be a couple of orders of magnitude more.

It would all go away into the history unnoticed if it was not for Bruce Schneier who suddenly chipped in with his commentary that he agrees to the gentlemen in question. Now, Bruce is not stoopid and he is the head of security for BT. To explain to our full satisfaction how come that his …
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