More cyclicality – real-estate, insurance, shipping

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Here’s three new cases:

  • Shipping – see Sink or Swim on massive over-building [also discussed in my presentation on lessons from the crisis]
  • Commercial real-estate – see article on office vacancy.
  • Insurance – can’t say more on this at the moment, as there’s a client opportunity, but there is crystal-clear evidence of the big swings in profitability in this industry too.

As I say, the frustrating thing is that we know why it happens, and some strategies for coping ...

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Anger at business schools

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Fired up by some stinging criticism from a former student, Joel M. Podolny once at HBS and Yale, shows admirable contrition for the failure of MBA programs to equip executives and their consultant advisors to run firms well. In The Buck Stops (and Starts) at Business School he vents the anger on this he shares with those outside business schools, and blames the carving up of management challenges by function that leaves academics without a holistic appreciation of ...

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Don’t surrender to uncertainty!

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I hope senior management do not get persuaded to divert their attention to studying ‘complexity’ in the hope of understanding recent economic turmoil.  “‘Power curves’: What natural and economic disasters have in common” argues that “parallels between financial crises and natural disasters–such as earthquakes or forest fires–suggest that the economy, just like complex natural systems, is inherently unstable and prone to occasional huge failures that are very hard or impossible to foresee. Proponents of this school of thinking are ...

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Business case for sustainability

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Michael Olson of Pleiades Technology Futures just pointed me to what looks some solid materials on how to make the business case for investing in sustainability from Bob Willard at Sustainability Advantage. This contrasts strongly with much of the well-meaning but mostly futile aspirations of many sustainability advocates.

Bob’s approach is extremely clear and expressed in terms that would likely grab exec attention – pointing out in particular that many substantial investments in sustainability offer a perfectly good ...

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Good strategy from big listed firms

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I have been tough on the poor strategy seen over both of the last two boom-bust cycles, so good to see in Sensible Giants from the Economist that the largest listed firms have disproportionately little debt compared with both smaller listed peers and private firms.

It seems that these large firms are both:

  • more able to fight off the stupid urgings of naive analysts who pushed less powerful companies to take on more debt to pursue unsustainable growth, with the implicit ...
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