Sounds + Food 'n' Retail

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Just a short tweet.

I'm currently reading a Dutch book on the 2003 crisis at Ahold, but which is actually a historical account of how the corporation came to be. A couple of things I found interesting:

• Ahold actually stands for AH (Albert Heijn) Holdings


• We all know that things are cyclical, but it was interesting to read how a recession and high oil prices were a challenge that Ahold had to face in the 60s-70s, and how they managed to survive.


• In order to inspire Dutch people to shop more, they introduced a financing scheme for fridges, which people couldn't afford at that time. General Motors did a similar thing to help people afford their cars; seems like an interesting way to "upgrade" an economy.


• The fear of a socialist government drove Albert Heijn to look outwards and form Ahold (similar to why IKEA decided to globalise also).


• One of the consequences of politics at that time was the board of directors, meant to provide impartial guidance and represent the workers.


• They made extensive use of consultancies (often McKinsey) whenever they decided on a strategic trajectory.


• One of the directors was a big fan of Harvard Business Review :)


• They use the US as a source of knowledge on how to design their supermarkets. Later on, moving to the US was also seen as a way to increase that learning, as well as a new revenue-source.


• When AH moved to the US, they also brought their own ideas, like, eh, advertising (a terrible, terrible idea).

That's it for now! I'll go into greater detail at a later date.

The reason I like Star Trek, most sci-fi in fact, is because of the space-opera aspect. You don't just tell a story, you design a universe around it. I've been a fan of the show, ever since the age of 10 when I got to watch TV at home. In some ways, sure, the time spent watching the show impoverished my life by taking me away from other endeavours, in other ways, it enriched it by contributing to my ability to dream.

As I grew older, I started paying much more attention to the story-telling aspects of the franchise. For instance, did you know that until the second season of Star Trek, the next generation, the writers didn't create a place for the crew to relax? It was only then that the makers came up with the concept of Ten Forward, hosted by the infamous Guinan (see pic). Later, in its spin-offs, Deep Space Nine and Voyager, we also saw a big role being played by the "lounge", hosted by Quark and Neelix respectively.

It was felt that by introducing this aspect into the show, a third place, it allowed the characters to show a different side of their lives, necessary if you want to teach a complete philosophy about society, as Gene Roddenberry was in fact doing. And of course, it spawned plenty of dramatic stories, that would otherwise never have happened. It allowed for romance, friendship, and conflict to happen, for aliens to meet and interact with one another.

What's interesting about the franchise that each series had a different archetype, which also affected the room for "drama." You could see it as both an evolution and devolution of a story. Star Trek, the original series, was the raw outline of Roddenberry's philosophy about the future of society. The next generation was much more developed and allowed for deeper interpersonal relationships. Deep Space Nine was again an evolutionary step, and much of the stories centred around "life" on the station.

Both Voyager and Enterprise represented a devolution. Voyager introduced the "morale officer", in my opinion, an engineered effort to bring a certain warmth to the story. But it was much less about teaching philosophy, as it was about survival. It showed that Roddenberry's universe was in fact small and could break apart at the edges. But it was still a good story.

Enterprise represents a return to those raw ideas. Perhaps it was felt that the franchise could cover no more new ground, and that a new philosophy had to be designed. It was also a story of survival and the raw pioneering spirit, shown in part in Voyager. But it felt like a military mission, there was little room to form complete characters. Instead we were presented with deep dramas, echoing the 9/11 events, which turned the characters into one-dimensional creatures, much perhaps the way the news depicts the main characters involved in the post-9/11 era.

To me, at least, Star Trek is a good analogy for certain principles in life. That it is not enough to search, but also to build. That friendships and societies are built, not only from the hard work they require, but from the breaks we take to reflect on our actions, and the places that are engineered to cater for that need.

Food for thought.

Ran Charan, who I wrote about a few days ago, made another excellent contribution to my thinking (and hopefully yours), the concept of "social operating mechanisms." He defines them as mechanisms that synchronise individual contributors' efforts.

A step back
Individualism vs. collectivism represent two personality-types. There are the managers, who are integrators and bring both groups together and (are supposed to) identify with the greater purpose of the organisation: maximisation of profit, etc. And there are individual contributors, who through their own efforts bring forth new data and growth, etc. These types are not always suited for management, as they need that freedom to be creative.

Social operating mechanisms fit within the framework of execution, in the sense that that is one of the last stages in a multi-stage process. As the leader/problem-solver of an organisation, you start by identifying a problem; you come up with a set number of fundamental priorities to solve the problem; and you (design social operating mechanisms to) spread that solution throughout your organisation.

An example
Mr. Charan mentions a number of examples, but (for obvious reasons perhaps), I like the Wal-Mart one the best.

• In the early 90s, every Monday to Wednesday, ca. 30 regional managers visited 9 Wal-Mart stores and 6 competitor-ones, to check if Wal-Mart's strategy of offering lower prices than the competition was being implemented correctly.
• Every Thursday-morning, Sam Walton conducted a 4-hour session with a group of 50 people, including those regional managers, buyers, logistics- and advertising people to discuss the status quo, what was going right and wrong, and the future.

The results of these managers visiting the "real world" and the immediate discussion of that data enabled Wal-Mart to stay in touch with what was happening and respond quickly to problems.

Making it relevant?
If this seems like a big-company problem, maybe so. But even on a smaller scale, you could see a similar process happening in the week of a franchise-owner, I discussed a few weeks ago.

As soon as an organisation grows beyond a few people, the barriers between your customers and the leadership of an organisation increase. The politics can be frustrating and are one of the main reasons why original founders leave. The Amazon-story, which I wrote about a while ago, and which also discusses of how Jeff Bezos, founder and CEO of Amazon tries to keep in touch with the core-principles of Amazon, is also an example of a social operating mechanism.

Naturally, today's reality is somewhat different from the time (2000) that the book was published. We have "the internet" now, which should make creating social mechanisms a much easier to solve. I say 'should' as opposed to 'will,' because it still requires the necessary cohesion, which many technological solutions (in my opinion) are still lacking.

It still comes down to designing people-processes which help you implement core-priorities, and having the tolerance for, let's call them, idiotic decisions that sometimes come from the type of group-think often prevalent in organisations.

The picture is courtesy of infed.org

Let's face it, even with nature knocking on our door, some accountant will still ask what this whole thing is going to cost. Science, facts, morality… it's not enough. I compare it to smoking; even though everyone knows smoking kills, it took pressure—social, governmental, commercial—for people to quit. And the same applies to businesses going green.

Without further ado, here's five pressures that make the business-case for companies to change.

1. Governmental pressure - let's ignore for a fact that government is the one keeping its finger on the pulse of scientific research, social, business, and technological trends. But what is hard to ignore is that the government is actively pushing businesses to change, either by punishing the wrong-doers, by subsidising clean practices and technologies, or by providing new infrastructures around these new rules, allowing for businesses to dispose of their waste in better ways and use alternative, cleaner energy-sources.

2. Consumer pressure - like with smoking, not all consumers have been following the new green "religion" quite as passionately. That said, there are the early adopters, the geeks, the pressure-groups, that are insisting on businesses changing their ways. And those businesses are themselves customers to their suppliers and are doing the same thing to them.

3. Business climate pressure - apart from the above, two things will strongly pressure businesses to change: costs and competition. The rising cost of fuel, electricity, and water, etc., as well as the cost of disposing their waste, is a good incentive to implement technologies that help conserve energy and produce less waste. Similarly, as competition will do the same, businesses are forced to respond.

4. Knowledge-carriers - with the amount of scientific research being produced everyday, it was only a matter of time before methodologies would be developed to help businesses become greener. Since this is still a specialised activity, both commercial parties (consultants) and governmental institutions are there to advise companies on how to change.

5. New technologies - new inventions are constantly being brought to the market, that help businesses conserve energy or get it from alternative sources. Think: technology to monitor and regulate energy-use, water-conserving toilets, more efficient lights, green roofs, etc.

Anything I missed?

In a way, you can't blame businesses for resisting. There have been lot's of change-initiatives these last decades—from ERP to joint ventures—which have produced questionable, if not disastrous results. For change to happen, it must be driven by strategy first, because doing business is like doing war. There is a high price for failure and no one will be congratulating the loser.

But what is certain, is that eventually there will be no more choice. Those that are slow to react will do so at the cost of an unsympathetic government, of the competition racing ahead, and of customers dropping their support.

This article is mirror-posted on tech IT easy, where there's also an interesting discussion going on. Why do people end up going green?

I'm in a philosophical mood. Got the flu, lack of sleep, an excess of stress, and the general feeling that I need to "get things done" before I have earned the right to enjoy life (though I will try to enjoy seeing old friends on the 31st).

Yesterday, or this morning, I published a list of materialistic wishes for 2OO8… now it is time for the a-materilistic, or rather the idealistic wishes I have for my family, friends and myself in the near and more distant future.

Surprises - After composing a list of idealistic "to-do's," I felt that no matter what you plan it's important to experience and be open to surprises. What life is worth living without them?

Financial success for my family & friends - as materialistic as it may seem, there is a clear correlation between success and happiness, and I wish this very much to the people I know, those that I don't know, and myself of course. Money not only makes the world go round, it makes for a better world.

Beware of the accelerator - I can't speak for other people, but I've noticed a clear trend with myself. I'm like a ball, when I start rolling, I go faster and faster, until it becomes hard to stop. This is true for my work, for my more artistic projects, even for depressive days. It's important to keep the balance, as theoretical as that may sound. Even if it feels "wrong" to stop sometimes, stop, and even if it feels wrong to work sometimes, work. It's a little connected to 'surprises' also.

No assassinations during the holidays - a minor point perhaps (is it?), but have you noticed that last year on this day, Saddam Hussein was executed, as was Benazir Bhutto a few days ago? A serious bummer, dude.

A better US president… perhaps - I think there is a complex interplay between what I would call macro-leadership and micro-management. Both are important, and one cannot exist without the other. The US makes a good case-study for observing the interplay between federal and state-politics. When Bush goes against the climate, you see plenty of bottom-up activity for improving the climate on a city or state-level. I would love a US president that is more moderate and appreciative of the complexities of international politics, terrorism, climate-change, world-hunger, world-disease, emerging economies, etc. But really, I just want people to fight for what they believe in, whether it be top-down, or bottom-up.

For myself:
A good job in 2OO8 - one that I enjoy doing and that teaches me skills that help me be a better project-manager.

My own company for 2OO9 onwards - not sure when and how this will manifest itself, but that is what I'm working towards.

While I'm stuck on writing some other posts—the idea is there, the execution some way off—it is time for another collection of links.

• Using Human Sigma for measuring customer engagement - Mitch Owen reviews a new book on the market, that suggests that evaluating our efforts at customer satisfaction happen on four levels: Confidence, Integrity, Pride, Passion.


• How to coast to a writing career - Valleywag writes an insightful post (for once) about what matters when blogging. I like "AVOID: Blogger ego. If you do blog, just write and forget about it. Don't reply to your comments with more than "Good point, h8rboi, thanks. Don't troll other bloggers for links, or try to get onto Techmeme by posting about whatever's already there. ... People in the real media don't care what your Technorati rank is, they'll just Google you to see what you write." That said, I have no intent to engage on a writing career.


• Mind hacks: an interview with Jonah Lehrer on neuroscience - What I like: "Artists are constantly being forced to reverse-engineer the brain. By reverse-engineering the art - by trying to understand why, exactly, it resonates with us - we can learn about the mind."


• Thirteen examples of successful brand experiences - could be filed under architecture. The British design council points us to 13 different "experience-castles" (my own term), where customers can be enchanted.


• Calculating the carbon footprint of wine - What can I say? It's the new world! Some key-points: organic is not as efficient as we think; distance matters; packaging matters.


• Bonus Link: Why does a salad cost more than a big mac. - A picture says more than a 1000 words. This is just as applicable to Europe btw. Thank Wolsey for inventing the subsidy!

Enjoy! More of this: check out the S+FnR bookmarks—updated 24/7 !

Let's start with a brief disclaimer: I am not a lawyer, fiscal expert, EU expert, or anything that can constitute an authority in matters of European legislation. I have linked to relevant data at the end of this article, which I strongly encourage interested readers to check out.

SEPA, meaning “Single Euro Payments Area,” is an initiative, due to be launched in 2008 and fully implemented by 2010, but has been in the planning ever since the EURO-currency was unleashed upon the member-countries in 2002.

Essentially, while the EURO brought some transparency to consumers, banks, and businesses on a cash-level, SEPA is meant to be the non-cash equivalent, introducing a common standard of non-cash transfers between banks, businesses, and consumers across the EU-region. This is facilitated by a standard referred to as "straight-through processing" (STP), which allows for an automated processing of payments between banks.

Technically speaking, this means that payment-messages between parties will contain certain data-elements that include information on the amount, bank account details and the names of the sender and receiver, and is exchanged between banks through a common ISO-standard, called: UNIFI (ISO 20022) XML.

All of this mumbo-jumbo is governed by the European Payments Council (EPC) (see pic below), which is the decision making and coordination body of the European banking industry in relation to payments, and consists of 67 members, including banks and banking associations.


(click picture for more detail)

Benefits to consumers and businesses
These are manifold. Essentially, a harmonised standard allows consumers to easily, transparently, and securely make payments across borders, which also means that consumers don't need to open separate banks to handle their business in different European countries. In addition to this, it introduces a common standard for pension-transfers across banks (and I assume countries), and greatly increases the choice of financial service providers to consumers.

For businesses, the benefits are far more numerous. Essentially, having shared standards allows them to easily accept and process payments from any card from a SEPA-bank. National borders no longer need to be a barrier to growth and businesses can have a more direct financial relationship with consumers across the Euro-region. Similarly, B2B-transactions across borders enjoy similar "upgrades" and will require much less overhead, be more transparent, secure, and quicker than before.

For a more exhaustive list of changes, please check the EPC-report on Making SEPA a reality!

Final thoughts
While this all sounds very rosy-coloured, I expect that the key-factor will be marketing, i.e. communication about what SEPA is and how to use it. So far, there has been very little news on SEPA, even though it is due to be launched in less than 3 months from now. Similarly, a status-report by the EPC (pdf) points out that there has been very little communication from public authorities about their intention of using SEPA products, and another Dutch article, from a few days ago, reports that 92% of Dutch business-owners are not yet prepared for SEPA.

That said, if anything was needed after the EURO was introduced, it was increased transparency of financial services, and preferably on a pan-European level. Both the fact that businesses and consumers can run their financial affairs from a single bank in a single country, and that both also have more choice of service providers, is a huge improvement. For the latter, I hope the increased competition will lead to more efficient financial services. And for the first, I hope it will lead to more businesses expanding their operations across national borders, and more migration by European citizens across the continent.

Of course, much remains to be done before we can truly call Europe one "country," including a more harmonised patenting-standard, and of course overcoming many of the legal and cultural barriers which continue to exist. But the SEPA, if all goes according to plan, is a significant step ahead towards making this a reality.

Some helpful links

• The European Central Bank on SEPA
• The European Payments Council on SEPA
• EPC-report on Making SEPA a reality (very good to read!)
• Latest SEPA status-report

Any feedback on possible mistakes in my interpretation of the facts is strongly encouraged and appreciated!