The News Corp phone hacking saga continues like a runaway train.
Actually, to my mind it's not about phone hacking, although it did start when the public discovered that the News of the World hacked into the phones of people other than celebrities. That meant the illegality which had been accepted for years was suddenly an outrage.
And although it's called the phone hacking scandal, the real story is corruption.
The UK has long prided itself on being corruption free. It can't any more. Media, politicians, police all scratching each others' backs with secret deals, payoffs, freebies, exchanges of confidential information.
Politicians playing for Murdoch's media support. And in return he expected...?
A relationship between police and Murdoch's empire that included police being paid for information.
Former executives from the NoW being given well- paid jobs with the police and government.
The original enquiry finding no problem other than a couple of minor underlings, who went to jail, and the enquiry being closed with unseemly haste.
And so it was back to business as usual.
But every day sees more sensational developments. It's not just underlings taking the rap any more, big names are beginning to fall.
The latest is the top cop, Sir Paul Stephenson, Commissioner of the Metropolitan Police, who resigned yesterday.
There were a number of pressures on him but the one that to me is the biggest is that he accepted a gift of thousands of pounds of free health spa accommodation.
It doesn't matter who the owners were, who arranged it, whether it had anything to do with Murdoch.
The problem is the nation's top policeman accepted a valuable gift from someone.
At the very best it shows appalling judgement and naivete.
And like others being outed in this drama, he just doesn't get it.
Here's what he said:
Sir Paul insisted there was "no impropriety" in relation to his use of the spa. He said: "I am extremely happy with what I did and the reasons for it — to do everything possible to return to running the Met full time, significantly ahead of medical, family and friends’ advice. The attempt to represent this in a negative way is both cynical and disappointing."
See, accepting gifts is perfectly OK for senior police officers. There is such a thing as free lunch. People will give them gifts worth thousands of pounds and never even think of wanting a favour in return.
Just watch it, this story will grow like a snowball because it's becoming a really dirty fight. People involved are looking to deflect dirt from themselves by naming others, people are settling old scores, good friends are hurriedly being dropped, there's a mad a scramble as people scurry to put distance between themselves and News Corp. And of course, anti-News Corp forces, including media rivals, are throwing fuel on the fire.
There are widespread reports of Sir Paul's dig at the Prime Minister who he said risked being compromised by his closeness to former News of the World editor Andy Coulson.
And, naturally, not for himself did Sir Paul kept secret his relationship with and employment of Caulson's former deputy Neil Wallis as a 'strategic adviser'. No, that was to protect others: "I did not want to compromise the prime minister in any way by revealing or discussing a potential suspect who clearly had a close relationship with Mr Coulson."
Very senior people, including long-standing friends of Rupert Murdoch, have gone and are among those arrested. The top cop has gone and his deputy should be next.* The opposition is baying for government blood.
They'll make a movie of it one day.
Quotes are from:
Sir Paul turns on PM. The Guardian.
Daily Telegraph.
* Breaking News
It's ninety minutes after I posted this and the Assistant Commissioner has just resigned. Things are moving faster than we can keep up with.
Showing posts with label business. Show all posts
Showing posts with label business. Show all posts
Monday, July 18, 2011
Saturday, July 16, 2011
Power tends to corrupt...
So said Lord Acton back in the eighteen eighties.
Very relevant to the momentous events going on in the UK surrounding Rupert Murdoch's brand of 'journalism' I would say.
Another saying that springs to mind is 'one law for the rich, one for the poor', but this one is happening in reverse from the usual meaning.
The hypocrisy of the general public is never more evident than in the Murdoch saga.
He's made his squillons and gained his power & influence by feeding the public obsession with gossip and personal details about people's private lives, the more dirt-raking the better. His papers are as downmarket as you can get, with even the once internationally respected The Times and Sunday Times going on a rapid downward spiral when he took them over.
The public's insatiable appetite for dross gave tabloid rags like The Sun and the News of the World the highest readership in the UK. In Australia it's the same with his tabloids versus the broadsheets.
Then the hypocrisy. As long as the gossip and lurid details were about royalty, footballers, politicians and 'celebrities' the illegal means of obtaining the information were not questioned.
But when exactly the same methods were used against ordinary people - an uprising.
It's not the unprofessional, immoral, illegal actions which have caused such outrage. It's who the victims are this time.
They won't of course, but people should take a long hard look at themselves for accepting illegal practices when they were used against well-known people. That's encouraged the practitioners to see their illegal, immoral actions as normal practice, happily accepted by the public.
Then there's the side to this saga that will be society changing.
When the Dirty Digger, as Private Eye* famously dubbed him, bought into the UK's newspaper world he was a breath of fresh air. He challenged the establishment, as very few did in those days, and broke the print unions which were killing the hand that fed them. (I had personal experience of them when I worked in London ad agencies).
But as his influence with the public - read voters - increased so did his interference in politics. Now there is evidence not only of his power to influence the highest levels of government but of his organisation's illegal activity in phone hacking, fraudulently obtaining personal information ('blagging') and bribery of police.
The mutual back-scratching of News Corp., politicians and the police isn't new but it's reached new depths.
No-one knows how much more there is to discover. Was it confined to the now thankfully defunct News of the World? (Always a dreadful example of tabloid 'journalism'). Was it even confined to the UK? The FBI in the US is looking into alleged breaches of US law. In Australia, where his empire began and where he owns nearly two thirds of big city newspapers, MPs are calling for an inquiry into media regulation.
This time News Corp won't be able to sweep it under the carpet as they did earlier, sacrificing a couple of, albiet guilty, fall guys. I've always maintained that the culture of an organisation is set at the very top. Underlings do what they believe the boss will be happy with, often what the boss indicates he'll be happy with.
To make matter worse, far from making a couple of minor mistakes in handling the crisis, as Murdoch told the (his) Wall Street Journal they'd done, he's made uncharacteristically massive errors. Maybe he's simply lost the plot. But I suspect it's more that the years of increasing power and influence have made him overconfident about what he can get away with. Arrogance and treating people with disdain aren't cutting it any more.
It needed an immediate admission that the practices were totally unacceptable. An immediate apology and promise that he was on his way to sort it out and hold those responsible, right to the top, to account. An urgent personal apology to the family of the murdered teenager Milly Dowler, the hacking of whose phone started the public outrage.
He should not have refused to attend the parliamentary hearing - a bad decision since reversed only as he realised the severity of the storm and threats of a summons to appear were made.
He should have immediately dropped his bid to buy the whole of BSkyB, 'pending the outcome of the current investigations'. Instead he tried to remove it from the political arena by having it referred to the competion watchdog, then had to withdraw the bid anyway. Calls are now being made to consider whether News should be allowed to retain its existing 39% holding.
All in all, mistake piled on mistake. As I said, out of character and massively damaging to the empire. Perhaps even fatal to it in its present form.
It will certainly lead in the UK to a formal distancing between media proprietors and politicians and between the media and police. Perhaps a new media regulator, maybe no more self regulation. More attention will be paid to the meaning of a 'fit and proper' person in relation to media owners. Quite possibly stronger regulations about the percentage of media one person can control.
Very senior people are going to be held responsible for their actions and lose their jobs - instead of the usual platitude of 'I take full responsibility' with absolutely nothing happening thereafter.
And much more transparency all round.
It's a big, big story and, as they say, it has legs. And there'll be more sensational revelations as it evolves.
* Private Eye covers are consistently brilliant. Do have a look at their website, click on 'Covers Library' and search Rupert Murdoch for example.
Very relevant to the momentous events going on in the UK surrounding Rupert Murdoch's brand of 'journalism' I would say.
Another saying that springs to mind is 'one law for the rich, one for the poor', but this one is happening in reverse from the usual meaning.
The hypocrisy of the general public is never more evident than in the Murdoch saga.
He's made his squillons and gained his power & influence by feeding the public obsession with gossip and personal details about people's private lives, the more dirt-raking the better. His papers are as downmarket as you can get, with even the once internationally respected The Times and Sunday Times going on a rapid downward spiral when he took them over.
The public's insatiable appetite for dross gave tabloid rags like The Sun and the News of the World the highest readership in the UK. In Australia it's the same with his tabloids versus the broadsheets.
Then the hypocrisy. As long as the gossip and lurid details were about royalty, footballers, politicians and 'celebrities' the illegal means of obtaining the information were not questioned.
But when exactly the same methods were used against ordinary people - an uprising.
It's not the unprofessional, immoral, illegal actions which have caused such outrage. It's who the victims are this time.
They won't of course, but people should take a long hard look at themselves for accepting illegal practices when they were used against well-known people. That's encouraged the practitioners to see their illegal, immoral actions as normal practice, happily accepted by the public.
Then there's the side to this saga that will be society changing.
When the Dirty Digger, as Private Eye* famously dubbed him, bought into the UK's newspaper world he was a breath of fresh air. He challenged the establishment, as very few did in those days, and broke the print unions which were killing the hand that fed them. (I had personal experience of them when I worked in London ad agencies).
But as his influence with the public - read voters - increased so did his interference in politics. Now there is evidence not only of his power to influence the highest levels of government but of his organisation's illegal activity in phone hacking, fraudulently obtaining personal information ('blagging') and bribery of police.
The mutual back-scratching of News Corp., politicians and the police isn't new but it's reached new depths.
No-one knows how much more there is to discover. Was it confined to the now thankfully defunct News of the World? (Always a dreadful example of tabloid 'journalism'). Was it even confined to the UK? The FBI in the US is looking into alleged breaches of US law. In Australia, where his empire began and where he owns nearly two thirds of big city newspapers, MPs are calling for an inquiry into media regulation.
This time News Corp won't be able to sweep it under the carpet as they did earlier, sacrificing a couple of, albiet guilty, fall guys. I've always maintained that the culture of an organisation is set at the very top. Underlings do what they believe the boss will be happy with, often what the boss indicates he'll be happy with.
To make matter worse, far from making a couple of minor mistakes in handling the crisis, as Murdoch told the (his) Wall Street Journal they'd done, he's made uncharacteristically massive errors. Maybe he's simply lost the plot. But I suspect it's more that the years of increasing power and influence have made him overconfident about what he can get away with. Arrogance and treating people with disdain aren't cutting it any more.
It needed an immediate admission that the practices were totally unacceptable. An immediate apology and promise that he was on his way to sort it out and hold those responsible, right to the top, to account. An urgent personal apology to the family of the murdered teenager Milly Dowler, the hacking of whose phone started the public outrage.
He should not have refused to attend the parliamentary hearing - a bad decision since reversed only as he realised the severity of the storm and threats of a summons to appear were made.
He should have immediately dropped his bid to buy the whole of BSkyB, 'pending the outcome of the current investigations'. Instead he tried to remove it from the political arena by having it referred to the competion watchdog, then had to withdraw the bid anyway. Calls are now being made to consider whether News should be allowed to retain its existing 39% holding.
All in all, mistake piled on mistake. As I said, out of character and massively damaging to the empire. Perhaps even fatal to it in its present form.
It will certainly lead in the UK to a formal distancing between media proprietors and politicians and between the media and police. Perhaps a new media regulator, maybe no more self regulation. More attention will be paid to the meaning of a 'fit and proper' person in relation to media owners. Quite possibly stronger regulations about the percentage of media one person can control.
Very senior people are going to be held responsible for their actions and lose their jobs - instead of the usual platitude of 'I take full responsibility' with absolutely nothing happening thereafter.
And much more transparency all round.
It's a big, big story and, as they say, it has legs. And there'll be more sensational revelations as it evolves.
* Private Eye covers are consistently brilliant. Do have a look at their website, click on 'Covers Library' and search Rupert Murdoch for example.
Sunday, May 15, 2011
Don't call us...
"Gulf News was unable to get a response..."
Absolutely typical of all-too many companies here.
This time it's from Sharjah, where according to the Gulf News report, expat residents have found notices from SEWA (Sharjah Electricity and Water Authority) on their doorsteps demanding payment of additional deposits of at least Dh3,000...to be paid within seven days or the services will be disconnected.
"We tried to contact Sewa to inquire through their phone number attached with the notice but in vain as no one ever responds," said one resident.
High-handed or incompetent? Both, probably. And just so typical. Make a statement, say something controversial, change the rules overnight, go into hiding.
You can read the full story here.
And on that note I'm getting away from it for a few weeks, back to Oz. I'll be back towards the end of June, although I'll probably post the odd piece on Life in Dubai while I'm away.
The suitcase is packed with sweaters; Sydney will be sunny but with a max of 20C and a minimum of only 8C tomorrow when I arrive according to the forecast. But cool as it is at least I'll be able to breathe the air, it won't be full of dust as it is today in Dubai.
Absolutely typical of all-too many companies here.
This time it's from Sharjah, where according to the Gulf News report, expat residents have found notices from SEWA (Sharjah Electricity and Water Authority) on their doorsteps demanding payment of additional deposits of at least Dh3,000...to be paid within seven days or the services will be disconnected.
"We tried to contact Sewa to inquire through their phone number attached with the notice but in vain as no one ever responds," said one resident.
High-handed or incompetent? Both, probably. And just so typical. Make a statement, say something controversial, change the rules overnight, go into hiding.
You can read the full story here.
And on that note I'm getting away from it for a few weeks, back to Oz. I'll be back towards the end of June, although I'll probably post the odd piece on Life in Dubai while I'm away.
The suitcase is packed with sweaters; Sydney will be sunny but with a max of 20C and a minimum of only 8C tomorrow when I arrive according to the forecast. But cool as it is at least I'll be able to breathe the air, it won't be full of dust as it is today in Dubai.
Monday, March 28, 2011
They're kidding, right?
It's in Arabian Business, not some sensationalist tabloid, so I tend to believe it.
I've checked the date and it isn't April 1st.
The report says:
Citibank’s UAE subsidiary has launched a marketing campaign offering residents a free one-way flight out of the country if they sign on for a personal bank loan.
Borrow up to Dh64,000 and they'll give you a one-way ticket out of here.
I need to go away and think about this one...
See what you think of the story, which is here.
I've checked the date and it isn't April 1st.
The report says:
Citibank’s UAE subsidiary has launched a marketing campaign offering residents a free one-way flight out of the country if they sign on for a personal bank loan.
Borrow up to Dh64,000 and they'll give you a one-way ticket out of here.
I need to go away and think about this one...
See what you think of the story, which is here.
Wednesday, February 02, 2011
Benihana Kuwait update
You surely must know that the big story in cyberspace is Benihana Kuwait, that's the Japanese-style restaurant franchise, suing a Kuwaiti blogger because, in what is a balanced review, he said he didn't like the food and wouldn't go back.
In my post on Monday I said the story needs to get as much exposure on the 'net as we can give it, and I urged other bloggers and social media users to expose these people.
You could hardly have done better!
It's all over cyberspace and now all sorts of media is picking up the story and joining in the universal condemnation of the crass stupidity.
There've been a couple of recent developments.
Michael Kata, COO and Executive Vice President of Benihana of Tokyo, who license the Kuwaiti franchise, told boingboing.net that the franchise agreement didn't allow them to order franchisees to sue or withdraw lawsuits, but that they were empowered to terminate the agreement should the franchisee bring the brand into disrepute.
As I said on Monday, that's exactly what they should have done. It'll be interesting to see what the franchiser does.
The other development is a press release from the other half of the company, Benihana Inc. in Miami.
Obviously concerned at the effect of the stupidity on investors in their company, they're distancing themselves as far as they can from it.
Absolutely nothing to do with us, they say. There are two totally separate companies and we have no control or authority over what the other company does.
They take a dig at the franchisee, saying their half of the company seriously consider all feedback an opportunity for improving operations and We encourage you to share your opinions and comments directly with Benihana of Tokyo, Inc. The company's contact information is available on www.BenihanaGroup.com.
They're well aware what a storm the stupidity has created and that there's universal condemnation, and they clearly want us to let the franchiser know our feelings directly. The full press release is here.
By the way, if you haven't started at the beginning of this story, the original post with the restaurant review is here.
Like me, I don't think you'll see anything in the review that relates to the claims made in the lawsuit. The words Mark uses have no connection with the claims made in the writ.
boingboing have a translation, which includes: "And so, we order the payment of KD5001 as a compensation for the damages caused to the restaurant management and for encouraging large number of customers not to try the restaurant by insulting, doubting the quality and food served by Benihana and using expressions that disgust people from trying the food. The person has caused huge material damages to the restaurant, ethic damage to the restaurant's reputation as an international brand that has chains all over the world as well as hurt the restaurant's potential to expand in Kuwait by influencing all kinds of nationalities not to try a restaurant that offers a specific type of food that is subject to taste preference.
If anyone should be sued for causing 'ethic damage to the restaurant's reputation' it's their own management.
In my post on Monday I said the story needs to get as much exposure on the 'net as we can give it, and I urged other bloggers and social media users to expose these people.
You could hardly have done better!
It's all over cyberspace and now all sorts of media is picking up the story and joining in the universal condemnation of the crass stupidity.
There've been a couple of recent developments.
Michael Kata, COO and Executive Vice President of Benihana of Tokyo, who license the Kuwaiti franchise, told boingboing.net that the franchise agreement didn't allow them to order franchisees to sue or withdraw lawsuits, but that they were empowered to terminate the agreement should the franchisee bring the brand into disrepute.
As I said on Monday, that's exactly what they should have done. It'll be interesting to see what the franchiser does.
The other development is a press release from the other half of the company, Benihana Inc. in Miami.
Obviously concerned at the effect of the stupidity on investors in their company, they're distancing themselves as far as they can from it.
Absolutely nothing to do with us, they say. There are two totally separate companies and we have no control or authority over what the other company does.
They take a dig at the franchisee, saying their half of the company seriously consider all feedback an opportunity for improving operations and We encourage you to share your opinions and comments directly with Benihana of Tokyo, Inc. The company's contact information is available on www.BenihanaGroup.com.
They're well aware what a storm the stupidity has created and that there's universal condemnation, and they clearly want us to let the franchiser know our feelings directly. The full press release is here.
By the way, if you haven't started at the beginning of this story, the original post with the restaurant review is here.
Like me, I don't think you'll see anything in the review that relates to the claims made in the lawsuit. The words Mark uses have no connection with the claims made in the writ.
boingboing have a translation, which includes: "And so, we order the payment of KD5001 as a compensation for the damages caused to the restaurant management and for encouraging large number of customers not to try the restaurant by insulting, doubting the quality and food served by Benihana and using expressions that disgust people from trying the food. The person has caused huge material damages to the restaurant, ethic damage to the restaurant's reputation as an international brand that has chains all over the world as well as hurt the restaurant's potential to expand in Kuwait by influencing all kinds of nationalities not to try a restaurant that offers a specific type of food that is subject to taste preference.
If anyone should be sued for causing 'ethic damage to the restaurant's reputation' it's their own management.
Monday, January 31, 2011
Sued for saying he didn't like his meal.
In case you've missed it I have to draw your attention to a post by Alexander on Fake Plastic Souks.
Briefly, a Kuwaiti blogger posted a restaurant review, in which he gave a couple of positive comments but said he was unimpressed with the food and wouldn't go back.
Fair enough, you'd think.
I'll quote a few lines from Alex's post:
And then there's the comment from a geezer called Mike Servo, who claimed to be the general manager of the Benihana management of Kuwait and who threatened to sue Mark.
"...our rights and name is being used in a wrong way and broadcasting the video without a proper consent from us is really annoying specially Benihana is just opened up its doors to the public. We are seeking and consulting our legal dept. on how we can form a type of law suit against your website to be brought up to the Kuwait authorities."
He goes on to trill: "We want you to give us your information, your name, your number and your address so our lawyer will take it from there and be sure that you in Kuwait were the jury is 100 % clean and fair."
Mark posted up on Twitter yesterday that he had received the lawsuit. Benihana Kuwait actually went ahead and sued a blogger for writing a bad review of their restaurant.
It's something that infuriates me. Justifiable criticism from a customer and a company rushes to the legal system.
Benihana HQ needs to look at this seriously and quickly because the action by their Kuwaiti franchisee is bringing their brand into disrepute.
In my opinion the unprofessional, unbusinesslike action needs to get as much exposure on the 'net as we can give it, which is why I've repeated the story here. I hope you other bloggers and social media users will expose these people too.
PS an hour later.
Just before shutting down and heading off to the airport I thought I'd see what cyberspace had on this. Bloggers, Twitter, Facebook - have a look folks. Benihana Kuwait have created a PR disaster for themselves. All their own work.
I wonder if they're beginning to understand how business works in the real world. You know, the place where customers have a say too. Where bullying and threatening creates a backlash.
If you are beginning to understand it, it's too late guys, you've damaged the brand already. You've poured ridicule on your own brand.
Briefly, a Kuwaiti blogger posted a restaurant review, in which he gave a couple of positive comments but said he was unimpressed with the food and wouldn't go back.
Fair enough, you'd think.
I'll quote a few lines from Alex's post:
And then there's the comment from a geezer called Mike Servo, who claimed to be the general manager of the Benihana management of Kuwait and who threatened to sue Mark.
"...our rights and name is being used in a wrong way and broadcasting the video without a proper consent from us is really annoying specially Benihana is just opened up its doors to the public. We are seeking and consulting our legal dept. on how we can form a type of law suit against your website to be brought up to the Kuwait authorities."
He goes on to trill: "We want you to give us your information, your name, your number and your address so our lawyer will take it from there and be sure that you in Kuwait were the jury is 100 % clean and fair."
Mark posted up on Twitter yesterday that he had received the lawsuit. Benihana Kuwait actually went ahead and sued a blogger for writing a bad review of their restaurant.
It's something that infuriates me. Justifiable criticism from a customer and a company rushes to the legal system.
Benihana HQ needs to look at this seriously and quickly because the action by their Kuwaiti franchisee is bringing their brand into disrepute.
In my opinion the unprofessional, unbusinesslike action needs to get as much exposure on the 'net as we can give it, which is why I've repeated the story here. I hope you other bloggers and social media users will expose these people too.
PS an hour later.
Just before shutting down and heading off to the airport I thought I'd see what cyberspace had on this. Bloggers, Twitter, Facebook - have a look folks. Benihana Kuwait have created a PR disaster for themselves. All their own work.
I wonder if they're beginning to understand how business works in the real world. You know, the place where customers have a say too. Where bullying and threatening creates a backlash.
If you are beginning to understand it, it's too late guys, you've damaged the brand already. You've poured ridicule on your own brand.
Saturday, January 15, 2011
Modernising the fleet
The car wash people seem to have been issued with smart new streamlined trolleys.
Wednesday, September 22, 2010
Cyber Stone Age
Waiting, waiting, waiting...
Claims that we're a major international commercial centre, business friendly, a great place to set up a business fly in the face of the Cyber Stone Age internet we have to struggle with.
The speed is no better than the old dial-up I had back in Oz fifteen years or more ago. That's a lifetime in the cyberworld - think of the development over that period. But not here.
It comes into sharp focus when you get back from somewhere like Singapore.
Using the computer there last week I was connected to websites within a couple of seconds. Click and the new screen opens in a couple of seconds.
I come back to Dubai and I sit looking at a slowly, very slowly, loading screen. Thirty to sixty seconds is normal.
Bottom left corner is mocking me with "Connecting to http://..." then after more time "Waiting for http://..." then even more time "Start downloading from site http://..."
And they're the same websites which open instantly in Singapore.
There are regular complaints about the high prices we have to pay for internet access, but to me that's not the main problem. The main problem is the lack of speed
.
It's hugely wasteful of time, reduces productivity which means increased costs. How many hours are lost here, I wonder, by people just sitting waiting for the computer to move on so that they can get on with their work.
We're paying high prices for a terrible product. If they gave it to us free it would still be a poor product.
Tuesday, August 17, 2010
Forward to the past
Here we go again...biggest, largest, tallest for Dubai.
Didn't take long did it.
This time it's the replacement Hard Rock Cafe, to be opened at Festival City.
The original Dubai Hard Rock Cafe in Media City closed about eighteen months ago. The new one we're told will have the largest Hard Rock Shop in the world in the largest Hard Rock Cafe outside North America and outside it will have the tallest ornamental guitar in the world at a height of 118 feet.
Just what we need.
Gulf News has the report here.
Didn't take long did it.
This time it's the replacement Hard Rock Cafe, to be opened at Festival City.
The original Dubai Hard Rock Cafe in Media City closed about eighteen months ago. The new one we're told will have the largest Hard Rock Shop in the world in the largest Hard Rock Cafe outside North America and outside it will have the tallest ornamental guitar in the world at a height of 118 feet.
Just what we need.
Gulf News has the report here.
Tuesday, August 03, 2010
The Blackberry saga
Blackberries are big news.
Big news here and worldwide, because of the threatened ban on parts of the Blackberry service. I've just been listening to a piece about it on Sydney's ABC local radio station for example.
Most of what I've seen and heard in the international media seems to be just reporting the TRA's threatened action without comment. But the stories are attracting plenty of reaction and the internet's full of comment.
Two aspects of the comments are amusing me.
First is the shock that a government might want to eavesdrop on people's communications. Typical of a non-democratic dictatorship is the theme of many comments.
'Naive' doesn't begin to cover it.
I'm amazed at how many people are unaware that our communications are routinely monitored by governments, including the world's leading democracies. Never heard of Echelon?
The other amusing aspect to me is the claim that companies won't be able to operate if they can't use Blackberry - businesses are totally reliant on their BB, people are saying, and without it they can't carry on their business.
In reality only a small percentage of companies use the device; I wonder how they managed before it was introduced.
Of course, the same could apply to any new device - I wonder how companies were able to operate before e-mail, before fax, before telephones, before telegraph, before...
It reminds me of a situation back in Sydney when I worked for a hotel group.It was the bicentennial year, hotels were running full. Some regular card-carrying business guests were having trouble getting a room with us, so we suggested that the hotels ran a wait-list for regular guests who could then be allocated a room if a cancellation came in.
At a marketing meeting the reaction from a hotel was presented, that they couldn't create a wait-list because the (computer) system didn't have that function.
A colleague shook his head while he held up a pencil and writing pad.
Sunday, July 18, 2010
I'm on a winner here
I've hit on a great new business. It's just so now that it's a dead cert winner.
Can't fail.
We'll be offering contemporary holistic lifestyle concept solutions.
What about that!
Bet you can't wait to place orders with me.
I had the brainwave thinking about a couple of announcements I've seen recently.
The first was from the Jumeirah Group, who are to introduce a new hotel brand. It will be, and I quote, "a contemporary lifestyle brand" and that apparently will "fulfil a clear market need".
Then the Pragma Group announced that it was taking over the Palladium building in Media City. That's going to become, I quote again, "a forum for holistic lifestyle concepts".
It's a huge advance on just the 'solutions' that so many companies offer. That's all a bit passe these days, although Gulf News has plenty of them today - a specialist provider of geophysical solutions and an aircraft technical solutions provider included.
To help generate business in the start-up phase - or should that be moving forward - I'll be using the traditional Dubai strategy - a big Opening Sale offering 'up to' discounts until stocks last.
What's that? What exactly will we be offering? I told you, contemporary holistic lifestyle concept solutions.
Jumeirah Group.
Pragma Group.
Can't fail.
We'll be offering contemporary holistic lifestyle concept solutions.
What about that!
Bet you can't wait to place orders with me.
I had the brainwave thinking about a couple of announcements I've seen recently.
The first was from the Jumeirah Group, who are to introduce a new hotel brand. It will be, and I quote, "a contemporary lifestyle brand" and that apparently will "fulfil a clear market need".
Then the Pragma Group announced that it was taking over the Palladium building in Media City. That's going to become, I quote again, "a forum for holistic lifestyle concepts".
It's a huge advance on just the 'solutions' that so many companies offer. That's all a bit passe these days, although Gulf News has plenty of them today - a specialist provider of geophysical solutions and an aircraft technical solutions provider included.
To help generate business in the start-up phase - or should that be moving forward - I'll be using the traditional Dubai strategy - a big Opening Sale offering 'up to' discounts until stocks last.
What's that? What exactly will we be offering? I told you, contemporary holistic lifestyle concept solutions.
Jumeirah Group.
Pragma Group.
Wednesday, July 07, 2010
Advantages of clustering
A couple of days ago the Financial Times ran an article on what we call clustering, headlined 'The added value of a group'.
It was talking about the advantages of businesses in the same industry setting up shop in the same location, something that's in its early stages in the west.
The article suggests the idea of businesses clustering has become an increasingly important part of regional development and corporate strategies since 1990, with the publication of a book called 'The Competitive Advantage of Nations'.
It's a much older concept in this region, in fact it's always been the standard way of operating.
Before I came to Dubai I was used to businesses wanting an 'exclusivity zone', wanting to be the only business of their type in the location.
I've been a big fan of clustering ever since I first saw the benefits.
For businesses it makes sense because if a number of companies in the same industry set up adjacent to each other it makes commercial sense for their suppliers to set up there too. A win win. They feed off each other and they're conveniently close for doing business with each other.
Examples in the west mentioned in the article are the financial district in London and Silicone Valley. Here we have them everywhere you look - Media City, Internet City, Healthcare City, Academic City, Logistics City. The list goes on and on.
I'm particularly a fan of the retailers clustering and I wish retailers in the west would follow suit.
Back in Sydney - or any other city in the west - the first thing is to remember where a shop selling particular stock is located. Then if they don't have what I'm looking for I have to go some distance, from long to not so long, to find another shop in the same business. If I know where another similar shop is, that is.
Here it's easy, because of clustering. And, by the way, it doesn't only apply to the souks, such as the gold souk, the textile souk, the spice souk, the perfume souk. Clustering is par for the course in the traditional shopping areas and even in the new malls.
It makes shopping so much easier and more convenient. You need a tyre changed? You know there's a cluster in Satwa, for example, where you can find exactly what you want - and in a few metres you can compare several to get the best price.
The same applies to textiles, jewellery, herbs & spices, gold & jewellery, electronics...
Talking of Satwa, one of my favourite shopping areas, there's a gold souk developing there, which is actually like the Deira gold souk used to be before it changed to rows of largely western-style shops selling western-style jewellery to tourists.
Satwa currently has thirty or so tiny shops, almost all displaying the traditional local and Indian designs.
The last couple of times we've had friends visiting they were instantly enthusiastic about clustering, wishing they had the same convenience back home.
Both shopping trips were to Satwa, one for dressmaking material the other for a particular type of gold ring.
Both visitors were mightily impressed that they had such a huge choice in a short easily-walked area. And both found exactly what they were looking for.
Financial Times is here.
It was talking about the advantages of businesses in the same industry setting up shop in the same location, something that's in its early stages in the west.
The article suggests the idea of businesses clustering has become an increasingly important part of regional development and corporate strategies since 1990, with the publication of a book called 'The Competitive Advantage of Nations'.
It's a much older concept in this region, in fact it's always been the standard way of operating.
Before I came to Dubai I was used to businesses wanting an 'exclusivity zone', wanting to be the only business of their type in the location.
I've been a big fan of clustering ever since I first saw the benefits.
For businesses it makes sense because if a number of companies in the same industry set up adjacent to each other it makes commercial sense for their suppliers to set up there too. A win win. They feed off each other and they're conveniently close for doing business with each other.
Examples in the west mentioned in the article are the financial district in London and Silicone Valley. Here we have them everywhere you look - Media City, Internet City, Healthcare City, Academic City, Logistics City. The list goes on and on.
I'm particularly a fan of the retailers clustering and I wish retailers in the west would follow suit.
Back in Sydney - or any other city in the west - the first thing is to remember where a shop selling particular stock is located. Then if they don't have what I'm looking for I have to go some distance, from long to not so long, to find another shop in the same business. If I know where another similar shop is, that is.
Here it's easy, because of clustering. And, by the way, it doesn't only apply to the souks, such as the gold souk, the textile souk, the spice souk, the perfume souk. Clustering is par for the course in the traditional shopping areas and even in the new malls.
It makes shopping so much easier and more convenient. You need a tyre changed? You know there's a cluster in Satwa, for example, where you can find exactly what you want - and in a few metres you can compare several to get the best price.
The same applies to textiles, jewellery, herbs & spices, gold & jewellery, electronics...
Talking of Satwa, one of my favourite shopping areas, there's a gold souk developing there, which is actually like the Deira gold souk used to be before it changed to rows of largely western-style shops selling western-style jewellery to tourists.
Satwa currently has thirty or so tiny shops, almost all displaying the traditional local and Indian designs.
The last couple of times we've had friends visiting they were instantly enthusiastic about clustering, wishing they had the same convenience back home.
Both shopping trips were to Satwa, one for dressmaking material the other for a particular type of gold ring.
Both visitors were mightily impressed that they had such a huge choice in a short easily-walked area. And both found exactly what they were looking for.
Financial Times is here.
Monday, July 05, 2010
That's more like it
It's back to basics with the official opening of the new Dubai World Central/Al Maktoum airport.
As I've said in many previous posts, Dubai is all about trading and always was. It's the reason for its very existence.
The city's economy has always been based on trading, on doing business. Spurts of growth have come as a result of forward-thinking investment in infrastructure based on growing the business base.
The feverish concentration on residential real estate over the past six or so years, particularly as it was unplanned and unregulated, had nothing to do with what Dubai's all about and it's caused most of the problems we're experiencing now.
In the sixties the investment in business infrastructure was the dredging of The Creek, using money borrowed from oil-rich Kuwait, to allow larger cargo boats to use it as a base.
The then ruler Sheikh Rashid also invested in excellent, for the time, telecoms infrastructure.
For access for business people and cargo he invested in Dubai International Airport and Port Rashid.
That good communications infrastructure led to international companies relocating their Middle East offices to Dubai when they left Beirut because of the civil war in the early seventies.
Then came Jebel Ali Port and money was also put into industrial development, such as Dubal, Ducab, all now highly successful and profitable.
I was here in those days and I remember the scepticism, and ridicule, about it all. They were dismissed as 'a waste of money' and 'ego trip developments'. Jebel Ali Port had no commercial future, it was far too big and not on any major trade routes, it was really for the US fleet to use as a base.
The same ridicule is not uncommon about the new airport. Why on earth does Dubai need the biggest airport in the world? What a huge waste of money on a grandiose ego trip. And there have been many gleeful posts on blogs and other sites saying with authority that it was one of the projects cancelled when the economic meltdown hit.
I remember an interview a few years back with someone high up in the airport management, I forget who it was. His point was that it wasn't about what we need now but is about planning ahead, anticipating what would be needed thirty or forty years in the future.
His made the points that land is at a premium in the emirate and if it wasn't reserved now for the airport it wouldn't be available when it was needed in forty or fifty years time. The airport wouldn't be the biggest in the world for some years, it would be constructed in stages depending on demand. And of course it was close to Jebel Ali Port to conveniently link sea and air cargo.
Appropriately the new airport has opened with cargo carriers, while passenger traffic is due to begin next March.
Gulf News has a report on the opening of the new airport here.
As I've said in many previous posts, Dubai is all about trading and always was. It's the reason for its very existence.
The city's economy has always been based on trading, on doing business. Spurts of growth have come as a result of forward-thinking investment in infrastructure based on growing the business base.
The feverish concentration on residential real estate over the past six or so years, particularly as it was unplanned and unregulated, had nothing to do with what Dubai's all about and it's caused most of the problems we're experiencing now.
In the sixties the investment in business infrastructure was the dredging of The Creek, using money borrowed from oil-rich Kuwait, to allow larger cargo boats to use it as a base.
The then ruler Sheikh Rashid also invested in excellent, for the time, telecoms infrastructure.
For access for business people and cargo he invested in Dubai International Airport and Port Rashid.
That good communications infrastructure led to international companies relocating their Middle East offices to Dubai when they left Beirut because of the civil war in the early seventies.
Then came Jebel Ali Port and money was also put into industrial development, such as Dubal, Ducab, all now highly successful and profitable.
I was here in those days and I remember the scepticism, and ridicule, about it all. They were dismissed as 'a waste of money' and 'ego trip developments'. Jebel Ali Port had no commercial future, it was far too big and not on any major trade routes, it was really for the US fleet to use as a base.
The same ridicule is not uncommon about the new airport. Why on earth does Dubai need the biggest airport in the world? What a huge waste of money on a grandiose ego trip. And there have been many gleeful posts on blogs and other sites saying with authority that it was one of the projects cancelled when the economic meltdown hit.
I remember an interview a few years back with someone high up in the airport management, I forget who it was. His point was that it wasn't about what we need now but is about planning ahead, anticipating what would be needed thirty or forty years in the future.
His made the points that land is at a premium in the emirate and if it wasn't reserved now for the airport it wouldn't be available when it was needed in forty or fifty years time. The airport wouldn't be the biggest in the world for some years, it would be constructed in stages depending on demand. And of course it was close to Jebel Ali Port to conveniently link sea and air cargo.
Appropriately the new airport has opened with cargo carriers, while passenger traffic is due to begin next March.
Gulf News has a report on the opening of the new airport here.
Sunday, June 13, 2010
Paid for but not delivered.
A service paid for by consumers isn't delivered. The non-supplier says it's not his fault, doesn't mention compensation.
Shock! Horror! Surely not!
In reality it's not an unusual situation in this area by any stretch of the imagination.
This time it's the exclusive World Cup TV coverage supplied by Al Jazeera Sport to the region.
Or more accurately, partly supplied.
There are reports from across the region of people who've paid hard-earned money to watch the games but not getting what they've paid for.
Almost half of the opening match between hosts South Africa and Mexico was lost. Next day about half the Argentina-Nigeria match was also lost.
Frozen screens, garbled pictures, wrong language was what the punters received for their outlay.
"We're being sabotaged" say Al Jazeera.
Hackers have been mentioned but the fun stuff comes with the conspiracy theories.
Al Jazeera Sport have blamed Nilesat, accusing them of 'an act of piracy by causing intentional disruption'.
Egyptian Radio & Television Union, which owns 40 percent of Nilesat, responded with their own conspiracy theory - that Al Jazeera might have decided to punish Nilesat 10 minutes after the first disruption by claiming that its causes were unknown and requesting its viewers to move to other providers, such as Arabsat, Hotbird and Noorsat.
Nasser Al Khelaifi, GM of Al Jazeera Sport, says that Al Jazeera is working with "a number of international specialised companies" to track down the culprits and that he was confident they would be be found soon.
That's nice.
Meanwhile, the problem needs to be sorted out so that people who've paid to watch the matches can actually see them. In full. In the right language.
I assume it's far too much to hope that a discount based on what's not delivered is in the pipeline.
There are plenty of reports in the region's media, here are some:
Gulf News.
Arab News.
Arabian Business.
Shock! Horror! Surely not!
In reality it's not an unusual situation in this area by any stretch of the imagination.
This time it's the exclusive World Cup TV coverage supplied by Al Jazeera Sport to the region.
Or more accurately, partly supplied.
There are reports from across the region of people who've paid hard-earned money to watch the games but not getting what they've paid for.
Almost half of the opening match between hosts South Africa and Mexico was lost. Next day about half the Argentina-Nigeria match was also lost.
Frozen screens, garbled pictures, wrong language was what the punters received for their outlay.
"We're being sabotaged" say Al Jazeera.
Hackers have been mentioned but the fun stuff comes with the conspiracy theories.
Al Jazeera Sport have blamed Nilesat, accusing them of 'an act of piracy by causing intentional disruption'.
Egyptian Radio & Television Union, which owns 40 percent of Nilesat, responded with their own conspiracy theory - that Al Jazeera might have decided to punish Nilesat 10 minutes after the first disruption by claiming that its causes were unknown and requesting its viewers to move to other providers, such as Arabsat, Hotbird and Noorsat.
Nasser Al Khelaifi, GM of Al Jazeera Sport, says that Al Jazeera is working with "a number of international specialised companies" to track down the culprits and that he was confident they would be be found soon.
That's nice.
Meanwhile, the problem needs to be sorted out so that people who've paid to watch the matches can actually see them. In full. In the right language.
I assume it's far too much to hope that a discount based on what's not delivered is in the pipeline.
There are plenty of reports in the region's media, here are some:
Gulf News.
Arab News.
Arabian Business.
Saturday, June 12, 2010
The non payment problem
The CFO of Arabtec, the UAE's biggest builder, was talking the other day about cash flows improving when the $8 billion support Dubai's government says it will, conditionally, give to Nakheel eventually means the company can start paying some of its bills.
Forget the slowdown, forget winning orders - the major problem businesses here have been facing is non payment of bills.
Almost as bad has been the 'you want payment you give us a 30% discount' contract-breaking arrogance from the big companies. But that's another story...
The most pressing issue was getting money to the major developers to help them pay their bills, get money flowing through the economy, keep projects going, save sub-contractors from bankruptcy, keep people in jobs.
It's happening but it's all taking far too long.
And although the $8 billion to Nakheel will help, it's really only a drop in the ocean.
A couple of stories I've listened to in the past few days illustrate the problem. Both companies doing well, providing the service they were contracted to provide, meeting deadlines, invoicing the agreed amounts.
The clients haven't kept their side of the deal though. Athough they received what they'd ordered they haven't paid for it.
(Isn't that illegal in the UAE?)
One is a small architectural firm. Non payment of invoices has meant they've had to fire all their staff with just the owner hanging on. The decision was whether to write it off as a lost cause and leave Dubai or hang in as long as possible hoping to collect the amounts due.
Hang in there was the decision, which has sort-of paid off. The bills will be paid, but only with a huge, and completely unjustified, discount. Take it or leave it. Discount or nothing.
It's not only a disgraceful way to do business, in my opinion it's nothing less than fraud.
The other is someone working for a sub-contractor. They've been working in the usual chain, for a main contractor who in turn is working for the developer.
He's just been told he's out of work, along with all his colleagues.
They've been working on five towers in one of the prestige developments. The main contractor hasn't been paid for a while so he's called a halt to work on the towers. The developer doesn't pay, no-one gets payed all the way down the chain.
Since the economic meltdown began I've heard many 'experts' saying that a downturn can be good because it clears out the dead wood, gets rid of the cowboys, that the good companies survive.
Partly true, but it also means that many good companies go to the wall, simply because they don't get payed for the good work they've delivered.
Forget the slowdown, forget winning orders - the major problem businesses here have been facing is non payment of bills.
Almost as bad has been the 'you want payment you give us a 30% discount' contract-breaking arrogance from the big companies. But that's another story...
The most pressing issue was getting money to the major developers to help them pay their bills, get money flowing through the economy, keep projects going, save sub-contractors from bankruptcy, keep people in jobs.
It's happening but it's all taking far too long.
And although the $8 billion to Nakheel will help, it's really only a drop in the ocean.
A couple of stories I've listened to in the past few days illustrate the problem. Both companies doing well, providing the service they were contracted to provide, meeting deadlines, invoicing the agreed amounts.
The clients haven't kept their side of the deal though. Athough they received what they'd ordered they haven't paid for it.
(Isn't that illegal in the UAE?)
One is a small architectural firm. Non payment of invoices has meant they've had to fire all their staff with just the owner hanging on. The decision was whether to write it off as a lost cause and leave Dubai or hang in as long as possible hoping to collect the amounts due.
Hang in there was the decision, which has sort-of paid off. The bills will be paid, but only with a huge, and completely unjustified, discount. Take it or leave it. Discount or nothing.
It's not only a disgraceful way to do business, in my opinion it's nothing less than fraud.
The other is someone working for a sub-contractor. They've been working in the usual chain, for a main contractor who in turn is working for the developer.
He's just been told he's out of work, along with all his colleagues.
They've been working on five towers in one of the prestige developments. The main contractor hasn't been paid for a while so he's called a halt to work on the towers. The developer doesn't pay, no-one gets payed all the way down the chain.
Since the economic meltdown began I've heard many 'experts' saying that a downturn can be good because it clears out the dead wood, gets rid of the cowboys, that the good companies survive.
Partly true, but it also means that many good companies go to the wall, simply because they don't get payed for the good work they've delivered.
Wednesday, March 31, 2010
At last - changes at the top of Nakheel
I've posted in the past about the delay in removing people ultimately responsible for the excesses of Nakheel and for experienced executives from the established merchant families to be brought in to sort out the mess.
So I'm pleased to see today's news that both have happened.
A new board has been appointed for Nakheel with the prominent businessman Ali Rashid Lootah named as the new chairman to replace Sultan Bin Sulayem.
The CEO, Chris O'Donnell, has not been reappointed to the board and there are naturally rumours that a new CEO may be appointed.
The Financial Times says:
"The ruler's lieutenants behind Dubai's real estate boom-to-bust years are being gradually replaced by established names from the city's mercantile elite."
I've said before that it's a pity they weren't in charge from the beginning. I'm sure we would have had far less ego-driven, commercially unviable, too-rapid development.
This news comes days after the announcement of the debt restructuring plan, which in spite of too little detail being included seems to have met with general approval by creditors.
At long last the right moves are being made.
It's taken far too long, which has caused huge and unnecessary damage to Dubai's business reputation. Better late than never though, I suppose.
Gulf News.
So I'm pleased to see today's news that both have happened.
A new board has been appointed for Nakheel with the prominent businessman Ali Rashid Lootah named as the new chairman to replace Sultan Bin Sulayem.
The CEO, Chris O'Donnell, has not been reappointed to the board and there are naturally rumours that a new CEO may be appointed.
The Financial Times says:
"The ruler's lieutenants behind Dubai's real estate boom-to-bust years are being gradually replaced by established names from the city's mercantile elite."
I've said before that it's a pity they weren't in charge from the beginning. I'm sure we would have had far less ego-driven, commercially unviable, too-rapid development.
This news comes days after the announcement of the debt restructuring plan, which in spite of too little detail being included seems to have met with general approval by creditors.
At long last the right moves are being made.
It's taken far too long, which has caused huge and unnecessary damage to Dubai's business reputation. Better late than never though, I suppose.
Gulf News.
Saturday, February 06, 2010
Some good news for Dubai
We're no longer Top Ten, which for once is good news.
This Top Ten is a list of the cities with the world's most expensive hotels. Dubai has been at or close to the top for expensive hotels for some time.
Now we're not even in the Top Ten according to the report of a survey I found in The Daily Telegraph.
World's most expensive cities for hotels
Moscow £266.56
Abu Dhabi £223.35
New York City £203.70
Paris £201.07
Manama (Bahrain) £189.36
Milan £185.73
Geneva £185.19
Copenhagen £182.74
Washington £179.53
Athens £177.81
This Top Ten is a list of the cities with the world's most expensive hotels. Dubai has been at or close to the top for expensive hotels for some time.
Now we're not even in the Top Ten according to the report of a survey I found in The Daily Telegraph.
World's most expensive cities for hotels
Moscow £266.56
Abu Dhabi £223.35
New York City £203.70
Paris £201.07
Manama (Bahrain) £189.36
Milan £185.73
Geneva £185.19
Copenhagen £182.74
Washington £179.53
Athens £177.81
Friday, December 04, 2009
The real problem
"It's not the problem that's the problem, it's how you handle the problem that's the problem."
An old truism, which I've been preaching to colleagues and clients for as long as I can remember. I believe it's one of the most important rules in business.
An example. I worked for a hotel group and was in a restaurant of one of our hotels when a waiter slipped and tipped a drink over a customer.
The manageress immediately hurried over with a clean, dry cloth and gave it to the customer. She apologised, said his meal would be on the house, asked him to drop the suit off at Reception, it would be dry-cleaned at no cost and returned the next day.
In a few seconds a possible problem was replaced by a positive outcome. The customer would only remember the drink spilling in the context of how well the hotel had handled the incident. A plus for the brand.
The most important thing you have in business is the brand.
It's hard work to build the brand image and its positioning, to instil a good feeling about it in the mind of users and potential users.
But to damage or destroy it is the easiest thing in the world.
There's a fairly recent absolute classic of how quickly a brand can be destroyed, which gave rise to the phrase 'Doing a Ratner'.
Gerald Ratner was CEO of a successful family chain of discount jewellers in the UK. Discounted but believed to be good value for money. A good brand image.
Then he made a speech to the Institute of Directors, which was picked up by the media.
He said the brand's products could be sold at low prices because 'it's total crap' and he went on to say that some items were 'cheaper than a Marks & Spencer prawn sandwich but probably wouldn't last as long'.
Damage to the brand? The share value fell by about half a billion pounds Sterling, the company almost collapsed. Share price had been at a high of 400 pence went as low as 9.5 pence, sales plummeted, investor dividends disappeared.
Gerald Ratner went but the damage was done. He'd been in charge for 25 years but destroyed it all in a few minutes.
I relate these stories because we currently have two examples of damage to a previously strong brand running in the media.
Very different stories but the difference demonstrates the truth of the saying and that it applies to any brand, whatever the business.
The subjects of course are Tiger Woods Brand and Brand Dubai.
Tiger Woods Brand is worth a huge amount of money, a large amount of its value based on a perception of perfection, unrealistic but that's what people tend to do.
After the row with Mrs Woods and subsequent minor car prang the damage to the brand began.
He hired a criminal attorney, refused to talk to the police and made no public statement.
The rumour mill went into overdrive, in the mainstream media and the blogosphere, and those actions added to the rumours. I haven't heard any jokes but I'm sure there must be hundreds.
He stayed silent for several days, and by the time he eventually made a statement the damage was already done.
The problem was the way the problem was handled.
Dubai World, although a very different story, is a similar example of the real problem being the way the problem was handled, which has resulted in damage to the brand.
I've already posted about the mishandling.
Brand Dubai has been built for decades on the basis of being a great business centre, perfectly located and commercially astute. A city with a long and succesful commercial history, a place where it was safe to do business, where the business people really knew how to run successful companies. Brand Dubai meant successful, safe investing.
As a result of the mishandling of Dubai World's debt restructuring and how it was announced we're now seeing things like this said in the world's media about Dubai:
"Dubai default...Dubai debt meltdown...Dubai financial crisis...bloodbath...risked triggering the biggest sovereign default since Argentina...city is now so swamped in debt that it's asking for a six-month reprieve...shock announcement that a debt-laden Dubai state corporation was unable to meet its interest bill...Dubai cast adrift as credibility crumbles...Dubai's financial health is under scrutiny"
OK, it was inaccurate, it was unnecessary blind panic, it was a misunderstanding of the status of Dubai World, it was lack of knowledge of how much debt was the subject of the announcement, of how much it was relative to the amount of debt in the world. But those reactions were caused by the mishandling of the situation in Dubai. Had the old saying been remembered the fallout would have been very different and without damage to Brand Dubai
If you are a potential investor, publicity like that will make you pause and rethink. If you are a financial institution you'll look much more carefully at Dubai companies requesting loans or offering bonds. There are plenty of other places around the world competing for your investment and loans.
However successful you are, however well you've built your brand, however long it's taken to build it to where it is today, make a mistake in handling a problem and you can damage it instantly. It can take years to regain the reputation and it can even end up as permanent damage.
An old truism, which I've been preaching to colleagues and clients for as long as I can remember. I believe it's one of the most important rules in business.
An example. I worked for a hotel group and was in a restaurant of one of our hotels when a waiter slipped and tipped a drink over a customer.
The manageress immediately hurried over with a clean, dry cloth and gave it to the customer. She apologised, said his meal would be on the house, asked him to drop the suit off at Reception, it would be dry-cleaned at no cost and returned the next day.
In a few seconds a possible problem was replaced by a positive outcome. The customer would only remember the drink spilling in the context of how well the hotel had handled the incident. A plus for the brand.
The most important thing you have in business is the brand.
It's hard work to build the brand image and its positioning, to instil a good feeling about it in the mind of users and potential users.
But to damage or destroy it is the easiest thing in the world.
There's a fairly recent absolute classic of how quickly a brand can be destroyed, which gave rise to the phrase 'Doing a Ratner'.
Gerald Ratner was CEO of a successful family chain of discount jewellers in the UK. Discounted but believed to be good value for money. A good brand image.
Then he made a speech to the Institute of Directors, which was picked up by the media.
He said the brand's products could be sold at low prices because 'it's total crap' and he went on to say that some items were 'cheaper than a Marks & Spencer prawn sandwich but probably wouldn't last as long'.
Damage to the brand? The share value fell by about half a billion pounds Sterling, the company almost collapsed. Share price had been at a high of 400 pence went as low as 9.5 pence, sales plummeted, investor dividends disappeared.
Gerald Ratner went but the damage was done. He'd been in charge for 25 years but destroyed it all in a few minutes.
I relate these stories because we currently have two examples of damage to a previously strong brand running in the media.
Very different stories but the difference demonstrates the truth of the saying and that it applies to any brand, whatever the business.
The subjects of course are Tiger Woods Brand and Brand Dubai.
Tiger Woods Brand is worth a huge amount of money, a large amount of its value based on a perception of perfection, unrealistic but that's what people tend to do.
After the row with Mrs Woods and subsequent minor car prang the damage to the brand began.
He hired a criminal attorney, refused to talk to the police and made no public statement.
The rumour mill went into overdrive, in the mainstream media and the blogosphere, and those actions added to the rumours. I haven't heard any jokes but I'm sure there must be hundreds.
He stayed silent for several days, and by the time he eventually made a statement the damage was already done.
The problem was the way the problem was handled.
Dubai World, although a very different story, is a similar example of the real problem being the way the problem was handled, which has resulted in damage to the brand.
I've already posted about the mishandling.
Brand Dubai has been built for decades on the basis of being a great business centre, perfectly located and commercially astute. A city with a long and succesful commercial history, a place where it was safe to do business, where the business people really knew how to run successful companies. Brand Dubai meant successful, safe investing.
As a result of the mishandling of Dubai World's debt restructuring and how it was announced we're now seeing things like this said in the world's media about Dubai:
"Dubai default...Dubai debt meltdown...Dubai financial crisis...bloodbath...risked triggering the biggest sovereign default since Argentina...city is now so swamped in debt that it's asking for a six-month reprieve...shock announcement that a debt-laden Dubai state corporation was unable to meet its interest bill...Dubai cast adrift as credibility crumbles...Dubai's financial health is under scrutiny"
OK, it was inaccurate, it was unnecessary blind panic, it was a misunderstanding of the status of Dubai World, it was lack of knowledge of how much debt was the subject of the announcement, of how much it was relative to the amount of debt in the world. But those reactions were caused by the mishandling of the situation in Dubai. Had the old saying been remembered the fallout would have been very different and without damage to Brand Dubai
If you are a potential investor, publicity like that will make you pause and rethink. If you are a financial institution you'll look much more carefully at Dubai companies requesting loans or offering bonds. There are plenty of other places around the world competing for your investment and loans.
However successful you are, however well you've built your brand, however long it's taken to build it to where it is today, make a mistake in handling a problem and you can damage it instantly. It can take years to regain the reputation and it can even end up as permanent damage.
Thursday, November 26, 2009
Shock at Dubai World announcement
The business world was expecting Nakheel to redeem its Islamic bond when it matures in two weeks.
Recent comments from Dubai government VIPs reinforced the expectation that debts would be paid on time.
So there's alarm in markets around the world since Dubai World briefly announced that it was asking creditors to defer payment for at least six months.
What a disastrous blow for Brand Dubai.
The bond has enormous significance because it's both the world's largest Islamic financial instrument and is considered the ultimate litmus test for Dubai's ability to meet its commitments.
Equally bad, the announcement was made after close of business on the eve of the Eid holiday, so now no-one's available for comment or clarification. That fact hasn't been missed by commentators either.
Badly, badly handled all round.
Commentators around the world are talking about it in disapproving terms and there's the question of whether this will be considered a default, with enormous implications for not only Dubai but Islamic bonds in general.
The New York Times says that the move demostrates that Abu Dhabi won't unconditionally bail out Dubai government controlled companies but that there has to be a genuine restructuring of the debt with the pain being equally shared by Dubai and its banks.
The Wall Street Journal talks about bankers and executives being stunned by the announcement, and says 'Dubai's efforts to deal with its mountain of debt estimated to exceed $80 billion were dealt a hammer blow.'
The Times, once one of the world's great newspapers but now reduced to near-tabloid level since being bought by Rupert Murdoch, predictably goes with the cliche 'Dubai World and properties built on sand.'
The UK Daily Telegraph headlines its report 'Dubai recovery hopes hit by debt 'standstill' call' and says that 'the credit-crunched Gulf playground, has shattered hopes of imminent financial recovery.'
The Financial Times has the widest coverage and talks about markets reeling at the announcement and acting with alarm at fears of default. Comments from analysts confirm the reaction.
There's only one positive side to the announcement and predictably the local media puts that spin on it, that Dubai World is to be re-restructured and an outside world-renowned expert is being brought in as Chief Restructuring Officer. Gulf News print edition headline, for example, says 'Dubai World gets a breather'.
The trouble is that it's the right move but it's taken far too long for the move to be made.
For nearly a year the Dubai World companies have been going through a 'restructuring'. But it's always a nonsense for the management responsible for a company's troubles to be allowed to create and preside over a restructuring made necessary because of their own policies. A Chief Restructuring Officer, an outside expert with a proven track record, was needed from the beginning of the crisis to sort the mess out. But it wasn't treated with the urgency the situation demanded.
They became bloated companies with unnecessarily huge numbers of people being paid huge amounts of money, huge duplication of job functions between the companies in the group, unnecessary competition to build the biggest, tallest.
That led to too many mega-projects all going ahead at the same time. Worse, many were pushing engineering into uncharted waters but second and third versions were being pushed ahead before the engineers had worked out how to make the first one. The Palm Islands/The World are a classic example.
Heads, senior heads that is, should have rolled long ago.
Thankfully the financial crisis put a stop to the nonsense and has forced the companies to come down to earth. Restructuring was inevitable and long overdue. It is happening but it's all taken far too long.
We're a year into the crisis before the real moves are made that needed to be made there and then.
(The Tamweel/Amlak merger is another example. The property market is desperate for mortgage providers but the two largest have been in limbo for over a year without a policy decision being made to get them back into business. And we've been told that it won't happen until next year.)
To my mind this is the biggest blow to Brand Dubai that I can recall. The one that will do the most damage to Dubai's reputation as a good, safe place to do business, as a place that understands what business is all about and knows how to conduct it.
We'll undoubtedly be seeing more of the 'Dubai collapsing, reclaimed by the desert' stories from certain commentators as a result of this announcement.
Ignore them, Dubai will survive as the commercial centre that it's been for nearly two hundred years.
But this is a huge setback.
You can read some of the comments about it here:
NYT. Dubai Fund Asks for Stay on Debt Payments.
WSJ. Dubai Debt Woes Turn Ugly After It Seeks Standstill Deal
The Times. Dubai World and properties built on sand.
Daily Telegraph. Dubai recovery hopes hit by debt 'standstill' call.
FT. Dubai shock after debt standstill call which also has links to related articles.
Recent comments from Dubai government VIPs reinforced the expectation that debts would be paid on time.
So there's alarm in markets around the world since Dubai World briefly announced that it was asking creditors to defer payment for at least six months.
What a disastrous blow for Brand Dubai.
The bond has enormous significance because it's both the world's largest Islamic financial instrument and is considered the ultimate litmus test for Dubai's ability to meet its commitments.
Equally bad, the announcement was made after close of business on the eve of the Eid holiday, so now no-one's available for comment or clarification. That fact hasn't been missed by commentators either.
Badly, badly handled all round.
Commentators around the world are talking about it in disapproving terms and there's the question of whether this will be considered a default, with enormous implications for not only Dubai but Islamic bonds in general.
The New York Times says that the move demostrates that Abu Dhabi won't unconditionally bail out Dubai government controlled companies but that there has to be a genuine restructuring of the debt with the pain being equally shared by Dubai and its banks.
The Wall Street Journal talks about bankers and executives being stunned by the announcement, and says 'Dubai's efforts to deal with its mountain of debt estimated to exceed $80 billion were dealt a hammer blow.'
The Times, once one of the world's great newspapers but now reduced to near-tabloid level since being bought by Rupert Murdoch, predictably goes with the cliche 'Dubai World and properties built on sand.'
The UK Daily Telegraph headlines its report 'Dubai recovery hopes hit by debt 'standstill' call' and says that 'the credit-crunched Gulf playground, has shattered hopes of imminent financial recovery.'
The Financial Times has the widest coverage and talks about markets reeling at the announcement and acting with alarm at fears of default. Comments from analysts confirm the reaction.
There's only one positive side to the announcement and predictably the local media puts that spin on it, that Dubai World is to be re-restructured and an outside world-renowned expert is being brought in as Chief Restructuring Officer. Gulf News print edition headline, for example, says 'Dubai World gets a breather'.
The trouble is that it's the right move but it's taken far too long for the move to be made.
For nearly a year the Dubai World companies have been going through a 'restructuring'. But it's always a nonsense for the management responsible for a company's troubles to be allowed to create and preside over a restructuring made necessary because of their own policies. A Chief Restructuring Officer, an outside expert with a proven track record, was needed from the beginning of the crisis to sort the mess out. But it wasn't treated with the urgency the situation demanded.
They became bloated companies with unnecessarily huge numbers of people being paid huge amounts of money, huge duplication of job functions between the companies in the group, unnecessary competition to build the biggest, tallest.
That led to too many mega-projects all going ahead at the same time. Worse, many were pushing engineering into uncharted waters but second and third versions were being pushed ahead before the engineers had worked out how to make the first one. The Palm Islands/The World are a classic example.
Heads, senior heads that is, should have rolled long ago.
Thankfully the financial crisis put a stop to the nonsense and has forced the companies to come down to earth. Restructuring was inevitable and long overdue. It is happening but it's all taken far too long.
We're a year into the crisis before the real moves are made that needed to be made there and then.
(The Tamweel/Amlak merger is another example. The property market is desperate for mortgage providers but the two largest have been in limbo for over a year without a policy decision being made to get them back into business. And we've been told that it won't happen until next year.)
To my mind this is the biggest blow to Brand Dubai that I can recall. The one that will do the most damage to Dubai's reputation as a good, safe place to do business, as a place that understands what business is all about and knows how to conduct it.
We'll undoubtedly be seeing more of the 'Dubai collapsing, reclaimed by the desert' stories from certain commentators as a result of this announcement.
Ignore them, Dubai will survive as the commercial centre that it's been for nearly two hundred years.
But this is a huge setback.
You can read some of the comments about it here:
NYT. Dubai Fund Asks for Stay on Debt Payments.
WSJ. Dubai Debt Woes Turn Ugly After It Seeks Standstill Deal
The Times. Dubai World and properties built on sand.
Daily Telegraph. Dubai recovery hopes hit by debt 'standstill' call.
FT. Dubai shock after debt standstill call which also has links to related articles.
Saturday, August 29, 2009
Dumped cars
You'll remember the silly story, long-discredited, about 3,000 cars abandoned at Dubai airport by fleeing expats.
It conjoured, as it was meant to, pictures of streams of refugees fleeing in panic. Dubai was doomed, being reclaimed by the desert. It was all part of the Dubai-bashing rumours that followed the earlier breathless and equally unbalanced 'miracle of Dubai' reports.
The rumour spreaders could be having another field day now because there seem to be even more abandoned cars around the streets, parked in the same place gathering dust. There seems to be hardly a street without at least one.
But the reality is that many of the owners are simply away on holiday and after a few weeks you'll see most of them cleaned up and moved.
But not all.
Like this one, which has been in the same place for months.
There were 3,000 vehicles abandoned, but all across the city not at the airport. And the figure has to be put into context. In a normal year there are about 1,500 vehicles abandoned.
It's a high number but it's all part of the unique society we have with eighty or higher percent of the population being expatriate, here as temporary guest workers.
It also reflects the legal structure regarding bankruptcies and debts and the antiquated payments system.
The mix means that the old-fashioned post-dated cheque system is the norm. People might pay for their year's rent by a number of post-dated cheques - but if they have insufficient funds later in the year, because they lost their job for example, it's off to Al Slammer. Non-payment of car loans gets the same result.
In their home countries the owners who can't meet the payments have their cars repossessed.
Here if they lose their jobs their best option is to take off back home, leaving their belongings and debts behind. If they stay and try to sort it out the problem is that they will almost certainly end up in Al Slammer.
That's the real story. That the law and the way of doing business with post-dated cheques really needs to be changed.
An interesting story earlier in the year on abandoned vehicles was in The National.
It conjoured, as it was meant to, pictures of streams of refugees fleeing in panic. Dubai was doomed, being reclaimed by the desert. It was all part of the Dubai-bashing rumours that followed the earlier breathless and equally unbalanced 'miracle of Dubai' reports.
The rumour spreaders could be having another field day now because there seem to be even more abandoned cars around the streets, parked in the same place gathering dust. There seems to be hardly a street without at least one.
But the reality is that many of the owners are simply away on holiday and after a few weeks you'll see most of them cleaned up and moved.
But not all.
Like this one, which has been in the same place for months.
There were 3,000 vehicles abandoned, but all across the city not at the airport. And the figure has to be put into context. In a normal year there are about 1,500 vehicles abandoned.
It's a high number but it's all part of the unique society we have with eighty or higher percent of the population being expatriate, here as temporary guest workers.
It also reflects the legal structure regarding bankruptcies and debts and the antiquated payments system.
The mix means that the old-fashioned post-dated cheque system is the norm. People might pay for their year's rent by a number of post-dated cheques - but if they have insufficient funds later in the year, because they lost their job for example, it's off to Al Slammer. Non-payment of car loans gets the same result.
In their home countries the owners who can't meet the payments have their cars repossessed.
Here if they lose their jobs their best option is to take off back home, leaving their belongings and debts behind. If they stay and try to sort it out the problem is that they will almost certainly end up in Al Slammer.
That's the real story. That the law and the way of doing business with post-dated cheques really needs to be changed.
An interesting story earlier in the year on abandoned vehicles was in The National.
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