Trap of success - Kodak as an example

Today I want to introduce the term “trap of success” by the case of bankruptcy of Eastman Kodak.

“Failure is the mother of success” is a well-known Chinese saying. However, the idea of “trap of success” argues that success can set the stage for failure.

Success often leads the growth and growth leads to greater complexity in business. As this happens, attention shifts away from the interactions between organisation and the business environment. It is taken for granted that current relationships will keep successful, and organisation’s attention is switched to managing the more complex relationships within the organisation.

When organisation’s performance declines, however, managers may keep adhering to the behaviour that had led success in the past. They pay attention to “doing things better” and paid poor attention to the potential benefit of “doing differently” or even “doing different things”. Therefore, the organisation becomes “learning disabled’. Managers become incapable of looking outside, reflecting on success and failure, accepting new ideas, and developing new insights. They may change, but fail to change fast enough to keep pace with the rate of change in the external environment, and this is the trap of success that they are falling into.

Kodak used to hold a dominant position in photographic film industry in the past century. It even developed the first digital camera in the world. However, due to its slowness in transitioning to the digital photography, Kodak started its struggle in earning profit in the late 1990s and filed for bankruptcy protection in the beginning of 2012. Kodak’s story illustrated the ultimate outcome of the trap of success, which is also called as the “death spiral”.

Reference:

*Wikipedia: Eastman Kodak

Customer relationship management (CRM) - Disney's SCSE quality standard

   CRM (customer relationship management) can be defined as the principles and practices that an organisation abides when interacting with its customers. CRM helps an organisation enhance customer service by identifying and satisfying customers' stated and unstated needs.

   We can take the "SCSE quality standard" of Disney theme parks as an example. SCSE stands for Safety, Courtesy, Show, and Efficiency, respectively.

   Safety: Disney claims the safety of its staffs and guests is the most important responsibility for it. In fact, the order of the letters S -> C -> S -> E implies the order of importance, and safety is the highest priority.

   Courtesy: Disney expects its staff to place themselves in tourists’ position, and do more than basic manners and politeness. Disney wishes its guest a pleasant experience as if they were the dignitary VIPs. 

   Show: Disney inspires its staff to treat every workday as the opening day, and all staffs, from cast members to cleaners, are part of the shows perform in the park. – There is no discrimination against job titles. Since staffs provide the direct impression to the tourists, each front-line staff represents Disney. In fact, all staffs are called “cast member” in Disney, all services they provide are part of the performance in the theme park.

   Efficiency: Disney believes by the effort on safety, courtesy, and show, and working as a team, efficient operation will definitely be achieved.

   This SCSE standard has positive effect on customer retention and business reputation. For example, the re-revisiting rate in Tokyo Disney is amazingly 98%. 

   When the disastrous earthquake (and tsunami subsequently) occurred in Japan on 11. March, 2011, instead of closing the theme park immediately, Tokyo Disney accommodated all its guests. Cast members provided foods and cardboards to people in theme park, and tried to comfort children and calmed them down. In this case, even under such critical and overwhelming situation, these admirable cast members in Tokyo Disney still performed the best practices of SCSE - to make sure all people in the theme park are safe, to relieve people's scary and pacify them, to take care of the guests in every details, and to do all the efforts efficiently.

Reference:

* SCSE - The Key to All OperationalDecisions, Theme Park Safety, OLC Group

Two factors that impact individual creativity and business performance

   Yesterday in the article "Creativityin business" we talked about brain training is inevitable for people to keep their competitive advantages in business environment nowadays.

   From my point of view, the factors that may impact individual creativity and business performance can be roughly categorised into two groups, the institutionalised factor and individual factor.

   Institutionalised factor indicates the layers of rules, standard operating procedures, and bureaucratic processes. Organisations develop these rules in order to operate and manage their business. However, bureaucratic structure and rigid norm can stifle creativity. Some organisations have started to streamline their extant rules, yet providing an environment that is creativity-friendly sometimes contradicts the extant rules. Encourage employees to break the extant rules through empowerment may help stimulate their creativity - with the precondition that no deviant actions will take place. 

   Individual factor refers to personal behaviour, internet addiction disorder (IAD), is specified here. For individuals, to keep one's brain in an actively creative status, one has to be aware of the IAD. IAD indicates the out-of-control internet using behaviour and is recognised as one kind of clinical disorder. Researchers from China have conducted studies by MRI brain scans on 35 participants, in which 17 of them are internet addictive. They found that in IAD patients' brain, abnormal white matter exists in brain regions involving emotional generation and processing, executive attention, decision making, and cognitive control. They concluded that IAD may have same effect on human brain as cocaine. Cocaine is central nervous system (CNS) toxic when over-dosing or abusing. Hence, IAD may have negative impact on individuals' abilities in generating creative and innovative ideas and enhance their competitive advantages.

   Silicon Valley has also suggested individuals to be away from the devices, including computer and internet, in order to prevent themselves from the occurrence of IAD and keep personal performance and interpersonal relationships in workplace. 

Reference:

*BBC: Web addicts have brain changes, research suggests

*The New York Times: Silicon Valley Says Step Away From the Device

Creativity in business

   This afternoon I read an interesting article on CNNMoney website: “Companies turn to brain games to tackle work stress”. In this article, the author Katherine Reynolds Lewis introduced the user experiences from several organisations that have applied the MyBrainSolution provided by Brain Resource, an organisation that develops brain products to help people keep the health of their brains.

   Knowledge management and organisational skills have shown its importance nowadays. Such phenomena results in the emergence of the programmes mentioned in this CNNMoney article. In order to keep the competitive advantage, the brain training is compulsory for people in business environment. Gregory Bayer, the chief executive of Brain Resource, explained the importance of training our brains: "The brain, we're finding out, is much like muscles in the body. If you exercise it, it gets better. You actually grow neurons…. If you can teach people how to manage those multitasking and stressful environments optimally, you're going to preserve their health."

   So now here comes the question: How do such brain training programmes be beneficial for business? According to Kathleen Herath, the associate vice president for health and productivity at Nationwide, "The best outcomes are when people are doing this along with another programme.” In other words, brain training can be a key factor in changing organisational behaviour.

   Hence, it will be beneficial for a business in the long run to encourage employees to use their creativity through empowerment. Creativity is defined by Amabile, the professor in Harvard Business School, as the quality of products or responses that are regarded to be creative by appropriate observers, and it can also be viewed as the process by which something so judged is produced.  

   In the fast changing business environment, creativity can enable business developing innovative products and processes, and handling with the problems relevant with organisational behaviours. However, when dealing with issues about creativity, the managers should at the same time try to develop integrity with stakeholders both inside and outside the organisation, since it is easy for people to relax standard when seeking for some novel ideas. Under such situation, a tension exists inevitably between creativity and ethics, which can be an important issue for knowledge management in business in the future.

Reference:

*CNNMoney: Companies turn to brain games to tackle work stress.

*Amabile (1996), "Creativity and Innovation in Organisations", Harvard Business School, 9-396-239.

Globalisation and environmental awareness

     Since the industrial revolution was taken place in the United Kingdom in the mid 18 century, and then spread throughout the world subsequently, industrialisation has made tremendous changes in various aspects such as agriculture, manufacturing, transportation, and technology. It has transformed our lives from an agricultural-based to an industrial-based one. Industrialisation has not only accelerated the modernisation process of human society but also has a significant effect on economic development, and has promoted the process of globalisation as a result.

 　自從工業革命在18世紀中葉於英國發生、並散布至全世界後，工業化已經在許多方面造成鉅變，像是農業、生產、運輸、與技術。工業化將我們的生活從農業基礎轉為工業基礎。工業化不僅加速人類社會的現代化流程、且對經濟發展上亦具有重大影響，並因此促進了全球化。

    As Al-Rodhan and Stoudmann mentioned in the “Definitions of Globalization: A Comprehensive Overview and a Proposed Definition”, globalisation “involves economic integration; the transfer of policies across borders; the transmission of knowledge; cultural stability; the reproduction, relations, and discourses of power; it is a global process, a concept, a revolution, and an establishment of the global market free from socio-political control.” 　

　根據Al-Rodhan與 Stoudmann在「全球化定義：綜覽與倡議」報告中所言，全球化為「包括經濟一體化；跨國政策的移轉；知識的傳輸；文化穩定性；複製（重現）；關係；與權力論述；它是全球市場不受社會－政治控制的一個全球化流程、一種概念、一場革命、以及一種發展。」

   Globalisation has made the economic and cultural activities much more inter-dependent inter-nations than before. Therefore, the United Nation has pointed out that the environmental awareness such as sustainable development has also been paid attention to in the economic globalisation cross nations. 　

　全球化已經使得經濟與文化活動在國際間較過去更為互相依賴。因此，聯合國已指出，環境意識，像是永續發展，已經在國際間的經濟發展中受到關注。

    Moreover, economic growth is accompanied with resource consumption. According to the IEA (International Energy Agency)'s Reference Scenario, for the following 20 years, global energy demand will increase by around 40%, which means an average of 1.5% a year. As a result, the industrialised world needs to pace up to arise environmental awareness, practice the sustainable development, and undertake significant changes to the natural environment.

 　此外，經濟成長伴隨著能源消耗。根據國際能源總署（ International Energy Agency, IEA）所提出的參考情境，接下來的20年中，全球能源需求會增加約40%，意即平均每年約1.5%的成長。因此，工業化世界需要加緊腳步喚醒環境意識、實踐永續發展、並為天然環境做出重大改變。


Reference:
*Al-Rodhan and Stoudmann (2006), Definitions of Globalization: A comprehensive Overview and a Proposed Definition, GCSP Occasional Papers, Geneva: Geneva Centre for Security Policy (GCSP).

The luxury tax act in Taiwan

   In the end of the article “The eurozone crisis” we mentioned Taiwanese government has conducted the luxury tax act to address the issue of booming house price. In this article we will talk about the luxury tax act in Taiwan.

　在” The eurozone crisis”的文末，我們提及臺灣政府已經執行奢侈稅以處理房價飛漲的議題。本文中我們就來談談臺灣的奢侈稅法案。

   A luxury tax is a tax on luxury goods: products not considered essential. In order to narrow the widening gap in wealth and curbing real estate speculation, Taiwan's Ministry of Finance (MOF) proposed the “Statute for Special Commodity and Service Tax” act that focused on luxury goods in 2011. Luxury goods will be taxed 10%, and property not lived in by the owner and sold within 2 years of purchase will face a 10-15% tax. As Taiwanese government has tried to curb rampant speculative property transactions and the widening gap in wealth in past decade, BBC News called this act as “an unusual move”.

　奢侈稅是對奢侈品課徵的稅：也就是對非必需品的商品而言。為了縮小日益嚴重的貧富差距與遏止房地產投機，臺灣的財政部於2011年針對奢侈品提出「特種貨物及勞務稅」一案。奢侈品將會被課10%的稅、而不動產所有權人銷售持有期間在2年以內者，會面臨10-15%的稅。過去10年間，臺灣政府試圖遏制猖狂的房地產投機交易、以及縮小日益嚴重的貧富差距，英國BBC新聞稱此奢侈稅一案為「一個不尋常的舉動」。

   Taiwanese government claimed it would "only impact around 5% of the population at the top of the consumer pyramid.” By conducting this act, the government also believed it could add 15 billion (TWD) to the treasury, funds that would be allocated to social welfare programs.

　臺灣政府聲稱奢侈稅「僅會影響消費金字塔頂端，約5%的族群。」政府也相信藉由此法案的執行，能為國庫增加15億新臺幣的稅收，而這筆收入將用於社會福利計畫上。

   For the perspective from the society, property agents and sectors opposed this luxury tax act. However most Taiwanese embraced this act and had confident that it would help release their living stress, especially in the metropolitan area.

　從社會的觀點來看，房地產仲介與公司反對此奢侈稅法案。然而多數的臺灣人支持此法案、並有信心這能舒緩他們的生活壓力，尤其是都會地區。

   Addition to the problem of property speculation, the living wage is another serious problem that the Taiwanese society faces nowadays. Living wage is the minimum income that a workforce earned that is necessary to meet his/her basic needs in a period of time or for a lifetime. However, for workforce in Taiwan, especially in the capital Taipei, their wage has been underestimated. It is something like a fairy tale to own a property in metropolitan area. And it results in the phenomena of brain drain - another problem that Taiwanese society confronts inevitably.

　除了房地產投機的問題，生活薪資也是臺灣社會今日面臨的另一個嚴重的問題。生活薪資是勞動者所獲取能滿足一段時間或其一生的基本需要之最小報酬。然而，對於臺灣的勞動者而言，尤其是在首都臺北，他們的薪資被低估了。想要在都會地區擁有一件房地產堪謂天方夜譚。而這又導致了人才外流的現象－這是臺灣社會所面臨的另一個無可避免的問題。

Reference:

*財政部賦稅署 特種貨物及勞務稅(簡稱特種銷售稅)條例專區 (Taxation Agency, Ministry of Finance, R.O.C.)

*BBC News: Taiwan passes 'luxury' tax tocool property market

*Library Congress: Taiwan: Luxury TaxProposed by Ministry of Finance

*The China Post: Luxury tax fails to haltrising home prices: data

*財團法人國家政策研究基金會 臺灣課徵奢侈稅對房地產市場的影響 (NPF Research Report, National Policy Foundation)

The soft power of a nation - Finland as an example

   Joseph Nye has defined soft power as “the ability to attract co-opt rather than coerce and rather than using force or money as a means of persuasion”. Soft power is a nation’s attractiveness and ability to shape opinions and produce attraction though culture, institutions, political values, and its foreign policy. Soft power provided an influence far beyond the traditional balance-of-power politics.

　Joseph Nye定義軟實力為「不以武力或金錢為手段所進行說服，而達成吸引而非強迫的力量。」軟實力乃是一個國家透過文化、制度、政治價值、與其外交政策，來創造機會與產生吸引力之的吸引力與能力。軟實力較傳統的權力平衡正至更具影響。

   For countries with soft power, their “country brand strength” is a valuable asset. This year, Switzerland was ranked as the world’s best country brand and Finland was 9^th in FutureBrand’s International Country Brand Index (CBI) 2012.

　對於具軟實力的國家而言，它們的「國家品牌強度」是相當珍貴的資產。今年，在FutureBrand的2012年全球國家品牌指標（Country Brand Index, CBI）中，瑞士被評為全球最佳國家、而芬蘭則為第9。

   FutureBrand is part of McCann World group. Its measure and rank global perceptions　and report the CBI annually. For the year of 2012, it has assessed the country brand of 118 countries in the world.

　FutureBrand是McCann World集團的一部份。它每年對全球感知進行評量與排名，並提出CBI報告。2012年，它評估了全球118個國家的國家品牌。

   For Finland, it was ranked as the 4^th in the Stable Legal Environment and Education System categories, and was 5th in health care and in the comparison of the value system of countries.

　對芬蘭而言，它在法律環境穩定度與教育系統類別上被評為第4名、而在健康照護與國家價值系統評比上排名第5。

   The nature environment in Finland was viewed as the 3^rd most beautiful on earth. Due to its progressive politics, it is now one of the world leaders in the issue of environmental awareness.

　芬蘭的天然環境被視為全球第3美。由於其進步的政治，芬蘭現在是環境意識的議題上的全球領航者。

Reference:

*Wikipedia: Soft Power

*Country Brand Index 2012-2013, FutureBrand