Eldon-Online

Vote for Hong Kong

It's election time in the USA. It is where I am right now and as I write it is still Tuesday so it ain't over. Personally I shall be pleased when it is. Not because the outcome is not important, it is, but because of the months and months it seems to have been assaulting our ears in Hong Kong and elsewhere - and the money the process costs in America. Frankly I prefer the British electoral system. Call an election, keep the period for electioneering short and restrict the amount of money it costs.  (Similar to the USA, though, it still doesn't guarantee we get the right person at the top!)

So with elections being topical I started to think, as I often do, about Hong Kong. Not from a political leadership perspective, but from the point of view of Hong Kong's position in the world, in Asia and in China - particularly in the post "American Crisis" era.

 Historically Hong Kong has thrived on crisis; political or economic. It was done by a mixture of entrepreneurial and practical business people with common sense, a facilitative civil service and a hard working labour force. 

 What's changed? 

 Well not a lot when you think about it. The entrepreneurs are still there, university-educated perhaps but with less of the raw gut instinct of their fathers. The civil service is still there and has the ability to perform as before, even if it does not always show the inclination to do so (due partly to the presence and pressure of a less business savvy and more banana-driven and hirsute legislature), and the workforce still seems to be largely willing to perform as hard as before. So although we, along with everyone else, who has been caught up in the "American Crisis”, have some issues, we've nothing to be concerned about long term, right?

Well, maybe we'll be lucky, but this is no time for complacency and it is pleasing to know that at least some in the business community are looking seriously at the subject. Mind you, looking, debating and agreeing are only a part of the sum; action is harder.

 I was delighted to be asked recently to give my views to a group of business people. Delighted because at this stage of career I am pleased to be asked my opinion about something - well just about anything actually.

 I used a couple of stories to illustrate the points I was making but my main thoughts from the first story, in brief, looked at:

 - the world over the next 30 years; a more interconnected, interdependent and international world. A world in which Hong Kong, despite the ties with China and the obvious synergies, must remain international in focus unless we want to become just another city in China - and a small one at that.

- whether we need to ask ourselves some basic but sensitive questions. For example have we become all too comfortable in relying largely on China? Do we realise there are markets in directions other than north? 

- Simply put, Hong Kong is where it is today because of our international focus. Because this is a city where people from different places can do business together. If we want to remain relevant to China, and the world, our internationalism cannot be left behind - unless we want to be left behind.

 In terms of the second story, the salient point was that as Hong Kong moves forward we have to increase our appeal. In the comments above, I talked about our interconnected world. In such a scenario people we need in Hong Kong will only be attracted here if our city offers them and/or their families the best lifestyle. This means being honest with ourselves. Are we sometime soon going to go beyond paying lip service to cleaning up our environment or do we expect to be able to do as little in the next 30 years as the last 30 and still have a city worth living in? Simply put, if Hong Kong hopes to compete going forward, it must be a desirable destination for both business and leisure.

 Lastly I made a few points about aggression; being aggressive in defending our turf and our reputation. There is a re-balancing taking place in world economies. We are becoming increasingly volatile in the global economy - a volatility that is being partly driven by flows of information and misinformation. But in this environment we need to consider what we must do to stay ahead of the competition. 

Once again, these trends raise some sensitive but basic questions for Hong Kong. Questions about how to best fend off the competition, to make sure we stay ahead of ALL those cities in Asia that want what Hong Kong already has? But also questions about dealing with negative perceptions transparently and promptly and aggressively protect Hong Kong's regulatory reputation.

So, a few thoughts on this Election Day but for me - and I hope for those of you who have an interest in your future, when you have an opportunity - Vote for Hong Kong.

Obituary - Farewell to Common Sense

Some time ago a friend forwarded to me an obituary. Not his in anticipation nor, happily, mine. I filed it away because I knew it would come in useful one day - as it had clearly been useful before. An obituary, lamenting the passing away of common sense. I suggest you read it before you go on.

If the structured finance crisis was not already enough to demonstrate the toxicity that a mixture of greed and insanity can bring, then surely we learnt the lesson that paying out millions of dollars in compensation to Chief Executives of institutions that had been brought to their knees was not morally acceptable; particularly to the people in those same companies who had lost their jobs. Didn't we?

Okay, so the amounts are now lower, but the headlines scream as loudly. Today's UK Daily Telegraph newspaper greeted its readers with the headline "Failed bank chief is £2m winner". This, of course, relating to the ousted head of HBOS, who has presided over the failure of a bank where, at the time of the forthcoming merger with Lloyds might see a loss of upto 40,000 jobs, according to some estimates (a little overdone, in my view). Oh - and he gets to keep a job in the new organisation!

In the meantime, across the pond, incredulity remains that a company like Lehman has gone, the folk at Bear Stearns who were rescued thank their lucky stars for achieving "first-loser" advantage, AIG were happy that they were too big to fail (insurers to the Government perhaps?), while toilet paper sellers are still doing a roaring trade around the offices of the likes of Morgan Stanley, Washington Mutual and Wachovia Bank. Everywhere across the globe, speculation is rife about the future - and now the US Government has acted to help shore up the world economies by chucking a couple of hundred billion US dollars at it!

Well, at least the markets have reacted positively today in response to this (rather late) gesture - but the British Government, in case they are uncharitably feeling a sense of schadenfreude,  can take the smile off their faces if they think they have acted expeditiously and smartly; think Northern Rock first of all, and then heed the words of an adviser to Hong Kong's Monetary Authority and to the Bank of England (now former adviser), Sir Charles Goodhart, whose view was that HBOS might have survived if the Government had acted more quickly. Back on the lap of poor old Gordon Brown - blamed again. It seems, they say, that if you meet him, make sure he doesn't wish you good luck!

But is all of this enough? Despite the market rally, have we now bottomed out in the west or is it just a temporary "happy blip" to make us feel better over the weekend? To be followed by the stark reality that on Monday morning we will still not have created any more jobs, an increasing number of people will realise they can no longer afford the rent on their swanky apartments, and the credit card repayments will continue to come under pressure.

No I do not think the world is coming to an end in financial terms, and we will muddle through eventually, but common sense not only suggests we should not live beyond our financial means. It also means that beyond finance, we should not condone (by turning a blind eye) the farce that appears to be Zimbabwe and other similar situations; that hiding behind religion - whichever one - is not an excuse for terrorism, and that many other of todays idiocies (see next blog;  "Non-Compete Clause") could be addressed appropriately by a strong dose of common sense.

Let's hope there is a cure for the apparently deceased.

River Deep, Mountain High - The "Service" Puzzle

What is it about companies that name themselves after huge natural geographic features like Amazon and Everest? Even the about to be nationalised Northern Rock might fall into the same category. Large organisations that build a decent reputation and then let it fade. A victim of success, perhaps, followed by a period of masterfully executed "hand sitting" on past glories. Or is it just a continuing acceptance of lower standards.

I regaled readers of this blog on 17 September with a string of "mishaps" and lack of communication by Amazon in "Up the Amazon (.com) Without a Paddle". To their credit, in January this year after a direct appeal to Chairman Jeff Bezos and another letter to the legal department, I received a reasonably terse note stating that they had removed the reviews to which I was objecting. It was as if they were saying, "If we say sorry, he might take us to court and sue us because we have admitted to identity theft". Despite my notes in writing that this was not what I wanted to do. Such is the level of concern today over litigation. The point is, it took over 6 months and much time-wasting to get a resolution to something that, I consider, would take rational, empowered people a month to decide upon. Anyway thank you, Amazon.com. Enough. Matter closed.

But no sooner have we navigated the Amazon, when up ahead of us looms Everest.

I honestly am not the complaining type, as a rule, but the parallels between Amazon and Everest incidents are scary. Forget the preamble about how we got into a contract with this "home improver". We did, based on a perception of product quality - and ignoring the advice of others. And that was when the trouble started. Letters from the company, resulting in emails by me to the author of the letters - totally ignored. In desperation, a letter to the Managing Director, which, unlike Amazon was actually responded to by a "Customer Relations Co-ordinator". Dates for commencement of the contract agreed; 9 days to complete the work. The workers didn't seem to turn up on nice days, and on bad weather days said it was too wet to work outside. Complaints telephoned in were - "noted". Scaffolding outside the house - creating an open invitation for aspiring burglars. More complaints, more excuses and, joy, an on-site meeting - some 20 days after the commencement of the contract. Promises that a couple of more days work would complete the project - but by now the house was going to be empty - and the scaffolding was still up - even more incentive for sharp-eyed burglars (as if they needed any!). After a further 16 days - during which time no workers came, the scaffolding still up, - and the burglars decided they were free and clear. They used the thoughtfully provided scaffolding, presumably disguised as workers if necessary, forced a window and then had enough leisure time to dismantle the alarm system and place it neatly on the floor. They then opened another window from inside the house, to provide another getaway.

Can you imagine what Everest has done since by way of response? If you said nothing, you are pretty close to the mark. The promised telephone call back? - not yet received. The faxed letter to the Managing Director? unanswered - not even by the Customer Relations Co-ordinator, who wrote somewhat hopefully in September 2007 "...we take our commitment to customer care very seriously". (And by the way, a copy of the letter is on its way by registered post so someone will have to sign for it!)

Oh well, they said that the Chinese Year of the Rat was not good for Roosters or Horses! And if the burglars happen to discover this blog, why the heck couldn't you have taken the ancient Volvo?

The rant? It all comes back to service standards and certainly to company leadership. We should be more serious about who we put in charge of companies, any company - and if there is a service provider out there named after another fabulous natural geographical phenomenon - you're not getting any business from me! It's too risky.

A Little Compassion - A Big Lesson

Some readers have been telling me that my Blog has been conspicuous by its absence lately; it’s nice to know it is missed. But given all the bad news in the markets, the poor weather, and the incessant reports on the US Primaries it was probably a good idea to stay away from adding to the negative comment. So, after accompanying Hong Kong’s Chief Executive on a trip to various Middle Eastern cities, I thought that prior to this year getting under way properly for me, at least from a working sense, (in other words after Chinese New Year), I would take the opportunity to do something I had not done before.
It was an important and intensely personal item on my agenda. A visit to my Father’s grave in Mombasa.
Kenya, of course is suffering from internal strife at present, although there was precious little sign of it in Mombasa, or indeed in Nairobi as we passed through, but that is not to say that problems do not exist elsewhere in the country, However, it was in Mombasa that I came across a young man whose attitude to life, and particularly to religion – which seems to be behind many of today’s more troublesome issues - was so refreshingly uncomplicated, it got me thinking.
His name is Sulaiman, and if you deduce from the name that Sulaiman is a Muslim you would be absolutely correct. But, if you took the train of thought to its logical conclusion that Sulaiman came from a Muslin family you would only be 50% correct. You see, Sulaiman’s Father was a Muslim, but his Mother was a Christian and the parents took a rather unique view of the upbringing of their children. The first-born was brought up a Christian, the second-born a Muslim – and so on – through all 13 children. One Father and one Mother.
Sulaiman is a fully practicing Muslim. He prays five times a day, he fasts during Ramadhan, he does not touch alcohol – but he also goes to Church on Sundays, only partly I suspect because he admitted to really enjoying singing the hymns. The thing is, Sulaiman sees nothing really contradictory in any of this. He explains that, at the end of the day, if there is one God it doesn’t actually matter what name you give Him.
It might help the world in general if there were more “Sulaimans” around. People for whom existence is a matter of living life properly, humanely and generously – even if they have very little to give except their compassion. Even if, though desperately poor financially, they can “give the world a smile and a kind word” as Sulaiman said.
His first thoughts and words in Mombasa, as I left the War Graves Cemetery, were words of comfort. Thank you Sulaiman. I wish there were more like you.

Korea - Land of the Morning Calm

The western nickname for Korea has not proven so true in my house for the last couple of days, where my telephone has been ringing off the hook, ever since President-elect Lee Myung-bak announced my appointment as co-chairman of the special committee on National Competitiveness. It seems it is the first time a foreigner has been appointed to such a role, and let's not be coy, I am both flattered and honoured (not to mentioned somewhat amazed).

There will be many who ask why I agreed to take this on, and you may be sure that I asked myself the same question. I did not seek the role, and there is no compulsion for me to do so. I owe nobody anything, and I am beholden to no-one. I was rather amused, in fact, by a suggestion reported in the UK newswire Times Online that I might be able to influence the Korean regulators to approve an application from my former employer who wishes to invest in a Korean bank. It only goes to show that the commentators don't know me at all, and the comment from the regulator who said I would not influence them was absolutely right; I wouldn't dream of even trying. The piece, under the byline of Andrew Salmon suggested that I was "unavailable for comment". I think, on reflection, that about the only journalist from Korea who didn't call me yesterday was Andrew Salmon.

So, for those good people who swamped my blog site yesterday - and look like doing the same today - here are some facts (that might also correct some of those in the Times Online's rather inaccurate "potted" CV).

I am a career banker, who started out in 1964, left Britain in 1968 and who has worked and lived in a variety of Middle East countries as well as Hong Kong and Malaysia. I have been traveling globally on business since the late 1980s, and first started visiting Korea regularly from about 1992. I retired from the HSBC Group over two and a half years ago after an association of 37 years. I believe it was a mutually satisfactory relationship, but since leaving them I have got on with my life and have no association with them other than some shares and some friends. I live in Hong Kong.

I am independent, and always have been, sometimes to the dismay of others who wished I was more "flexible". I believe in fair play and get easily irritated by bullies (and by companies like Amazon.com who still refuse to answer my letters on identity theft (mine) - even though I have sent the recent letters earlier this month by registered mail - see "Up the Amazon (.com) Without a Paddle" posted 17 September 2007).

I first got to know President-elect Lee Myung-bak when I chaired the Seoul International Business Advisory Council (SIBAC). I found him to be a man with drive and vision. His views on creating Cheonggyecheon were being criticised by many people, it seemed, but having lived through some of the disruptions caused in Hong Kong by the creation of the Mass Transit Railway, I could see that there was a long term benefit to be gained by short term inconvenience. I believe that today the benefits of Cheonggyecheon are plain for all to see, and I expect Mr Lee has not finished yet.

I have no illusions (or delusions) of "guruhood". I am conscious that I am a foreigner with a remit to suggest ways in which Korea might become a more "acceptable" destination for foreign direct investment. Korea itself has to determine if this is what it wants. I have no magic, no crystal ball, but I hope I bring a degree of openness and objective thinking with no pre-conceived ideas or bias to a country with potential that in my view should be realised.

"Sorry to Keep you Waiting" (well, not really!)

Why is it, do you think, that those in authority or holding senior positions in newly emerging economies have so little regard for arranging or keeping to appointments?

Heads of companies, potential investors and other ultimate decision makers are usually willing to make long journeys to meet with their counterparts in these economies. They will do so partly as a matter of respect and courtesy, but particularly to indicate how serious they are about entering into relationships which they believe will have long term beneficial implications for both sides. But they soon get put off when they discover how difficult it is to arrange appointments even well in advance, or worse, hear of stories that even if you do get an appointment it is quite likely to be changed (even by days) or you will be asked to see someone else. (Unless, it seems, you are prepared to pay a fee for ensuring the meeting goes ahead - and this I would neither encourage nor condone). Other than being just downright rude, it will serve no useful purpose if potential business is lost in this way. Just because a country is doing well today does not mean it will always do well, and that is when "friends" become really important. Perhaps it's time that "Business Etiquette" was taught not just at the schools but also to Governments.

"Go West, Young Man" - Hmm, no thanks...

The mid 19th century exhortation, by which generations of Americans moved across the country from their eastern seaboard arrival point to the west is now only valid from that country if they keep on going... (and of course you can't just say "young man" any more in deference to political correctness by gender - which in this case is fine by me, even if we have gone totally overboard in other instances!).
I started this week talking about globalisation in Korea and finished the week in Shanghai talking to a UK company which is contemplating a serious move into China, in a great cosmoplitan bar on the Bund, the Glamour Bar owned by Hong Kong based Australian friend Michelle Garnaut, where the clientele was a real mixture of nationalities, followed the next morning by visits to a variety of buildings and sites on behalf of some Middle Eastern investors. This is economic globalisation.
If that wasn't enough globalisation for one week, the only member of my immediate family not in China at the end of the week was my wife. Our eldest son (Hong Kong based with an ability to comunicate in Mandarin and Spanish) is embarking for the second year running on some crazy 250km run across the Gobi Desert , with part of the idea being to raise money for charity, (more donations welcome). Our second son (fluent in Mandarin and with good Spanish) continues to work in Marketing and PR in Beijing for a British school and get involved in music as much as he can, and our daughter ( fluent in Spanish and Portuguese) is in Shanghai for a long weekend visiting school and University friends (nearly all of whom are good in Chinese) who have gravitated to Shanghai.
Did I have anything to do with the fact that they and their friends are "global?" Other than having provided a "global" life for them (well, only our children, not the others!) which was perhaps not always easy for them, they have all independently decided that the future lies in the East (or perhaps in our daughter's case, Latin America eventually...but not yet).
I don't need to look any further than my own family and friends to recognise that social globalisation anyway, is already an accepted way of life. Our friends, and the friends of our children are similar to us, if not ethnically at least in thought. It's a start - and it's now "Go East...young person", (of course).

Shanghai - and for my next trick?

A few weeks ago on one of my regular visits to Shanghai, I saw an old friend who I first met in 1988 when we were both attending an MIT Senior Management Programme. We kept in touch for a while, but then our respective duties grew to the extent that we had little time for social correspondence. My loss, really. The gentleman in question, an official with the Shanghai Municipal Government, eventually became a Vice Mayor - but was given the responsibility for the development of Pudong; the swamp land that has become the financial hub of Shanghai - probably of China - today. Despite his achievements he remains a modest man and, perhaps unusually in China today, is still formally active in his mid 70s, (and a much more fluent speaker of English than I recall). Talent...out of the old school.
Last night, having dinner in a restaurant located in a building on the Bund that once housed the offices of the Chartered Bank of India, China, and Australia (the forerunner of today's Standard Chartered Bank), I was looking across the Whampoa at the handiwork of my friend, and couldn't help but think about the Shanghai of the 1920s (and no, despite comments to the contrary I was not here at the time), the Shanghai of the 50s and 60s, and the Shanghai of today. What contrasts the city has seen, and what lessons should we take forward from this history.
I think you would come to the conclusion that for a city to be successful it never loses sight entirely of the past, (otherwise it would have knocked down its old buildings, especially on the Bund), it always believes it has a future and plans ahead, (and every city has the people who do this, even if the doctrines of the time were not always encouraging), and it uses the best people it has to realise the dream. Funny, it always comes back to people as the common denominator.
Shanghai has almost come full circle. In terms of Asia it is, today, a City of Life. The only problem it needs to consider is how to sustain its momentum...so, as a magician would say "For my next trick..."