Click to listen to the audio version of this Daily Paradox.

When high standards are accompanied by GUSTO something that is excellent becomes great. Playing last night in the Singapore Arts Festival at the Esplanade, Singapore – now one of the world’s top concert halls – the Academy of Ancient Music cleverly featured the Korean singer Sumi Jo to add the ingredient that performed this miracle.

The Academy are internationally famous and those who appreciate Handel, Vivaldi, Albinoni and Purcell will already know them as outstanding, unique in their class. If anyone thought that ancient music might be a bit straight-laced or conventional such misgivings were quickly dispelled by Sumi Jo. With a voice potentially mirroring that of Kathleen Battle and a wardrobe to enchantingly upstage even the royalist of princesses, Sumi Jo brought to the performance a breath of fresh air and a touch of humanity that lifted the hearts of all those who heard her.

What is it that turns excellent into great?

The ingredients must be there, of course, in full. Like all great performances the preparation, the practicing, the hours of hard and often lonely work, all must be experienced if the pinnacle of performance is ever to be achieved. The Academy has been demonstrating these characteristics for years.

However, peak performance only becomes heavenly when those playing transmit to their audience a light touch of genius, a rapport that stirs the feelings of joy to the point of tears. Whether the pieces are popular or little-known there is one additional spice that completes the magic for performer and audience alike. I call it GUSTO.

Enthusiasm is the basis on which determination is built and enthusiasm itself is generated by encouragement. An attentive, respectful and fully committed audience is a good start for any performer – artistic, commercial, political or social. But there is something more than enthusiasm, something that manifests itself in sheer delight.

GUSTO is not a heavy-handed application of the rules; it does not come from age or from youth, from innocence or from experience. It comes from rapport, from being able to read the other person – or, in this case, the audience – and sense the mood. Its embryo is in self-deprecating laughter, in not taking ourselves too seriously, in being able to laugh with our audience.

It turns a smile of affection into a laugh of love and a performance of beautiful music into something we will never forget. Thank you, Academy, and thank you Sumi Jo. A combination made in heaven. No wonder the angels are singing.

Click to listen to the audio version of this Daily Paradox.

Why is the sinking of two small islands in the Gulf of Mannar, between India and Sri Lanka, so important to us all?

The islands are part of South Asia’s first marine biosphere reserve and their demise has been caused mainly by coral reef mining. Environmental protection laws have been in force for nearly a decade; they do not seem to have worked in this case. The area is home to many marine species; even more importantly it is the source of livelihood for more than 300,000 fishermen.

Like the problems of illegal logging and ‘slash and burn’ farming, this is not simply a case of better policing being needed, it is about the root cause – a still expanding world population in need of food, water, air and livelihood. A population moreover that has learnt to expect some of the good things of life because they can see them on the internet. Are we to deny the locals their right to earn a living? Must we police them into starvation?

A broader perspective to this problem is provided by the current standards of making utility and software products to satisfy our burgeoning requirement for refrigerators, freezers, new computer-type technology, home hardware and for all the aids to life that with only modest levels of safety can pass the consumer-usability test.

Built-in redundancy of such products is now standard and shortly after their warranties expire they will likely need repairs so costly that a new model is cheaper. Demanding better quality and longer warranties threatens the earnings of millions of Chinese, Indians and others.

Mass production bought benefits to many but it also bought built-in redundancy. If, as a manufacturer, I have the option to sell something either once or twice in a two year period I do not have to think hard about my decision. Unless, that is, I am taxed on resource use. To achieve this, resources must of right be partly owned by the people at large. Does this suggest wide-scale nationalization? Certainly not. It demands that extraction, pollution and the use of finite resources should yield taxes for the benefit of those whose earnings will be reduced by the existence of the taxes themselves.

In that way we may return to a society more concerned with conservation and longevity of the planet and stop the Gadarene rush to self-destruction. If we do not have an internationally agreed and monitored system of this sort we shall suffer sooner rather than later.

Click to listen to the audio version of this Daily Paradox.

From responses to The Daily Paradox and from other anecdotal research it is clear that many people want greater transparency in the dealings of organisations that interact with the public. I am an advocate of this, too. In fact, several readers thought my suggestions about insider trading (12May11) worth examining further.

There is broad acceptance, as well, that the lives of celebrities should be available online. ‘If you accept the fame you must put up with the pain’. Sometimes it is amusing, too; Newt Gingrich’s giving all “for America” had to make you laugh.

What about when it comes to displaying photographs of the dead, whether they are terrorists or victims? The White House has agonized for a week about the Bin Laden pictures and come up with a ‘monitor’ solution – specified highly regarded people shall see them, you and I shall not. Meanwhile, Mohamed Al Fayad has, in my opinion rather brutally, financed a film about the death of Princess Diana.

The issues at stake are a mixture of personal rights, effectiveness, legitimate public interest and style. Even widely accepted porn is still generally felt to be properly accessed only in private and by those beyond the age at which it might corrupt them for life. Other than the young, it is felt, nobody is vulnerable enough to need protection from it. Possibly a strange view when you consider the lengths to which we go in some parts of the world to protect human rights. Do any of us have a right to innocence any longer?

‘Expose the corrupt and you will reduce corruption’ may be true. ‘Expose the corrupt and you will corrupt more people’ may equally be so. Where is the balance?

It is sad that in the 21^st Century we have lost so much of the style associated with the Edwardian and Victorian eras. It was, of course, accompanied by much hypocrisy and cant but a rough piece of plywood needs a veneer of rosewood to make an attractive table – and society is a rough-hewn concept. We need to know how furniture is made but we don’t have to be reminded of it every time we sit down to a meal.

Life is a stage and where there is a stage there is also behind the scenes. That place should be available for investigation but perhaps not indiscriminately publicized. ‘Backstage there be spiders’ as I have often said.

The test for me is whether what I am learning helps me to make the world a better place. If my subsequent actions confirm that it does, then I think it is useful. If all I get out of it is stimulus to my less desirable instincts I doubt its value.

The debate will continue for a long time. I do not offer a solution, merely the chance to reflect over the weekend what prurient muck-raking does to improve our lives and whether, once dead, we should, perhaps, be allowed to rest in peace.

Click to listen to the audio version of this Daily Paradox.

So Ben Bernanke has chosen Friday 13^th to wave a threat over the stability of the US dollar and warn of catastrophic consequences if Congress continues to use the checks and balances system of US politics as a forum for political decisions. Sounds astonishing? It is – but that is exactly what he is saying, in summary. Moreover, he may well be right.

Whether he is or not, the impasse over US Government spending limits and the dangers it implies for the rest of the world’s economy suggests that something is wrong with the system. It is not the US political system. We might prefer collegial to confrontational politics but the human race is still some way off understanding responsible cooperation – the number of armed conflicts in play at present confirms that.

A country’s right to use its currency as it sees fit is still considered inalienable but when that currency becomes too strong, as with the Yuan, or when it is regarded as a Reserve Currency, as with the US dollar, common sense must be brought into play. What is happening is that the world’s economy has become international, the world’s politics are tottering towards internationalization, through the UN, NATO, ASEAN and many worldwide bodies, but the world’s currencies are stuck in parochialism.

The volatility of the major currencies and the rise in the price of gold and other commodities is in part traceable to uncertainty about the durability of currencies. The concern was greatly increased when the major currencies started printing trillions of dollars that were not backed by any substance. Money is a symbol of goods and services. If you have not got the goods and services the money is worthless. Hence the escalating worldwide inflation.

Does this mean that we should have an international currency? If the experience of the Euro is to answer that, definitely not. The Euro is holding together under great pressure and only because of the IMF’s ability to bail out faltering economies such as Greece. When it does so it becomes economic policeman substantially in charge of that economy until it recovers.

If there were an easy answer to these questions it would already have been found and implemented. Money as a concept is fine but our use of it and of the way it can be manipulated into excessive debt is disgraceful. It will cause much hardship and distress in the years to come. We must work out an international financial system that doesn’t allow countries and institutions to become “too big to fail” or the whole system will eventually fail with immense suffering and loss of life.

The good news is that it won’t happen this Friday 13^th.

Click to listen to the audio version of this Daily Paradox.

So the head of the Galleon Group Hedge Fund, has been found guilty of insider trading which brought him a profit of US$60M. Sentence is awaited. There are claims that insider trading is “rampant” on Wall Street. Not only there, I suspect.

Nobody wants the market mechanism, as exemplified by the open and fair auction, to be circumvented to the advantage of a few and the disadvantage of the majority. We’d like to have a level playing field when making our investments.

But the only truly level playing field in the world is in games of pure chance where observation, education and intelligence play no part at all. So the nature of a market is that somebody is going to be “inside” anyway, even if it is only because of the education, IQ or alertness of the person whose judgement decides when and what to buy and sell.

Look at it this way. If I gamble on race horses every day I will get more proficient at it. I will therefore become an insider. If I have a friendly groom in a top stable as well I will be even better informed, outwitting other gamblers. I will certainly be “inside” then.

So is the person who reads all the investment tips from all the available media “inside”?  Nobody else has the time to do that so it must be inside or unfair. But that is published data, available to all so judged not to be inside. On the other hand a call from someone who has access to the accounts of a company that has done especially well or particularly badly is definitely inside.

The difficulty is, where do you draw the line?

I think that you can never stop insider trading and that the effort put into prosecuting what must be the tip of the iceberg should be devoted to promoting transparency. Instead of trying to define what is and what is not “inside” why not try to make all information available as soon possible. Where there is no secrecy there can be no “insider”.

A study is needed to determine how effective this approach might be. To make it successful depends, if you like, on insider trading being promoted, not forbidden. The faster the inside information gets out the less adverse impact it can have. There will still be insiders but they will be inside for such a short time that their impact on the market will be minimal. If there were total transparency there would be no insiders at all.

Of course, if the objective is to stop anyone making money on the Stock Exchange it is doomed from the start. Speculation is at the heart of capitalism; we cannot have it and condemn it at the same time.

Click to listen to the audio version of this Daily Paradox.

Microsoft may or may not be your favourite supplier. As the statement implies, it is not mine. Whatever your feelings about this behemoth you have to worry about the concentration of so much control into the hands of so few giants. Recent events at Sony suggest that assurances of privacy are not always reliable. Oligopolistic banks, petrol suppliers price rings, soft drinks companies back-scratching arrangements, all seem to have left us numbed to the rising centres of power in both information and clout.

Skype has served us well, I think. At least they seek feedback, they seem to develop their service with the customer in mind – something quite novel for many of the oligopolies – and they have always been responsive when I have needed them to be. Will this old-fashioned understanding of service persist under the new master?

The signs are not encouraging. A price that is clearly unrelated to the current apparently sustainable profits implies a need to recoup the high cost. Do you see significantly increased charges in the future? I do.

None of us minds paying reasonably for what we need if it is delivered in timely and sensible fashion. We resent paying for excessive gismos that 99% of us will neither understand nor use. We rail against the imposition of incomprehensible terms and conditions – interesting that you do not even have to print them today; good enough to say that they exist. Once stated, that lets you, the supplier, charge anything you want. Terms and conditions are largely invented as they go along.

Consumers have too little say when a deal such as the Skype / Microsoft proposal is on the table. Sure there will eventually be competitors to challenge excessive exploitation but that takes time and prodigious amounts of capital. Meanwhile, the consumer is left to fight the disruption, complex terms and rising prices when all s/he wants is to make a phone call.

Time to get onto the social media and express concern. It’s the only weapon we have but it is a powerful one. Message for Microsoft – well, you write it. I certainly will.

Click to listen to the audio version of this Daily Paradox.

Giving by businesses is at the heart of Corporate Social Responsibility (CSR). We all know that while what you give is important, how you give is equally important. The “teach-a-man-to-fish” analogy is universally accepted. On the other hand “the payoff” is a nasty term for a nasty practice, for gangsters not civilized behaviour.

Nobody doubts that CSR benefits the community. We do not question the need for a more socially responsible world. We must therefore resolve the tug of war between business responsibility to maximize profits and the generosity of good neighborliness.

The difficulty is that Corporations have no more sense of responsibility than lampposts, only individuals within corporations do. So who in a company do you make the arbiter of what is given, to whom and how? If you ask the treasurer it will be very little and most likely with postdated cheques. If you make Public Relations responsible they will be seeking to mitigate the issues that have dogged the organisation’s reputation. Sales will be looking for the biggest return for the buck.

In fact, each department of a business will, understandably, react by responding to its commercial remit. There is, of course, everything right with a business benefitting from its giving but reward to the giver is not a good basis for generosity. Equally, the considerations of the business cannot be ignored.

In every business there is a group of senior people nearing retirement and recently retired. They probably own shares; they will have some financial stability and security; they have acquired a little wisdom on the way up. Let us call them the Senate.

These are the ideal people to recommend the amounts involved and to decide how they shall be used. A group of four or maximum five, two of whom should be recently retired, changing yearly by the addition and retirement of one to and one from the group will ensure that they do not get stuck in a rut.

Their remit? To make use of some of the organisation’s money so that individual beneficiaries grow and flourish. The members of the Senate will be personally responsible for the funds, will describe their deployment in a section of the organisation’s Annual Report and will take an active part in how the funds are used.

If they do this proactively and with real involvement they will become Mentors.

Click to listen to the audio version of this Daily Paradox.

Paul McCartney is to embark on his third marriage. Good for him and Nancy Shevell. Life at 68 has much to offer – and at 78, 88 and 98 as I learn all the time from many enthusiastic Mentees who want another slice before they go to rest. It seems that defeat is, for many, merely another spur to get out of bed early and make the new day better than the previous one.

The human spirit can be indomitable. Failed business, serious incapacity from illness, disastrous marriages, even painful traffic accidents do not stop us from having another go.

What is it that drives us to try, try, try again? Robert Bruce said “Whether doing suffering or forbearing, you may do miracles by persevering”. All my life I have carried that quote in my wallet, referring to it not just for myself but for others, too. It is fundamental to anyone who wants to succeed, even more important for those who think they want to give up.

What is it that separates aspiration from fact? What triumph of hope over experience endorses second marriages? What belief that the next idea is the one to conquer the world?

For all the doom and gloom we lap up from the media, the human being is an adaptable optimist. No amount of discouragement will make us believe that tomorrow is anything other than better. Every new enterprise, each budding friendship promises a sunnier time ahead.

What about those who do not feel the same way? What of the many millions whose accident of birth let them down? How are they to celebrate a life that starts with little, demands much and rewards so sparsely?

There is a well-known saying that it is more blessed to give than to receive and nobody would deny that. I would like to propose an additional thought that it is more blessed to receive graciously than to give grudgingly. For sharing the gifts of joy, enthusiasm and happiness is something we can all do by helping others find their Tree on the other side of the Field.

Such help can return to the world infinitely more than financial giving alone. I’ll discuss this in the context of CSR in a Voicemail soon.

Whoever we have to thank for unwarranted optimism, please keep telling us of the impending sunrise. It’s a wondrous thing and I hope someone who hasn’t inherited such enthusiasm will catch a little of it.

Click to listen to the audio version of this Daily Paradox.

Speculation is described either as shrewd, entrepreneurial forecasting or as rampant exploitation, depending on whether you win or lose by it. You can use either description to explain the recent rapid rise in commodity prices – so rapid that it is now being described as another bubble.

Markets are there to establish prices. The point at which a seller and a buyer agree a price is when the market has established equilibrium between the two adversarial objectives of maximizing income and minimizing expense. So far so obvious.

The issue is about forecasting and how we do it. We are herd creatures, given to a sense of what is fashionable and instinctively inclined to follow the majority. I am told that it was less than ten hours from her appearance at the door of Westminster Abbey to the moment at which copies of Kate’s dress were on sale in the shops. There’s influence for you, but there, also, is the herd instinct.

We forecast by observing, by asking, by receiving other people’s views, by pondering and by spinning a coin. The last of these methods seldom works.

Surprisingly few people observe well. Lives have been made safe and comfortable and this reduces alertness, the foundation of good observation. We can learn to observe better.

Asking questions is sometimes seen as an admission of ignorance which is why people are often reluctant to do so. We can be taught to ask questions. Seeking other people’s views is easy – the tricky part is knowing which views are expressed in your interest and which in the interest of the person giving the view. Best to assume that all other views are from the agenda of the view-giver and not from yours. The old adage of “buyer beware” is as relevant today as it was in the Middle Ages. This is especially true of financial products and services.

Toughest of all is ‘pondering’, a mix of analysis, commonsense, experience and creativity. Best done in a measured way but with some pressure of time, good pondering produces the best solution to any problem, financial, social, economic or political. Britain has just pondered about its voting system and reached a conclusion which I personally think is good. But then, it is on my agenda.

How is your pondering? Is it an area in which you could improve the quality and success of your business, career and life?

Have a good ponder about that over the weekend.

Click to listen to the audio version of this Daily Paradox.

There are good KPIs and bad KPIs but unfortunately most bosses think all KPIs are good. The assassination of a serious terrorist is self-evidently a good KPI. A bad KPI happened when the British National Health Service was ordered to reduce A&E waiting time from 4+ hours to 20 minutes. They achieved it by appointing “Auxiliary” Nurses who greeted you – and your broken arm or bleeding nose – smiled, took your name and then left you to wait for 4+ hours. But you were not “waiting” because you had been “seen”.

The local head of an international Bank told me that he had met the new CEO of the whole bank who had told him that his objective was a greatly enhanced bottom line regardless of how it was done. A bad KPI because the CEO had forgotten what banks are for – to serve customers. A novel idea for 2011?

The KPI argument is partly a contest between short term and longer term and principally about two things: [a] do we want the planet and the human race to survive – and that includes, of course, our families? [b] do we want a fulfilled life or a tortured life? The choice is ours and there would seem to be no contest.

So why, in practice, is there such a non-stop contest?

The answer is that if we believe that the immediate satisfaction of greed is a life sustaining and fulfilling way of carrying on, that is what will happen. The human race will gradually destroy itself and any future sentient beings will regard us as abominable.

When a KPI is largely decided by the person who is going to deliver it, it can be excellent because people set themselves tougher targets than their boss would ever dare. That depends, of course, on the environment in which they work being dedicated to self-realisation and personal responsibility rather than enslavement.

The key to successful use of KPIs is to test each one with the following questions, before they are set:

Is there a better way of motivating this person or team than threatening them? Make no mistake, a KPI is a threat. If your P isn’t I’d the K will be turned against you.

What are the ways round achieving this KPI – as per the National Health Service example mentioned?

What are consequences of achieving this KPI? Winning a small battle is not worth while if it precipitates a world war.

If I was given a KPI like this would I be happy or hopping mad?

The day of the KPI as a panacea is dead. Used sensibly it still has a place but let’s find a way of making it Socially Responsible and Sustainable and not just a race to the trough.