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Putting a global strategy together
Putting a global strategy together
Management gurus tend to become very muddled when they try to bring together the local decisions which every manager has to make and the global strategy into which they must fit. The old adage of "Think Global, Act Local" and its many different permutations no longer really works.
Partly this is because the world is, as always happens, changing rapidly. But it is also because the nature of the present change puts a barrier between managers and their anticipation of market changes. The whole eCommerce revolution has tended to paralyse managers. They know that far-reaching decisions have to be taken. But they do not feel that they have quite grasped all the implications yet. So decision making is hesitant. They have half an eye on their local decision making and half an eye on what they see unfolding around the world.
And that dilemma is what this issue of Balance Sheet is designed to alleviate. We start with Richard Cookson, our thoughtful columnist from The Economist. In what is likely to be an influential article he takes a look at the well-meaning ways in which banking regulators have tried to make the world a safer place. And then he looks at the results both now and in the future. He doesn't like what he sees. As so often happens, the tinkering with the rules creates outcomes which are far from what was intended.
Then Denzil Stirk of Arthur Andersen gets to work in some detail on the latest state of the proposals from Basel and provides some insights into what asset-backed securities investors can expect in the months ahead.
But we have to allow the central banks their say as well. So Patricia Jackson and David Lodge of the Bank of England take us through the argument behind the draft proposals recently issued by the Bank in its efforts to bring an element of fair value accounting to the world of financial instruments. This is likely to be a battleground for years to come and their analysis is an excellent starting-point for any debate.
Part of the problem with the whole e-commerce debate is the lack of sound understanding of what is actually happening. Arthur Andersen's recent survey of the likely impact of how eBusiness-to-Business changes will impact the financial services industry is a comprehensive overview of the realities and Russell Collins provides a handy guide to both the survey and the consequences that its findings are likely to have.
In the world of risk management the ground is perpetually shifting. Bruce McCuaig provides a persuasive case for the idea that the way forward has to be through some form of demand-driven assurance while Yen Yee Chong, one of the most prolific pundits around, draws some lessons from case studies from around the world showing the impact of e-commerce on risk management.
Then we look to Mark Haynes Daniell for further advice. In the second of two exclusive extracts from his influential bestseller, World of Risk: Next Generation Strategy for a Volatile Era, we concentrate on the case study side of his work. He spotlights some of the winners and the losers and explains what went right. And what went wrong.
But in the end it is all down to personal experience in the risk management world. The lessons learned are the valuable ones. So we close with a thoughtful piece from Vicky Kubitscheck. She draws on her extensive experience and thinking to put together a cogent case for using risk management as a discipline for creating added-value within financial services businesses.
In the end it does come down to that: the global may seem hard to grasp. But all strategies have to make sense on your own terms if they are going to work.