Rok: Another one bites the dust…


Of course it is sad when, yet another UK firm, that for so long was a real success story, collapses. When I read this it triggered a memory regarding worse than anticipated results and the suspension of a Director. The CFO who had been there for over 5 years.

This happened in August and it struck me at the time how our Ontospace technology would have helped a company like this identify emergent issues rather than to have to wait for the numbers to tell them it was too late. Little did I know that “it would come to this”.

We can’t tell the future but we can let a company establish how “fit” they are and, through complexity analysis, identify (otherwise) hidden areas of weakness within the organisation that may be worked upon BEFORE the cause irreparable damage.

Building firm Rok set to enter administration

Rok specialises in maintenance and employs more than 2,000 people across the UK Rok, the Exeter-based building services company, has said it is to place itself into administration.

In August, the company – which employs more than 2,000 trades people – reported a £3.8m loss for the first half of the year

Just one week before the results, the group said it had uncovered "serious failings" in financial and operational controls.

I am not suggesting that we possess the solution to business woes in such turbulent financial times but, as BBC reported at the time, there were “serious failings” in their “financial controls”. If a business has the ability to monitor its current financial health (structural robustness) in an objective and transparent manner they possess the ability to manage that proactively.

Otherwise managing the finances falls to those suitably qualified to do so and, for a variety of reasons, they don’t always get it right. It should never require an “independent review” to unearth issues related to the financial well-being of an organisation. Are we to believe that the CFO operated unchecked? I am not suggesting anything improper but, at best, there has been failure at the highest level within the Company.

You may find this blog post from July relevant and of interest. There are also some good links on there:

If “Risk Leaders” don’t know…how can their bankers and insurers?

 

“Running a company based on just the financials is like driving a car by only looking at the rear view mirror!”

With Ontospace we are able to map internal operational interdependencies and effectiveness as well as external supply chain robustness. We can provide the same in depth analysis and, if required, real-time monitoring of critical operations or processes.

COMPLEXITY is not an imaginary foe dreamt up just to make life more difficult than it already is for modern business. It is the inevitable consequence of the advancements we have made. We view a business as the dynamic (non-linear) complex “system” that it is and needs to be.

 

“Is seeing believing?”: Not when it comes to the deficit


I watched a very interesting programme on BBC2 last night. Horizon: Is seeing believing? It dealt with a variety of optical illusions and investigated how our brain and senses work. Available on BBC iplayer for 7 days. Definitely worth a look.

But, what they didn’t explore is the need for a 6th, maybe even 7th sense to help us see the truth through the smoke and mirrors created by our Political leaders and their “brother bankers”!

When I woke up yesterday I did so to this news:

In a letter in tomorrow’s Daily Telegraph, 35 business leaders say they “would encourage George Osborne and the Government to press ahead with his plans to reduce the deficit”. They add that it would be a “mistake” to water down or delay the deficit reduction plan.

Well they would wouldn’t they! That way WE carry the can and they get some “insulation”.

NOW I am not blind to the fact that we are in a hole. Nor the pressing need to take pretty drastic steps to tackle it. What I have a problem with is how many times do the ordinary citizens of UK have to pay?

(1) The banks had our money. Leveraged it, gambled it and lost it.

(2) So WE bailed them out. We kept our debt, paid theirs and got what?

Now they are returning to profit -. Nice big bonuses all round “HURRAH”…

…but how?

(3)CITIZENS: That’s right, by overcharging the (already, two time losers) to continue to use their facilities. I hesitate to call them services as this in some way infers that we are viewed as customers when really all that we are is a series of numbers whose indebtedness is a satisfactory substitute for loyalty (which is much more costly!)

SME (the backbone of our economy): Even the BBA have admitted that they haven’t been fulfilling the commitments they gave to, lend to and support , British business. That is FAILING BRITISH BUSINESS to you and me!

Vast amounts of money being printed (Quantitative Easing) to artificially maintain the market. Inflate, as in balloon or bubble so that “market value” has little or no meaning. Banks with multi billions of toxic assets that they cannot afford to see properly revalued (even spellchecker wants to replace this with devalued!) and nations whose currencies are shot.

Well at least that provides a great backdrop for “financial players” to make even greater killings on both stocks and currencies. Nice work if you have no moral fibre.

(4) Now we all have to prepare for further detail on Austerity measures. These will entail deep cuts to vital Public Services. We know that the Public sector grew “fat”  and inefficient during the Labour years – fed by the taxes created (I nearly said earned!), to a large extent by the spectacular – if ultimately unsustainable growth – of the UK Financial sector. Of course every one was happy to bask in the faux prosperity and to welcome the fact that the Public sector was better than it had been for a generation. Not much of a benchmark then!?

So the people who don’t have the luxury of one or two average salaries will feel the greatest impact and, effectively, pay some more for the greed and folly of “the elites” – I chose this phrase deliberately as it relates to other recent blogs covering COMPLEX SOCIETIES from history and “words of wisdom” from eminent Sociologist, Ulrich Beck.

Do yourself a favour and take a look at this video that, whilst I wouldn’t say I endorse every aspect of it, I think gives everyone the opportunity to understand about Austerity and be entertained in the process.

Best of all it’s not my fault – so I don’t have to say sorry – just point in the direction of somebody else. Like they, with all their City connections, didn’t know what was happening and were too weak to do what an opposition party is supposed to!!!

How long before the, justified, feelings of anger, disgust and injustice manifest themselves as strikes and civil unrest?

How much will that cost the economy?

Of course “they” don’t know because they haven’t thought that far ahead. It doesn’t fit with the culture that got us here in the first place. Results, quick return or early payoff. If I get it right I win…who cares who loses!

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Why (and how) the U.S. Has Launched a New Financial World War


BEIJING - OCTOBER 29:  Chinese and American na...

Image by Getty Images via @daylife

Any, reasonably well informed and right-minded person must have been wondering just what the hell has been going on with the money being pumped into the financial system and continuing to “disappear”!?

The article, from which this extract is taken can be found here. It MAY answer some pretty obvious questions…and pose plenty of new ones!

Finance is the new form of warfare – without the expense of a military overhead and an occupation against unwilling hosts. It is a competition in credit creation to buy foreign resources, real estate, public and privatized infrastructure, bonds and corporate stock ownership. Who needs an army when you can obtain the usual objective (monetary wealth and asset appropriation) simply by financial means? All that is required is for central banks to accept dollar credit of depreciating international value in payment for local assets.

Victory promises to go to whatever economy’s banking system can create the most credit, using an army of computer keyboards to appropriate the world’s resources. The key is to persuade foreign central banks to accept this electronic credit.

 

The Author: Michael Hudson is a former Wall Street economist. A Distinguished Research Professor at University of Missouri, Kansas City (UMKC), he is the author of many books, including Super Imperialism: The Economic Strategy of American Empire(new ed., Pluto Press, 2002) and Trade, Development and Foreign Debt: A History of Theories of Polarization v. Convergence in the World Economy. He can be reached via his website, mh@michael-hudson.com

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