Late last year, for one night only, fans of the musical The Lion King were turned away from the Lyceum theatre in London’s West End. If they had been able to peer inside at the stage they would have witnessed not Simba, dancers in multicoloured costumes and “The Circle of Life” but a solitary, slender 45-year-old Canadian with bouffant hair standing behind a lectern. There were no props, apart from the video screen relaying his image around the huge auditorium, but this didn’t bother the youngish crowd who had bought 4,000 tickets at around £20 a piece to listen to one of two consecutive performances.
The speaker was the influential journalist, author and ideas entrepreneur Malcolm Gladwell, in town to promote his latest book, Outliers: The Story of Success. But this wasn’t a book reading or a Q&A session of the kind authors traditionally submit to. Neither was it a slide show, as you might expect to find at a lecture. Instead, the author recounted a single vignette from the book – the tale of why a plane ended up crashing, from the perspective of the pilots and those in the control tower – and burnished it into a narrative with all the chill and pace of a traditional ghost story. Even the lighting was kept deliberately low to create the right atmosphere. The performance lasted precisely an hour and five minutes, and no questions were invited after Gladwell had finished speaking. Rather than a talk about a book, it looked more like a carefully choreographed stage show.
Lunch with the FT: Sir Simon Rattle
attle found the criticism painful. Popping another tomato in his mouth, he lets slip that the reason Lunch with the FT took so long to arrange – more than a year – was that he was stung by what I had written. “That’s why I avoided speaking to you.”
. . .
But last year his Berlin contract was extended to 2018 – an impressive vote of confidence from an orchestra that, unusually, is entirely self-governing while receiving most of its funds from the state. And a visit to the London Proms revealed a man who had matured and mellowed. He had finally begun to learn German. He still struggles to speak it (“anyone less linguistically gifted than me is hard to imagine”, he confesses), but by attempting to do so he had broken an important psychological barrier. His podium gestures were as jubilant as ever, but his Brahms had acquired unmistakable depth.
Sitting across the lunch table, I begin to understand why. Rattle is settling into comfortable middle age. The blue T-shirt may advertise a man still young at heart but the curls are white and thinning. Yesterday’s boy wonder is now older than most of his orchestra. He has begun to slow down, to be slightly less sensitive to criticism.
But there’s another factor at work. Rattle has made his home in Berlin, something not even Herbert von Karajan, his most illustrious predecessor, had done. He lives in one of the city’s leafy quarters and is often seen doing the family shopping in its open-air markets. It’s as if he has gone native. So what has he learned about the Germans?
“People are more subtle and complicated than they are made out to be,” he answers, pouring some of the red wine he has brought outside. Does this mean Germans are not the humourless caricature peddled by England’s tabloid newspapers? Rattle sighs. It wasn’t until his late twenties, he says, after discussing the horrors of the Nazi era with Viennese conductor Rudolf Schwarz, a Belsen survivor who resumed his career in Birmingham after the war, that he became aware of the complexities of national identity.
Who Switched the Playbooks
When I was starting up in China, many experts cautioned me on what I would encounter. “It’s not a free market and there’s no rule of law, they told me. “The government controls the courts, the companies and the banks. Central planners in Beijing, not the marketplace, decide what goods to produce and which companies should produce them.”
“Decisions are made for political, not economic reasons,” they went on to explain. “The heads of China’s state-owned enterprises serve at the pleasure of the Party, the banks are told what loans to make, and making a profit is secondary to ensuring employment. That’s the reason why China’s banks are a mess and full of non-performing loans.”
Occasionally, I would push back, noting the economic progress that China had made since Deng Xiaoping opened the economy in 1978. “You don’t believe the government’s numbers, do you?” they would ask incredulously. “Everyone knows they’re manufactured to convey whatever message the government wants. And, when it comes to financial statements, forget it. Chinese companies have at least three sets of books, and you can’t believe any of them.”
Peter Bernstein’s Lasting Lessons
The news came to us at HBR just after our newest issue went to the printer; that issue contains, sadly, the last article he wrote for our pages. Because it is the July-August issue, and will arrive on newsstands two weeks hence, it will seem strange to many readers that the byline makes no note of his passing — and worse, that the editor’s letter is mute on the many accomplishments of his rich and long life. Such are the perils of print publishing, and for that we apologize.
But here let it be said that, when work began last January on envisioning the July-August issue — a special, double-sized issue devoted wholly to exploring how the business landscape would be transformed by the financial crisis and recession — Peter Bernstein’s voice was the first we sought to include. He was the master at explaining issues of financial risk, and there has scarcely been a time when the world needed his kind of clear analysis more.
In response to a vaguely worded invitation from us (deliberately so, in the interests of giving Peter full license to address what he felt needed to be addressed), he came back with a tightly crafted essay called “The Moral Hazard Economy.”
Thinking for the Driver: The New Mercedes E250CDI
If the car senses erratic steering and rapid corrections, the telltales of fatigue, the Attention Assist will advise you to get some rest as it displays a big coffee cup icon in the instrument panel (this is my favorite ISO 9000 icon, by the way). Attention Assist is just one of a dozen or more marquee safety systems Mercedes has piled onto the E-class for 2010, and it’s clear at the outset that Mercedes is returning to safety as a transcendent brand value after years of marketing itself as the spoils of well-paying bad behavior, the glittery metal floss under Britney Spears’ untrussed derriere.
Suddenly, the E-class is, again, the car for grown-ups.
I won’t parrot the company line about the E-class being the heart and soul of the brand, except that it is. The E-class is a “business saloon,” the standard-issue Mercedes — stout, reliable, comfortable and enduring. This is the stainless-steel Rolex of cars, steadily elegant and appropriate for any occasion, and you have to admire the alacrity with which the E-class can go from being a tan airport taxi drone in Berlin to being a valet-park star in Beverly Hills.
To save you the suspense, I’ll tell you now: The new E-class is a fantastic car but for one huge, agonizing, inexcusable error that baffles me like a Rubik’s Cube the size of the Seagrams Building. More on that in a moment. For now, consider a short list of some of the more fun safety systems available on the E-class as standard or options.
The End of the Affair
The phrase “bankrupt General Motors,” which we expect to hear uttered on Monday, leaves Americans my age in economic shock. The words are as melodramatic as “Mom’s nude photos.” And, indeed, if we want to understand what doomed the American automobile, we should give up on economics and turn to melodrama.
Politicians, journalists, financial analysts and other purveyors of banality have been looking at cars as if a convertible were a business. Fire the MBAs and hire a poet. The fate of Detroit isn’t a matter of financial crisis, foreign competition, corporate greed, union intransigence, energy costs or measuring the shoe size of the footprints in the carbon. It’s a tragic romance–unleashed passions, titanic clashes, lost love and wild horses.
Foremost are the horses. Cars can’t be comprehended without them. A hundred and some years ago Rudyard Kipling wrote “The Ballad of the King’s Jest,” in which an Afghan tribesman avers: Four things greater than all things are,–Women and Horses and Power and War.
Organic Dairies Watch the Good Times Turn Bad
When Ken Preston went organic on his dairy farm here in 2005, he figured that doing so would guarantee him what had long been elusive: a stable, high price for the milk from his cows.
Sure enough, his income soared 20 percent, and he could finally afford a Chevy Silverado pickup to help out. The dairy conglomerate that distributed his milk wanted everything Mr. Preston could supply. Supermarket orders were skyrocketing.
But soon the price of organic feed shot up. Then the recession hit, and families looking to save on groceries found organic milk easy to do without. Ultimately the conglomerate, with a glut of product, said it would not renew his contract next month, leaving him with nowhere to sell his milk, a victim of trends that are crippling many organic dairy farmers from coast to coast.
For those farmers, the promises of going organic — a steady paycheck and salvation for small family farms — have collapsed in the last six months. As the trend toward organic food consumption slows after years of explosive growth, no sector is in direr shape than the $1.3 billion organic milk industry. Farmers nationwide have been told to cut milk production by as much as 20 percent, and many are talking of shutting down.
Spy Fired Shot That Changed West Germany
It was called “the shot that changed the republic.”
The killing in 1967 of an unarmed demonstrator by a police officer in West Berlin set off a left-wing protest movement and put conservative West Germany on course to evolve into the progressive country it has become today.
Now a discovery in the archives of the East German secret police, known as the Stasi, has upended Germany’s perception of its postwar history. The killer, Karl-Heinz Kurras, though working for the West Berlin police, was at the time also acting as a Stasi spy for East Germany.
On Manufacturing in China
HE recent scandals about poisoned baby milk, contaminated pet food and dangerous toys from China have raised questions about manufacturing standards in the country that has become factory to the world. In China’s defence, it was probably inevitable that as production grew so would the problems associated with it, at least in the short term. Similarly, it could be argued that China is going through the same quality cycle that occurred during Japan’s post-war development or America’s manufacturing boom in the late 19th century—but in an environment with infinitely more scrutiny.
A response to both these observations can be found in “Poorly Made in China” by Paul Midler, a fluent Chinese speaker who in 2001 moved to China to work as a consultant to the growing numbers of Western companies now replacing factories in Europe and America with subcontracting relationships in the emerging industrial zone surrounding Guangzhou. It was the perfect period to arrive. The normal problems of starting a business, such as getting clients or providing a value proposition, do not hinder Mr Midler, who had the benefit of being in the right place at the right time.
An Interview with George Roberts & Henry Kravis
Henny Sender interviews KKR founders George Roberts & Henry Kravis on the economy, buying “defensive” companies and government intervention.