Your own brand

I have read the Trump Card by Ivanka Trump again recently.  An heiress who is "happen" to be rich and famous is not at all surprising. Even the fact that she has built a successful career is often viewed as a "dah", considering how much resources and opportunities are available to her. Yes she has the upbringing, the wealth and the last name that people can only dream of, I still admire her being a high achieving woman and entrepreneur.  I recommend young women, and men, read this book, as it gives out tangible career and business advice. Sometimes these pieces of advice do not necessarily need to be novel or fancy. In fact, there are sets of principles that will always apply, whether you are fresh graduates or top executives. These are normally common sense principles, for example, don't be late, check typos in your emails. If you do these, you won't get any extra brownie points but if you don't, you will immediately feel the negative impacts.

What I also like about the book is that Ivanka described the journey she took to discover and establish her own identify and brand when launching her fine jewelry business.  This is inspiring for entrepreneurs who have started but have not really found the edge, or who are still putting together their business plans. I recently asked a group of entrepreneurs, after they decided to launch a business, what was the first thing they did the next morning. The answers include, get a good accountant, register a company (for 20 odd pounds), and find your target market. The answer is unique to everyone.  But no one said that they had a lie-in the next morning, and ended up doing nothing about their business idea.  Well, many people did not have a lie-in but legitimately had a second thought about the business idea. They felt the barrier to entry to too high in the market they wish to pursue, or the market is already saturated.  There people (including me), who simply went through the motions, are not entrepreneurs, yet.

Everyday, things get invented and new business are formed. I recently came cross an article about the set up cost of an asset management business. The first impression was gee, £1 million sunk cost, 5 years to break even! Then I read it again carefully and had a pen in hand to write down the cost items. It turned out, the author went for the maximum you could spend for each item and include items that may not apply for all businesses.  The picture suddenly become less discouraging than the author painted.  The barrier to entry may not be as high as you thought.

Back to the question on what to do the next day should you wish to go on a business venture, my view is you could think about your brand, in other words, what do you (and your business) stand for. We are not the daughter of Donald Trump, but there is a brand for each one of us. It is a matter of finding it out and putting it out there. The "putting it out there" bit is easier considering the number of social media means available. You can hyperlink your LinkedIn pages to a CV document, just to add one more dimension to your otherwise fairly standard CV. Blogger and personal website could also be another good way to brand yourself in front of your clients, employers or business partners. But be sure to have a consistent image via these social media, so that it is memorable.  The rationale is simple, if you open a can of Coke and it tastes differently each time, then you don't have a brand.

OECD Forecasts During & After the Financial Crisis: A Post-Mortem

I attended the titled event at Bloomberg's futuristic London office on 11 February 2014.  Pier Carlo Padoan, Chief Economist at OECD, gave us a keynote on one of the policy notes produced by OECD's economics department. The note was to dissect (to echo the name of the note) the forecasting errors over 2007-2012 with the hope to draw lessons and improve both the data and the methodology of future forecasting.

One of the main findings is that the GDP growth was overestimated on average across 2007-2012, in other word, none of the forecasting models from OECD, IMF or other major international organizations predicted the 2008/9 financial crisis and the 2010 Euro crisis. This is not new news.  The good news is OECD have beat themselves really hard by reviewing where went wrong and have come up with a list of developments so the audience started to feel a little better.  

There are two questions lingering in my mind: First, are we fooling ourselves by believing we can accurately forecast future crises if we had considered all relevant factors and used all the data in the world? Mr Padoan mentioned that their model failed to forecast the Oil Crisis in the 1970's and they have drawn lessons and improved their forecasting technique since. Unfortunately, 30 odd years later, their forecasts failed again. The available data and indicators have grown in both quality and frequency in the last few decades, and forecasters are now even talking about "big data" (suppose they know what it is). But are data really the solution? This lead to my next question, are we using the right model or is there a right model? One of the panelists, Prof. Paul de Grauwe, from LSE argued that the model used by mainstream economists is wrong. This was due to the failure to diagnose what caused this crisis. In his view, the prolonged crisis was caused by demand side problems whilst fiscal policy makers are looking for answer from the supply side.  I am not in a position to agree or disagree with this view but this could partly explain what went wrong in previous forecasts.  

I believe that forecasting is indeed difficult. Mr Padoan pointed out that major international organizations tend to use similar methods, which means they tend to be wrong at the same time.  This is probably why the creditability of these forecasts were called into questions, a bit like the ratings from credit rating agencies. This is also why I personally spend no more than 5 second on a piece of news with "GDP forecast" in its title. Having said all that, I am hopeful that by thinking independently and creatively, these orgnisations could provide invaluable market intelligence, which could assist investors, business owners, and governments in making their decisions.

My mind was tangled with these questions (too high IQ to cope) after the event until my husband asked me an excellent question: what does OECD do.  According their website:

The mission of the Organisation for Economic Co-operation and Development (OECD) is to promote policies that will improve the economic and social well-being of people around the world.

Can a wildly inaccurate GDP forecast contribute to this mission?  To me, what I really hope to get from them is not a GDP number. I hope they could communicate these numbers better by breaking them down and explain what these means. For example, a 2% GDP growth in country A is different to a 2% GDP growth in country B because country A has 2% more people working with 0 productivity growth whilst country B has 2% productivity growth without adding one man in the workforce.  Interpreting numbers is far more important if business and investment decisions are to be made based on them.

Perhaps OECD can educate users on the extend (probability) users should apply to the numbers' accuracy, equip users with data and tool to do their own forecasts.  In a perfect world where individuals have their own forecasts, you may get 50% of the people right and another half wrong. For example, one out of the two exporting business owners decided to increase production in China, which matched the demand exactly.  Whereas, if we have international authorities doing synchronized forecasts, with a poor historic error rate, and users use them without pinch of salt, you could potentially end up having 100% of the people wrong. This means two out of the two exporting business owners decided to increase production in China which exceed the demand, causing overcapacity, financial loss, and etc etc.

The event is nonetheless thought provoking and not a single second has been wasted both during and after the event.