Catarina's World

Leon Panetta just became a hero to American women by announcing that the U.S. ban on women in combat positions will be lifted. It’s hence an interesting  moment to look at gender equality in business. In this short video Tory Burch talks about how women entrepreneurs should find their passion and be just as ambitious as men:

Let’s hope it doesn’t take too long for the Pentagon to live up to Panetta’s promise. For about half a century women and men have been equal by law in Sweden. But inequality between the sexes is still so bad the government is of the opinion that to achieve equality in the business world it will be essential to legislate.

Out of 100 start-ups in Sweden only 23 are started by women and they are less likely to get financing than a company started by a man. So much for me telling my Saudi girl friends that in Sweden we are equal.

Davos: Women are important to the world economy

In Davos this year the World Economic Forum, for the first time, had a discussion on getting more women into economic decision making.  Prominent women such as Harvard president Drew Gilpin Faust, European Commissioner Viviane Reding, Christine Lagarde, Managing Director of the IMF, Sheryl Sandberg, COO of Facebook and Saudi business leader Lubna Olayan took part. They discussed how the gender gap at the highest levels of business can be closed.

Their conclusion was that ambitious women are often regarded as aggressive. The Harvard president pointed out that’s because women are judged according to the stereotypes we grow up with. It was also said on the panel that successful women are frequently disliked by both men and women. Why? According to them it’s again all to do with  the stereotype of a woman. It’s hence essential that we move away from such old fashioned stereotypes.

Lubna Olayan pointed out that King Abdullah has now appointed women to 20 percent of the seats in the shura council. (that’s as close to a parliament they get in Saudi Arabia). Immediately the objection was that the women were not qualified but appointed just because they are women. Their CV’s were published and that clearly showed that they were indeed qualified, not only highly educated but experienced as well.

We need more female business owners

Tory Burch who you watched in the video, started her company in 2004 and nine years later her clothes are sold in more than 800 stores all over the world.

She also leads the Tory Burch Foundation that offer mentorship and provide micro loans to women entrepreneurs. Her advice to female entrepreneurs is “don’t give up. There are so many times it seems insurmountable but keep the hard work going. It’s worth it and you and your hard work can make a difference”.

There is a need to make more woman start up their own companies and succeed. And get more women to sit on boards. Tory is not alone in having a foundation that makes a contribution in this respect. There are an abundance of such programs and with the European Union making it clear they want  to get more women into high level business it makes sense.

In the World Economic Forum panel discussion, Viviane Reding talked about how the EU first tried to persuade companies to get 40% women in leadership positions on a voluntary basis. Nothing happened. The EU hence legislated to get talented, educated women into top positions in companies. The law is intended to allow women to make a breakthrough into business, taking into account that 65% of university graduates in Europe are women. The first year saw 3% more women in senior positions in corporate Europe.

Do you believe it’s a good thing that Leon Panetta has lifted the ban on women in combat? Is it a good idea to close the gender gap at the highest levels of business? Should women be as ambitious as men not only in the military but in business as well? Do we need more female business leaders and entrepreneurs? Is it fair that successful women are regarded as aggressive? Would it be a good idea to have more qualified women on corporate boards? Should there be equality between the sexes when it comes to getting funding for a start-up? Has the time come for women to be proud of their accomplishments and be treated as equals in the corporate world? 

Video: stanfordbusiness

Sounds like some socialists voicing their discontent, doesn’t it. But it’s what world leaders are telling The World Economic Forum. The Economist‘s economics editor, Zanny Minton Beddoes, is of the same opinion. In this short video she explains why rising inequality around the world is rapidly becoming a major headache:

The World Economic Forum’s Global Risks 2013 Report highlights wealth gaps (severe income disparity) as a bigger problem than unsustainable government debt in a survey with over 1,000 leaders.

Opinion of world leaders – not “the usual subjects” 

It would be different if it was  Occupy Wall Street or leftists that lamented inequality. That it’s top leaders of business, finance and government indicates how serious the problem is. As you know, The World Economic Forum network consists of high level leaders.  The fact that they are worried should make us worried. More than we are about sovereign debt apparently.

Will democracy decline?

Inequality has widened for decades in two thirds of the rich countries and many emerging economies, including India and China. But the global crisis has made it even more of a problem, not least because of the austerity measures being implemented.

It’s in times like these that democracy declines and autocrats get the opportunity to grab power. When I lived in London, I used to frequently attend seminars at the think tank Chatham House. Their senior research fellow and author Charles Emmerson has written Eve of Disaster, an analysis looking at why 2013 eerily looks like the world of 1913, on the cusp of World War. I am sure you will find interesting and food for thought.

Do you agree with world leaders that rising inequality is the main risk facing our world? If so, what do you think should be done to stop income disparity getting completely out of hand? Should austerity be abolished and economies stimulated to make them grow and hence have a positive impact on inequality? What’s your suggestion? How can we make life better for more people so they spend money and hence improve the world economy? Or are you of the opinion that rising inequality is a good thing and that the leaders telling the WEF it’s the main problem facing the world are wrong?

Video: EconomistMagazine

European Union leaders are now advocating “More Europe” as a solution to the Euro Crisis. Watch Harvard professor Niall Ferguson explain to The World Economic Forum what a more integrated Europe would entail:

Those pro “More Europe” fail to acknowledge that any federal system implies a transfer of resources from the more efficient and productive core to the periphery.

For well performing countries like Germany a federal Europe would be expensive. According to Ferguson, it would cost the Germans up to 8% of GDP per annum for the foreseeable future. And with the very real possibility of a full-blown European banking crises as a result of a trigger, say a Greek default, is a federal Europe really a good idea?

Seems to me it’s time to start having a fresh look at the problems facing Europe. What’s been done so far isn’t working and it’s highly unlikely that giving more powers to Brussels would do the trick. Contrary to Ferguson’s belief however, there is massive discontent with the EU in Western Europe. Doubt that governments in that part of Europe will be re-elected if they cede more power to Brussels.

The unpredictablility of economics

In 2008 Queen Elizabeth asked top economists at the London School of Economics what caused the economic crisis. And they could not give her an answer. With hindsight we can patch together what happened and the domino effect that ensued. But until events unfolded nobody was certain what would happen. Six month later the British Monarch received a reply from British economist Thomas Palley stating that economists have become increasingly arrogant, narrow minded and unable to innovate.

We can now also conclude that it would probably have been better for the world if Hank Paulson had saved Lehman Brothers, like Warren Buffett suggested. But Paulson, presumably, didn’t understand what Lehman’s bankruptcy would cause and hence refused to do so. Or, as some believe, deliberately exported a US problem to the rest of the world.

The unpredictability of economics is a major problem because most available tools take time to come into effect. By the time they do, the economic landscape may have changed. Even if everybody agrees that solution x is the best way forward they could all turn out to be wrong.

Testing if a crisis can be solved by austerity

At the moment European politicians are for the first time in modern history testing if austerity can fix an economic crisis. It was tried, for instance, in the 1840s and failed. And it looks as if it will fail again. Austerity is unfortunately having a negative impact on growth and development in Europe. People and governments are not spending, which is fatal and goes against the economic health desired.

How about parallel currencies?

Professor Dirk Meyer, an economist based in Germany, has come up with an innovative solution to the financial problems facing Europe.

He rightly states that despite the fact that the Euro is presently causing huge economic problems, it is politically and economically a good idea. Consequently Meyer believes the way forward is to keep the Euro and, at the same time, bring back national currencies.

It’s the best solution to Europe’s problems I have so far come across. And it is my hope that EU leaders are seriously evaluating that option. You may beat them to it by having a look at his ideas in “Bring back Deutsche Marks! (Euros can stay)”. It could enable Europe to have the cake and eat it. Why does it have to be either or? With economies as diverse as say, Germany and Greece, having parallel currencies could very well be the way forward.

Do you believe a federal Europe is a good idea? Will it solve Europe’s current economic problems? Would having parallet currencies work? Is it likely there will be another Lehman trigger in the future? If so, would a federal Europe be more vulnerable or protected? Or maybe you are of the opinion that  the current austerity programs will sort out Europe’s problems? Wen Jiabao said to EU leaders recently: “China will continue to invest in European government bonds and bonds issued by the European Financial Stability Facility”. So if the EU proceed with current policies Europe will, like the United States, end up heavily indebted to the Chinese government. 

Video: WorldEconomicForum – You Tube

Small companies can be completely ruined by one person that decide to vent his grievances online. And for large companies losses can amount to millions of dollars. All it takes is one disgruntled employee or customer.

Have you calculated how much bad online reputation would cost you? To avoid it are you making sure internal communication as well as customer service are excellent?

More than an eye for an eye

Today's online world has enabled destructive people to have a field day. Small companies can lose a lot of money and even go bankrupt. Sure companies make mistakes but sometimes there is no proportion between what harm they have caused and the price they have to pay. But still few companies take precautions.

Beware of disgruntled employees and customers

One company got badly hit by a former employee making negative comments in a forum of relevance to their business. The comments swiftly came up high on Google's search results. Another example is an angry customer that took revenge on a small town company that had to close down as a result.

An IT company was mentioned in a thread on an online forum with thousands of comments. What the dissatisfied customer wrote had a huge impact and because the company didn't react swiftly the damage was huge. They are still having problems despite the fact that the customer in question was compensated years ago.

How much does bad online reputation cost you?

Having a bad reputation online can easily be calculated financially per month or year. A company that suddenly has a bad reputation just need to compare their sales to the year before. The difference is the price they are paying.

Ruining your brand or burning your company?

If customers don't dare to buy from you because Google is wrongly giving the impression that your company is surrounded by conflict you will suffer. All it takes for that to happen is that someone googles your name and a revengeful post ends up high on the first page of search engine results.

Is your customer service excellent?

The customer is always right. But regardless if they are or not, you have to make sure your customers are content. Already before the internet one upset customer meant you lost ten. Nowadays you may lose thousands. So having excellent customer service is absolutely fundamental in our online world.

Does your internal communication make staff feel appreciated and important?

Many companies, especially SMEs, have not paid much attention to internal communication and merely regarded it as an expense. Nowadays that’s no longer possible. Do your employees feel “part of the family”? If not, do you communicate in ways that make them see what’s in it for them? Do they have access to you or other superiors to air their grievances? If not, they are likely to vent their concerns online. Nowadays everyone has an online audience, Facebook friends if nothing else. So if your internal communication isn’t making staff identify with and like the company, you have a problem that needs to be rectified swiftly.

How can you change your online reputation?

By pushing already highly-ranked negative posts down search engine results pages so that they are seen by fewer people. Several companies have started blogs and used social media to turn around their reputation online. By constantly updating their blogs and social media accounts it normally takes about three to six months to squeeze the bad post down from the first to second page on Google.

Prevent it from happening

All businesses should keep an eye on the web and do what they can to prevent anyone from harming their reputation. You have to start monitoring SERPs (your search engine result pages) and how and when you are mentioned in online articles and forums. A simple way is to use Google Alerts or other such tools. It's also important to make sure that you own all the URLs that could possibly be used to give the impression that the information comes from you. Angry environmentalists for instance purchased a .net for one company and started publishing negative information with the intent to harm.

Have you adapted to the internet recording everything and forgetting nothing?

With the increasing number of constituencies using the internet to find information, are you doing online reputation management? Do you know what your employees, customers or the public at large write about you online? If not, it's high time you look into this aspect of our online world. The World Economic Forum recognized the importance of doing so by naming one online reputation management company as one of the 31 Technology Pioneers for 2011. Through proprietary technology they enable companies to monitor the web, delete information, and control how they look when searched online. If necessary, use one of those companies.

The tools are there, so what are you waiting for? Someone to get a negative article about you published online? That people bent on revenge should have this kind of power is in my opinion completely wrong. But that's unfortunately the way it is so, like it or not, it's time to start contemplating how we should live our lives in a world where the internet records everything and forgets nothing. There are software that enable companies to see everything a person does online, including on social media. And once that kind of software is widely used the tables will be turned and revengeful people will find their online reputation ruined. They will not be able to get a job and people will be reluctant to do business with them. Presumably that will make such people think twice before trying to harm someone online. But until then, invest in internal communication and customer service to make sure your customers and employees are happy. It’s a small expense compared to a bad reputation online.

Photo: Christopher Hill – PhotoExpress