China’s debt risk management isn’t much better
It looks like the United States and England aren’t the only countries facing billions in bad loans.
When you read “trillions of renminbi of defaulting loans already in China that no one is doing anything about,” you perk up about the coming crises in sovereign debt and realize it is truly global, with global repercussions.
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Interview for Korea’s KRX Magazine: Small, smart companies and more
With the release of Future, Inc. in Korean and Chinese, I’ve had the great opportunity to do interviews with Asian business magazines. I find that they ask more interesting, more insightful questions than many of their Western counterparts, so they are often fun interviews. The only problem is, once they are translated, I have NO IDEA what they said.
I just finished an interview with Korea’s KRX Magazine, which covers the Korean stock market and business in general, and I decided to post the whole text in English, so someone can appreciate it.
The questions:
Companies have hard time in business due to the global financial crisis. What new trends can we look for?
The most important trend is away from the philosophy of growth at all costs. For years, particularly in the United States, management has followed a typical playbook – get big, quickly, through borrowing money from private venture capital or public offerings. Then, you can go national or international, reaching bigger markets and gaining leverage over vendors and distributors. Once you have leverage over vendors and distributors, you cut costs by firing excess employees and force downward price pressure on the market. With the extra cash from operating expenses, you buy more national or international companies. For around forty years companies have repeated this formula.
The theme here was BIG BIG BIG. The problem with “big” is that it sometimes comes at the expense of “smart.”
About Eric Garland
Eric is one of the world's pre-eminent thoughtleaders in forecasting and strategy. He helps leaders of business and government make critical decisions about their futures.New project: Manufacturing 2020!
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