Warning: It's Bigger And Growing More Important

"My mind rebels at stagnation. Give me problems, give me work, give me the most abstruse cryptogram, or the most intricate analysis, and I am in my own proper atmosphere. But I abhor the dull routine of existence. I crave for mental exaltation." Arthur Conan Doyle

This Week

It's Mother's Day, a day of love and respect. -- I have some very strong views this week about 星巴克 and what needs to happen to challenge this brand. -- My warning about AI is that it isn't dystopian. It is disruptive, and no, it will not give everyone access to competitive advantages. -- Comments about government employees and working from home. If you want to find a job in this environment, here is how I would do it. -- The oil industry will shock and anger you; it's not our oil after all, and there is a reason why oil-producing provinces in Canada are pushing back on climate change. -- The economy and retailing, interest rates on mortgages and business loans are a monster to retailers and consumers. Also, it is a lot more fun in the luxury sector, but it survives on the backs of the 60% who live paycheck to paycheck. -- Finally, the secret to success.

This issue will be out bi-weekly between June and September and return weekly in the fall.

The Markets

The markets are rebounding; they may stall as they continue to shake out the hangover from the AI adrenaline rush but don't think for a moment that AI is behind us. It is just beginning.

However, the issue is still the economy. In Canada, it's about jobs and inflation, Markets and economists react: BoC June rate cut bets slashed after unexpectedly strong jobs data - The Globe and Mail

In the US, it is about the wars and inflation. Fed Holds Rates Steady, Noting Lack of Progress on Inflation

On the other hand the oil industries are also declaring huge profits, as are grocers. As consumers are about to face huge increases in mortgage and rent payments, these economies are going to make a large noise and it isn't one of excitement.

Personal Log: Happy Mother's Day

I was seven years old, on my way to school. My mom wasn't feeling well, and I told her I wanted to stay home and look after her. She said it wasn't necessary that she would get much better and faster knowing if I was at school. Forty years later, I was in China; I got a call from my mother. My wife told her I had caught a cold, and Mom wanted to hear my voice. We chatted for a while and assured her I was fine. Five days later, in my Beijing apartment, there was another call; this time, it was about 3:00 am, and it was my wife, very distraught; she said George, your mom passed away today. It was sudden; you have to come home. She died from a virus that had attacked her heart.

I landed in Toronto and sat in her chair in the family room, where she always sat. The sadness I felt at that moment was too much to express. Because of the time changes and travel I wasn't there for the viewing. The funeral was the next day. I told my wife I wanted to be alone with my mother, and she single-handedly cleared the room of over 100 people. I knelt in front of her open casket and cried, something she would never let me do.

The next morning, I also got a call from the global CEO, who said I should take all the time I needed. I told him my story about when I was seven and that she would want me to return to work and not worry about her. So, out of respect for her, I returned to China a week later.

My mother and wife have always been the only supporters I needed. My mother was a very mathematically and analytically inclined woman with a great sense of humour and hope for life. But mom's best lesson was always asking me if I had thought of the what-ifs in my choices. That's why I analyze things so much. My mother met my wife-to-be a few times while we were dating; one day, she took me aside and said this is the one who will make you a better person. She was right. When I reflect on all the wisdom my mother and wife gave me, both had a hand in making me a better person. My kids feel the same about both women.

Happy Mother's Day To All Moms

STARBUCKS Needs Its MoJo Back (AKA) MAGIC BRAND POWERS

Starbucks is about coffee's cultural and social rituals. It was a place to relax and connect with people you know and want to know. Turning this brand into a traditional QSR or adding it to another delivery hub was and is not the right direction. Trying to make this brand anything other than what it is will bring more challenges and not usher in what it needs, which is more fashion.

Yes, Starbucks is/was Fashion Brand in the food and beverage world.

They need to make the coffee experience fashionable again. The first signs that they drifted away from that were unions. They lost their connection with employees, and the downward trend began. Starbucks is an in-store experience where you need a coffee gourmet to create something new weekly or monthly. I agree that consumers have adapted to working from home and shopping online, but this hasn’t replaced their desire to go out to see and be seen. These coffee shops need to create a compelling reason for them to visit, experience, and look to do it again and again. They struggled because they thought they didn’t have to innovate or create.?

How does it get its MOJO back?

- Re-emphasize the culture of coffee drinking - Lead with product innovation - Strengthen their community connection - Leverage technology wisely - Marketing and Communication: tell and sell the brand story - Rebuild Employee Engagement: union activity has hurt it. - Demonstrate Ethical Responsibility: It's about trust and the future

The biggest mistake I see in these brands is that they move from being fashionable to another publicly traded brand. Nothing matters more now than the right leadership at the top. #MagicBrandPowers #MoJo

Warning: It's Bigger And Growing More Important

If you are wondering what this is about, let's start with a story from Hesiod's works, "Pandora was given a jar, which she was forbidden to open. However, her curiosity got the better of her, and she opened it, unleashing all evil into the world." We did unleash it, but it isn't really evil. It would have to be alive to do that. We are talking about AI. It will change many industries, from farming, pharmaceutical, and medical care to banking and retailing. Based on my experiences with AI, as it gets better and grows more important, there will be job losses, but not before organizations begin to deploy it and use workers to train it. And while what's visible today are the creative jobs at risk from designers to actors, it is only a matter of time before it reaches all private and public sector roles Most organizations' problems will be the speed with which change and decision-making happens. Every organization will have to keep up. I am not surprised that some organizations have introduced GPT to their company employees, especially if it is connected to their database. Simply what they are doing is training their AI model.

Even 苹果 is considering how to deploy AI in all of its Apps and products. It was inevitable. So, where do we go from here? How do workers and companies prepare for the greatest shift on earth? As a guest speaker at 加拿大约克大学 - 斯古里克商学院 last week I told a group while I was part of a panel that AI will be more disruptive than the internet and e-commerce combined. It will absorb work tasks like planning; it will challenge designers in the fashion industry because AI can have access to the power of all human knowledge and come up with ideas. Even if they are imperfect, they will be more creative and out of the box than ours. Our goal is to keep Pandora's jar under control and to learn to work with AI so that we remain the most important intelligent asset an organization has. Because the warning is real, it is getting bigger and more important.

Politics and Society: Let's talk work from home and landing that job

Work from home:

This week, we learned that Federal government employees and their union balked at being asked to return to the office three days a week versus two. I have no issues with workers doing their jobs from home. However, the stories from the media also suggest that they don't feel they can do their jobs in the office because of technology limitations. So how can they be more productive from home when the better end of their bad technology is in the office? Most workers in Canada who are in the private sector sales and service jobs are on the road or at their place of work every day. What the public servants did this week was elevate themselves higher than all other workers in importance. It was wrong, and it will win no favour from most taxpayers—none of us like being stuck on the highway or incurring great expenses to travel and work. But the majority in the private sector also have to save for their retirement with after tax dollars that go to these public service workers. This has been pushed one peg too far!

Landing that job: Create value where employers don't see they need it

Experience trumps where you went to school and your connections. You will get the job if you have street credentials with real-world experience and are keeping up with change. Yes, AI, more specifically, in most cases. I suspect that if you have been at this for a few months and not hearing back there are many reasons. The economy is another, as are organizations not sure about headcount as things are in a technological shift. So, how do you land that next job? Apply for the roles that you believe you are over qualified for. Think about adding value to organizations where they lack it. Yes, this will require a great deal of due diligence on your part. Don't wait for the job opening. Create that opening, contact the CEO or Senior VPs. Human Resources may be great connections, but they are not always strategic. They tend to be more tactical. The employment game has changed; the job growth has been mostly part-time despite all the media hype. Don't ask if the job is hybrid until the second interview; avoid being dragged into political discussions during the interview actually never go into that pit.

Energy: Canadian Oil Is Not Canadian Owned

These are quotes from the article, which is here from Policy Options. Why does it matter? When we hear how critical the oil industry is to Canada, we should also know that these profits are leaving the country. The last Federal Government allowed China to invest in the Canadian oil industry between 2008 and 2012, so much for all the hoopla about the risk of foreign interference. The chart above shows that the vast majority of Canadian oil produced is foreign-owned. It is no surprise that there is pushback on climate change in Canada. Politics seems dirtier than the tar sands oil.

Quotes from the article.

"Ownership of Canada’s largest oil sands companies is highly concentrated, with just 14 prominent shareholders collectively controlling significant portions of Imperial Oil, Cenovus Energy, Canadian Natural Resources and Suncor. More striking is that over 70 percent of these major shareholders are foreign entities."??

"Exxon Mobil retains majority ownership (70 percent) in Imperial Oil, while China’s Hutchison Whampoa owns 40 percent of Husky Energy. Together, financial giants like Capital Group, Fidelity, and BlackRock hold over 25 percent of Canada’s largest oil sands producers."?

Economy and Retailing:

A Monster In The Stores

The Bank of Canada, in this Globe and Mail Article, says that Canadians will feel a lot of financial pain with mortgages coming due—coupled with credit card debt, which doesn't bode well for the economy. The BOC Governor says rates will come down but nowhere near their record lows. However, it is not just consumers; businesses are also going to feel the pain as their loans come due and then add in declining consumer spending, and there is a double-edged sword the BOC has to deal with.

The Bank of Canada needs to lower rates faster. It must orchestrate "The Great Save." A 0.75% drop by the end of Q1 2025 would be about right as a start, and a further 1.25% by the same time frame of 2026. Or there will be a worse Canadian story that no change in Government can fix. As for retailers, buckle up! It will be a lot tougher if you're not in the value sector.

It's a lot more fun in the luxury sector for now

Even here on LinkedIn, those who comment on retailing steer clear of the lower end of retailing and try to focus on the Premium and Luxury sectors. If anything, that seems more exciting to comment on, and if you could, that's where you would rather work, where consumers spend, spend, spend.

Unfortunately, the rich make their wealth off of the 60% of consumers who live paycheck to paycheck. When the 60% cut their spending because they struggle with affordability, the higher income earners will spend less on luxury while the very rich never stop. Therefore, there is a domino effect. Luxury is not entirely immune; it is merely a magical illusion that price increases can offset profits, and not a lot of complaints are made about higher pricing. However, the economic challenges are not that different for Luxury brands. Just how they address those challenges tends to differ. What are the challenges? They are much of what you have been reading for the last few months, cost of borrowing, geopolitical and AI. How to address the issues in the luxury sector this article offers some suggestions. Read more here from IMD

At the end of the day: The Secret to Success

Everyone wants to know the secret to success. You would never find out if we were to list all the quotes, ideas, books, and public speakers. So stay with me on this one. Scientists hypothesize (and they really do) that there are multiverses out there. In other words, many universes with versions of you living different or similar lives. Pick a scenario, and it may exist (hypothetically). Some are successful and happy, some not so much. So, if you are not satisfied with your current path in life and want to change it, well, we can't shift into another universe. But we could hypothesize someone living a different life, one that is successful and you would like to have; all you need to do is hypothesize, write out how they may have done it themselves, turn it into a personal plan, and work on it in this universe. So, if you thought it was something magical, it's not; success is about your willingness to make choices.

I bring 30 years of executive leadership to a room of leaders who need a real-world view of how to deal with the fast-changing and disruptive world that AI brings. Competition simply is going to change.

#retailing #strategy #innovation #marketing #economy #innovation #careers