Category Archives: In The Press

Cladding Purchase in the Spotlight After Grenfell Tower Fire

After the tragic death of at least 58 people in the Grenfell Tower fire, confusion remains over whether the decision to use combustible panels in its construction was in accordance with British building regulations.

 

The Guardian and the BBC have both reported that Reynobond panels with a combustible polyethylene (PE) core were used in a refurbishment of the 24-storey Grenfell Tower, completed last year. This has yet to be independently confirmed by investigators, although it would explain the frighteningly rapid spread of the fire. The thermoplastic material is known to melt and drip as it burns, which spreads the fire downwards as well as upwards.

Manufacturer’s own warning ignored

A Reynobond brochure from 2016 shows that PE cores are only suitable for buildings up to 10 metres in height, while panels with a fire-retardant (FR) core should be used up to 30 metres. Grenfell Tower is 60 metres tall, for which Reynobond recommends their A2 model, with a non-combustible core.

The Guardian’s report states that the Reynobond PE cladding supplied to the companies refurbishing Grenfell Tower was £2 cheaper per square metre than the alternative Reynobond FR.

Confusion over legality of PE panels

While media outlets have pointed out the PE panels are banned in the U.S. and Europe, there remains some confusion as to whether they are legal in the U.K. or not.

Two Government ministers have said that “in their understanding”, the use of the cladding is against British building regulations.

Treasury chief Philip Hammond told BBC News: “My understanding is that the cladding in question, which is banned in Europe and the US, is also banned here. So there are two separate questions: one, are our regulations correct; do they permit the right kind of materials and ban the wrong kind of materials; and the second is were they correctly complied with, and that will be a subject the inquiry will look at and will also be a subject the separate criminal investigation will look at.”

Trade Minister Greg Hands told Sky news: “My understanding is that the cladding that was reported wasn’t in accordance with UK building regulations. We need to find out precisely what cladding was used and how it was attached.”

Vague building codes

A Reuters report found that British building regulations documents did not specifically say PE-core panels should not be used, yet that doesn’t mean builders are clearly permitted to use them: “British safety regulations across many industries are usually principles rather than rules-based.”

This means the law often requires companies to act safely without giving a specific definition of what this would involve. Firms are instead expected to be able to prove in court that they “behaved in a way that their industry would consider safe, given current knowledge and technology”.

The Fire Protection Association (FPA), an industry body, has reportedly lobbied for years for the government to make it a statutory requirement for local authorities and companies to use only fire-retardant material. 

Paper trail

Lawmakers have urged the Government and the police to immediately seize all documents relating to the building’s renovation to prevent the destruction of evidence that could show criminal wrongdoing.

“The Prime Minister needs to act immediately to ensure that all evidence is protected so that everyone culpable for what happened at Grenfell Tower is held to account and feels the full force of the law,” said Labour lawmaker David Lammy. This means that all emails, minutes of meetings, correspondence with contractors, safety assessments, specifications and reports, must be kept intact.

The Government is reportedly carrying out an urgent inspection of other tower blocks in Britain to assess their safety. There are roughly 2,500 similar apartment towers throughout Britain.

Trump Has Exposed Corporate America to a Carbon Tariff

Putting aside the issue of catastrophic global warming for a minute, let’s look at a very possible consequence of the U.S. withdrawal from the Paris Agreement – retaliatory measures from other nations in the form of a carbon tariff on American products.

Well, there goes the planet.

Trump’s withdrawal from the Paris Agreement has dominated the headlines all weekend, and rightly so – it’s regarded by many as the most devastating decision of his presidency so far.

Rather than dwelling on what has already been covered – the diminishment of U.S. moral leadership, short-termism, isolationism and the rejection of science – let’s examine the very real threat of economic countermeasures from other nations.

The idea of a carbon tariff was first suggested by former French President Nicholas Sarkozy in November last year. “[If Trump] won’t respect the conclusions of the Paris climate agreement … I will demand that Europe put in place a carbon tax at its border, a tax of 1-3 per cent, for all products coming from the United States, if the United States doesn’t apply environmental rules that we are imposing on our companies.”

Writing for Forbes last week, London Business School’s Ioannis Ioannou suggested a similar course of action:

“Countries and transnational institutions should seriously consider and carefully evaluate potential sanctions or economic countermeasures. A tax or import tariff on U.S. made products and services would account for carbon emissions used in the manufacturing process or, more ambitiously, incentivise leading companies to move parts of their business out of the U.S.”

Leading U.S. CEOs alarmed

As part of a last-ditch plea from Corporate America to dissuade Trump from his decision, an open letter was published last week in Washington, D.C. newspapers and signed by companies including Apple, Google, Facebook, Microsoft and Unilever. Amongst the warnings listed in the one-pager, the risk of retaliation was called out:

Withdrawing from the agreement will limit our access to [clean technology markets] and could expose us to retaliatory measures.”

It’s not just the dot coms who have come out in support of the Paris Agreement. Oil giants ExxonMobil and ConocoPhillips made the case that the U.S. would be much better served by having a seat at the table to “safeguard its economic and environmental best interests” – i.e. retain a veto – in future climate negotiations.

The fairness argument

Trump used the word “fair” and “unfair” multiple times in his speech:

“The bottom line is that the Paris Accord is very unfair at the highest level to the United States.”

“…Negotiate our way back into Paris under the terms that are fair to the United States and its workers.”

“…Under a framework that is fair and where the burdens and responsibilities are equally shared …

“We want fair treatment for its citizens and we want fair treatment for our taxpayers.”

The decision to withdraw, however, means the U.S. will have the fairness argument thrown back at it. As trade partners including Canada, Mexico, China and the EU implement carbon trading systems and caps, resentment is likely to grow towards the world’s second-largest emitter of carbon dioxide. For countries looking to address this disadvantage, a carbon tariff would serve to level the playing field.

Dirk Forrister, International Emissions Trading Organisation president and CEO, made the point that the Paris Agreement was designed to avoid this situation from occurring:

“The notion of a trade battle over climate change is something everyone’s tried to avoid for two or three decades. That’s why we have an international agreement to put everyone in the same frame.”

Here’s the good news

Trump wants to renegotiate his way back in. While Trump’s apparent willingness to re-enter the Paris Agreement on American terms shows some promise, it may not be possible. Christiana Figueres, the former UN official who led the negotiations, said this isn’t how international agreements work. “You cannot renegotiate individually,” she said. “It’s a multilateral agreement. No one country can unilaterally change the conditions.”

Other nations are rallying: There has been some commentary after Trump’s announcement that the Paris Agreement is actually stronger without U.S. participation. While many of the arguments inevitably read like sour grapes, two points ring true: firstly, the announcement appears to have strengthened the resolve of other nations to meet their targets. International leaders are lining up to not only condemn Trump’s decision, but to reaffirm their commitment to the Agreement.

Secondly, the Trump Administration’s rollback of domestic climate policies, including gutting the Green Climate Fund and hobbling the EPA, means that the U.S. was highly unlikely to meet its climate targets anyway. Australian International Relations and Environmental Policy export Luke Kemp argues that this would have set a poor example: “Other countries [would have been] more likely to delay or free-ride on their pledges if they [saw] the US miss its target.”

U.S. states, cities and corporate leaders are embracing a low-carbon economy, despite (or to spite) Trump. Examples include Californian leadership in reducing emissions, and the Mayors of 61 cities across the U.S. pledging on Thursday to meet commitments agreed to under the international accord.

The transition to the renewable economy is gathering pace. The economics of higher energy efficiency, falling renewable energy prices, abundant natural gas, and the rise of electric vehicles and smart grids will continue to displace coal and oil.

November 3rd, 2020: The rollback of the Paris Agreement and other climate initiatives will take years, as will any retaliatory measures (such as tariffs) put in place by other nations. Could the 2020 election become a referendum on the Paris Agreement?

Image: Shutterstock

View from the top: Three Ways Procurement Must Transform

ISM’s top brass called in the media to map out the transformation of the profession into a tech-focused intelligence agency that will attract the very best talent.

Tom Derry (ISM CEO), Hans Melotte (Starbucks EVP Supply Chain & ISM Board Chairman) and Kristopher Pinnow (CPO B/E Aerospace & ISM Board Member) sat down with the media at #ISM2017 to answer some burning questions. With Derry providing the context while Melotte and Pinnow added their views as practitioners, three key themes soon emerged.

1. Intelligence transformation

“Times are uncertain, and business hates uncertainty”. Tom Derry sets the scene for #ISM2017 by highlighting the turbulent geopolitical situation that’s impacting the profession worldwide. The presence of two world leaders as conference keynotes – Colin Powell and David Cameron – underscores the anxiety with which many professionals are watching global events unfold.

Derry’s message is that supply managers should cultivate a sharp intellectual curiosity to not only inform themselves of disruptive events, but to position the function as a source of intelligence within the organisation. Importantly, we have an opportunity to be the voice of calm and reassurance, hosing down anxiety with facts, rather than fear.

ISM’s leadership in this area was demonstrated last year when it released a supplementary Report on Business, focusing specifically on the UK’s shock Brexit Referendum’s effect on US business. The decision was prompted by a flood of enquires from US business and media representatives about whether the data for the influential report would reflect the fallout from Brexit. Derry told Procurious at the time that ISM was in a position to gather real data and “put the information out there so businesses can make informed decisions based on facts, rather than fear, concern or emotion.”

The panellists agreed that while it hasn’t always been the case, transforming into a source of intelligence for the business is something to which the profession needs to aspire. Melotte stresses that procurement needs to have all of its data intelligence in real time. “We’re digital natives,” he says. “We book our food online, we track our spouses’ flights – but the workplace is often more of an analogue environment. We need to be in the moment, preempting issues before they arrive.”

2. Technological transformation

Derry warns that if you’re the steward of a process, you’re about to lose your job when it becomes automated. But it’s not all bad news: “New types of jobs will exist in the future, with new skills required to do those jobs. The impacts of technology also have the potential to make us better at what we do, such as data analysis and being more efficient with distribution.”

Melotte tells the room that technology is critically important for our jobs and our companies, yet we’re at risk of underestimating its impact and potential. He notes that among the conference’s 2500 attendees, some will still be associating technology with automating source-to-pay processes and other fundamentals. “Fortunately, there’s also a lot of thought leadership at this conference with leaders who are imagining the opportunities for technologies within the supply chain – what we do, and how we do things,” he says.

“Imagine the potential that cognitive learning, artificial intelligence and predicative analytics will have on how we forecast commodities, demand and consumer behaviour, or how we bring insights back to our business around supplier patterns.” Melotte says artificial intelligence is just one example of the big transformation currently taking place in the profession, with an increase in speed being a key benefit. “We’ll see faster speed to market, and pilot projects that you can turn around in only three months.”

3. Talent transformation

“There’s no question there’s a demographic bump,” says Derry. The “birth dearth” between the baby boomer generation and millennials means that there aren’t enough members of Generation X to step into roles as their predecessors retire. “I’d argue that those smart young people, who are digital natives, do have the tools and the mindset to adapt rapidly,” Derry says. “You’re hiring for that kind of talent all the time.”

Pinnow talks about the importance of developing and sharpening intellectual curiosity in the talent pipeline, and says there’s a lot that established professionals can learn from new talent. “You have to recognise that you don’t know everything. You have to encourage people from a talent management perspective [to teach you new concepts].”

Melotte says that having a balance of skills in your talent pool is crucial. “In tomorrow’s world, we all have to make sure there’s a certain percentage of our teams that are data scientists; who are deeply versed in analytics to give us insights. [We need to] hire and seek out this type, migrating the competency pool to ensure there’s a balance between strategic sourcing and data scientists.”

Colin Powell Talks Security, Trade and Trump at #ISM2017

While many attendees at #ISM2017 were waiting to hear what General Colin Powell would say about President Trump, the former Secretary of State also provided some valuable insights into supply management.

“An army marches on its stomach,” says Powell to a packed ballroom at #ISM2017. “It’s the logistics that allows you to face an enemy.”

Powell draws on his experience in the Vietnamese jungle 55 years ago to illustrate how dramatically the military supply chain has improved. “We just didn’t have efficient supply systems then.” The young Powell was eating plain rice 21 times a fortnight with the occasional slaughtered pig thrown in, because the supply chopper would only come once every two weeks.

Fast-forward to Operation Desert Shield and Desert Storm, the biggest military operation since the Normandy landing. “We realised that it was logistics that would matter. We had to change some rules of behaviour.” Powell talks about some of the creative solutions to logistical challenges in the Gulf, including sourcing trucks from Egypt to move American tanks, early adoption of bar-code tech and using GPS to track those trucks (“we cleaned out every Radio Shack in America”), water scarcity and a vast amount of mail for 425,000 troops that had to be flown in: “I had to get three extra C5A’s, just for the mail.”

Powell believes there’s a lot the military and commercial worlds can learn from each other. “Both sides have to learn what’s going on the world today in terms of speed, service, quality of product and keeping up with the information revolution.” 

On Global Security

“America is not facing existential risk to our existence as it was in the Cold War,” says Powell. “There are problems that are real, but they’re overplayed and blown up.”

Powell gives North Korea as an example. After noting the poor state of their missile technology, he says there simply isn’t going to be an attack. “Give me a strategic reason why North Korea would shoot a missile at Honolulu or San Francisco. What would that achieve apart from ensuring the destruction [of Pyongyang] the following day? All that counts there is the preservation of the regime.”

Similarly, Powell believes concerns around China are overblown. “China won’t be an enemy. They won’t block the routes … It’s a nation that’s extremely important on the world stage. They want to create more influence around the world, [and they’re doing so by] building train systems in Africa, Latin America, the third world. They’re building because they want influence.”

Powell also points out that China is holding a trillion dollars of US paper. “It’s a complex country, but we have to welcome their products and an open, fair trading relationship. China has brought 400 million people out of poverty, not by raising taxes or invading people – they did it by selling stuff. Predictably, as people became more wealthy, they want more. Chinese labour costs will rise.”

On Trump

“I think what Mr Trump has to do now is reverse some of the campaign promises he made that frankly could never have been implemented, such as declaring China a currency manipulator,” says Powell, noting that Trump is maturing in his understanding of these issues.

“It’s in our interest to see him do well. Countries around the world [are] waiting for stability and clarity,  and for these campaign promises to settle down. The rest of the world wants to see coherence and consistency over time in what we say and do.”

Responding to a question about the political and economic impacts of withdrawing from the TPP, Powell says it was an unfortunate decision. “It was in our interest and would have benefited us over time.”

Powell says that the real beneficiaries now will be the Chinese, who are putting together their own trade agreement. “All our [trade] allies are joining China, and we’re standing aside.”

“The world is globalised. I’ve watched our factories going up in China – that’s just the nature of it. Success [can be had] by playing in that game, not wishing it would go away.” Speaking of globalisation in general and NAFTA in particular, Powell says that being mad about problems with trade doesn’t get you anywhere. “Fix it, but don’t throw it away.”

On Generation Next

“I have faith in the millennials and faith in the kids coming afterwards,” Powell says. “I do a lot of work with youth. I can’t change the past, I can [only] watch the present, but I can influence the future through the hearts and minds of young people.”

Getting The Biggest Bang For Your Buck At A Procurement Conference

Game-on! There’s a right way – and a wrong way – to approach a major procurement conference. With your company making a significant investment to have you there, here are five tips to help you demonstrate an impressive ROI. 

 

This morning marks the start of the world’s biggest procurement and supply management conference. Let’s imagine, for a minute, that you’ve hit the fast-forward button and find yourself on the other side – bags packed, standing outside your hotel and waiting for a cab.

How do you feel? Exhausted but satisfied that you’ve made the most of every minute? Or a little bit … guilty? As your taxi pulls away and heads for the airport, will you wonder whether you should have spoken to just a few more people? You’ve attended plenty of sessions, but why didn’t you take more notes?

I know the feeling. It’s so easy to snooze your way through a conference, but it’s crucial that you don’t!

It’s my third year attending ISM’s annual extravaganza, and I’m starting – just a little – to feel like a bit of a veteran. As such, I want to do what old-timers do best, and share some advice to other conference-goers. Whether it’s through attending the best of the best speaker sessions, or through networking like a champion, I’m going to show you five ways to get the most bang for you buck.

It’s not a vacation

Remember the glory days when going to a work conference was, essentially, a bit of a treat? Sure, you had to attend a number of presentations but, in exchange, you were gifted a few days out of the office, possibly at a semi-exotic location, and a few cocktails at the bar with your peers.

Today it’s considered an absolute, and rare, privilege to be selected to represent your company at a major professional-development event. Budgets and headcounts are increasingly slashed, which means getting the approval to attend a conference borders on the extraordinary. As such, you can bet you’ll need to demonstrate a pretty sizeable ROI.

But you’ll only make the most of it if you’ve prepared well in advance and bring your A-game to the event itself.

  1. Have a plan

I’ve been busy interviewing members of the ISM2017 Conference Leadership committee (including  Lara Nichols, Naseem Malik and Howard Levy), and they’ve all stressed the importance of having a plan for the next four days.

It’s absolutely crucial to understand your key conference objectives in advance. What do you, and your organisation, want to achieve? Maybe your employer is keen for you to find new suppliers, gain market intelligence, or benchmark information? You might have some personal objectives such as finding a mentor or even a new job, or want to use the opportunity to position yourself as a thought leader.

The crucial point is that these events are no longer just about the individual attending.  Attendees need to multiply the investment and make sure that everyone in the team benefits from their learning from this event. This is why it is important for you to “amplify” what you learn back into your team. 

  1. Familiarise yourself with the agenda

Depending on the conference’s size, there could be dozens of sessions, many of which will happen in tandem. Take some time to constructively assess the schedule with your own objectives in mind. Select topics and sessions that are most relevant to you, and think about what will be relevant to your company, too.

Prioritise and plan your itinerary, but don’t overdo it! Be realistic about how much you can achieve, how many sessions you can logistically make it to – and how much information you can actually absorb.

  1. Become a social-media anthropologist

Nothing says “conference efficiency” quite like an advance perusal of the speakers and attendees list. It might seem extremely forward, but an invitation to connect ahead of the event via LinkedIn, Twitter or Procurious is actually pretty flattering. And, if you’ve got the courage to go one step further and send a personal message, you’ve got a great conversation starter when you eventually meet in person.

If online meet-and-greets aren’t your style, you can still benefit from researching the backgrounds and careers of attendees or speakers. This will help you to decide who you are most keen to talk to and if attending certain sessions will be worth your while.

Make sure you upload your full biography and a fabulous profile picture onto the conference App so people can find, and reach out to, you too!

  1. What’s your end game?

You started with the end in mind, you arrived at the conference armed with your objectives and a commendable knowledge of the agenda and speakers. Now you need to decide what sort of report you’re going to present back to your team.  A PowerPoint? Notes?  It’s useful to have an idea of this before the conference kicks off so you can simply fill in the gaps because,  let’s face it,  if you promptly present a comprehensive report to your peers after the event, you’re far more likely to be selected to represent the team going forward.

So, armed with this “straw-man” of your report, attend your sessions of choice and take notes. Engage with your peers to learn their views and insights, and include those in your report too. Go directly to speakers and suppliers and ask them for material that you can incorporate.

At ISM2017, don’t forget there’s a group of media professionals (including the team from Procurious) reporting on the conference – keep an eye out for blog articles with insights from the event, and catch the news from sessions that you weren’t able to attend.

  1. Share Your learnings

Use Twitter, Procurious and LinkedIn to share key learnings live from the event. Live updates and posts from the event can make you really popular back at the office and ensure that your whole team benefits from your attendance. Don’t forget the hashtag!

Are you at ISM2017? Don’t miss out on Procurious Founder and CEO Tania Seary’s top tips on how to Network Your Way To The Top on Tuesday May 23rd, 3.45pm.

And, when you drop into the Exhibit Hall, be sure to visit The Procurious team at booth 439 for advice on how social media can supercharge your procurement career.  

How To Survive a Social Media Storm

Media personality, author and columnist Bernard Salt weathered a social media storm last year after his provocative article about the spending habits of millennials went viral. Today, he shares his top tips for businesses under attack on social media.

Six months ago, Bernard Salt wrote a tongue-in-cheek article about what he called the “evils of hipster cafes”. The article lightheartedly poked fun at hipsters’ apparent preference for low chairs, hard-to-read fonts on menus and thumping music. But it was this paragraph that ignited a storm:

I have seen young people order smashed avocado with crumbled feta on five-grain toasted bread at $22 a pop and more. I can afford to eat this for lunch because I am middle-aged and have raised my family. But how can young people afford to eat like this? Shouldn’t they be economising by eating at home? How often are they eating out? Twenty-two dollars several times a week could go towards a deposit on a house.

What followed was nothing less than a nation-wide reaction. Inter-generational battle-lines were drawn between the over and under-40s, a flurry of rebuttal articles were published in competing newspapers, and the issue of housing affordability – a major problem in Australia’s capital cities – was thrust firmly into the spotlight.

“The smashed avocado article was written to highlight the division in cultures”, says Salt. “And certainly, it did that. Everyone over the age of 50 thought it was terrific, and everyone under the age of 40 thought it was terrible. It exposed divisions, and prompted a discussion that will hopefully lead to a better solution.”

But it was online that the brunt of the storm took place, with critics and trolls lining up to attack Salt in 140 characters or less. Having experienced it first-hand, Salt now has some advice for other individuals – and businesses – who find themselves getting smashed on social media.

Hold fast, don’t panic, and wait one week

“It’s all about getting through the first week”, Salt says. When something happens – whether through misadventure or entirely by accident – and there’s a reaction on social media, my advice to businesses is to hold fast, don’t panic, and wait.”

Salt has broken down the lifecycle of a social media storm:

Day 1: The first day will be quite impactful, as the issue – whatever it may be – begins to trend on social media. This is when the storm front is approaching.

Days 2 to 4: The worst part of the storm. “From days 2 to 4, people will come out of the woodwork to throw petrol on the fire. The trolls, the haters, and any enemies you may have will jump at the chance to further their own interests at your expense. Hold fast! The thing to remember is that this is NOT the mainstream community – these are fanatics and social media warriors. Don’t mistake their opinions for the common sense of the majority.”

Days 5 to 7: At this stage, the main storm will have passed, and more reasoned voices begin to come to the fore. People who are more qualified to comment on the issue don’t put their hands up to contribute to the debate immediately – they generally wait, and take some time to produce a well thought-out response, either in support or otherwise.

Six months later, Salt’s smashed avocado article has been warmly embraced and is frequently referred to in discussions around housing affordability. It may have even influenced federal policy. The article has also, undeniably, helped Salt’s own career and propelled him into the role of one of Australia’s leading social commentators.

Consider starting your own storm in procurement

What can CPOs learn from Salt’s experience?

The lack of attention paid to procurement and supply management across many organisations is an ongoing frustration, illustrated every time we have to explain to people what procurement actually does. There are some lessons to be drawn, therefore, from Salt’s very successful method of grabbing attention and getting noticed.

A savvy CPO could consider putting out a deliberately provocative statement within the business that will force their colleagues to pay attention, kick-start the conversation about a particular issue, and put procurement onto peoples’ radar.

If there’s an issue that’s troubling procurement but isn’t a priority in the wider business, Salt’s advice is to “expose it, and bring it onto the agenda”.

Bernard Salt will deliver a keynote speech at PIVOT: The Faculty’s 10th Annual Asia Pacific CPO Forum.

Desperation: Somali Piracy Back On The Rise

After a relative hiatus over the past five years, international supply chains are once again threatened by a resurgence of piracy off the coast of Somalia.

At the height of the Somali pirate crisis in 2011, 151 vessels were attacked in one of the world’s busiest shipping routes. Thousands of hostages were taken and billions of dollars were lost in ransom, damage and delayed shipments.

An unprecedented international response saw the dispatch of over two dozen vessels from the EU, the U.S., China, Russia, India and Japan, which succeeded in reducing the number of attacks down to only 17 in 2015, mainly involving smaller fishing vessels.

However, last month, dozens of armed men in two small skiffs captured the Aris 13, an oil tanker flying the flag of Comoros, and escorted it to be ransomed in the semi-autonomous northern Somalian region of Puntland. The vessel was attempting to pass through the Socotra Gap, a route between Ethiopia and the Yemeni island of Socotra, when it was boarded by pirates. The route is often used by vessels as a shortcut to save time and money, but has been identified as a high-risk area by anti-piracy groups. According to reports, the Aris 13 was “low, slow and too close to the coast”, making it an easy target for armed attackers.

The Aris 13 was the first large commercial vessel to be captured since 2012, when the Greek-owned MV Smyrni, carrying 26 crew and 135,000 tones of crude oil, was held in a pirate anchorage for 10 months before being released for an undisclosed ransom.

Speaking at a news conference in late April, U.S. Defence Secretary Jim Mattis told reporters there have been “five or six” piracy incidents in the region in the past two months. An anonymous defence official told The Washington Post  that the increase in pirate activity could be linked to complacency among shipping companies, who may have relaxed their security procedures (such as carrying anti-boarding devices and armed contractors) in recent years.

What drives people to risk piracy?

Whilst the international naval response to the piracy crisis has been effective, the situation is expected to continue until the root cause is tackled – the lack of authority of Somalia’s central government. The country has been labelled a “failed state” since a bloody clan-based civil started in 1991. Other factors that drive piracy include:

  • Widespread drought and famine
  • Local anger over illegal foreign vessels fishing in Somali waters
  • Extreme unemployment with no factories or industry
  • Very low earning for fishermen (approximately US$5 a day)
  • The lure of high potential earnings from piracy and ransom money
  • Cash from piracy providing the first boom in living memory in coastal towns.

Reports are also emerging of piracy on the rise on the other side of Africa, along Nigeria’s coastline. Pirates have taken to kidnapping crew members for ransom along the major oil shipping route. Previously, hijackers would siphon off oil from commercial vessels, but now that oil prices have fallen, abductions have proven more lucrative.

In other news this week:

Uber to unveil flying taxi service by 2020

  • Uber has announced “Elevate”, a flying taxi service featuring electric vehicles capable of a vertical take-off and landing.
  • Users will be able to book a ride with their mobile phone app, with Uber’s marketing team already spreading the message of “push a button, get a flight”.
  • The biggest selling point of the urban air network is that it would be able to avoid congested streets in busy cities. The service is expected to launch first in Dubai and Dallas.

Read more at Smartcompany.com.au

 ISO 20400 launched to support sustainable procurement

  • The world’s first international standard for sustainable procurement was launched last week. ISO 20400 was created with the input of experts and industry bodies from over 40 countries and is expected to increase supply chain transparency globally.
  • The Standard is applicable to any organisation, public or private, irrespective of size and location.
  • Read more about the background to ISO 20400 in Procurious’ interview with committee member Jean-Louis Haie.

Access ISO 20400 here.

Everything You Need To Know About Bitcoin In One Super Infographic

 The precise workings of Bitcoin are still a mystery to many but here’s everything you need to know about the rise of the digital currency. 

Bitcoin is a digital currency which uses peer-to-peer technology. It doesn’t require a bank for making online transactions worldwide and is also known as the first cryptocurrency that does not use central repositories. As such, it’s classified as a decentralised currency by the U.S. treasury.

The currency was first introduced in 2008 to a cryptographic mailing list. On 9th January 2009, the first version (1.0) of Bitcoin was released and on 12th January, the first transaction took place.

Presently, Bitcoin prices are climbing and there’s a whole host of significant, and widespread, clients. Pennsylvania was the first state in U.S. to  accept Bitcoins back in 2013.

UK bank, Barclays, have revealed that they will be the first to facilitate  users in making charitable donations using the currency outside their system.

Total Processing has created an infographic to explain The Rise and Rise of Bitcoin since 2008.

Toby Dean works on behalf of Total Processing in content creation and marketing. He creates engaging graphics and content that help businesses stand out from the crowd. Over the past seven years has worked with dozens of SME’s in both an agency and freelance capacity.

Negotiation, Trump-Style – The Winner Takes It All

Negotiation with suppliers can be done using hardball tactics, so long as there is no genuine need for an ongoing relationship.

In the New Yorker last year, Tony Schwartz, the ghostwriter for Donald J Trump’s The Art of the Deal said:

‘He lied strategically’.

‘I put lipstick on a pig’.

Rather than inviting more in-fighting than a Taiwanese parliament, let’s focus on the negotiation trap inherent in Trump’s behaviour.

Whether you’re for or against him, Trump’s negotiation tactics are more obvious than a bogey hanging out of your left nostril on a video conference call. Let’s look at his top five tactics:

  1. Huge ambit opening positions – if he wants $2.50, he asks for $1 Billion.
  2.  Flattery – ‘You’re a good guy, a great guy, the best’!
  3.  Bluster – ‘This is going to happen my way, it always does … believe me’.
  4.  Anger (feigned or real) – ‘This deal is so bad, so wrong, you’re making me really mad’.
  5.  Insult and intimidation  – ‘You’re a loser, you’re crooked, you are going down big time’.

These tactics may or may not have worked, but it’s fair to say that at best, they are transactional.

The Winner Takes It All

A deal can be done using these tactics as long as there is no genuine need for an ongoing relationship. The winner takes it all, the loser’s standing small. (Sorry, too much ABBA in adolescence).

Interestingly, a lot of people have asked me if I think Trump’s tactics could be useful for them.

My short response is ‘If you plan on renewing that client, want referrals or would like to be treated as a trusted adviser for a while, then probably not’.

However, when I ask them if they’ve been subjected to these, and other, tactics from clients including senior managers and Procurement, most say ‘All the bloody time’.

Many sales managers and sales people are aware of these tactics being used against them, yet are so keen to get the deal that they succumb, subjecting their company to poor margins, ridiculous stress to meet deliverables and a culture of subservience.

How to address the key tactics in Trump’s playlist

  • Huge ambit opening positions: Plan your own positions, especially your walk away. Politely refuse to discuss offers outside that range. Get back to discussing what the client is trying to achieve
  • Flattery: If you’re desperate for approval, ring your best friend, your mum or ask your dog if he loves you mid-lick. You don’t need approval and validation from clients.
  • Bluster: Ignore or say ‘thanks for sharing that, so let’s look more closely at the issues on the table’.
  • Anger: Keep asking questions like “Why is this so bad? Why do you want to still pursue this then? What would you like to do from here? (my personal favourite).
  • Insult and intimidation: See Anger, or coolly refuse to continue until the behaviour stops.

Unless you don’t care whether your client gets a great result or not, transactional negotiation styles won’t work very well.

Equally, whether they are the President of the United States or the Chief Procurement Officer, you should build a skilful, tactical wall and get them to pay for it.

Elliot Epstein is a leading Pitch Consultant, Keynote Speaker, Corporate Sales, Negotiation and Presentation trainer who gets sales results rapidly. He has coached and trained high profile corporates globally in presenting, selling, negotiating and pitching. Visit Salient Communication for more information.  

This article was first published on LinkedIn.

Game-changer: Elon Musk intervenes in Australian energy crisis

Energy politics has reached fever pitch in South Australia, where an increasingly fraught situation has been disrupted by a single tweet from Elon Musk.

Take a moment to feel sorry for your procurement colleagues working in the Australian energy sector. Since former Prime Minister Tony Abbott’s now-famous “axe the tax” campaign against a national carbon trading scheme in 2011, Australia has been without a clear federal energy policy, leading to very little certainty about future direction for the sector.

This is a problem, as power companies plan three to four decades ahead. A lack of bipartisanship on this issue means that even if a policy is put in place, any future change of government (from Coalition to Labor) would mean a rollback of the hard-won legislation of their predecessors. Power companies know that at some stage in the near future, a carbon trading or emissions intensity scheme will need to be put in place, but they don’t know what form it will take, when it will happen and what the targets will be.

Compounding the issue, the Federal Coalition government is at odds with Labor-majority state governments around Australia on energy policy, culminating in this tense exchange last week between South Australian Premier and the federal energy minister, Josh Frydenberg. South Australia has drawn the lion’s share of criticism from the federal government on its energy situation. The state has an aggressive renewable energy target of 50% by 2025, with a high reliance on wind power.

South Australia’s energy crisis started in earnest on 28th September last year, when the state experienced a once-in-50-year storm event. Gale force and storm force winds, including tornadoes and 80,000 lightning strikes, damaged 23 pylons on electricity transmission lines. As a result of the initial damage and automatic safety features shutting down undamaged parts of the network, the entire state power grid cut out for at least three hours while emergency repairs were underway. 

Power gets political

Even before the power was switched back on, a number of politicians in the federal government commented on the crisis, linking the storm damage with the state’s renewable energy target. Prime Minister Malcolm Turnbull said South Australia had paid “little or no attention to energy security”, while the Deputy Prime Minister, Barnaby Joyce, told the ABC that “Wind power wasn’t working too well last night, because they had a blackout”. One Nation senator Malcolm Roberts took the opportunity to urge all government to “exit all climate change policies.”

Much of the news cycle following the storm was dominated by a debate over renewables and energy security, and whether the storm damage or the state government’s policy was to blame. The situation was compounded by a series of further blackouts while calls increased for an urgent review of energy security at the state and national level. The debate spilled over into the international media, with South Australia rapidly becoming a much-cited example of a failure for renewable energy. Renowned Danish wind farm expert Soren Hermansen, who helped create the world’s first 100% renewable island, defended wind power by saying, “I’d have to go to Australia to deal with a blackout. We have a very powerful grid – we don’t experience any failure.”

Musk intervenes

Dropping unexpectedly into this politically-charged debate, billionaire co-founder of Tesla and SpaceX Elon Musk presented a game-changer with a single tweet earlier this month:

The offer was originally made by Lyndon Rive, Musk’s cousin and Tesla’s vice-president for energy products. Tesla has offered to install the 100 megawatt hours of battery storage that would be required to prevent further power shortages, price spikes and blackouts in South Australia. When pressed on Twitter by Mike Cannon-Brookes (Australian co-founder of Silicon Valley start-up Atlassian) on the seriousness of the offer, Musk himself doubled down with the pledge to “get the system installed and working 100 days from contract signature or it is free”.

Tesla’s confidence in its ability to deliver stems from the stepped-up battery production out of its new Gigafactory in Nevada, along with a recently-completed installation of an 80MWh grid-scale battery farm in southern California. The Californian project took 90 days to complete and cost US$100 million.

After a flurry of tweets and an hour-long phone call between Elon Musk and Prime Minister Turnbull, the debate around energy policy in Australia appears to have switched to an entirely new (renewable) direction. South Australia has announced a $550 million energy package, with:

  • $150 million for a 100MW grid-scale battery
  • $75 million in grants and another $75 million in loans to eligible projects which support private innovative companies and entrepreneurs
  • A $360 million state government-owned gas-fired 250MW power station to provide energy security when needed.

Meanwhile, Prime Minister Turnbull has unveiled $2bn expansion plans for the Snowy Mountains hydro-electric scheme, aimed to add 2,000MW to the scheme’s 4,100MW  capacity, or enough power for 500,000 homes. In a sign that the tension between federal and state energy policies continues to play out, Turnbull told reporters that the hydro-electric scheme will provide 20 times the capacity of the South Australian battery system.

Encouragingly, in the past month the national debate seems to have shifted away from the decades-long opposition between renewables and coal, to the state and federal governments trying to outdo each other on renewable projects. Cannon-Brookes wrote the following in a series of tweets that capture this shift:

“The national energy conversation seems to palpably have changed. We’re debating lithium ion vs flow vs pumped hydro storage solutions … whether 100MW is enough [or whether] 2GW is too much. $150m [investment in grid-scale batteries] in South Australia, $30m in Victoria, $2bn Federally. I’m confident there will be a series of good bids [for battery storage tech providers] in South Australia. Super funds, power operators, HNWs and many individuals wanting to invest. Most importantly, Australian people and the tech community and speaking up, loudly, that they want change.”

In other news:

Heavy construction equipment manufacturers waiting on Trump’s infrastructure plan

  • Executives in the construction industry are concerned that President Trump has not yet invested time to win congressional backing for his $1 trillion spending plan for large road, rail and bridge projects.
  • Equipment manufacturers have experienced low activity from farming, construction and mining clients in recent years, and are reportedly impatient for information about what form the investment will take.
  • The administration has indicated that an infrastructure plan would come after Congress deals with complex health care and tax reform.

Read more at The Wall Street Journal.

Kids @ Work: Children crash professor’s live interview with BBC

  • In a now-famous video interview, Professor Robert Kelly’s children burst into his room while he is discussing the impeachment of South Korean President Park Geun-hye with a BBC anchor.
  • The interview was interrupted first by his daughter, who dances into the room to join her father, then a baby in a bouncer and finally by his wife rushing in to herd the children out of the room.

Read more about incorporating your children into your work day on the Procurious blog.