h a lc r ow z e i tge i s t m aga z i n e ISS U E F I V E
Twenty thousand leagues under the sea
the spirit of the time
Gulf state Qatar is capitalising on the wealth it's accruing from oil and gas to foster a society with excellent education and infrastructure into the next century.
Deep Ocean Expeditions is poised to make the first dive 1,000 metres below sea-level, carrying scientists and tourists.
Investment in soft management issues can be hard to quantify but McKinsey outlines how, in fact, it directly impacts the bottom line.
When startups reach the point of commercial potential, they need a different kind of leader. There are good and bad ways of managing the replacement of the incumbent chief executive.
Celebrated for inspiring the imagination of children around the world for half a century now, Lego is also a dramatic business turnaround success.
Light bulbs are inefficient. Fluorescents are dirty. But LEDs will light up your life. Joey Nicotera uses his apartment in Boston to demonstrate how.
Businesses have started to embrace coaching in the work place to ensure they get the best out of people. That includes everyone from those rising up through the ranks right up to the chief executive.
Michael Skapinker from the Financial Times outlines why the social and environmental challenges of our age, once seen as obstacles to progress, have now become opportunities for innovation as well as for business development.
Innovation and imagination at work Zeitgeist is published by Halcrow, Vineyard House 44 Brook Green, London W6 7BY, United Kingdom tel: +44 (0) 207 602 7282 fax: +44 (0) 207 603 0095 email: email@example.com halcrow.com Cover photograph: Deep Ocean Expeditions Photography: Blattner Brunner Inc. Professor Justin Marshall Deep Ocean Expeditions Michael Christopher Brown Marcel Jean Vos, Vitra, Corbis Illustrations: Chris Ede, Darren Hopes Piotr Lezniak Editorial and production: Editor: Dawn Hayes Graphics: Tracy Newman Design: Frank Sully & Partners Contributors: Mandy Ross Dominic Lutyens Anne Schukat Amanda Blinkhorn McKinsey, Michael Skapinker ©2008 Halcrow Group Ltd. Copyright in the style, structure and content of the magazine belongs to Halcrow and/or its affiliated undertakings. No part of this magazine may be reproduced, stored in a retrieval system or transmitted in any form without permission of the publishers. The magazine is for general information purposes only and Halcrow gives no warranty or assurances about its contents and is not liable for any editorial, typographical or other errors or omissions. Halcrow disclaims any liability for loss arising from reliance on information herein. This magazine, its supply to you and the disclaimer stated above are governed by the laws of England and any dispute is subject to the exclusive jurisdiction of the English courts.
Space travel was arguably the pinnacle of man’s achievement in exploration in the 20th century. In this millennium the focus looks set to be down in the depths of the world’s oceans. Experts estimate that only 5 per cent of the sea has been explored. The first adventure submersible diving programme will plunge into Australian waters this year, carrying scientists and tourists on board. The trip could give us a better understanding of the ecosystem, discover new species and even find cures for human diseases. Qatar, is embarking on its own journey to secure its future not just for the next decade, but for the next century. We examine the Gulf state’s national strategy, including investment in education, which it hopes will offset its dependence on energy dollars. Meanwhile, research carried out by McKinsey shows that soft management issues, like boosting talent and reinforcing corporate culture, have a direct impact on companies’ bottom lines. Echoing that sentiment in Pushing the Envelope, Michael Skapinker from the Financial Times argues that engaging with the big social and environmental challenges of our age underpins companies' profit. A recent report from the European Commission shows that the most innovative companies are those that are most in tune with the outside world and interact with it. In our fifth edition of Zeitgeist, we continue to expore innovation with a broad mix of topics, which we hope you will enjoy. As always, we welcome your feedback so please feel free to contact us directly at firstname.lastname@example.org
If you no longer wish to receive this publication, email: email@example.com.
Dawn Hayes, editor
Twenty thousand l under the sea Tourists and scientists are poised to take part in a Pacific Ocean dive to unexplored depths that could uncover new species and a better understanding of the marine ecosystem as well as finding cures for human diseases
Deep Ocean Expeditions
As petroleum companies venture ever deeper towards the seabed in search of the planet’s last untapped oil reserves, the race to the final frontier – the unexplored depths of the world’s deepest oceans – may yet be won by science and good old-fashioned exploration. Deep Ocean Expeditions, a private Australian company, is scheduled to make its maiden voyage 1,000 metres below sea level in April 2008, taking with it international scientists, a film crew and paying adventurers. They plan to explore nine separate dive sites in Australian waters in an adventure that could uncover new information about the marine ecosystem, unknown species and even cures for human diseases. During the 20th century, it was journeys into space that attracted high-profile attention and funding. Meanwhile, the sea remains a mystery. In fact, just 5 per cent of the world’s oceans have been explored according to the US National Oceanic and Atmospheric Association. And delving deeper could lead to the discovery of more than oil.
The man behind Deep Ocean Expeditions, Australian-born Mike McDowell, is no stranger to adventure: he spent three decades leading expeditions to unlikely corners of the globe, pioneering some bold business ventures and claiming many firsts along the way. He used ice breakers to take travellers to the frozen wastes of the Arctic and Antarctic. And he was one of the founders of Space Adventures, which took the first paying passengers into space. He set up Deep Ocean Expeditions to cater for a new kind of tourist adventurer, as well as to help support scientific research. Deep Ocean Expeditions is sponsored by the Australian Research Council, as well as by commercial companies, and is the only company offering a submersible diving programme for adventurers.
Getting around 1,000 metres under the surface will be like flying a helicopter under water At these unexplored depths, the water pressure is more than 100 times higher than it is on land and temperatures are around four degrees centigrade below zero. “Getting around down there will be like flying a helicopter under water,” McDowell said. Still, the sea is considerably more accessible than space. The participants will travel in mini submersible vehicles – which starred in the 3D Imax film Aliens of the Deep – to monitor life in the undersea realm over the next three years. These are underwater vessels that go deeper than is possible for divers. Unlike submarines, they must be transported to the bottom of the sea and rely on surface support for high-pressure oxygen replenishment. The submersibles will give marine biologists the chance to discover which animals live in the deep ocean, how they communicate with each other
in the dark and how they are sometimes related yet discovered thousands of kilometres apart. The submersibles are fitted with special manipulator arms, collection baskets, high-definition cameras and high-powered lights. Each one holds a crew of
Profess or Justin Mars hall
two, one of which must be a skilled pilot. “The world is woefully ignorant about what the oceans really are,” said McDowell in an interview. “We need data to understand it, so my vision was to outfit a boat with advanced science and media
capabilities and put submersibles on board. Until now, no one – scientists included – has dived submersibles off the coast of Australia. The assets and funding are simply not there publicly. Being Australian, I wanted to take up the challenge.”
“We’ve fitted the world’s only privately-owned submersible support ship, the MV Alucia, with three manned subs on board, science research laboratories and aquariums, a film-making facility and accommodation for VIPs and sponsors. “It’s a collaborative venture. I provide the sub technology and logistics and we have some great scientists to interface with the science community internationally. A number of companies are investing in the project and there’s an opportunity for paying passengers with a taste for discovery to be part of it,” explains McDowell.
Pr ofesso r Jus ti n Mars hall
Sophisticated new sampling technology means we can bring these animals up alive and well and observe what they do Professor Justin Marshall of the University of Queensland secured funding from the Australian Research Council and will lead the science contingent of 14 Australians and 23 overseas marine experts. He comments, “We’re entering uncharted territory: just an acrylic bubble with a 12cm-thick skin between you and this extremely dark and hostile environment.” Marshall and other Deep Ocean Expeditions’s scientists were responsible for guiding much of the photography and material in Sir David Attenborough’s Blue Planet TV series. He explains, “A big part of this project for me is to observe the life that lives down there, film it, sample it for science, and understand, appreciate and preserve it. Think of the angler fish in Finding Nemo with its light-ended lure. It’s so exciting to see them operating in their natural habitat. We fully expect to find new species.” It was a deep-sea crustacean which proved to be the inspiration for the creature in the film Alien, so interesting encounters are undoubtedly on the agenda for Marshall’s team.
“Sophisticated new sampling technology means we can bring up these animals alive and observe what they do. All sampling until very recently involved trawling things up from the bottom, typically in pretty poor condition,” he explains.
Next time you go to a pool, close your eyes and float in absolute darkness. Imagine if that was where you lived – how do you find food? How do you find a mate? Attached to each submersible is a pair of mechanical arms with rate-controlled Hawke sensory manipulators that provide six functions and which are capable of collecting samples of up to 45kg in weight, as well as deploying instruments and specialist biological and geological sampling tools on the seabed and above it. These manipulators can be operated by the pilot or the observer, with minimal training, because of the intuitive nature of the joystick controls used. “Next time you go to a pool, close your eyes and float in absolute darkness. Imagine if that was where you lived. How do you find food? How do you find a mate? There’s a lot of intriguing sensory and genetic stuff to learn about deep-ocean life. Knowledge is key to protecting species.” Marshall cites the example of the Orange Roughy, which was fished to the point of population collapse to grace the menus of Sydney’s best restaurants. We now know the slow pace of such deep-sea fish means they live to perhaps 70 years, reaching sexual maturity only after many years, making them non-replenishable stock. The sea is also viewed as a potential treasure trove of compound molecules. Industry reports cite a group of deep sea microbes that have been found
to inhibit the MRSA superbug, for example. There are hopes that other compounds may be able to act as anti-cancer agents. The University of Queensland and a number of scientists will receive samples from Deep Ocean Expeditions to enable them to progress their bio-prospecting research. In addition to the scientists and film crew on board, the expedition is attracting interest from those looking for a unique kind of adventure. McDowell says, “The chance to be part of it has massive appeal. These days we delineate ourselves
pr OfessOr Justin Marshall
more by what we do than by what we own. People want to see unique places with comforts too.” Ironically, McDowell had a pretty uneventful childhood for someone so thirsty for adventure. “Growing up in Canberra, I never went more than 150 miles from home. My family was not adventurous,” he said. “My tipping point was a year as part of an Australian expedition to Macquarrie Island in the sub Antarctic. It was wildlife heaven. I knew then I needed to get into the world. I’ve spent 25 years travelling and on
expeditions with no house or home. I dream of doing things that are unusual, concepts that are new, and having problems to solve.” For McDowell, exploration and innovation are intertwined; pushing into the unknown accelerates new thinking. As he puts it, “The real world is out there...” And the deep sea could be set to become the ultimate travel destination in the 21st century. Written by Mandy Ross, freelance writer.
The link bewen profis and organizational performance Executives oten worry that work on “soft” management issues is not only hard to quantid but also difficult to jusid with boards and skeptical “short-termis” invesors. Reassuringly, however, McKinsey research highlights the way initiatives to boos talent, srengthen values, and reinforce corporate culture appear to directly improve the boxom line We recently analyzed hundreds of global businesses whose employees and managers participated in an extensive (and ongoing) organizational survey.¹ For each of these businesses we established an organizational profile – an assessment of corporate effectiveness in nine key areas that, we believe, underpin organizational excellence (Exhibit 1). We then compared the results with various aspects of these companies’ financial performance.² Significantly, we found that companies ranking in the top quartile for overall organizational quality (a straight average of the nine areas) were more than twice as likely as those in the bottom quartile to have above-average margins for their industry (as measured by earnings before interest, taxes, depreciation and amortisation). Other metrics – including the ratio of net income to sales and growth in enterprise value – also helped us identify the correlation between good organizational performance and above-average financial results (Exhibit 2). The research strongly reinforces our belief that a robust organization is a critical foundation for a healthy company: one that not only delivers immediate results but can also repeat this kind of performance years into the future.
Exhibit 1 - The foundation Nine key areas that support organzational excellence Accountability
Reporting relationships and performance measurement ensure that people are accountable for business results
Internal skills and talent are sufficient to support the company’s strategy and create competitive advantage
Coordination, control Business performance and risk are measured and reported Direction
People understand and are aligned with where the company is heading and how to get there
Environment, values The quality of employee interactions (e.g. culture, workspace design) fosters a shared understanding of core values External orientation The company has constant two-way interactions with customers, suppliers, partners, or other external groups to drive value Innovation
The company generates a flow of ideas and embraces change so that it can sustain itself, survive, and grow over time
Leaders at all levels shape and inspire the actions of employees to drive better performance
Employees are inspired to perform and encouraged to stay with the company
Next, we analyzed the nine areas of organizational effectiveness individually. We found that a ranking in the top quartile in any area was correlated with better financial performance, but not all areas were equal in
this respect. In the case of coordination and control, top-quartile companies were 2.7 times more likely than bottom-quartile ones to have above-average margins. At the other extreme, for motivation, external orientation, and environment and values, companies in the top quartile were only 1.8 times more likely to have them. It’s interesting that we observed a strong linear relationship between organizational and financial performance for five of the nine areas: capabilities, direction, accountability, innovation, and coordination and control. Such findings imply that efforts to improve those organizational qualities should pay off directly. However, the picture presented by the data on three areas – leadership, external orientation, and environment and values – was less clear: the correlations between these three and above-average financial performance weren’t limited to the top quartile. Perhaps it’s enough for companies to ensure that they are not at the bottom of the class; further effort might be wasted. We did not find a linear relationship between organizational and financial performance when it came to motivation, the ninth area. While companies that motivate their employees in truly distinctive ways appear to enjoy a financial upside, there wasn’t much difference between average motivators and those in the bottom quartile; both groups were equally likely to outperform other companies in the sample financially. This finding may reflect the fact that very few of our respondents reported being unmotivated to a significant extent – a sign that today’s highly mobile labor market frees dissatisfied employees to find other work quickly. To be sure, many factors drive financial performance, and evidence of correlation is not evidence of causality. Therefore we have intentionally declined to isolate the financial impact of organizational performance on individual companies. Still, the correlations we identified are striking, as they strongly suggest that companies pay a financial penalty for weak organizational performance and that strong organizational performance reaps financial dividends. Improving a company’s organizational capabilities is a complex challenge, given the variety of practices available to achieve excellence in each of the nine categories (our survey highlights
Exhibit 2 - The links between financial and organizational performance Likelihood that company in given quartile for organizational performance will have above average financial performance,1% EBITDA2 Top quartile Middle 2 quartiles Bottom quartile
2.2 times more likely
Growth in ratio of enterprise value to book value 62 Top quartile 52 2.0 times more likely Middle 2 quartiles 31 Bottom quartile Growth in enterprise value Top quartile Middle 2 quartiles Bottom quartile
1.5 times more likely
Growth in ratio of enterprise value to sales 57 Top quartile 57 Middle 2 quartiles 31 Bottom quartile Growth in ratio of book value to sales 65 Top quartile 48 Middle 2 quartiles 38 Bottom quartile Growth in ratio of net income to sales 58 Top quartile 53 Middle 2 quartiles 38 Bottom quartile
1.8 times more likely
1.7 times more likely
1.5 times more likely
1 All data taken either in survey year or averaged over three years; survey year varies by company, as survey was conducted over past five years 2
Earnings before interest, taxes, depreciation and amortization.
more than 40 practices in all). Previous McKinsey research suggests that excellence in only three to five practices is sufficient to have a real impact.³ Moreover, we find that the use of practices in certain combinations tends to be even more effective. Companies can now pursue such efforts with the knowledge that the resulting improvements will have a positive impact on the bottom line. Notes
¹ The data behind the results come from the opinions of more than 115,000 people, ranging from frontline workers to CEOs, in 231 organizations around the world: public and private companies, government entities, and non-profits. The companies compete in a variety of industries, including banking, insurance, petroleum and telecommunications. ² To link the organizational results with a company’s financial performance, we constructed, for each industry, benchmarks based on the performance of at least 100 publicly traded global companies within that industry from 2000 to 2004. We compared only organizations that publicly reported their financial results. ³ Keith Leslie, Mark A. Loch, and William Schaninger, “Managing your organization by the evidence,” The McKinsey Quarterly, 2006 number 3, pp. 64-75.
This article was written by Aaron De Smet, Mark Loch and Bill Schaninger for McKinsey & Company, and was first published in The McKinsey Quarterly in August 2007.
ss sine u b loP s e a v P e u t td s s ta r r d s a s i s itâ€™ o t w o s a h l k il s te w ience s t s th s i e w x Per re a k le he b e P t . o e l e b P m a k otenti a ean y l l c e P a r ar ake ci a l m r e o m t com be s t y l l usua
T N I O P G N I P P I T E TH
When John sculley joined Apple Computer as president and CEO in 1983, a climate of mutual mistrust quickly developed between him and founder steve Jobs. Jobs was dismissive of sculleyâ€™s lack of technological knowledge. sculley, who had left his job as president and CEO of PepsiCo, saw Jobs as a loose cannon. Mistrust snowballed into all-out war and, less than two years later, Jobs tried to force sculley out. his plan backfired when his successor won the support of the companyâ€™s executives to strip Jobs of operational responsibility. Jobs remained as chairman but he soon quit, unable to bear the loss of control over the company he had founded.
YOu sHOuld bE ablE TO TEll afTEr THrEE quarTErs If YOur CEO Is THE rIGHT maTCH sculley came and went and Jobs has since returned to steer Apple into newfound success with its iPod. But the story demonstrates the potential pitfalls of bringing in new management to steer a business through different stages of development. Entrepreneurial founders who inspire the early stages of a business rarely make its best stewards when it becomes a bigger, more commercial entity. in some cases, managing the transition of such individuals to roles with less decision-making power, can be both painful and damaging. in a climate where executive behaviour and rewards are scrutinised increasingly closely, investors are less tolerant of the fall-out that can
Return to investors compared to market average, by reason for CEO exits 2006 Source: Booz Allen Hamilton
8.3% (above market average)
Percentage of CEO departures in which boardroom infighting was a factor Source: Booz Allen Hamilton 2004-06 11%
accompany the transition from one CEO to another. From 1995 to 2006, annual CEO turnover grew 59 per cent, according to a 2007 study of 2,500 of the world’s largest publicly traded corporations by management consulting firm Booz Allen hamilton. in the same period, performance-related turnover rose 318 per cent, the study shows. in 1995, one in eight departing CEOs was forced from office. in 2006, nearly one in three left their post involuntarily. in the technology arena, where the risks associated with innovation can be higher, the turnover rate is in turn higher. Many founder CEOs fail to see the need for fresh blood to move their foundlings forward beyond first base as they scale up in size, said Bart Markus, general partner at venture capital company Wellington Partners. “how you transition to a professional CEO is crucial,” he said. “You have to consider what you’re going to do with the founding CEO and, in choosing a new one, you must ensure you have someone that fits the business at the stage it’s at.” Wellington Partners, which deals mainly with German-speaking Europe, has made it a rule to find founding CEOs a new role where they can add value within a company, not get rid of them. “You’d be amazed at the amount of negative energy people develop and deploy against a company if you get rid of them, even if they own shares,” he said. Wellington has overseen a number of CEO transitions, including at Artech, a French software developer. To achieve its potential, the company
needed a CEO with the skills to galvanise employees as well as customers. it hired an American, a senior executive in the European operations of a large Us software firm who was just not appropriate to the strategy the company had set out, Markus said. in addition, the company had a FrancoAmerican culture clash on its hands. The new CEO lasted four months before Artech’s management was forced to start from scratch. hiring CEOs involves dealing not only with what a person has done but also with who he or she is as a person, according to Markus. “if people tend to be hired for what they have done, they are often fired for who they are,” he said.
INvEsTOrs arE lEss TOlEraNT Of THE fall-OuT THaT CaN aCCOmPaNY CEO TraNsITION Companies that forced their CEOs from office in the UK, for example, returned significantly better returns to shareholders compared with the rest of Europe (13.3 per cent versus 6.9 per cent), the Booz Allen hamilton study shows. however, other European companies, that had planned CEO successions, generated shareholder returns 2.4 percentage points higher than their UK counterparts. The study also showed that bringing in an outsider as CEO is less successful than grooming in-house management. Matching executives’ experience and skills with the stage a business has reached is crucial, as Upaid systems learned when it embarked
CEO turnover rate (worldwide) Source: Booz Allen Hamilton
on a search for a brand new CEO in 2000. The company was shifting away from selling pre-paid telephony in developing countries to selling mobile payment software in the developed world. The company hired the CEO of one of Nokia’s subsidiaries, only to find itself forced to renew the search less than a year later. “he met all the criteria on paper, appeared to be a great match and he wanted an entrepreneurial challenge,” said David Dunn, who was then executive managing director and chairman of Upaid and is now managing director of law firm
YOu’d bE amazEd aT THE amOuNT Of NEGaTIvE ENErGY PEOPlE dEvElOP aNd dEPlOY aGaINsT a COmPaNY If YOu GET rId Of THEm, EvEN If THEY OwN sHarEs CEO turnover by reason The cyclical increase in turnover due to mergers balances the drops in exits due to retirement or dismissal.
Patton Boggs international Business Practice Group.“But it’s very difficult for an executive who has spent their life in large - company operations to make the transition to the small early-stage company culture.” The new CEO set about building a company before first confirming that there was sufficient committed budget as well as demand for the product. There are examples of smooth transitions: Frank Averdung was hired as CEO of Process Technology NaWoTec near Frankfurt to replace its former CEO Christian hockemeyer. The company, which was sold to Carl Zeiss in 2005, makes photo masks for silicon chip design. hockemeyer had built up infrastructure
CEO turnover by region Across North America, Europe, and Asia in the last couple of years, the rate of CEO turnover, although still elevated, has flattened
and hired good people but the company needed commercial skills for its next phase of growth. Trained as an engineer, Averdung had technical knowledge but had spent most of his career in sales, marketing and general management. it was this combination of skills that clinched the job for him and, in his case, his predecessor became a crucial mentor and ally once Averdung accepted the job, helping him to assimilate the company’s culture and relationship structure. Mentoring is key to successful CEO transition, said Dunn, as is leaving the new CEO to make their own decisions and mistakes. “it’s quite important to give your CEO the resources and latitude to fail as soon as possible, because in a small company you can’t afford to go on year after year with a CEO who isn’t working,” he said. “in fact, you should be able to tell after three quarters if your CEO is the right match for the market you plan to enter.” Dunn advises that boards should maintain the focus of incentives on the success of the company rather than the success of the CEO. “holding a CEO to a set of performance milestones allows you to take a more holistic view of his or her ability to deliver, and avoids the emotion often associated with this stage of a company’s development,” he said. Managing their expectations from the start can determine whether you help create a success or a failure.
North American tenure and returns In 1995, leaders who delivered sub par stock performance were just as likely as CEOs who delivered above-average performance to achieve long tenure. By 2006, CEOs whose stock performed well were almost twice as likely to last more than seven years in office.
Percentage of CEOs with above-average returns who had tenure greater than seven years 59%
Percentage of CEOs with below-average returns who had tenure greater than seven years 62%
Source: Booz Allen Hamilton
Balancing consisency imagination
BLATTNER BRUNNER INC.
Lego, the iconic plastic bricks conceived in 1932, is indisputably a model of innovation. The design, originally crafted in wood by a Danish carpenter called Ole Kirk Christiansen, has made Lego Group the biggest toy manufacturer in Europe by sales and the fifth largest in the world. FĂŞted for its creative influence in inspiring freeform play in children, Lego continues to thrive, yet it is more than a triumph of commercial longevity. While maintaining consistency â€“ it still uses its original interlocking two by four bump-and-holes design â€“ the company has continued to innovate successfully. Its journey has not been without hurdles, key among them an erosion of sales as interest in digital media soared in the last decade. Faced with this new competitor, the company posted its first financial loss in 1998 and it looked like the toy phenomenon would be consigned to the annals of a bygone age. But the company fought back by rationalising its workforce and assets, and by joining forces with some of its biggest competitors. It rode the success of brands like Star Wars by developing joint products, including a video game, called Lego Star Wars II, which sold 1.1 million units in its first week of release. This helped the Lego Group to turn a $374 million loss in 2004 into a $281 million profit in 2006.
planning a century in advance From the hothouse of the Arabian Gulf, the tiny state of Qatar, with less than 1 million inhabitants, is positioning itself alongside some of the more familiar Middle Eastern names as one of the regionâ€™s most ambitious powerhouses. We examine the thinking behind the countryâ€™s
Qatar is becoming a more familiar name in the west for many reasons. It bid for the 2016 Olympic Games and stages an increasing number of sporting events. Its AlJazeera satellite TV station has upset governments around the world, including most Arab governments, and it has bought a 20 per cent stake in the London Stock Exchange and 10 per cent of the stock exchanges in Scandinavia and the Baltics through the Qatar Investment Authority, one of a handful of sovereign wealth funds which have had a big impact on the world’s financial markets. Clearly it is set on establishing itself as a major force on the world stage. Qatar’s confidence and bank balances arise, of course, from the Middle East staple of oil and, increasingly, natural gas. Oil was first discovered here in the 1940s, but it was in 1972 that energy giant Shell found what has become known as the North Field, the world’s largest reservoir of gas and perhaps the single most important factor in raising the per-capita gross domestic product of Qatar’s citizens to US$36,632, the highest in the Arab world, according to the International Monetary Fund. Qatar – built on a small peninsula jutting into the Arabian Gulf – is sitting on some 900 trillion cubic feet of gas and over 13 billion barrels of oil. Its astonishing mineral wealth, meant it could long ago cast off its traditional economic reliance on pearl diving and fishing, and move into the hydrocarbon premier league.
Each person living in the emirate, in theory, owns some 11.25 million cubic feet of gas and 2,187 barrels of oil The buoyancy of the global energy market has ensured that its citizens are now, on average, wealthier than their British, French or German counterparts, while the capital Doha has become a regional capital and focal point for investors from around the globe. Yet the country’s rulers are acutely aware, from looking at Gulf neighbours, and further afield, that plentiful hydrocarbon resources are no guarantee of long-term economic and social stability. Qatar may be surfing the crests amid a sea of fuelhungry economies – it is attracting investment and tourists,
and its people have a better standard of living than ever before – but this, it appears, is not enough. Now the country is embarking on a journey which it hopes will secure its future, not just for the next decade or even for the next generation, but for the next century and beyond. Fortunately, the immensity of its mineral wealth liberates the emirate to think long term. The state is making an investment of upwards of US$130 billion in its infrastructure over the next few years. Some of that will go towards constructing a 2,500 acre Education City, which has already attracted universities from the US and Europe. It is also building a science and technology park which acts as an incubator for budding entrepreneurs.
annually by 2011. The technology cools gas to -180 degrees centigrade and shrinks it to a liquid one sixhundredth of its size, allowing it to be shipped in 54 Korean-built tankers bought as part of the biggest shipping deal since the end of the Second World War. But the country’s good fortune in the resources it enjoys is only likely to be efficiently deployed if it is able to draw on lessons learned by others from around the world. It knows it needs to generate investment and development that is not only sustainable, but will also balance the revenues it currently generates from oil and gas. So Qatar is focusing on building a knowledgebased economy, with plans to build dedicated new business areas or ‘cities’, like the science and
The country is planning for the next century and beyond A new international airport is under construction; contracts are being signed for new roads, hospitals and schools; another 8,500 top-end hotel rooms are expected to become available within two years; work is beginning on a 108-floor skyscraper; Qatar Petroleum is building a new headquarters; and an entire new city called Lusail is being built, which will house 200,000 residents and offer marinas, golf courses, entertainment districts and island resorts. Qatar’s ambitions are illustrated by its bid to host the 2016 Olympic Games, while it is due to hold the 2010 World Indoor Athletics Championship and the 2011 Asian Football Club event, for which the world’s first underground sports stadium is in plan. There is no question that oil and gas are propelling the country’s economy. The Ras Laffan port complex, situated in the north of the country, now supplies the vast majority of the 25 million tonnes of liquefied natural gas that Qatar exports annually alongside its 292 million barrels of oil. Advances in liquefied gas technology mean Qatar hopes to be exporting 72 million tonnes
technology park. These are being designed to provide the right built environments for incoming high-tech industries and businesses, as well as to encourage Qatari people to set up their own businesses. Politically and economically, the country – which has a degree of democracy, two female government ministers, and where foreigners are permitted to buy the freehold of properties in certain areas – appears to have greater lure than some of its neighbouring states. Still, competing regionally with resource-rich city states like Abu Dhabi and Dubai, Qatar’s small population of under 1 million people is disadvantageous. Only around a quarter of inhabitants are thought to be native Qataris. But it is estimated there will be 1.5 million citizens by 2015, attracted by thriving financial, healthcare, education, legal, tourism and hydrocarbon distillate sectors. Doha, named after Ad Dawha – the big tree which famously grew next to the fishing port which gave rise to the capital – is clearly intent on spreading its branches.
Howâ€™s this for an idea? Get someone else to open your mail for you and let you look at it over the internet from anywhere, any time? They then recycle the paper for you. Itâ€™s as innovative a concept as the Pony Express was in its day, which cut the time it took for mail to travel between the Atlantic and Pacific coasts of America in 1860 to ten days. We may still be some way from living in a paperless society but Earth Mail Express in Seattle is moving us closer to reducing the mountain of letters that are transported around the globe every day using existing technology. The company opens post on behalf of customers, scans it and sends it to them electronically. The company forwards letters to customers if they want them, or recycles the paper if they donâ€™t. Business and individual customers pay US$13 per month for an electronic mailbox, where they can view their post in PDF format over the internet. In fact, Earth Mail Express says, customers can usually tell just by viewing the envelope whether they want to open it or not, and two-thirds of what it handles is shredded and recycled without being opened. The company says it employs military veterans with Department of Defence clearance as scanners for security reasons. It says that since a lot of the post it receives contains cheques, it plans to introduce a service to electronically deposit cheques for customers later this year.
From Pony E
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Michael chri stopher Br own
light with Soul Light bulbs are inefficient. Fluorescents are dirty. LEDs will light up your life – beautifully Boston isn’t supposed to be this cold in midMay. It’s 7 degrees centigrade and raining so hard that any hints of spring have turned to grey mush. And then you enter a loft apartment, a few miles north of the city, that is a symphony of light. Spotlights illuminate the entrance, in an old brownstone building that was once part of the Charleston Chew candy-bar factory. A shifting radiance draws your gaze to the oval dining table where a George Nelson bubblelamp glows soft green, then fades to yellow. On the right, a shelf-like structure covers part of a wall. Each of its 20 chequerboard panels slowly morphs from blue to purple, in a lightshow that, with the panels’ ability to take on any colour, could be as varied as the music from the piano beside it. Around the corner in the kitchen, a large cabinet is fronted by four doors of translucent glass. Tucked inside, hidden backlights bathe bowls, plates, cups and glasses in a luminous, fuschia-pink wash. This is the work of Joey Nicotera, a lover of light. Since he was a child, Nicotera, now 33 years old and working as an IT manager, has collected and dabbled with toys that light up. But it was when he started to use fixtures based on light-emitting diodes (LEDs) that his vision came to life. He first read about colourchanging LED lamps several years ago, and knew right away that he wanted them. In 2005 he bought the Boston loft, his first home; since then he has installed a range of more
than 50 computer-controlled LED fixtures. LEDs, made of semi-conductor chips that convert electricity into light, have come a long way since Nick Holonyak junior invented the first one for General Electric in 1962. At first they were not very bright, so they were used mainly in such gadgets as calculators and watches. As they improved, LEDs made their way into traffic signals, signs and displays. During recent years, they have expanded their reach into retailing, entertainment and architectural lighting, including landmarks and facades. Now, with the help of a few visionary pioneers like Nicotera, they are crossing the final frontier – into the home. Whereas LEDs are rapidly improving, the common light bulb, a glass-encased filament heated to incandescence, has advanced little in design or efficiency in the past 100 years. Only about 5 per cent of the energy it uses is emitted as visible light; the rest is wasted as heat (which is why some in the industry mock it as an oven in disguise). Fluorescent lights, which were developed in the 1930s and consist of tubes that contain mercury, are roughly five times as efficient. The appeal of LEDs is that they contain none of the mercury and already rival fluorescents in efficiency, making them better for the environment. LEDs have other advantages besides. They can endure up to a decade of non-stop use and, instead of failing, just grow dimmer with
time. That spares you the cost and inconvenience of replacing burnt-out light bulbs. An LED is also shock-resistant and takes up hardly any space. Each LED is typically about the size of the eraser you might find at the end of a pencil.
On top of all this, LEDs promise to give you more control over your lighting than any other technology. Unlike incandescent or fluorescent lamps, which spew light in all directions, LEDs generate directional light, which makes them
popular with art collectors. Moreover, being able to mix the light of red, green and blue LEDs can generate millions of colours, which lets you tune the light output of a fixture according to your mood, the occasion, or to the time of day. And because LEDs are small, they allow for a far greater choice in fixture design and position. Some in the industry believe LEDs could lead to a revolution in lighting design and even in architecture. New types of fixture, such as walls, floors or ceilings that light up, could become commonplace. “A new style of lighting will evolve,” said Jim Benya, whose company Benya Lighting Design is based near Portland, Oregon in the US. “Lighting as we know it today will become history.”
Michael ch ristopher Brow n
lighting as we know it today will become history
ideal for illuminating the spaces you want. Because LEDs produce light in a narrow range of wavelengths, you can avoid any potentially harmful or unwanted radiation, such as ultra-violet or infra-red light – a feature that has made them
The first residence fitted entirely with LEDs was in London’s Chelsea. In 2003, Marcel Jean Vos, then a property developer, teamed up with two companies to embed colour-changing LED fixtures in the floors and walls of his own apartment. Everyone thought he was mad, recalls the tall, exuberant Dutchman, but the result was stunning. He sold the property a year later for a premium of nearly 20 per cent over the going market rate. Earlier this year Vos Solutions, his Londonbased design consultancy, completed a project for a wealthy British businessman who had his villa in Portugal fitted with more than 1,000 LEDs. Although few homes are lit entirely with LEDs, an increasing number of designers are using them for special tasks – to light a home theatre, for example, or a rotunda or a hallway. Focus Lighting, a New York-based design firm, recently used LEDs to light a staircase made of glass in a Greenwich Village penthouse owned by a young couple – she a creative director at an advertising agency and he a chef. “The LEDs are capped into
Marcel Jean Vos â€“ thevospad .com
the back of the glass, so they just glow magically,” said Paul Gregory, the owner and principal designer of the company. “That’s hard to achieve with any other light source.” James Turrell is a light artist who has used LEDs in several works in people’s houses. Born in 1943, Turrell, a Quaker with white hair and a beard, lives on a ranch near Flagstaff in Arizona. His work has a meditative quality and often plays with the perception of light. He is best known for his ‘skyspaces’, which typically consist of a small, enclosed chamber with an opening in the roof so you can see the sky. The colour of the light inside the chamber, coming from hidden fixtures around the opening, is programmed to change slowly as the colour of the sky changes with the time of day. His largest installation, at the Roden Crater in Arizona, is a long-time work in progress that consists of tunnels, chambers and a viewing area inside the crater’s vast space. Most recently, Turrell completed an installation at the Napa Valley estate of Norah and Norman Stone, two art collectors. The work consists of a skyspace surrounded by an outdoor pool and an unenclosed skyplane above an outdoor dining area. The designers thought about using other light sources for the project, but none had the colour range or was as easy to control as LEDs, says Dan Dodt, a lighting consultant who helped with the project. Turrell also designed the lighting of an indoor swimming pool and adjacent rooms for Richard Baker, a property developer who is based in Greenwich, Connecticut. For his part, Joey Nicotera did his own designing. He had all the walls in the loft outside Boston painted in shades of medium grey and ensured that his furniture also came in neutral colours to maximise his choice of light. In addition to that, all the fixtures are either functional or
decorative, so that they do not look strange or out of place when the lights are switched off. This article was first published in the Economist’s Intelligent Life magazine and written by Anne Schukat
How LEDs work An LED chip, housed inside a dome-shaped lens, is based on two types of semi-conductor materials that are sandwiched together. The two layers are referred to as n-type and p-type. The n-type contains an excess of negatively charged electrons, whereas the p-type is characterised by an abundance of positively charged holes that can accept electrons. At the junction where the two materials meet, electrons pair up with holes. This forms an area that is depleted of charge, thus preventing current from flowing. But if you apply a large enough voltage across the junction, electrons and holes flow in from opposite sides. As electrons and holes recombine, each electron gives up energy, which is emitted in the form of light. Whereas most semi-conductor chips in electronic devices are made from silicon, LEDs are made of complex alloys of exotic materials like indium and gallium. In fact, it is the composition of the semiconductor materials that determines the wavelength of the photons produced by each electron, and thus the colour of the light.
The perfect chair
Office chair design has come a long way since the first industrially produced articles from the late 19th century. This is one of the most challenging areas of design, where appearance is primarily dictated by function
Forget height-adjustable seats and spring-mounted backrests. Your office chair will come with fewer knobs and levers in future. In fact, the boundaries between office and domestic chair furniture are increasingly blurred as demand for innovative design rises. On the one hand, increasingly design-savvy companies and employees are hankering after goodlooking chairs. On the other, employers are wising up to the link between ergonomics and productivity. The need to balance function with aesthetics, without one overshadowing the other, is perhaps the biggest challenge faced by office chair designers. “Most ergonomic improvements are thought to increase worker productivity by 10 to 20 per cent,” said Alana Stevens, marketing director for seating at US manufacturer Knoll. “Given that the average worker is productive for about five hours per day that amounts to an increase of between 30 and 60 minutes every day. In the US, the Occupational Safety and Health Administration estimates that, for employers, an average ergonomics programme costs somewhere between US$150 and US$400 per worker a year, and that an effective health and safety programme can save $4 to $6 for every $1 invested.” Back pain and musculoskeletal problems like repetitive strain injury cost businesses money. A mix of both costs US businesses up to $60 billion a year, according to data provided by the US Census Bureau and a range of other organisations. In Germany, 31 million cases of back pain per year are responsible for 97.4 million days of missed work and financial losses of 20 billion euro, according to a report by the medical school attached to the Free University and to the Humboldt University in Berlin. Changing working patterns is one reason for growing concern with ergonomics. Our working lives have become increasingly sedentary compared to the days before computers, when we periodically walked from our typewriters to our filing cabinets to store information. Internet traffic volumes are escalating, which results in people spending even longer in front of their screens.
The vogue is for increasingly pareddown yet vibrantly colourful designs
What, then, is today’s state-of-the-art office chair like? Contrary to what you’d expect, all-singing, alldancing adjustments are no longer cutting-edge. “in an ideal world, the office chair would have zero adjustments,” says Stevens. “Studies show that when you have too many of them, users get confused and sometimes make adjustments that are not to their benefit.” Office chairs are, to use the jargon, increasingly ‘intuitive’ and ‘responsive’, capable of moulding themselves to the sitter’s anatomy without he or she actively making any adjustments. Knoll’s Life chair, for example, has a tilt mechanism linking back and seat rest: when you sit in it, the seat gauges your body weight and prompts the back to provide you with the lower back support you need. a heavier person, for example, will need more back support. its Chadwick chair, meanwhile, tilts forward three degrees when the user sits forward, automatically cushioning your back. another trend is for chairs that allow you to recline while still providing support to your back, such as Mario and Claudio Bellini’s Ypsilon chair for German office and home furniture company Vitra. this is a response to the increasing use of miniaturised electronic devices like laptops, mobile phones and personal organisers, which also makes height-adjustable arms more important. Chairs are looking increasingly futuristic, using mesh upholstery, an idea pioneered in Herman Miller’s aeron chair. While providing firm support, mesh is more porous so makes for a cooler chair to sit in. in addition, its semi-transparency complements the look of contemporary, open-plan offices. aesthetically, the vogue is for increasingly pared-down yet vibrantly colourful designs. the more upscale ones tend to have been dreamt up by big-name designers who don’t see office chair design as beneath them. take antonio Citterio’s axess Plus chair, Philippe Starck’s eccentric sunshine yellow Hula Hoop chair, which has a seat that rests on a rubber ball joint, allowing it to tilt in any direction, and alberto Meda’s Medapro chair.
Chairs are looking increasingly futuristic with mesh upholstery, an idea pioneered in Herman Miller’s Aeron chair
Cutting-edge design is for chairs that downplay rather than emphasise technological wizardry. a chair called the Worknest created for Vitra by design-world hotshots, brothers Erwan and ronan Bouroullec, breaks the mould by sheathing and hiding its sophisticated adjustment mechanisms, even its armrests, in a stretchy knitted fabric that also envelops the user when he or she sits in it. “We wanted to get away from a technical-looking chair,” says Mark adam, head of product marketing at the seating division of Vitra. “the fact that you can’t see its metal elements makes it look very organic and inviting to sit on.” it’s an ‘anti-office’ chair available in a variety of funky colours that help to make it feel even less institutional. “the Worknest brings a new aesthetic to the workplace,” says Sevil Peach, of architectural practice Sevil Peach Gence, which has designed contemporary office interiors. ‘it does away with the technical look and feels like a cosy club chair while embracing all the ergonomic requirements. the open-plan landscape in many offices, with its endless chairs resembling spiky-looking insects, can now benefit from a softer, more ‘emotional’ chair which comes in a wonderful range of unexpected colours.” in her experience, employers and employees are increasingly demanding about what chairs they choose. “Clients want to test a selection of chairs and have the last say in their selection,” she says. “Choice has become much a more important and personal thing.” there are no shortcuts to buying a good office chair. according to Simon alderson, co-owner of hip London furniture retailer, twentytwentyone, buying one is not so different to buying a swanky sofa or chair for your home: “Like many other stylish contemporary products, it’s often a case of ‘You pay for what you get’. if you want your chair to be of lasting quality, it’s worth the investment.” By Dominic Lutyens, freelance journalist.
Contrary to popular belief, coaching is not for failures. Amanda Blinkhorn discovers that businesses are embracing it to ensure they get the best out of people, from the lowliest foot soldier to the CEO
Coaching, he believes is an increasingly essential tool in the workplace – and it is equally useful for those on the way up in an organisation as it is for those who have already reached the dizzy heights of the boardroom. “Tiger Woods didn’t fire his coach the moment he won the Masters at 19. He went out and hired even more,” said Cartwright, explaining that the more successful people are, the more expertise they need around them, not less. “I met a guy this morning who is in a company which is now training its managers to be leaders,” said Cartwright. “He was going from a relatively comfortable position, where he was successful and knew what he was doing, straight into learning how to lead effectively – and they are two very different skills. “Management is all about looking after the team – leading is completely different. It’s about deciding the vision and direction of a company, and if you are going Jez Cartwright, Career CoaCh, through that on makes it his business to help your own it can be quite unnerving.” Companies get to the top Any new role at work can bring you face to face with numerous We don’t expect our best footballers, film stars confidence-sapping bear traps, he said, because or singers to reach the top on fresh air and talent, often you are moving from a situation where you yet when it comes to our working life, most of are perceived to be doing well, to one where you us have no qualms about struggling up the have very little feedback – no-one tells you how career ladder on our own. you’re doing until you start doing it wrong. It’s often, wrongly, seen as a sign of failure if Age is also a factor that makes taking on new people ask for help at work, said Jez Cartwright, challenges more difficult. “When you learnt to a sports-psychologist-turned-career-coach who drive, you had a reason to do it. You were probably makes it his business to help companies get to 17 and wanted or needed to be able to do it. the top and stay there. He finds it baffling that As you get older, you tend not to be so relaxed performance coaching in the work place is a about learning new things. If I were to ask you relatively new innovation – and still viewed now to go and learn how to fly a plane you with suspicion by bosses and employees alike. might get quite nervous about it and you would
as defensive and they snap back “No – I’m not!” make some mistakes,” said Cartwright. He is not afraid to delve into a person’s Lots of his work is involved with helping background or childhood to find out what people to adapt to new challenges. makes them behave the way they do. “Let’s “In one company you may get a bunch suppose someone finds it very difficult to of engineers who know absolutely every communicate in a group or to give a presentation,” detail of the new software they have developed. he said. “Now they may explain it simply by saying That may seem to make them the natural they are very shy. Well, we might look at it and people to go out and market it, but experience think about what it was that led to that – it may shows that they will probably have no idea have been a teacher who shouted them down how to communicate that information when they were a child and made or how to put themselves in the them feel silly for speaking out, position of a purchaser.” A lot of and since then they have found A lot of professional coaching professionAl it difficult to speak up.” is about correcting people’s false coAching is Once uncovered these problems perceptions about themselves. are easier to deal with. “When “We are great at lying to About correcting you have identified the problem, ourselves,” said Cartwright. people’s fAlse a person’s confidence generally His approach is to ask everyone perceptions About goes through the roof. “It’s about who works within a department understanding what’s going on for their opinion of the others, themselves for people. Everybody has needs which leaves them nowhere to which are crying out to be fulfilled, and if you hide. It’s fair, but scary, especially when learn how to do that, it makes such a difference. people are confronted, gently, with their colleagues’ “Some people don’t know what they don’t perceptions of themselves. know. As I coach I am there to walk alongside “The idea is to help them face reality. If you them and just make suggestions to help them ask someone how they rate their communication make things work in a better way.” skills on a scale of one to ten and they consider But surely that is a job for friends and family? themselves a ten, while everyone around them Not so, says Cartwright, because friends and sees them as a three, then it is something family love you as you are and cannot be which, gently, needs addressing.” relied on to tell the truth.“It’s all about being The trick, said Cartwright, is not only to brutally honest,” explained Cartwright, but get them to face reality, but to keep focused on in a caring way of course…” that reality “to keep rowing upstream because it’s so easy to spin back round and go back to old habits.” This is no mean feat, which is why To find out more about Jez Cartwright’s Cartwright sticks around (a typical programme work visit www.akindred.com. lasts at least eight weeks) to help them through For more about career coaching in general it. “Usually people take it pretty well and it helps visit www.associationforcoaching.com. to have a sense of humour – the classic example is The Handbook for Exceptional People by trying to tell someone that they come across Jez Cartwright is published by Pan Macmillan.
Pushing the envelope
Corporate responsibility is not quite dead Is corporate social responsibility (CSR) dead? Yes, says Harvard Business Review’s ‘Conversation Starter’ blog. CSR will increasingly be seen as a public relations sham, the bloggers say. Yes, says my colleague Stefan Stern, who recently predicted that companies would abandon CSR in favour of sustainability. No, says the European Commission, which commends companies that go beyond minimum legal requirements to address societal needs. It spent three years and 1.4m producing a 108-page report on CSR. Many will regard the commission’s endorsement as a sure sign that CSR’s time has past. Its report, written by academics from INSEAD and other European business schools, certainly contains a fair amount of nonsense, including the finding that managers become more socially responsible if they meditate. Doing yoga, according to the report, seems to produce a broadly similar result. But one INSEAD graduate is not ready to say goodbye to corporate social responsibility. Speaking at the business school last year,
Patrick Cescau, Unilever’s chief executive, laid out his view of how companies’ engagement with society had changed. Cescau said companies’ commitment should go further than philanthropy, although that still had its place. He also said companies and non-governmental organisations were no longer automatic adversaries. In many cases, they worked together, as Unilever did in 2003 when it joined Oxfam, “an unlikely bedfellow”, to study the impact of the company’s activities on Indonesia. Most important, Cescau said that corporate responsibility involved understanding that “many of the big social and environmental challenges of our age, once seen as obstacles to progress, have become opportunities for innovation and business development”. Emerging markets would be the main source of many companies’ growth and helping those societies develop would ensure a stream of new consumers, he said. Does this leave CSR dead or alive? The name is surely dead: many dropped the “social” some time back, regarding it as either too vague or too limited, leaving just corporate responsibility. If we are heading for harder economic times, many companies will feel tempted to drop corporate responsibility too and concentrate on shoring up profits. Profit, in good times and bad, is where any discussion of companies’ responsibilities should start. Without profit, there is no future for shareholders, employees or stability, the future of business is grim: look at Kenya or, worse, Zimbabwe. Stability has many components, but prosperity is one of the most important. The more people have to lose, the greater their interest in social peace. For companies, supporting education, entrepreneurs and good nutrition is more than philanthropy: it is money well spent. Even in the most stable countries, companies need the community’s approval to function. Opinion can turn against them
fast: witness European consumers’ distaste for genetically modified food, or the attacks on big pharmaceutical companies over the pricing of AIDS drugs in Africa. Neither of these public reactions was entirely fair. The opposition to genetically modified food is scientifically dubious and the South African government has done more damage to AIDS sufferers than big pharmaceutical companies ever did. But life is unfair. Anyone with contacts in non-governmental organisations would have seen both these crises coming. Knowing what activists are up to, whether by working with them or getting to know them, is good practice. NGOs do not always understand how companies work, as the European Commission report (which contains plenty of sense, too) makes clear. Finally, as Cescau says, there are profits to be found in helping solve society’s big problems. Cutting energy consumption and packaging is not just a demonstration to consumers that the company takes climate change seriously. It is also a way to improve profit margins. Wal-Mart persuaded a toy supplier to reduce its packaging. This resulted in the company using 497 fewer freight containers a year and saving US$2.4m. You can call that costcutting or you can call it sustainability. Both Cescau and the commission report (which is sensible here, too) argue, rightly, that corporate responsibility can no longer be seen as a separate activity. It has to be central to what companies do. The report found that the most innovative companies were also the most attuned to the world outside, which should not surprise us. It does not really matter what you call it: being alert to business threats and opportunities, wherever they come from, will not go out of fashion. This article was written by Michael Skapinker and first published in the Financial Times.
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