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TEDxLakeComo 2009 - Ulderico Capucci

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Ten days ago, the Corriere della Sera wrote that Sarkozy, a boy who work really hard for his country, asked a Nobel Prize for Economics, Mr. Stiglitz, to rethink the way we estimate the national wealth. This century-old story of the GDP sounds like a great dictatorship, doesn’t it? It seems to be not completely satisfying. This commission has written 292 pages and 12 suggestions, trying to put happiness at the center and statistical estimates a bit asides, but it has been welcomed very poorly by the economists, so the newspapers reported that this commission is now no longer operating. Along this lines, the article was actually entitled: ”The unsustainable irrationality of this GDP”, that should be an indicator of our economic development. What does GDP talk about? Well, it talks about production volumes, it talks about consumptions, it talks about investments, it talks about the costs of labor, it talks about the cost of money, it talks about public deficit, it essentially talks us about money. But does all development really boil down to money, are money the real economy? Let’s take a look around us: what are the indicators of development of a country, of a system, of a nation, of a people? If we look at today’s Italy, what are the really critical issues? We have structural problems: scarcity of researchers, scarcity of energy sources, scarcity of infrastructure... ok, let’s put it all aside. But we also have serious organization problems, i.e. the duration of trials. In Italy, it takes eight years to declare the bankruptcy of a company; the European average is four years. Aside from what Brunetta says, we have a public administration that does not offer reliable solutions. Our educational system is not ranked that well, in the international classifications, and the skills it provides are not easily expendable in the job market. In Palermo there are eighty thousand undergraduate students, half of which study law, just because their parents would be proud to have a lawyer son. Perhaps they'd better become agronomists or tourism professionals. We find it hard to “become a system”, to put together the protagonists of the economic development. Plus, we have very important problems and civil needs: is the organized crime, whether we call it Mafia or ‘ndrangheta, a burden on Italy’s economy or not? Does it affect the development or not? The corruption index ... not the “Clean Hands operation”, but the creeping one, the one that relies on recommendations and favors, the Mastella style one. We have the highest rate of tax evasion in Europe. And we have social and environmental problems: earthquakes happen all the time, We have security problems, and young people are having trouble in finding a stable job. Politicians of both wings are less and less credible, and so institutions are. We have problems of social motivation: people have no dreams, no hopes, no ambitions. And then we have cultural problems: for instance, meritocracy does not rule, neither in Universities nor in hospitals. Italians are not prone to respect rules of any kind. And then there is the culture of favoritism, of individualism. So my point is: have all these things got something to do with GDP? GDP does not talk about them, does not consider them, these things are not part of the “Money complex”. Well, let's then do a couple of observations, a couple of thoughts about this. First, GDP measures the wealth in terms of material benefits, completely ignoring the immaterial ones. Then it only has to do with financial costs, with the cost of money. It has nothing to do with the social costs. Plus, it only looks at the short-term growth, not the long-term growth. If instead we look at the GDP trying to detect the drivers that lead to development... the speaker before me talked about the culture of Africa. Does culture create wealth or not? Does ethics, something we have talked about, help to make money or not? Are ethics and profit necessarily in conflict? Are motivations and competences an income-generating energy or not? If we look at the culture, Italy gives us a little example. Let's be honest: those who run an hotel in Romagna cannot count on a beautiful seashore. Yet the tourism sector made Romagna thrive. Conversely, Calabrian seashores are in itself much nicer but residents are much poorer than people in Romagna. What's different with people in Romagna, that decided to “make a system”, that created consortia and sell their products in Germany, that run laundries and hotels, that learned to both compete and cooperate together? Why does a kg of grape cost two euro if produced in the Langhe, and only fifty cents if produced in Apulia? Both grapes take the same hard work: but in the last fifty years, a different mentality in the north of Italy promoted the development of the vines, a deeper research on the wine-making processes, the creation of consortia for production, distribution, and branding. Then, perhaps, cultures, motivations and competences have something to do with the development, and are a source of income. Within this “frame”, Gerolamo Saibene says: ”Here we are also looking for a glimpse into our future world, for something that gives us new hopes”. What can make us hope that a different way to conceive the economy and the development will take place? Companies can. From a company's perspective, the world looks different. Profit, in companies, is now as glorified as GDP in nations. Profit rules, they say: whatever you think of... for instance, all entrepreneurs declare to consider human resources as a key factor. I usually reply them: ”Ok, but in your business plan human resources are nothing but a number and a cost. Ethics, competences and motivations don't seem to take place in your plan. So, in a sense, we have a dictatorship of the profit even here. But in the last few years something has started to change. People in business don't just talk about profit, they also care about assets. And along with material assets, immaterial assets are increasingly being given attention. For instance, customers' trust in the company is an immaterial benefit called fidelization, and becomes an asset. It's not put in this year's income statement, it's not considered a profit, but it's in the balance sheet, virtually. Businessmen are increasingly saying that results are only good when sustainable over time. Costs must surely be cut, but waste, things that don't generate value, especially must. Long story short, the generation of value shows up. Value is not the profit. Value is a balance, a trade-off between costs and benefits. And the generation of value says that all we do in this world is useless if it's not useful for the others, who benefit from what we do. There's no point in printing reports that nobody reads and nobody uses, even if we have produced them efficiently. Along with profit, companies are increasingly talking about an economic indicator of growth and continuity called the generation of value. Let's then make a few examples: if the clerk in a fashion store says to the customer: ”Madame, this dress couldn't fit you better” even if the truth is quite the opposite, sure she increased the profit, but she also damaged one of her store's assets because when this lady comes back home, her daughter will give her honest opinion, and so she won't probably return into that store anymore. If a bank teller persuades a poor old lady to buy Parmalat's bonds, he'll probably increase his bank's profits but also damages its assets because he does an unethical thing. If a guy at the purchase department don't pay suppliers, and forces them to declare bankruptcy, certainly he reduces his costs, but he doesn't create synergies towards the external world. So, aside from profit, there's another indicator of the economy and the development: this value, behind which there's a structural capital. For instance, companies pay much attention to their brand's worth. But brand's worth does not talk about profit; brand's worth talks about the reputation that a company earned along its life. There's a “relational capital”: the trust. Does the trust that customers and suppliers rely in the company have a quantifiable value? Where should we put it in the income statement? Competences and motivations represent a human capital, so the story is the same. Within the companies, the economic value and the driver of development start to be something other than money, than materiality. A new road and a new point of view are being taken. For instance, does motivation produce results? Surely yes: if a person is motivated, (s)he gets higher scores at school. We all have met a professor that made us love his subject, and at the end of the year we all were more skilled. So that professor did generate value. He “cultivated” resources, rather than exploiting them. He did generate a big deal of value. Now, motivation is an energy, it's a clean and free energy. And not motivating our sons, our staff, people, companies, represents a huge waste of resources. I wrap up with this punch-line: there are two ways of conceiving the economy, the economy of profit, and the economy of value, which changes the system of incentives and the way we stay together. Two coexisting ways in the world of thinking and doing. Japanese built their economic development by committing to the so-called “total quality” for fifty years, [while] Chinese make money to burn by counterfeiting stuff and breaking every rule. Among the companies, there's Ferrero who, in case you didn't know, won a world-class prize for reputation beating IKEA, Nike and other very well reputed companies, and then there's Colaninno and the other “sharks of finance” who certainly became very rich but did not respect the generation of value. Which side will we take? This choice involves us as citizens, it involves us as consumers, it involves us as professionals, it involves us as economic players, and it does involve us as parents, because it will directly impact on the Italy we'll leave to our children. (Applause)

Video Details

Duration: 15 minutes and 32 seconds
Year: 2009
Country: Italy
Language: Italian
Producer: TEDx
Director: Gerolamo Saibene
Views: 178
Posted by: tradottiinitaliano on Dec 12, 2010

Consulente di management, Ulderico Capucci ha conosciuto e sperimentato l’azienda (Unilever, multinazionale europea), la consulenza americana (Hay) e ha sviluppato una società di consulenza italiana (Tesi). Ha collaborato da vicino con imprese e storie di successo (Ferrero), di insuccesso (Alitalia) e di forti cambiamenti (Poste Italiane). Ha studiato, osservato, conosciuto molte imprese (piu di 150), molti paesi, molte culture. È una memoria storica di 50 anni di sviluppo industriale in Italia e fuori Italia. È un operatore che ha usato la teoria per capire la realtà e le esperienze pratiche per elaborare teorie. Presiede Neo-polis ( www.neo-polis.it ).

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