Failures – exposed, reflected, considered

How HR departments fail companies from inside and outside

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Let’s start by analysing how HR departments sometimes “wrack havoc” on human resources of a company.

The infamous Fast Company article of 2005  “Why We Hate HR”  is as discussed and relevant as before. It trashes HR people as dull-witted pen pushers, “The human-resources trade long ago proved itself, at best, a necessary evil — and at worst, a dark bureaucratic force that blindly enforces nonsensical rules, resists creativity, and impedes constructive change. HR is the corporate function with the greatest potential — the key driver, in theory, of business performance — and also the one that most consistently underdelivers.

Opsss.

According to the same article, “a 2005 survey by consultancy Hay Group, just 40% of employees commended their companies for retaining high-quality workers. 41% agreed that performance evaluations were fair. 58% rated their job training as favorable…. Most telling, only about half of workers below the manager level believed their companies took a genuine interest in their well-being.” Only half of employees think HR cares about them?

HR staff are either perceived as harbingers of bad news or in “best case scenario” of doing a ‘useful’ activity, they are still a bureaucratic and legal bottleneck, usually slowing down operations and generating much negativity and pessimism among employees. Then I guess it shouldn’t surprise us that more and more companies observe more direct and stronger connections between employees and their managers as a result of eliminating the HR function. And one company – perhaps jaded from its previous HR department’s debilitating effect, hired one HR staff, but agreed on not calling her that – she goes without a title. Business is moving the other way, to reduce HR departments by outsourcing its paper-pushing functions; PriceWaterhouseCoopers estimates it can shave 15 to 25 percent off your HR costs. These humans are simply not resourceful enough.

Wow. Can it get any worse for the HR staff?

In one very public scandal, BBC’s HR manager Lucy Adams “was accused of presiding over ‘corporate fraud and cronyism’ over huge pay-offs to former executives” add a further insult to injury. Some of most notorious HR strategies such as PTOs, PIPs and performance reviews may even destroy a company.

It thus seems that existence of many HR departments defeats their very raison d’être as far ‘internal’ (i.e. inside a company) activities and corporate goals are concerned.

What about an HR department’s ‘external’ role, that of scouting for the best and the brightest? Company’s strategy is its culture (created by its employees), and its culture is its strategy, which is of course true and goes to say how essential it is to find the right people who would not only have skills-experience match but more importantly have a cultural fit for the company. Zappos, Pixar, Cirque du Soleil and others successful companies attribute their success primarily to their people.

Yet, despite the known and accepted fact that many applicants forge and offer polished cover letters and CVs, HR departments – the bigger/more famous the company, the bigger number of applicants apply for the company – continue to commit two essential mistakes:

  1. overly rely on data on CV/cover letter;
  2. look for as close a “literal” (as opposed to “big picture“) match to the job vacancy as possible.

In most cases, the first mistake yields much redundant work (for and by HR departments), disappointment (when, once accepted, it turns out the candidate didn’t have either good enough/pre-requisite skills or experience or was not a cultural fit), or lose (employee being fired or resigning shortly after joining the company).

The second mistake, equally or even more widespread, not only causes all the same problems, but, more importantly, discards candidates with profiles that are wider or somewhat different from the vacancy scope. In the modern age in which present and future belong to generalists, HR departments’ tunnel vision – the same tunnel vision that discredits HR as a department unable to see the big picture (company’s vision) nor assess or understand well enough business vision as to deserve a decision-making power inside the company – turns off many a qualified generalists (i.e. multidisciplinary people) or candidates with a wide cross-section of skills and experiences, who would have otherwise been (significantly) useful and thrived within the company.

Thus the conjunction of the two above-mentioned mistakes and standard HR internal practices end up costing the HR not only their reputation, but in a longer run, dissuade companies from the idea of having a dedicated HR department. Or, as my generalist friend Arnold suggested, given how standard matching algorithms work in general, it ain’t no big stretch to imagine that if HR continues on its current path, it will inevitably lead to HR function being automated via a software program with one of standard programs specially designed for that purpose.

Lastly, erroneous hire usually ends up being a waste of monetary, time and emotional investment both for a company and an (erroneously hired) employee, all the while as HR department is being paid to ‘recruit’ talent.

Modern saga “The Fox and the Hedgehog”: generalists vs. specialists

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About 2,700 years ago, Archilochus wrote that “The fox knows many things, but the hedgehog knows one big thing.” Taking that as a starting point, Isaiah Berlin’s 1953 essay “The Fox and the Hedgehog” contrasts hedgehogs that “relate everything to a single, central vision” with foxes who “pursue many ends connected … if at all, only in some de facto way.”

And so we have become a society of specialists with much heralded “learn more about your function, acquire ‘expert’ status, and you’ll go further in your career”  considered the corporate Holy Grail. But is it?

The modern corporation has grown out of the Industrial Revolution (IR). The IR started in 1712 when an Englishman named Thomas Newcomen invented a steam-driven pump, to pump water out of a mine, so the English miners could get more coal to mine, rather than hauling buckets of water out of the mine. That was the dawn of the IR. It was all about productivity, more coal per man-hour; and then it became more steel per man-hour, more textiles per man-hour, etc.

The largest impact of the IR was the “socialization” of labor. Prior to the IR, people were largely self-sufficient, but the IR brought increased division of labor, and this division of labor brought specialisation, which brought increased productivity. This specialisation, though, decreased self-sufficiency and people became increasingly inter-dependent on one another, thus socialised more. Also, with the division of labor the individual needed only to know how to do a specific task and nothing more. Specialization also caused compartmentalization of responsibility and awareness. On a national level, it has allowed nations to become increasingly successful while the citizens become increasingly ignorant. Think an average American. You can be totally wrong about almost everything in life, but as long as you know how to do one thing good you can be a success, and in fact in a society such as this increased specialization becomes advantageous due to the extreme competition of our society. Environments with more competition breed more specialists.

But is the formula that ushered humanity in 20th century of rapid technological industrialisation and economic development still valid or as impactful in 21st century as it was for last 300 years? In our modern VUCA world, who (specialist OR generalists) have a better chance of not only surviving but thriving?

According to a number of independent research papers, employees most likely to come out on top of companies and becoming successful in long term are generalists—but not just because of their innate ability to adapt to new workplaces, job descriptions or cultural shifts. For example, according Carter Phipps (author of Evolutionaries) generalists (will) thrive in a culture where it’s becoming increasingly valuable to know “a little bit about a lot.” More than half of employees with specialist skills now consider their job to be mostly generalist despite the fact that they were employed for their niche skills, according to another survey. Among the survey respondents, 60% thought their boss was a good generalist, and transferable skills – such as people skills and leadership – are often associated with more senior roles.

We’ve become a society that’s data (from all various specialisation, industries and technologies) rich and meaning poor. A rise in specialists in all areas — science, math, history, psychology — has left us with huge amount of data/info/knowledge but how valuable is it without context? Context in a data-rich world can only be provided by generalists whose breadth of knowledge can serve as the link between various disciplines/contexts/frameworks.

A good generalist, David Christian gave his 2011 TED talk called “Big History” of the entire universe from the big bang to present in 18 mins, using principals of physics, chemistry, biology, information architecture and human psychology.

To conclude, it seems that specialisation is becoming less and less relevant due to 1) increasing, interconnected and overlapping data and information that permeates all aspects of our lives, 2) increasing VUCA-ness of social, political and economic situations of individuals and nations, 3) need to envision and derive from a bigger context or connect few contexts/disciplines/frameworks. All points seem to be better addressed by generalists.

Singapore, Rousseau and the social contract

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In 1965, less than two years after joining Malaysia, Singapore was forced to leave the bigger country and declare its own independence.

Then its economy was in tatters. Lawlessness reigned. High levels of unemployment, lack of sanitation, short supply of potable water, and ethnic conflict were conditions that marred Singapore. About three million people, half of who were unemployed, occupied an island that was sandwiched between two large and unfriendly states: Malaysia and Indonesia. Ethnic Chinese and Malays were divided by race and language and often fought street battles.

Both economy and political situation were dire and mutually reinforcing.

1960s conventional wisdom in economics held that every nation, especially a small one, needed a hinterland to succeed. Singapore had none. The status-quo wisdom of development economists was that multinational corporations were great exploiters of cheap land, labor and raw material.

Forced to by all means to find work for their people, the leaders of Singapore engaged in promoting “globalization” before it became fashionable to do so.  The reason why Singapore embraced globalization one generation earlier than other third world countries was because it had no choice but go against the dependency theory that was the predominate economic thinking of then.

But globalization was but one sign of manifestation of a bigger picture. At the heart of the Singapore model is the social contract that was articulated between the ruling People’s Action Party (PAP) run government and the people of Singapore. In essence, it said that while the people were willing to accept more government control, give up some individual rights, and work hard, the government would create the environment that would deliver prosperity and a better quality of life.

The idea of social contract is not new.  Rousseau was among one of the most prominent theorists of social contract. In his view, the larger the bureaucracy, the more power required for government discipline. Normally, this relationship requires the state to be an aristocracy or monarchy (as far as he is concerned, both could be elected). Rousseau argues that the political authority (with which people are in social contract) will have two parts, sovereign (generic, legislative, representing the general will, which he defines as the rule of law) and government (particular, administrative day-to-day).

The autocratic dominance of the ruling PAP also provided confidence that national policies based on the social contract would remain stable in the short run, while continued efforts would be made to plan for Singapore’s long-term challenges.  And they did.

In the period of 1960-1999, Singapore had been able to achieve an average annual economic growth of 8%.  Singapore became one of the fastest-growing countries from 1970 to 2000, and the country has been classified as a ‘Growth Miracle’ and as an ‘Asian Tiger Economy’. As a result, World Bank officially classified Singapore as a “developed economy.”

The Singapore story is a thorn in the side of development specialists from the school of thought that Samuel Huntington has labeled as ‘convergence’ theorists, who believe that all desirable characteristics of national development (democracy, free markets, higher standards of living, etc.) reinforce one another. While democracy in Indonesia after Suharto and in the Philippines after Marcos has caused even more economic uncertainty and overall poverty, it has been the reign of an autocratic regime in Singapore that delivered economic development.

1. As the democratization of third world countries in Eastern Europe, Latin America and East Asia has shown over the last decade, being elected to office by the general populace provides no guarantee that national leaders will be free of corruption, effective, or dedicated to the national interest. In the case of even President Salinas of Mexico, a moderately respected elected president by Latin American standards, the national interest came second to his personal interest to keep the instability of the Mexican economy brewing while he changed jobs to become the head of the World Trade Organization (WTO). Contrary to the unanimous pushing by his economic advisors who were convinced that Mexican currency and financial markets could be saved from imminent collapse if an immediate devaluation of the currency was made before his retirement, Salinas did not act for fear of blotting his reputation. Like the Mexican example, the financial collapse of democratic Thailand and Russia in 1997 showed that elected leaders who come to power with substantial expectations on their shoulders after intense campaigning in which they promised significant national (social and economic) development, can never be immune from mortgaging the future of their people to finance grandiose if imprudent national projects that among other things, serve to enrich the cronies that helped in the outcome of the election in the first place.

2. Apart from effective governance, Singapore government exercises considerable discipline in managing its economic affairs. While PAP ran on a socialist platform to get elected, it was careful of which industries the government nationalized. Usually, the government did not intervene in markets it felt the private sector was doing a good job of meeting Singapore’s economical interests. This policy was outlined in a speech called “Survival” that former foreign minister, S. Rajaratnam, delivered in the early 1970s. In the speech, Rajaratnam told that the government supported state-run corporations like Singapore Airlines and Neptune Ocean Lines because the private sector did not have the ambition nor the financial backing to start such essential organizations that would make possible trade with the developed countries.

3. Importance that the government has attached to Singapore’s human resources development and the investments it has made in its own people. While the PAP ruthlessly crashed all independent labor unions and consolidated what remained into a union umbrella group called the National Trade Union Congress (NTUC), which it directly controlled, it did set up technical schools as well as paid foreign corporations to train unskilled workers for higher paying jobs in electronics, ship repair, and petrochemicals. For those who still could not get industrial jobs, the government enrolled the participation of the NTUC in creating labor intensive, “un-tradable” services, mostly for the purposes of tourism and transportation.

Written by Hayk

March 10, 2013 at 9:53 am

Chicken or egg: democracy vs economic growth – case Thailand

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With 2011, a wave of unrest descended upon the MENA. What became later known as “Arab Spring“ represented a ragged set of uprisings throughout MENA countries including Tunisia, Egypt, Libya, etc. The vision of those uprisings was but one, at least initially, as it could be heard on every street and square, shouted or screamed from mouths young and old. Freedom. Democracy.

Some of those uprisings turned ugly (civil war in Libya and Syria), others (Tunisia, Egypt) ushered in what many reformers/revolutionaries believed to be a new era.

Freedom, democracy. Of course, those high-pitched and loaded terms are as cliché by now, without much merit nor substance, rallying slogans for disillusioned and ignorant. What people really meant, or needed to mean, was “better life standards,“ “more and secure jobs“ (on social/personal level) and “economic growth“ (on national level).

Another cliché/stereotype associates democracy and economic growth. Many think that those two are interchangeable, i.e. occurrence of one will automatically imply or cause the other. Then there is “modernization theory,” predominant since the late 1950s onward, and which claimed that middle and other aspiring classes created by industrial capitalism would necessarily (and eventually) bring about accountable and democratic governments. Reality is less obvious that this foregone and simplistic conclusion.

Why so? There is an easily spotted pattern, in which democracies usually are among the economically developed countries. However, the paths to democracy are varied. One is tempted to think that lack of economic stability or growth, which implies increasing poverty levels, will trap societies in a vicious political circle of dictatorial reign and economic deterioration. While bonds of poverty cannot be dismissed, they are not inexorable. Countries such as Taiwan, South Korea, Japan, Singapore, Malta and Greece went from utter poverty into spectacular growth, some as much as quadrupling their per capita incomes. Dictatorships bloomed in Taiwan and Singapore during the entire and South Korea during most of this period of drastic economic transition and growth. Only Japan and Malta remained democratic throughout their respective periods of economic growth, and Portugal as well as Greece tattered between democracy and dictatorship, while growing economically.

There is no predictable pattern, but once a democracy is established, its survival depends on a few factors. Foremost among them is the level of economic development.

Let’s have a closer analysis of how a democracy caused an economic depression, with a study of Thailand’s recent history.

In the 1980s and early 1990s, nations from Indonesia to the Philippines embarked on their own democratic transitions, not unlike the 2011 Arab Spring. In Thailand, hundreds of thousands (middle class) came out into the streets of Bangkok in 1992 to bring down a military government. They wanted democracy and freedom. Thailand boasted a large, educated middle class, one of the best-performing economies in the world, and a relatively robust civil society. By the late 1990s, Thailand had held several free elections and passed a reformist constitution that enshrined greater protections for civil liberties and created a wealth of new institutions designed to ensure civil rights.

However, the “reformist“ frenzy started cooling off in the late 1990s, as many leading Thai reformers, who were behind the protests in 1992, backed off. They believed that Thailand had passed a threshold (of transition to democracy and economic growth), and as a result, many NGOs, media watchdogs, and organizations that were instrumental during and in the immediate aftermath of the 1992 uprising closed down. It only helped, with dawn of the Asian financial crisis in 1997, to put many of those idealistic-minded middle-class reformers into unemployment, making it even harder for them to spend time volunteering at organizations dedicated to reforms.

As Thai reformers slowly drifted off, a telecommunications tycoon Thaksin Shinawatra used his fortune to build a political party. He bought up politicians to join his party. To soften the blow and an at the same time trying to appeal to the larger part of the Thai society, the poor, Thaksin initiated a well-thought combination of entrepreneurial inducement and grassroots empowerment projects, including inexpensive health care schemes and loans to villages to start businesses.

In 2001, Thaksin became the elected PM, and showed little love for democracy. He used his power to threaten Thailand’s free media, eviscerate its independent civil service, and launch a campaign against insurgents in the Muslim south. He rewarded political allies and punished political enemies. In 2005, Thaksin was reelected, again with massive support from the poor, and largely thanks to the lackluster opposition of the Thai middle classes, which by then had grown disillusioned with democracy, believing it had delivered only elected autocracy. The reaction was prompt. Another row of street protests in 2006, whereby Thai middle class once again took to streets, hoping to topple the elected (autocratic) government. The result was a military coup of 2006. Thaksin fled into exile.

The military coup triggered an economic meltdown. Thaksin might have damaged the country’s weak democracy, but the military ruined it. It shredded the reformist constitution and set the stage for today’s Thai government, which unleashed massive force against demonstrators who gathered in the streets of Bangkok in spring 2010.

Thaksin is once more back to the country, in a proxy way, via the elections favoring his sister’s party and her as a PM.

How to avoid a similar democracy failure in MENA?  It is essential to create and keep independent government watchdogs, new and independent press outlets. Introduction of government policies to reduce economic inequalities is also vital, allowing an increasing transition from low to middle class. Lastly, while a charismatic (or not so much) leader is a good focal point for rallying reformists, a more important and longer-term reform is to induce a knowledge economy and infrastructure facilitating foreign investment and (especially foreign-owed) property rights/protection.

Written by Hayk

February 20, 2013 at 9:19 am

Top 10 ways to manipulate people (Chomsky)

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Noam Chomsky wrote the article entitled “top 10 ways to manipulate people.” Below is the reprint of this article.

1. The strategy of distraction

The primary element of social control is the strategy of distraction which is to divert public attention from important issues and changes determined by the political and economic elites, by the technique of flood or flooding continuous distractions and insignificant information.

Distraction strategy is also essential to prevent the public interest in the essential knowledge in the area of the science, economics, psychology, neurobiology and cybernetics.

“Maintaining public attention diverted away from the real social problems, captivated by matters of no real importance. Keep the public busy, busy, busy, no time to think, back to farm and other animals” (quote from text Silent Weapons for Quiet Wars).

2. Create problems, then offer solutions

This method is also called “problem -reaction- solution.”

It creates a problem, a “situation” referred to cause some reaction in the audience, so this is the principal of the steps that you want to accept.

For example: let it unfold and intensify urban violence, or arrange for bloody attacks in order that the public is the applicant’s security laws and policies to the detriment of freedom.

Or create an economic crisis to accept as a necessary evil retreat of social rights and the dismantling of public services.

3. The gradual strategy

Acceptance to an unacceptable degree, just apply it gradually, dropper, for consecutive years.

That is how they radically new socioeconomic conditions (neoliberalism) were imposed during the 1980s and 1990s:

• the minimal state
• privatization
• precariousness
• flexibility
• massive unemployment
• wages
• do not guarantee a decent income,

…so many changes that have brought about a revolution if they had been applied once.

4. The strategy of deferring

Another way to accept an unpopular decision is to present it as “painful and necessary”, gaining public acceptance, at the time for future application.

It is easier to accept that a future sacrifice of immediate slaughter.

• First, because the effort is not used immediately
• Then, because the public, masses, is always the tendency to expect naively that “everything will be better tomorrow” and that the sacrifice required may be avoided

This gives the public more time to get used to the idea of change and accept it with resignation when the time comes.

5. Go to the public as a little child

Most of the advertising to the general public uses speech, argument, people and particularly children’s intonation, often close to the weakness, as if the viewer were a little child or a mentally deficient.

The harder one tries to deceive the viewer look, the more it tends to adopt a tone infantilizing.

Why?

“If one goes to a person as if she had the age of 12 years or less, then, because of suggestion, she tends with a certain probability that a response or reaction also devoid of a critical sense as a person 12 years or younger.” (see Silent Weapons for Quiet Wars)

6. Use the emotional side more than the reflection

Making use of the emotional aspect is a classic technique for causing a short circuit on rational analysis, and finally to the critical sense of the individual.

Furthermore, the use of emotional register to open the door to the unconscious for implantation or grafting ideas , desires, fears and anxieties , compulsions, or induce behaviors …

7. Keep the public in ignorance and mediocrity

Making the public incapable of understanding the technologies and methods used to control and enslavement.

“The quality of education given to the lower social classes must be the poor and mediocre as possible so that the gap of ignorance it plans among the lower classes and upper classes is and remains impossible to attain for the lower classes.” (See Silent Weapons for Quiet Wars).

8. To encourage the public to be complacent with mediocrity

Promote the public to believe that the fact is fashionable to be stupid, vulgar and uneducated…

9. Self-blame Strengthen

To let individual blame for their misfortune, because of the failure of their intelligence, their abilities, or their efforts.

So, instead of rebelling against the economic system, the individual auto-devaluate and guilt himself, which creates a depression, one of whose effects is to inhibit its action.

And, without action, there is no revolution!

10. Getting to know the individuals better than they know themselves

Over the past 50 years, advances of accelerated science has generated a growing gap between public knowledge and those owned and operated by dominant elites.

Thanks to biology, neurobiology and applied psychology, the “system” has enjoyed a sophisticated understanding of human beings, both physically and psychologically.

The system has gotten better acquainted with the common man more than he knows himself.

This means that, in most cases, the system exerts greater control and great power over individuals, greater than that of individuals about themselves.

Written by Hayk

November 10, 2012 at 12:38 pm

Stark Lessons From The Costa Concordia Disaster

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This is a guest blog by Eve Baxton.

Nowadays, cruise ships are widely regarded to be one of the safest forms of travel, more so than both airplanes and automobiles. Like with all forms of travel however, when an unfortunate disaster does strike, it usually provides stark lessons for the future – prompting new safety procedures, policies and changes in law to avoid the same ever happening again.

Perhaps the most profound maritime example of this was in 1912 with the sinking of the RMS Titanic. Since the disaster, which claimed the lives of over 1,500 people, swift changes were made within Maritime law in regards to passenger safety; namely, providing enough lifeboats for all on-board. An obvious safety precaution it would seem, but human error can still find a way – as the sinking of the Costa Concordia earlier this year also demonstrated.

Around 9:45, on the evening of the 13th of January, the Costa Concordia struck a rock just off the eastern shore of Islo Del Giglio, on the western coast of Italy, tearing a 50 metre gash on the left side of the hull. Parts of the engine room immediately began to flood and having lost power, the ship drifted back towards the shore of Giglio, where it grounded and began to sink on its starboard (right) side (otherwise known as ‘listing’) – eventually rendering the lifeboats on that side unusable. Instead of being evacuated within 30 minutes of the abandon ship announcement (as Maritime Law dictates) it took over six hours for all surviving passengers to make it off the ship, despite the close proximity to shore and calm sea. The disaster resulted in the deaths of thirty people, with another two missing and presumed dead.

Both the captain, Francesco Schettino, and Costa Cruises received heavy criticism for the disaster and loss of life which could’ve been avoided had multiple safety violations not been made and protocol been better adhered to. Like the Titanic, and other more recent maritime disasters (such as the MV Le Joola in 2002 and the MS al-Salam Boccaccio 98 in 2006, killing over 4000 and 900 people respectively) the sinking of the Concordia has prompted multiple changes in maritime law.

The Cause

The sinking was a direct result of the Concordia moving off its designated route, to within 150 metres close of the shore, in a manoeuver known as a ‘salute’ or ‘showboating’, a sail-by for promotional purposes. Most if not all cruise liners perform these manoeuvers, which by their nature have the potential to be dangerous, but are safe if they’re properly navigated. This one however was instead scheduled to take place a few days previous, but was cancelled due to bad weather. It was claimed by crew members that Schettino, deviated from a GPS navigated route past the shore in order to make this salute; which ultimately led to the Concordia’s collision.

Abandoning Ship

With too many of the hull compartments breached with water to keep the ship afloat (in such a way that mirrored the fate of the Titanic) and its sinking inevitable, fatalities still could’ve been avoided. After the initial impact and power had been lost, frightened passengers were told that there had been a power failure and not to worry. Once the extent of the situation was established, passengers were eventually told to get put on their life jackets and to go to their muster stations. However, illustrating the lack of direction and communication amongst the Concordia’s crew, a crew member was filmed telling passengers that all was well and to go back to their cabins, just 30 minutes before the abandon ship announcement was made. When it eventually was, the crew were reluctant to lower lifeboats, almost an hour before the ship began to list making them impossible to deploy thereafter. Consequently many passengers were left stranded on the ship, whilst some made it to shore on lifeboats, others being helped by locals, and others attempting to swim to shore. The captain broke protocol by leaving the ship whilst his passengers were still on-board. The evacuation efforts went on until 4:46 am.

The Changes in Law

Perhaps the most prominent change in maritime law prompted by the Costa Concordia is that all cruise liners must now hold safety drills for passengers before the ship even leaves the dock. Previously, it had to be held within the first 24 hours of setting sail. In the Costa Concordia’s case, this drill was held within the first 24 hours for new passengers, but of the 4,252 passengers, 696 people who boarded the ship at Civitavecchia had not been briefed on safety procedures, with the drill scheduled for the next day. This naturally caused a lot of confusion and panic when passengers were called to the muster stations.

Other procedures under review include the way in which crew take the muster. Amidst panic during an actual disaster, or during a routine drill which holidaying passengers may not take seriously (or pay attention to) the accuracy of calling out names and ticking off lists comes into question – especially on large cruise liners with thousands of passengers. Royal Caribbean Cruises have adopted a more effective method on two of their cruise ships. Both Oasis and Allure of the Seas (two of the largest cruise liners in the world) have a far more accurate method in which the crew scan passenger’s key cards, allowing them to determine who is present in a much swifter, less chaotic fashion. Another possible change is the addition of more life jackets in public areas. With the power cut on the Costa Concordia, dark conditions made it difficult for passengers to go back to their cabins to retrieve their life jackets, more so for recently boarded passengers unfamiliar with the ships layout. Royal Caribbean Cruises again have been quite innovative with their solutions, handing out lifejackets at the muster stations instead.

Countless other regulations, precautions and procedures are also being reviewed, with staff training also being reassessed. The nature of disasters such as the sinking of the Costa Concordia, or even the Titanic, are so often made up of one initial incident, mistake or otherwise, which doesn’t necessarily have to pose a threat to human life. What does pose a threat however is when the correct procedures are not adhered to, or are ineffective, causing more mistakes to be made and turning something preventable into a disaster. Maritime law has continued to push for the highest standards to protect everyone who goes on a cruise, with each (albeit statistically rare) disaster over the years shedding light on areas that need improvement; having a large impact on the safety regulations, precautions and procedures of today. These all serve to protect passengers, whatever the situation. And perhaps it’s because we learn so much from the past that a cruise ship still remains one of the safest ways to travel.

Written by Hayk

November 10, 2012 at 10:22 am

Don’t Fail Your Business – Avoid the Most Obvious Traps

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This is a guest blog by Eve Baxton.

Owning a professional business is a huge responsibility. It involves all the potential risks and traps that are imaginable. According to a survey in 2009 by PrinceWaterHouseCoopers more than half of the enterprises suffered from the economical crimes. In most of the cases, small sized enterprises are the best prey to fall for potential traps around.

These dangers include employees or managers misrepresenting or manipulating the financial information, customers misusing the enterprise’s borrowing in criminal activities and contractors producing false bills. Along with that, other elements exist that perpetrate fraud against the enterprise by electronic means. This includes hacking, manipulating the telephone service and robbing customer’s confidential data, such as credit card numbers or usernames and passwords.

The ultimate quest that should be taken care of as soon as possible, to protect your business is identifying the sources of potential fails. That is not an easy task to take on, for a less experienced businessman. By just considering some basic and yet important things, the enterprise can be easily protected from potential frauds, however.

According to the statistics, the most common reasons for falling into these traps are the lack of experience, commitment, and, most significantly, management. Let’s take a look at the potential traps that most of the enterprises, no matter big or small, fall for.

 

  • The Innocent Employee Trap
    According to the facts, most of the time insiders; employees, managers, or company’s officials, are the main reason for an enterprise to fall and fail. These employees “innocently” steal the assets of the company, and commit accounting frauds. Detecting such actions is vital; it requires a lot of methodologies and commitment to be employed, however.
  • The Clever Customer Trap
    Another hazardous trap that most of the enterprises fall for is the clever customer trap. It has been found that many customers are using fake identities, stolen credit cards, or are filling out fake liability and injury claims to perpetrate the company. All these actions by “the sweet customers” only results in the enterprise’s money being taken away.
  • The Fake Return Scheme Trap
    The most common victims of this type of frauds are retailers. It is the best scam for the clever customer to perpetrate against any enterprise. Most of the times, the customer brings back used merchandise that has not been bought from the same place and tries to return it and get new merchandise under the shelter of the fake return schemes.
  • The Greedy Contractor Trap
    Most companies rely on outside service providers for its survival. Therefore, many of the enterprises fall for the greedy contractor trap. It is not uncommon for the contractor to bill more than the task he has done is worth, and more often even asks for the billing of a task that has not yet been completed. Strong policy, terms, and conditions should be presented to the contractors, before entrusting them with any task, to avoid these attempts, and leaving no room for the contractor to commit such frauds.

 

Protecting Your Professional Businesses

After viewing the potential traps, let’s take a look on the precautionary measures that an enterprise can take to avoid unnecessary fails; these important methodologies can fraudproof your business against its very own employees.

  1. The Method of Anonymous Employee Reporting

Utilizing this method is one of the best methods for detecting the potential dishonesties that can occur within your business; compared to scheduled employee reporting, the violators’ opportunities to destroys any vital fraud traces are severely limited.

  1.  The Method Of Surprise Auditing

Along with the regular, scheduled internal audits, surprise auditing should also be performed in the enterprise, as it significantly increases the chances of detecting potential irregularities, thus making your company more protected.

  1. The Method of External Auditing

Along with the above mentioned methods, this is also a significant tool to determine a potential fraud; it should be held at regular intervals.

 

Business Insurance – The Ultimate Protection

Along with all the above methodologies, the most important step in stabilizing an enterprise is business insurance. It plays an important role in the art of preventing the failures related to undetected frauds. Professional business insurance protects the business from many unexpected frauds, and it enables a recovery from what may seem as a catastrophic loss. Even when insuring your business, you should consider several key factors, however; for your business insurance to be viable for you, it needs to offer an equal protection for any business, regardless of its size, and to provide protection from all sources of frauds and failures. First thing that comes to mind is protection from theft. Theft is the most common and uncontrolled source of assets loss that occurs in most enterprises internally and externally, making insurance without theft protection almost useless. Protection from litigation is another important aspect; while unfounded law suits from wealthier competition are likely to turn out in your favor, the costs before you prove your innocence can cause your business to fail, so proper insurance has that covered. Protection from unwanted liabilities provides you with protection, when the assets, coming from your company, are used for any illegal activities, which is not a rare occasion with internal frauds and thefts.

It’s your responsibility to implement a fraud proof protection method, that suits best to your enterprise’s needs, properly. All it requires is some commitment and dedication towards the business; no matter how malicious the fraudster’s aims are, you can stop your company’s fail before it’s to late!

Written by Hayk

October 30, 2012 at 6:29 pm

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