Tagged : history

Why a superprovince isn’t the solution

I’m concerned about something for quite some time now. Currently, there’s a discussion in the Netherlands about the so called ‘superprovince’. The Dutch government is planning to merge three provinces into a single big one. This so called superprovince includes the city of Amsterdam and houses over 4 million people.

It’s not the actual merger I’m concerned about. No, it’s the reason why. Doing this based on a vision is great. But the Dutch government appears to have none… unless you count ‘money’ as being a vision. Politicians argue it’s more efficient to centralize the government, which means less managers and more efficiency, thus more decisiveness and a better competitiveness. This results in more jobs and even more money.

But… if a merger of three provinces makes governing more efficient… why not merge five provinces? Or seven? Or why not all twelve?

“We have to do this”

That’s where the “we have to do this” argument comes in. I love this argument, since it’s one of the most commonly used arguments. The beauty is, you can use it for anything. Think, let’s say, of the airline merger which was announced last week. American and US Airways want to merge because the competition merged a couple of years ago. If the argument can be used by commercial airlines, it most surely can be used by the Dutch government as well.

So, why does the Dutch government “have to do this”? Well, competition from other countries and cities is growing stronger. Think of Paris and London, who try to attract the same Fortune 500 companies as we do. If we make Amsterdam and our main metropolitan area stronger (the superprovince), we’ll stay ‘in the game’.

Well, that makes sense. Maybe the superprovince isn’t such a bad idea after all. One question: What happens when our competitors respond by growing bigger as well?

San Francisco Bay Area merger

Recently I found an example which illustrates what happens then. It turns out the San Francisco Bay Area, which is the 13th largest economy of the world, wants to merge for almost identical reasons (but on a larger scale). This merger of the Bay area, which includes the city of San Francisco and Silicon Valley (home to companies like Apple, Google, Facebook and eBay) would result in a superprovince which houses 6,9 million people and gives them a lead over cities like Los Angeles, Chicago, New York City and London.

Wait, hold on a second. London? Are the British going to be affected by this on-other-side-of-the-world-merger? If so, London has to act in order to stay in the game. And if London acts… we have to do something too. Maybe we can merge our superprovince with another one or two provinces… That’ll give us a change. Right?!

Why follow the others?

This is exactly why I’m concerned by the current situation. Ultimately, we’re forced to follow the others’ lead, grow when they grow and increase efficiency when they do the same. And this cycle repeats itself over and over again. Instead, I believe the Netherlands should focus on its own strengths. Doing so, it’s good to realize we have a major advantage. We’re a (densely populated) country with about 17 million people, which should make us competitive with about any western city or region in the world. Hence, let’s only merge things that make sense.

Why not establish a true national police force, a nationwide fire-response system, a few highly specialized hospitals at strategic locations, a nationwide public transit system which encompasses the entire country and a single national park service.

This leaves us with municipalities. They’re ideal to take care of services which require to be close to the people. Like social services, education and basic health care services. This makes it absolutely clear what a municipality is… it’s the local government.

A local and central government

I believe we don’t need another superprovince. Instead, let’s emphasize and strengthen the areas in which the local an central government excel at. Local government is close to the people while the central government is all about big plans and the big picture. Isn’t that all we need for a small country like the Netherlands?

The Inauguration of Barack Obama

On January 20th 2009, two million people, including myself, were in Washington DC to witness one of the most historic US presidential inaugurations ever… The inauguration of Barack Obama. Since it’s been four years, I’ve been thinking about what to write about this truly historic event. Truth to be told, I don’t know.

Maybe a story about the great ‘We Are One’ concert of Bono, Bruce Springsteen and other celebrities will do? Or what about the strategic location I choose to see the inauguration and parade… I could talk about this for hours! No? A horror story about the ‘Purple Gate of Doom’ perhaps? Wait! It’s a party. No horror stories today…

I believe the story of an African American pastor from Chicago is great. While waiting for Obama, he told me about the moment when he met President Bill Clinton (in the 90s). One day, this pastor traveled with Clinton’s motorcade when the president decided to get some fastfood. He directed the entire motorcade to the nearest fastfood chain and used the drive through to order food for everyone… True story.

Or wait, I met this other great guy from New York. He told me about the unprecedented security measures in his nephews office, which is located next to the parade route at Pennsylvania Avenue. Or is it more interesting to tell the story about George W. Bush? I was near the White House when he arrived there for the last time while being president. That was quite something. We (the NY-guy and me) knew that president Bush’ helicopter, Marine One, would land on the South Lawn. But we didn’t expect three identical helicopters. All three approached the White House from the south. But George W. Bush was in just one of these presidential helicopters. I guess these three helicopters did the ultimate (real-life) shell game. It took us until the third helicopter to figure out in which one George Bush travelled. Speaking of people from Texas, our section of the parade route was secured by Texan police officers. How sad is that, being a republican police officer from Texas who’s deployed in the nations capital on that particular day. That’s a true ‘being in the belly of the beast’ situation. But I have to admit… we, including the Texans, had lots of fun together. Which is good, because it was an extremely cold and long wait…

Which leaves us with the last story to be told… which is the inauguration of Obama itself. During those days, the message of hope and change sounded throughout the United States. Everyone hoped for better times, which could easily be seen on the faces of the people attending the inauguration. It simply was unbelievable and something I’ve never seen before. And… the sound of two million people shouting Barack Obama’s name and going wild after he took the oath of office… That was quite something!

Well, I don’t know which story I should pick. But perhaps I don’t have to. Instead, I created a new OneMinute video (see above). It’s the inauguration (and preceding days) in just one minute. Enjoy!

Barack Obama’s motorcade

Exactly four years ago, on January 17th 2009, I was in Washington DC. It’s three days before the inauguration of the 44th President of the United States takes place. An event I was looking forward to for a very long time already. In fact, this trip was planned (and paid for) about four months earlier, in September 2008. Barack Obama and John McCain were still in campaign mode and the election was two months away. At that time, I didn’t realize I was about to experience an historic inauguration. An inauguration attended by two million people in Washington DC and billions (!) more via television.

Anyway, I finally arrived in Washington DC. After a tour inside the US Capitol and a visit to the National Mall, I walked to Lafayette Square, which is a public park in front of the White House. All I wanted was to cross the street and make some pictures of the White House… but a nervous security guard stopped me. He ordered me to wait for a few minutes. It didn’t take that long before a helicopter positioned itself right above us. Also, in the far distance, there was the (increasing) sound of many police cars… It’s the motorcade of Barack Obama! Immediately, I grabbed my camera and shot this video (see above).

Three days later, Obama was sworn in as 44th President of the United States.

“We’ve lost our tolerance for complexity”

Because of the Internet and big-box stores, we get access to a lot of information, products and services, thus giving us more choice and freedom. While this sounds great, it isn’t always. Since we have more choice, choosing anything gets more difficult. A lot of complexity is added.

Last week Ron Johnson presented the new retail concept for JC Penney, a large department store. He said shoppers are done with wading through “an endless sea of racks,” which he believes is a larger industry trend. “In a world where the product we want is just a key-word search away, we’ve lost our tolerance for complexity,” Johnson said.

Yesterday I read something about Visa trying to popularize electronic payments (by smartphone). The report noted that “Visa’s hoping to make itself the go-to point for this solution, so ‘handset manufacturers don’t have to deal with 26.000 banks.'”

This is interesting. So just as JC Penney wants to get rid of an endless sea of racks, Visa wants to get rid of an endless sea of banks. In both cases, they’re trying to remove complexity for it’s consumers. In case of JC Penney, it’s us, the average shopper. In case of Visa, it’s businesses.

I’m curious which endless sea of … is next, and will have its complexity removed.

“A great department store… if it was 1995”

“They toured me through some of the ‘new’ JC Penney stores. I closed my eyes and realized this is a great department store… if it was 1995.” It’s a pretty bad thing to say about a store. And it’s not just anybody who said this. No, it’s JC Penney’s own CEO, Ron Johnson.

I guess things must be really bad when your CEO says these kinds of things about your own company. This leaves me with two questions. 1) Who is this guy and 2) what should a great department store look like?

1) Who is Ron Johnson?

He’s the guy who pioneered the concept of the Apple Store and the Genius Bar at Apple. Under Johnson’s direction, Apple’s retail stores achieved a record level of growth, exceeding a billion dollars in annual sales within two years of their debut. Last year, he left Apple to join JC Penney, a US department store, as its new CEO. He wants to achieve the same with JC Penney as he did with Apple.

I think it’s safe to assume this guy knows something about business and retail. And, more importantly, he knows what to do in order to turn JC Penney into a great modern department store. That leaves us with question two.

2. What does a great department store look like?

Huge assortments and one-stop shopping – Many ‘experts’ are confident the current retail model is broken. Physical stores will be replaced by online versions. Within years, all we do is shop online. Jonson disagrees. He quickly points out people thought the same when Apple launched the Apple Store. Which turned out not to be the case.

Physical stores are still the primary way people acquire merchandise, and he thinks that will be true 50 years from now. Ron Johnson sees no reason why department stores can’t flourish. They can be people’s favorite place to shop. They’ve got all these strategic advantages like the lowest cost of real estate, exceptional access to merchandise and scale to create enormous marketing power. Besides, people like stores with huge assortments and one-stop shopping. It’s just the way departments stores look, their lack of imagination and the way they engage customers.

Specialty stores – When people want a great product, they visit specialty stores like H&M, Nike or Zara. Shoppers are done with wading through “an endless sea of racks.” This is not just true for JC Penney. It’s a larger industry trend. Based on research about American’s shopping habits, it’s clear that specialty stores work. “In a world where the product we want is just a key-word search away, we’ve lost our tolerance for complexity,” Johnson said.

That’s why JC Penney’s plan includes creating 100 specialty stores within the department stores. The move expands on what Penney has already done, creating store-within-a-store areas where sales per square meter are three times higher than the average of the rest of Penney. Within four years, all department stores will be completely redone.

Main street and Town Square – The sea of outdated merchandising fixtures from the 1980’s will be replaced by a hundred specialty stores, essentially creating a small town. Just like any town, this means a street is needed. And that’s exactly what Ron Jonson created when he imagined the Main Street concept. Main Street will be the aisles that guide you around the store, passing all of these specialty stores. This Main Street showcases trend-right brands and so called experiences. The comparison with a local town doesn’t stop here. In the center of the store there will be a Town Square. What will this Town Square be? That’s still a secret. All we know is that Johnson said it contained “truly innovative thinking” and will be revealed in 2013.

Just like Apple

While analysts think these changes are a “revolutionary approach to retailing” and “it will have other retailers waking up,” I think you could have seen these changes coming months ago. Because this approach to retail is essentially the same as Ron Jonson did when he pioneered the Apple Stores a decade ago. And Johnson freely admits he’s ‘stealing’ Apple’s floor plans from its retail stores.

Apple stores are split in two, Johnson explained. The “Red Zone” is where customers discover new products and the “family room” is where returning customers come to learn something new or fix their products, like the Genius Bar. This obviously is very similar to the Main Street and Town Square concept he imagined for JC Penney.

“It seems like change takes place over night, but it really doesn’t,” Johnson said. “Something I learned while at Apple is ‘Every journey begins with just one step.'”