Go Lean Commentary
Give and Take …
It is hard to get one without the other. Everything of value has a cost associated with it. That cost may be paid in time, talent or treasury. There is nothing for free.
So for you Caribbean people, who want Direct Foreign Investors, here’s a BIG question: Are you willing to pay the price?
Investors will give …
They will want to take as well.
Not all investors will get their return; not all investments work; not all “bets” win.
Some will actually lose!
How do we Refuse to Lose and yet technocratically manage unsuccessful business endeavors?
It’s call a “Wind Down”:
Definition of wind down – per Merriam-Webster
to cause a gradual lessening of usually with the intention of bringing to an end
There is an Art and Science to this process; its called “Fail Fast“. Yes, we can adopt the community ethos to Refuse to Lose – a commitment by a group or society to the values of quality, success and winning – yet still judiciously manage failures, non-success and bankruptcies.
See this related in the AUDIO-Podcast here:
AUDIO-Podcast – When Failure Is A 4-Letter Word – https://www.npr.org/2019/07/05/738963753/when-failure-is-a-four-letter-word
Posted July 10, 2019 – Silicon Valley gurus tell you to “Fail Fast.” But what if you live in a place where the shame of failure is so strong, and the barriers to success so steep, that the “Failure-Is-Good” advice feels dangerous?
Today, we hear from entrepreneurs around the world who are rewriting the failure mantra to fit the places they live. In the process, they’re changing how their society judges winners and losers.
In summary, Failing Fast (or Failing Forward) allows for quality, success, and winning to come faster. Think “1 step backwards, 2 steps forward”. This is an important consideration for a new Caribbean, where Return of Investment is a priority. See this excerpt from the book Go Lean…Caribbean, (Page 24), a roadmap for the Caribbean Union Trade Federation (CU):
Return on Investments (ROI)
While the CU must govern to meet the current needs of it stakeholders, there must always be a future focus. A lot of CU initiatives must be embarked on for the future return of present investments. This also applies to basic services like education. For the region, fields of study in the class room should reflect not just the realities in the current job market, but also where the job market is moving to. So while there may be no need to teach typing and shorthand, there is abundant need to teach computer programming, web site design and “mobile app” development.
Can the community expect a reasonable return on such educational investments? Absolutely. But only if the graduates remain in the region. Therefore the community ethos must be to embed incentives and inducements to dissuade emigration; as in forgive-able student loans, on-the-job training employment contracts, paid apprenticeships, etc. This ethos also translates into governing principles for federally sponsored business incubators, R&D initiatives, entrepreneurship programs and the regional implementation of Self-Governing Entities (SGE).
This commentary completes the series on the Refuse to Lose ethos; this is Part 6-of-6. The full series is cataloged as follows:
- Refuse to Lose: Lesson from Sports
- Refuse to Lose: Remediating ‘Columbus Day’
- Refuse to Lose: Introducing Formal Reconciliations
- Refuse to Lose: Despite American Expansionism
- Refuse to Lose: Canada’s Model of Ascent
- Refuse to Lose: Direct Foreign Investors Wind-Downs
It is the assertion of this series of commentaries that the Caribbean can win, despite occasional mis-steps or investments with no returns. Yes, we can “Refuse to Lose” despite bankruptcy. We can facilitate technocratic wind-downs.
The Go Lean book presents a full eco-system for “winding-down” failed business endeavors. It detailed a Bankruptcy process for the Caribbean region, where this scope would be the exclusive jurisdiction of the CU Courts. (This is where ‘give and take’ is so important – if you want all the benefits that the Go Lean roadmap brings, you have to give up the responsibility of this vital area. This means ceding to the authority of the CU over the sovereignty of the member-state). See this excerpt from the book (Page 33) here:
10 Ways to Impact Turn-Arounds – #2: Bankruptcy Processing
Upon acceding this treaty, all bankruptcy processing in the region will be assimilated under the CU Federal Courts – applying to individuals, companies and even municipalities – thereby bringing protection to plaintiffs, but also balance and fairness to creditors. (Bankruptcy’s “turn-around” motives would therefore “trump” any preservationist objectives). To apply lessons learned in Detroit in 2008, the CU will apply strategies similar to the federal “managed bankruptcy” for GM/Chrysler to ensure a turn-around of the automotive industry and locales.
Among the 370-pages of the Go Lean book are the turn-by-turn instructions on “how” … to adopt the new community ethos for “Return on Investment”. All investments will not produce a return, we therefore want to Fail Fast, so that we can go back to winning. This means the regional bankruptcy process must also be restructured within this regional economic and governmental reboot. The book presents the strategies, tactics, implementations and advocacies to execute so as to facilitate Caribbean bankruptcies. See this sample of direct Bankruptcy (or “wind-downs”) references in the book:
|Page 114||10 Ways to Better Manage Debt – #5: CU Federal Bankruptcies
When debt become too excessive and can no longer be managed by the debtor, the usual solution is bankruptcy. Most advanced economies even allow for governmental entities to avail this privilege. The CU treaty will grant this oversight (and receivership) to CU federal courts, with a mandate to lean towards reorganization, rather than outright dismissal of legitimate debt, though all creditors may have to take a “hair-cut” (minor loss). The courts will appoint direct receivership to Trustees to facilitate the processing of the bankruptcy obligations for municipalities, companies and individuals.
|Page 114||10 Ways to Better Manage Debt – #5: Credit Reporting – Sharpening the Tool
With the threat of loss due to a heavy debt induced bankruptcy, there is the need to monitor and assess the collectability of potential and current debtors. This justifies the need for regional credit reporting systems, for individual and institutions. In order to facilitate a win-win from the interest economy, lenders/investors need to know of risks associated with debt.
|Page 116||10 Ways to Impact Elections – #5: Campaign Accounting, Debt and Bankruptcy Processing
The CU system will designated each campaign as an incorporated public entity, requiring quarterly reports-disclosures, official payroll and financial accountability. Candidates/campaigns and vendors can even seek bankruptcy protection.
|Page 136||10 Lessons Learned from 2008 – #8: Leverage – Common Sense Restraints
Banking risk is managed by controlling leverage, the magnifying factor compared to equity that borrowing money allows for a bank. Banking regulations best practices keeps leverage amount near 12-to-1. In 2008, Lehman Brothers leverage rate was pegged at 31-to-1; the more they borrowed the less capital equity they featured, so profits, and losses, were magnified. The mortgage crisis led to Lehman Brothers massive losses, then bankruptcy; the US largest at $691 Billion.
|Page 136||10 Lessons from Detroit – #2: Michigan Take-over
In March 2013, the Governor declared the city insolvent and appointed an Emergency Manager. By July, the city declared bankruptcy. The city had a $327 million deficit, faced more than $14 billion in long term debt and was making ends meet on a daily basis with the help of bond money held in a State escrow account. Austerity and truncated city services ensued; Detroit was a failed city! The CU will apply the lesson by managing Failed-States crises and emergency response for disasters.
|Page 136||10 Lessons from Detroit – #3: GM / Chrysler 2008 Bankruptcy
The Great Recession of 2008, plummeted auto sales, access to credit evaporated and the Detroit Three approached insolvency. Declines in Detroit Three production result in losses in US employment, income, and government revenues. To mitigate, the US Federal government coordinated a “managed bankruptcy” for GM and Chrysler; (Ford limped with-out one). The CU treaty allows for the regulation of bankruptcy at the federal level to ensure justice in re-organizations.
|Page 136||10 Lessons from Detroit – #4: TARP Bail-out
The “managed” descriptor for the GM/Chrysler bankruptcy entailed $79.7 billion in loans and capital injections (bail-out) from the Toxic Assets Relief Plan (TARP) of October 2008. GM/Chrysler was able to short-pay many creditors, protect pensions and “start anew”. GM re-incorporated and made an IPO of stock in 2010. For the fiscal year of 2010, GM reported profits, interpreted by many Analysts as an industry rebound and an economic recovery for the Detroit
|Page 155||10 Ways to Improve Credit Ratings – #8: Bankruptcy
The CU will manage bankruptcies (dissolution and reorganization) for individuals, companies and municipalities. Overseeing this process at the federal level will bring balance and fairness to the creditors and avoid abuse by debtors.
|Page 160||10 Ways to Impact Student Loans – #5: Non-Dischargeable with Bankruptcy
The CU will assume jurisdiction over the region’s bankruptcy (BK) process for individuals, and institutions. To guarantee student loan collections, they will be exempted from discharging student loans in the BK process. This strategy guarantees that loans will be collected …eventually. This guarantee lowers the cost/risk for the capital needed for loans.
|Page 168||10 Ways to Improve Governance – #8: Economic Crimes and Bankruptcy Jurisdiction
CU agencies will assume jurisdiction for economic crimes; those can have a systemic threat on the region’s financial institutions and economic engines; these includes bank & mail fraud, securities fraud, constitutional-judicial-officers offenses (public integrity), kidnapping, enterprise corruption/RECO, and cyber-crimes. All bankruptcies, individual, companies and municipalities will be litigated at the federal level, so as to assuage abuse and colloquialism.
|Page 199||10 Reforms for Banking Regulations – #10: Bankruptcy Reform
The CU will manage bankruptcy for individual, companies and municipalities. This will bring balance and fairness to the creditors and avoid abuse by debtors on student loans, mortgages and other consumer, corporate & institutional debt.
|Page 218||10 Ways to Preserve Caribbean Heritage – #9: Turn-around Strategies
While “turn-arounds”, as in the case of Bankruptcies, pursue the economic obligations more so than preservation objectives, the CU, with BK processing at the federal level, will intercede so as to apply a “managed bankruptcy” approach whenever preservation is an issue. This is a lesson learned from the Detroit Auto Makers’ filing in 2008.
The subject of Bankruptcy processing has been addressed in many previous commentaries; consider this sample list here:
|http://www.goleancaribbean.com/blog/?p=17373||Marshall Plan – A Wind-Down/Turn-Around for Haiti|
|http://www.goleancaribbean.com/blog/?p=17371||Marshall Plan – A Wind-Down/Turn-Around for Cuba|
|http://www.goleancaribbean.com/blog/?p=17379||Marshall Plan – A Wind-Down/Turn-Around for Puerto Rico|
|http://www.goleancaribbean.com/blog/?p=16668||Justice and Economics – Reformed Bankruptcies can forge change|
|http://www.goleancaribbean.com/blog/?p=16522||Reconciling the IMF’s Past, Present & Future for Sovereign Reboots|
|http://www.goleancaribbean.com/blog/?p=15965||Retail Apocalypse and Sears Bankruptcy; Another One Bites the Dust|
|http://www.goleancaribbean.com/blog/?p=15796||Lessons Learned from 2008: Righting The Wrong in Housing Industry|
|http://www.goleancaribbean.com/blog/?p=15787||Lessons Learned from 2008: Too Big to Fail –vs- Too Small to Thrive|
|http://www.goleancaribbean.com/blog/?p=11647||Righting a Wrong: Puerto Rico’s Bankruptcy|
|http://www.goleancaribbean.com/blog/?p=3311||Detroit’s Exit from their Historic Bankruptcy|
Refusing to Lose and bankruptcies …
… it is amazing how these two subjects align together.
For those with a Judeo-Christian background, the emphasis on repentance and redemption should be familiar:
“a saint is just a sinner who fell down and get back up” – Song “We Fall Down” by Gospel Great Donnie McClurkin
Yes, the old concept of “falling down and getting right back up” is just the new concept of Failing Fast.
The more things change … the more they remain the same.
Winning and Refusing to Lose will help the Caribbean to be a better homeland to live, work and play. But, all efforts will not be successful, and that’s OK. We do not undermine our Refuse to Lose ethos if we Fail Fast and turn-around to adapt to the resultant lessons-learned and analyzed best practices.
This is the nature of a technocracy.
The term technocracy was originally used to designate the application of the scientific method to solving social & economic problems, in counter distinction to the traditional political or philosophic approaches. – Go Lean book Page 64.
The culture of winning and Refusing to Lose is viable for the new Caribbean. This is conceivable, believable and achievable. Let’s get busy! 🙂
About the Book
The book Go Lean…Caribbean serves as a roadmap for the introduction and implementation of the technocratic Caribbean Union Trade Federation (CU), for the elevation of Caribbean society – for all member-states. This CU/Go Lean roadmap has these 3 prime directives:
- Optimization of the economic engines in order to grow the regional economy to $800 Billion and create 2.2 million new jobs.
- Establishment of a security apparatus to ensure public safety and protect the resultant economic engines.
- Improve Caribbean governance to support these engines, including a separation-of-powers between the member-states and CU federal agencies.
The Go Lean book provides 370-pages of turn-by-turn instructions on “how” to adopt new community ethos, plus the strategies, tactics, implementations and advocacies to execute so as to reboot, reform and transform the societal engines of Caribbean society.
Download the free e-Book of Go Lean … Caribbean – now!
Who We Are
The movement behind the Go Lean book – a non-partisan, apolitical, religiously-neutral Community Development Foundation chartered for the purpose of empowering and re-booting economic engines – stresses that reforming and transforming the Caribbean societal engines must be a regional pursuit. This was an early motivation for the roadmap, as pronounced in the opening Declaration of Interdependence (Pages 12 – 13):
xi. Whereas all men are entitled to the benefits of good governance in a free society, “new guards” must be enacted to dissuade the emergence of incompetence, corruption, nepotism and cronyism at the peril of the people’s best interest. The Federation must guarantee the executions of a social contract between government and the governed.
xvi. Whereas security of our homeland is inextricably linked to prosperity of the homeland, the economic and security interest of the region needs to be aligned under the same governance. Since economic crimes … can imperil the functioning of the wheels of commerce for all the citizenry, the accedence of this Federation must equip the security apparatus with the tools and techniques for predictive and proactive interdictions.
xxiv. Whereas a free market economy can be induced and spurred for continuous progress, the Federation must install the controls to better manage aspects of the economy: jobs, inflation, savings rate, investments and other economic principles. Thereby attracting direct foreign investment because of the stability and vibrancy of our economy.
Sign the petition to lean-in for this roadmap for the Caribbean Union Trade Federation.