We are already well acquainted with President Barack Obama as the Blackberry President (see my post in November 2008) who is the most technologically savvy leader among the G8 economies.

In fact, the very first President to use smartphone and social media technology, elected in November 2008. That was then this is now. Over the last four years, we now know he is a growing Apple fan as well, toting a MacBook and an iPad.

147 years after the Thirteenth Amendment permanently abolished slavery across the United States of America, President Obama has entered his second term as the first black President of America. Whatever the politics, this election will be historically significant just like the one in 2008. During his first term, Apple Inc. has become the most valuable company in the world.

So what is the key challenge facing the President as he fires up his MacBook? The financial markets were asking the same question even as the Dow Jones dropped 2% in New York trading in the hours following the victory celebrations in Chicago.

Unemployment remains very high by historical standards not only in the US but also here in Europe. A second term President, reaching to solve the challenges facing his country in a bi-partisan way can do something very special. If he is brave enough.

There is one stain on his first term record, which President Obama cannot easily wipe away, and it was his actual or perceived lack of focus on the economy, his approach to business. Unfortunately for Mitt Romney, his alternative vision of being a ‘CEO President’ executing business-like solutions, although credible, was not enough to win even though what the US and global economy needs right now is economic leadership. Virtually unthinkable in today’s climate, is the miracle of 25 years ago when two politicians from the Right and two Communists changed the world - Margaret Thatcher, Ronald Reagan, François Mitterrand and Mikhail Gorbachev. Standing on the common ground on key issues facing the world, they witnessed the collapse of the Berlin Wall and gave birth to a new post Cold War Technological Age.

So where to start?

President Obama’s first term will be associated with healthcare reform. The costs of this historic legislation must be honestly reckoned and also paid for. The ideology of “new deal” fiscal stimulus will require moderation and a parallel deficit reduction strategy. Instead of the anti-business rhetoric and Wall Street bashing, Obama needs a credible strategy to enable business to create new jobs with confidence and spend the cash currently held in offshore tax havens.

While Steve Jobs offered to develop campaign ads for Obama and the leaders of Google and Microsoft shovelled cash towards his re-election, tech companies were being conservative when it came to business. They argue for reductions in regulation and when it comes to taxation, they have far more in common with the GOP than the Democratic Party. Thanks to its byzantine tax arrangements, Apple was able to keep its overseas tax bill in 2011 down to just 1.9 per cent. There’s not many schools and hospitals being built or green energy investment made available from those meagre proceeds.

Perhaps however, he needs to listen to Steve Jobs on “jobs”.

In his conversations with President Obama reported by his biographer, the CEO of Apple criticised the education system for being crippled by union work rules. He argued that until the teachers unions are broken, there would be almost no hope for education reform to boost the skills at home required to fill new high tech high value jobs Apple was creating and the politicians wanted. Hard stuff.

But then Silicon Valley geeks vote Democrat but they think and act like Republicans.

Barack Obama is so popular here in Europe that polls score regularly over 80% in his favour. So can the Apple President rise to the challenge from one of the greatest visionaries and value creators we’ve yet seen?

Using the social media phenomenon Twitter last night, he gives us a hint in a brief tweet after a long day, “four more years” @BarackObama.

Predictably this research drew virulent condemnation from unions, politicians journalists and church leaders, though much of it was hysterical and all of it political. The Prime Minister even tried to use it to justify more women on Board’s, a clumsy attempt to deflect the political heat whilst demonstrating very poor logic.

The Harvey Nash Board Practice, in conjunction with the London Business School MBA consulting team has found that the issue of FTSE 100 CEO pay is just not as simplistic as many would have us believe. Executive pay is a serious topic for public debate but we need to ground the discussion in fact to have any hope of setting a sustainable path for the future.

The main assertion which caused such offence was that the ten highest earners received a 49% increase. This is simply false for three reasons as our research demonstrates.

Firstly, since the beginning of the recession in 2007 not a single CEO listed in the reports top 10 earners had a significant rise in salary and benefits. In fact the average rise was 1.6%, below the growth in average earnings during that time.

So, much of the growth has come from performance related pay. But for the report’s authors to pick one year where the economy started to recover and performance improved, places the report out of context. Over the four years the picture is very different: since 2007 CEO performance related pay has actually declined by 2%.

Secondly, the IDS report, in some instances, is actually misleading. Four of the top ten earners’ compensation is stated in their annual accounts in US dollars. To simply convert this to sterling during a period where sterling has devalued 25% further artificially overstates the so called rise in pay.

Thirdly, the report stated that CEO rewards were not in line with share price movement, invoking a sense of reward for failure.

Again, looking at the IDS data in 2010 this seems correct, however, the Harvey Nash / London Business School MBA Consulting Team research found that during the period Jan 2006 and Dec 2010 changes in share price explained about 30% of the variation in direct pay of continuously serving CEOs. In short, longer term CEOs are being rewarded, and penalised, for share performance.

The recession impacted performance related pay which dropped by 56% in 2009 compared to 2007. As the global economy recovered in 2010 along with company performance, flexible performance pay and long term share awards created a "rise" of 49%. The fact is that performance related pay is still 2% below the pre-crisis levels in 2007 on a constant currency basis.

The public tolerates actors, sports stars and entrepreneurs earning tens of millions per annum. So we must conclude that the main objection is around reward for failure, not quantum of pay.

So let’s take Sir Martin Sorrell, CEO of WPP, the world’s largest media company, employing 153,000 creative professionals around the world. WPP is the sort of creative digital company which Britain needs to champion if we are to rebalance our economy away from its dependence on financial services and public sector employment. Sir Martin started the business with a £250,000 loan and grew it from £1m to a global winner worth £8bn over 26 years. He has always invested his wealth in the company, never selling shares and is hired on a contract which allows the board to dismiss him “at will”. He has not had a basic salary increase over the last decade and over 50% of his package is company performance related. His pay package is very much in line with best practice recommendations by Harvard Business School and billionaire investor Warren Buffet, someone who has campaigned against the one way bet of executive share options. WPP competes in a global market where just 12% of revenues are generated in the UK market and almost a third are generated from fast growing emerging markets. By way of comparison, one of WPP’s competitors, Time Warner, paid its CEO Jeff Bewkes, a reported $26m in 2010 according to the Wall Street Journal, who acknowledged that the company had a history of wasteful acquisitions and the destruction of shareholder value.

When looking at the data on a short-term, year by year basis, the correlation was significantly less, with less than one per cent of changes in CEO pay being explained by share price performance. Two of the top five companies singled out by the IDS report are in the Resources sector (Rio Tinto and Xstrata), and therefore commodity price changes over the period were the likely driver of share prices in the short term and not the performance of the CEO.

One important note is that more than half of the top ten earners were either not resident or born in Britain and attracted from the USA, Europe and Africa reinforcing the global nature of the FTSE 100.

Increasingly London has become one of the most successful capital markets for large global companies, many of whom employ executives from all over the world. In seeking to attract the very best talent available Boards must offer compensation packages in international currency and compete with the USA, Europe and increasingly Asia in hiring wealth creators. This is no easy task.

The furore over the IDS report was unprecedented in stirring up a heady mix of politics and emotion with one union leader calling the top ten earners “greedy pigs”. Given that most of the executives are not British, this was extraordinarily ignorant and at a time when UK Plc is being encouraged to seek new growth in stronger emerging markets, it is disappointing that both the Prime Minister and the Leader of the Opposition did not take this opportunity to make the case for attracting and retaining the interests of large global wealth creating companies to the UK’s capital markets for the benefit of the country as a whole.

Hosted by Nick Kirkland, a CIO turned CEO himself, the CIO CONNECT conference near St Paul’s Cathedral in the heart of the City of London is quite a spectacular affair. I was hugely impressed with the technology and infrastructure turning each presentation into an interactive session with full audience participation as iPod’s were used on RIM’s local server to project instant survey results onto large screens in real time. I love this sort of thing particularly when used to engage talented people. I also love the way it enables you to make money in business. The ability to innovate and change our world seems to be limitless from a technological point of view and CIOs are in the driving seat. Don’t you wish you were an expert in technology? What a great job it must be? Just look at Steve Jobs, Mark Zuckerberg and our very own Mike Lynch. The CIO is cool with a capital "C".

A summary of my thoughts?

Well here is the CEO of Microsoft’s thoughts. Check out http://www.microsoft.com/mscorp/execmail/2009/09-29NewEfficiency.mspx

Steve Ballmer’s thoughts on the "new normal". Not everybody’s cup of tea but strip out the sales pitch and digest these 3 guiding principles for your career from hereon. You really cant go wrong if you get this right.

1. Efficiency - do more with less. This is mainly to do with reducing the unit cost of product or services.

2. Productivity - with less do more! Mainly sales and marketing. Increase people’s ability to generate greater levels of output and therefore revenues

3. Innovation - Chief Innovation Officer? Absolutely - innovate or die.

Onto my 5 big things for the CIO conference.

The #1 big thing affecting us all is the social networking phenomenon. The next generation (Gen Y’s and M’s) are the new shoppers, prospective house owners, employees and even leaders (God help us!). They work for you already. They get social media, online business, online chat. Virtual reality. They shop online and they go to their friends and Linked In Groups for recommendations - not the government’s Consumer body or the Competition Commission. No way.They just pop an informal question online to their friends on Facebook and then immediately act. Whether you are a Walmart or a BP you better understand how this social activity affects demand and how your customers behaviours have changed and how they think. CEOs are focusing on these new channels and dangers to their business model. Try and understand how it affects them and their business and look for opportunity.

The #2 big thing is "mobile me". Mainframes, PC’s, websites even laptops are going the way of the steam locomotive. Lovely relics from the recent past which are too big, expensive, cumbersome and inflexible to compete with the individually driven mobile application environment. Someone said to me recently we needed one global accounting system into which all data is poured and from which fabulous valuable financial information will flow like pure water in the desert. Sorry, no thanks I want to empower teams (which may be defined as countries or regions) to own their own systems and data in a structured environment and from which they can pull the data THEY want to make them more successful where they are in the market in which they operate. In real time. Mobile me is the greatest cultural and technological shift since mainframe to desktop.

The #3 big thing is convergence. The internet just got very serious and the convergence of mobile hardware, HD video technology and as many apps as one can dream of has given the world a new channel to market. In the Middle East its not only given expression to millions of people, their aspiration and also frustration but its also inadvertently and perhaps inevitably created the internet’s first martyrs. People have died in 2011 as a result of using video and communicating using twitter & facebook. Unbelievable but true.

The #4 big thing is vulnerability. The loose association of hackers calling themselves "Anonymous" are causing anxiety attacks in the boardrooms of companies. This group attacks companies which in their view, suppress free speech on the internet and represent the worst of big business and Wall Street culture. "Beware" they say "we know who you are". CIOs can help explain to boards how the challenged is met through protective technologies and strategies to combat internet terrorism.

The #5 big thing is CIOs in the boardroom. Surely its time to step up and be a part of running the business as an equal partner. But how?

CEOs have the attention span of a gnat. Book yourself a "power half hour" each week or fortnight if traveling is an issue, with your CEO. Your objective is to get quality time and an opportunity to drive your business oriented agenda by getting closer to the action from the best angle - via the top dog.

Tip: Do what you do best which is prepare, set your own agenda and split the topics into long range strategic items, medium term project status updates, short term topics and decisions plus ad hoc issues and challenges to be aware of. All written down in an email and also brought along to the meeting - two copies - as you know the CEO wont have printed it off. Stop after 30 minutes and hold non urgent items over into the next meeting. Never try and get a hard decision from a cold standing start. Introduce topics and tough decisions over a longer period of time building up to the big decision you are after. Let the issues and challenges settle like dust or sand in the CEOs head like disturbed seabed. Shock and awe didn’t work for Donald Rumsfeld and it wont work for you. Incrementalism is the real tool of influence.

CEOs may not do as well on detail as you would like but they are expected to hold the entire universe of solutions to problems in their head. They don’t like to be shown up either so solve their problems for them. Inform them, even of the a minute failure in a distant office. You can be guaranteed someone will email someone and it will end up in the CEO’s inbox. Prevent embarrassment, and you will have an open direct line. Trust and confidence will build.

Email is a great soft direct marketing and internal collaboration tool, use it to tell your CEO EVERYTHING without demanding anything back. Write into the email itself and avoid attaching complicated Word documents with special capacity sucking embedded internal branding - but that’s just my view. Its all about the content

Be structured and prepare to push up into the Boardroom through reading all about the latest Combined Code for Non Executive Directors. Want to know what’s pressurizing the CEO? Read about how governance and regulation is affecting the business he or she runs, how investors and the behaviour of banks in extending credit (or not) stresses him or her out. The internet is a great library of information and content. You can be a virtual expert in anything given enough time to study and research. Universities? Who needs them! I need experience, leadership and wise counsel wrapped up in humility. Most people are on broadcast only option - which is so 20th century.

Be different listen, observe and try and see what you can offer which others have missed. I can guarantee you there is much more opportunity out there than what you think!

Just over ten years ago the CIO was the insurgent new Boardroom partner. Technology was turning the business world upside down or so we all thought at the time. Then the dot.com bubble burst.

At around 2006 the strategic influence of the CIO had sunk to an all time low in most organisations. Microsoft’s Steve Ballmer’s 2010 apocalyptic post credit crunch vision of "more for less" seemed to confirm what everybody was thinking. Technology is a utility. No more important than perhaps facilities. Switch the lights on and there it is. Ubiquitous and seamless. The CIO then reported into Finance.

How wrong we all were!

Three reasons why the CIO is now so important;-

1. The youngest (freakin’) Billionaire

Is not Travie McCoy but Mark Zuckerberg. Facebook founder and possible living (in a T-Shirt) legend when The Social Network scoops a few Oscars in a fortnights time in Los Angeles.

Web 2.0 is transforming business as we know it. Companies are scrambling to catch up and provide their existing markets and new entrants (Generation Y) a working commercial response. Recruiting graduates has been the most affected in the short term as professional services companies have had to surrender to the power of the Harvard Facebook generation of information dissemination and personal online referrals. What’s the point of spinning how great your employment credentials are when students, graduates and post-graduates on the inside track are all talking online. Result: All recruitment companies are using Linkedin to search for additional pools of talent augmenting traditional searches and proprietary databases.

What about traditional business models? Too much to mention here but in the UK, Fortune 1000 retailer Marks & Spencer just hired Tesco’s head of online retail - the largest online grocery company in the world.

2. Mobile - its all about me

Poor Nokia. And not great for Microsoft either when Nokia’s shares dropped 5% on the announcement of the new linkup (in favour of Microsoft) at the same time ditching first love, Symbian Foundation "a true geek" organisation with Californian dreams. Nokia also confirmed that Apple iAnything and Google Android were the biggest threats to Europe’s once great wireless telecommunications sector. Everybody wants to be mobile, enjoy all the technology benefits available, anywhere in the world, on a device of their choosing and focused on "me". And the "me" generation (Xers and Yers) make choices based mainly on design and desirability - a nightmare for technology security, network architecture, firewalls and the cost platform.

3. The WikiLeaks effect - a rolling Tsunami gathering pace and power

Cyberwarfare. It’s happening already. On the geopolitical front we have Stuxnet, not just a nightmare for Iran but also Siemens who provide much of the hardware for the energy industry. And its a bank’s worst nightmare.

On January 18 this year, a former banker handed over 2,000 Swiss bank accounts to the whistle-blowing website, WikiLeaks, alleging that prominent individuals have been involved in mass tax evasion. The very suggestion of a breach of fidelity is enough to send clients and potential customers and investors scurrying for cover with or without "proof". Its a reputational thing.

On February 15, the Financial Times reported that Anonymous released the e-mails from Greg Hoglund, the founder of HBGary, on the eve of one of the Technology Security Industry’s largest annual conference. He had been scheduled to speak at the week-long San Francisco event but cancelled after the publication of his e-mails.

Here’s the thing.

The hacking incident dominated the conversation as the annual Conference began, replacing the usual chatter about securing cloud computing and smartphones and winning big contracts. Some security professionals were appalled at the lax practices that allowed access to unencrypted e-mail between the organisation concerned and federal agencies including the FBI.

In the midst of all this, the Chief Executive of the Financial Reporting Council in the UK has called on the European Commission to focus on behaviours rather than rules in a recent speech. Stephen Hadrill argued that the current regime of "comply or explain" should remain a fundamental cornerstone of the EU framework. The context of modern governance following the financial crisis was to consider what impact Directors personal values and principles may have on governance and sustainable corporate performance. Executive remuneration links in to this debate and says a lot about Boards, their Non Executives and Chief Executive Officers.

He goes on to say "above all, those responsible for change must recognize that rules are not an end in themselves. The goal is to encourage the right behaviour in the boardroom - openness, probity, clear strategic thinking, selfless stewardship - in the interests of the company and its owners. Law provides minimum safeguards. But in our ever-changing global economy which throws up an endless stream of complex challenges, governance needs to be rooted in the directors personal commitment to strong principles and values, supported by engaged investors. Those are the aims of the UK Corporate Governance and Stewardship Codes. And in view of the record of progress in UK corporate governance, they are aims that I am confident they can and will deliver.”

Mr Haddrill highlighted the importance of international analyses of what went wrong, the role that governance had to play, and the likelihood of EU actions in this area. He warned of the need to build on rather than abandon the strengths of the existing system in that mere compliance with regulation may provide false comfort for companies and investors.

Calling on a sense of realism about how quickly the consultation on a Stewardship Code for institutional shareholders might deliver any results he noted that increased transparency and accountability throughout the complex investment chain would, of itself, be a benefit to pensioners, policy holders and other asset owners.

As if to illustrate the wider point, the Chief Executive Officer of the Prudential, Tidjane Thiam has turned down Société Générale’s offer to join the French bank’s board. The UK insurer is in the middle of bidding for AIA, the Asian operations of AIG. Mr Thiam said in a statement that he was flattered to have been selected for the position, which would have been put to a vote of Soc Gen shareholders in May but stated his absolute priority was to continue to focus on delivering strong results for the Pru’s shareholders. The Pru’s top executives have seen its 30 biggest shareholders since the announcement of the proposed takeover and a number are said to be sceptical on the value of the deal and clearly concerned about management stretch following reports of the Soc Gen offer.

For some time Harvey Nash and the CBI (Confederation of British Industry) have been calling on company Boards to exercise restraint and caution in the face of public (and investor) opinion which has turned remarkably hostile post the failure of Lehman Bros.

Whatever the merits of the Soc Gen offer, Tidjane Thiam was well advised to respond to the mood of investors and demonstrate those values espoused by the FRC. "Openness, probity, clear strategic thinking, selfless stewardship, all in the interests of the Prudential and its owners.

Tidjane, we congratulate you.

"In case you haven’t noticed, the U.S. economy today is being hit by two tsunamis at once: The Great Recession and the Great Inflection. The Great Inflection is the mass diffusion of low-cost, high-powered innovation technologies, from hand-held computers to Web sites that offer any imaginable service, plus cheap connectivity. They are transforming how business is done. The Great Recession we all know.

The “good news” is that the Great Recession is forcing companies to take advantage of the Great Inflection faster than ever, making them more innovative. The bad news is that credit markets and bank lending are still constricted, so many companies can’t fully exploit their productivity gains and spin off the new jobs we desperately need. The Great Recession forces companies to radically downsize, but the Great Inflection has made them radically more productive.

The writer cites an example.

A marketing agency in Minneapolis was forced by this Great Recession and Great Inflection phenomenon to make a film completely differently for a non-profit client. The budget was about a fifth of what was normal, almost all meetings and communication with the client was by e-mail. The script was developed and approved using a collaborative tool provided by www.box.net. Mobile working meant the script was reviewed in real time by all with complete transparency wherever they were, easy convenient and free. There was no budget to shoot new footage or stock photography - costing royalties of anything between $100 to $2,000 per image. The new economy provided low cost solutions online, www.istockphoto.com and www.voices.com and www.audiojungle.net within a relatively short period and for very little money. By being able to access all these cheap tools immediately, the company was able to complete the project in record time and focus on its value-add: imagination. The customer got a better product, a lot quicker and for less cost.

But the issue is this. Not many new jobs were created neither was significant profit generated. For that, the economy needs to pick up and credit needs to become more freely available. Given successful companies are now in a new state of "hyper-efficiency" any uptick in business would really improve the bottom line, generate cash and stimulate hiring, but that requires credit markets to loosen for customers and clients.

Strange times: The Great Recession and Great Inflection are making our companies ultra-lean, innovative and productive. But with credit still constricted, the economy is like a superfit track star with a weak heart. Getting credit pumping to the industrial muscles again must be the top priority."

“There are no simple policy solutions. Suggestions of windfall taxes or a special super-income tax rate make no sense at all. And of course it’s true that banking talent is highly mobile, and can disappear overnight to friendlier climes, which means that unilateral action by one country would be very damaging. There is no one-size-fits-all approach to establishing the right rewards. But in the coming years of public austerity, it’s going to be especially important that compensation committees set demanding hurdles and rigorous processes for determining pay. They could do a lot worse than starting off with some guiding principles which are set out in a recent piece of work on the subject from the US Conference Board. It calls for immediate and credible action to restore trust in the ability of company boards to oversee compensation, and to that end it sets out best practice and clear guidance. Among other things, it says that the compensation committee should think like an owner, and ask itself whether the package would be paid out on the same terms if it had been negotiated on an arm’s length basis by the owner of the entire company. Not a bad starting point.”

“The reputation of business has taken a severe knock during the recession, and not just in the banking sector”.

Companies don’t know what to do about uncertainty and unpredictability.

The recession means many employees are paralysed with fear and can’t do their own jobs, they are not on the same page as the leadership and can’t execute with excellence. Confidence has disappeared and has been replaced by its polar opposite - fear.

When employees are fearful it undermines trust there is no transparency or honesty and eventually they will panic.

These companies are still in what I refer to as a TOP DOWN mode and are concerned about being seen to be active, slashing jobs, reducing costs aggressively and increasing earnings in the short term to appease investors. It’s a race to the bottom and it’s got some very ugly aggressively macho characteristics. The PR teams are churning out the press releases everywhere.

Do you think I am being extreme? Well just look at the example of what’s happening in Europe where a senior Director of one of the largest companies in France has resigned yesterday after a number of suicides in the company blamed on “management through terror”. This downward spiral leads to negative energy in the organisation where the whole adds up to less than the sum of the parts. In this environment “innovation” and “creativity” is stifled, snuffed out like a solitary candle exposed to a strong wind.

The old paradigm

It doesn’t work anymore. Most top executives I have worked with haven’t bought into the new paradigm that we are living in a knowledge worker age. The industrial age is over.

Many pay lip service to this, nodding attentively but go straight back to the old ways of working. Hierarchical, command and control ways.

Failure

Mostly this has resulted in failure particularly over the last 10 years. The corporate landscape is beginning to be littered with examples - I would say in my experience over 50% of the global organisations of today are old paradigm organisations staring at failure down the road at some point. Do I need to mention the US auto industry? The collapse wasn’t a one night phenomenon it was obvious for most of the last decade.

Talent

All of us will be succeeded by Generation Y at some point in the not too distant future. Tomorrow’s leaders. Generation X is now in charge at Glaxo, BP, the new US administration, David Cameron and Boris Johnson perhaps. They will be succeeded by the media generation (Y) and this demands of us a change in approach.

The Talent paradigm shift is only possible with a complete change from the top. Empowerment. Letting employees and managers decide for themselves what greatness looks like to them, how it fits in. Not “what I want” but “what can I do?” It’s a positive force that’s needed and its source must be the CEO and his team.

Creating the conditions for innovation is more important than the innovation itself. Because then its sustainable and not a one off.

• a high level of trust
• empowerment
• collaboration

Initiate new organic growth and thinking in your organisation, but don’t manage the process or the outcome. Introduce the tools; open your systems to web 2.0.

Embrace new technology - sometimes its anarchic but it connects people, ideas and creates the unexpected. Twitter, love it or hate it. It definitely fills a need in society, as does Facebook.

When I say offshore you think cost reduction. But don’t! Think “I need to have my Technology Group integrated from more than one nationality and culture to foster innovation as well as driving down cost”.

As many technological innovations originate in the East now, it may be useful to tap into Asian talent, in our case it’s in Vietnam. Beginning to create new paradigms from having new people in the team from completely different cultures. With different life experience and different educational backgrounds. Enriching and creating the conditions for innovation.

Conclusion

Every successful activity has involved a breakthrough. But there is no breakthrough without a change in paradigm.

How can I tell you to innovate with Talent? I can’t. Most innovations are accidents anyway. Certainly in medical terms it’s a journey through the dark for most of the R & D process until something happens. Think Viagra and Penicillin - probably two of the best examples.

So you can’t manufacture innovation but you can create the right conditions for it.

Breakthrough requires a “break” with the old ways of thinking. It starts with your culture, your leadership style, acceptance of the new paradigm of talent management. It allows your teams to develop third alternatives. Not MY WAY or YOUR WAY but a THIRD WAY, our way.

John McCain and Barack Obama both campaigned using advertising on YouTube in 2008. Seven of the sixteen major presidential contenders kicked off their campaigns online. Personal Democracy Forum, a website and annual conference that explores the relationship between politics and technology, concludes that the internet will change democracy itself.

Using social-networking tools, another would be Presidential candidate generated a “money bomb”- $6m in one day, shattering previous records. These informal fundraising networks meant that Paul and Huckabee stayed in the Presidential race a lot longer than they might otherwise have done. But it was Barack Obama who has achieved the paradigm shift, raising more money from the grassroots than any campaign ever. In June 2008 alone a staggering $52m was raised of which $31m were donations of $200 or less.

Mr Obama has over 1m supporters on Facebook, used Twitter and is most famous for refusing to give up his Blackberry when it became a security risk once he was elected President. Obama’s team has proven that not only do they understand the DNA of the internet but that the new media and power of Web 2.0 can make what was deemed impossible now seem achievable. It’s fair to say the election of Obama embodied many ground breaking “firsts” not least of which he is literally the first internet President.

Much of Obama’s support comes from members of Generation Y, the group of young people born roughly between 1978 and 1996. According to the New Politics Institute, the number of eligible Generation Y voters in the US will be close to 50m this year and about a third of all voters by 2016. About 90% of them are online, compared to 75% of all adults. Two-thirds of internet users under the age of 30 have a social-networking profile, and half of these use the sites to get information about politics or the campaigns.

When Lance Armstrong sat down with John Battelle at the Web 2.0 Summit, he had been twittering for about 10 days. Now @lancearmstrong has taken the internet world by storm and he is one of the 10 most followed twitterer’s in the world with 1.4m followers. For those not acquainted with Twitter, Lance Armstrong explains:

“140 characters fit’s my personality well. I’m not much for small talk so 140 get’s me that. I see long drawn out emails and I delete them. It also brings a certain transparency to my life that others may have never seen or realized. Lastly, it works great for talking about the thing I care about the most (behind my family) and that’s fighting cancer. Twitter builds grassroots movements quicker than anything I’ve ever seen. I try to keep it positive….It has to be 100% authentic. I think people are smart. They know when they see something real. I talk about what’s happening now and it’s always the real scoop.”

It’s the Web 2.0 Armstrong brand-building phenomena which is taking place before our eyes at Le Tour de France which demonstrates the power of this new media. Armstrong’s amazing cancer research campaign “livestrong” has literally ballooned into a global movement on the back of his sporting achievements and his personal cancer story. Although the Tour is yet to conclude, Armstrong is in a podium position, which some say is an incredible demonstration of his talent as one of the oldest riders in the hardest endurance test in sport.

But that’s not the real story, incredible as it is. What Lance has done is to use the platform of a global sporting event to launch online, his new team for 2010, achieve previously unheard of coverage for their new sponsors and keep his cancer foundation “livestrong” in growth mode. His personal brand has enormous power now and he is listed in June’s Pro Cycling Power List as the most influential person in world cycling - ahead of any other cycling star and all of the sport’s administrators.

All this, from his bedroom in a two star hotel in central France dressed in shorts, compression socks and a hoodie. And true to form, the “twitter video” is shot by a handheld camera and doesn’t last longer than 80 seconds. 160,000 viewers had downloaded it within 24 hours.

Take note. History is being made here. And if you hold a leadership position in business, beware being trapped into saying you don’t “get” social networking.

http://www.livestrong.com/lance-armstrong/video/radioshack-and-lance-to-form-new-cycling-team-in-2010/5687253c-7dc3-45d2-aae5-9d028d738b21/

TV President is hosting a national talk show by Adam Boulton, Political Editor, Sky News

Barack Obama has become a regular fixture on US television. The President knows that he still has enough novelty value and star power to get the networks to clear their airtime and he’s grabbing every chance to dominate the agenda from the bully pulpit.

It is a class act. Although at official events Mr Obama’s message is usually scripted and read from teleprompter screens, he can talk his way out of trouble. I was moved to see the President win over US Marines at Camp Lejeune, although he opposed the Iraq war in which 4,000 of their comrades-in-arms lost their lives.

For now, his talk is invariably about the economy. Mr Obama is the most visible new president - not only because he’s a great communicator, but because Europe is blaming America for the global economic crisis and looking to Mr Obama to lead the way out it. The President’s ubiquity is designed to tell the US that it is in control of its own destiny. He must win this argument if his presidency is to succeed.

Even when the Administration doesn’t have the best arguments, or gets badly mauled, the checks and balances of the US Constitution ensure that the country’s options are debated at length; considered decisions emerge by a process of attrition. Take Mr Obama’s eye-watering, budget-busting budget. It will look very different by the time that Congress has exercised its “power of the purse”, to approve, veto or impose spending and tax proposals.

It is all so different in Britain. When the financial crisis erupted we were instantly reminded that our parliamentary democracy does not entail genuine consultation about what to do. From nationalising Northern Rock to the merger of Lloyds TSB with HBOS and the fiscal stimulus, decisions are enacted by fiat - either thanks to Labour’s decisive parliamentary majority or the Governor of the Bank of England’s right to intervene. There was nothing to be done once the announcements were made. Public attention moved on to the next emerging danger.

When the credit crunch threatened to topple Anglo-Saxon capitalism in the autumn, the discretionary power enjoyed by the British executive looked like an advantage. Gordon Brown could act while America dithered. It seemed incredible that Republicans in Congress could hold up their President’s economic rescue plan.

But Mr Brown’s pronouncements did not reverse the recession in spite of the dramatic metaphors thrown around. Meanwhile, the American body politic recognised something that others didn’t: this crisis is not an earthquake, Pearl Harbor or even 9/11. The clocks have not all stopped. This is a systemic sickness with unexpected symptoms that will take years to express themselves and be treated. All of us are threatened, but not all in one blow. There is time to talk.

And talk is what America is doing. A cacophony of politicians, officials, economists, business executives, media commentators and cable news channels constantly debate what went wrong, what needs to be done, and whether what’s been done is working.

The big reason why John McCain is not president now is that when he suspended his campaign in September at the height of his post-Palin popularity and called the nation to attention to debate the economic situation, he then found nothing to say. Mr Obama shifted his campaign from inspirational rhetoric to battling economic troubles in his acceptance speech in August. He hasn’t stopped talking since.

In only two months the new Administration has signed into law the $800billion stimulus package, published a budget that raises the federal deficit to new heights and set out policies for healthcare, housing and the banking system.

The President conceded in advance that not all his plans would work. In particular, proposals from the US Treasury have looked tentative and weak. But there’s no hiding failure and on Monday Tim Geithner, the Treasury Secretary, was forced to pacify Wall Street and revisit the Troubled Asset Relief Programme.

The Administration is also taking full ideological advantage of a crisis that calls for big government cheques. As Rahm Emanuel, Mr Obama’s chief of staff, warned in November: “You never want a serious crisis to go to waste...Things that we had postponed for too long, that were long term, are now immediate and must be dealt with.” Much of the new spending is only loosely linked to boosting the economy now. If not quite ushering in the United Socialist States of America gloatingly detected by some right-wing radio hosts, the President is shifting the economic balance, redistributing wealth by taxing the rich to expand central government support for health, education and welfare.

With anti-spending Republicans to the right of him in Congress and spendthrift Democrats to the left, Mr Obama cannot smuggle his plans through. So he goes on television to argue his case with conversational eloquence.

In Britain, it took until the run-up to Tony Blair’s third election victory before new Labour would even use the R word - “redistribution”. Mr Brown has equal difficulty with today’s R word - “recession”.

Unlike Mr Brown, the President is not implicated in the decisions that led to this mess and he can shift the horizon convincingly from the pessimism needed to get his stimulus package passed to this week’s optimism that “America will emerge from this stronger”.

Having left Mr Geithner to make his first, disastrous TARP presentation on his own, Mr Obama did not make that mistake again, bookending the Treasury Secretary’s testimony on AIG, the failed insurance giant, earlier this week with an appearance on 60 Minutes and a White House news conference. Even if the worst happens and Mr Geithner’s memory lets him down over approving executive bonuses as it did over paying his taxes, his loss would be a sideshow - in no way comparable to, say, the loss of Alistair Darling, the Chancellor, whom the Prime Minister has left to front the nasty bits of this crisis on his own.

Mr Obama is leading a great American conversation on the economy - jobs, homes and banks. He won’t win all the arguments. But this voluble President, and the wisdom of the founding fathers, are together helping the American people to take ownership of their fate with credible plans that have been tested by exhaustive discussion. Britons, meanwhile, must sullenly await what their political masters choose to throw at them.

Adam Boulton is on special assignment for Sky News covering President Obama’s first 100 days

I have posted below an edited version of the Royal Bank of Scotland’s public statement today at its Annual General Shareholder Meeting.

I believe the words and sentiment are so striking, so honest, that we all need to pause for a minute to read them. This is not corporate marketing spin. These words represent a profound change of direction and in my view are a watershed for all business leaders to take note of. See our previous blog on "To the G20: the answers are to be found in Scotland". This is truly the place where salvation can begin.

Let me say this publicly: Harvey Nash is proud to be associated with the Royal Bank of Scotland Group (including Citizens and ABN Amro) over the last 12 years. We have enjoyed an excellent and supportive relationship through good times and bad. The RBS team who work with us are truly world class talent. Our business, its cash flows and our trading model is well understood by the bank, indeed we have turned to the Royal Bank many times for advice in all areas of banking and cash management across the world, in the US, UK and Holland.

We are therefore delighted that RBS has sent this strong message and we support the call to stop the political "football" concerning controversial pension settlements and Board squabbles. These public arguments are deeply upsetting for us as clients and we want them to stop. We recommend that the government, the Prime Minister, the Cabinet and the Treasury take proper responsibility for their failures too, and put this behind them in everybody’s interest.

Fault and blame

Only a tiny minority of staff in RBS were in any way responsible for the major credit market losses we suffered in 2008. It is remarkable that there were only a few hundred people responsible in the relevant segments of our businesses chiefly in the financial centers of London, Amsterdam and New York, most of whom have now left the Group. And this is out of a global population of around 180,000 employees.

RBS profitable

Given the complexity of the Group and the progress of integrating the ABN AMRO businesses, it is impossible to unpick the results with complete accuracy. However, that said, our estimation is that RBS would have made an operating profit before tax and goodwill impairment in 2008. In other words I don’t think there can be any doubt that the key decision that led RBS to its difficulties was the acquisition of ABN AMRO.

Remuneration and rewards for failure

Reforms have been made as we undertake a comprehensive review of all remuneration policies in 2009. The new approach will I think be seen by most reasonable observers to have balanced the difficult conflicting issues we face. Reward will be longer term and more directly aligned to shareholder interest rather than short-term return. Our new Chief Executive has, at his own insistence, a clause in his contract ensuring that he will receive no reward if he leaves the company for reasons of his own failure.

Culture, corporate values and poor practice

We must make other changes. In particular our risk processes and aspects of our management culture must change and will.And in a more symbolic way some of the practices that were accepted at the height of a boom when the Bank was recording £10bn profits, cannot be acceptable now if indeed they ever really were.The CEO and his team are moving quickly to do what we can to demonstrate that the Company recognises its position and is changing.Would we choose Formula 1 sponsorship if we were starting from here? No.Should we retain a corporate jet? Its up for sale immediately.

The Future

I believe we should bring an end to the public flogging and focus on the good and enduring people and businesses of RBS and allow them to earn our way back to success. The past is done but this company is not. The legacy of the last year will stay with us but now is the time to look forward.

We have the foundations in place to rebuild the Group to standalone strength and everyone at RBS is committed now to doing just that.

This was not always appreciated by the world, particularly across the Atlantic where you may be forgiven for thinking it could be the next Donald Trump resort.

In fact it’s a wild and wonderful country which has over the centuries led the way in banking and financial innovation. The Scots have made their presence felt in the financial services sector on this island for over 300 years now. Even today the national character is positively associated with thrift, prudence and caution.

The Royal Bank of Scotland became the first bank in the world to offer an overdraft in 1728. Scottish banks still retain the right to issue their own banknotes which are widely circulated and may be used as a means of payment throughout Scotland and the rest of the United Kingdom; although they do not have the status of legal tender, but rather promissory notes. Unfortunately in a cruel twist of irony both their large banks, Royal Bank of Scotland (chartered 1727) and the Bank of Scotland (established 1695) have effectively been nationalised with taxpayer support as a result of the financial crisis. The "promise" was spectacularly broken were it not for the Bank of England’s intervention.

Then there is the Institute of Chartered Accountants of Scotland (ICAS). Did you know it was the world’s first professional body of accountants, receiving its Royal Charter in 1854 and was the first to adopt the designation "Chartered Accountant" and the designatory letters "CA". As a CA(South Africa), not only do I have plenty of friends in the stalls of Murrayfield, but I also share the sense of ICAS history having qualified as a Chartered Accountant (SA) myself over 17 years ago. These ancient roots bind me to a place 6,000 miles from the country of my birth.

All of this history came together for me personally when Harvey Nash co-sponsored an excellent BBC IR Society event "The Inside Story of the Economic Crisis’ with Robert Peston and Douglas Fraser. Douglas is the Business Editor for BBC Scotland and of course all BBC viewers will be acquainted with its current superstar journalist, Robert Peston. The event was professionally chaired by the Chief Executive of the Institute of Chartered Accountants of Scotland, Anton Colella. The IR Society and Tayburn Corporate Reporting were appropriately supporting the corporate governance agenda.

But it hasn’t been a good week since then. This nation’s image has been hurt with the collapse of the Dunfermline, Scotland’s largest building society and the violence against the Royal Bank of Scotland branch in the City of London. All this on the day the leaders of the world’s most important nations came to London.

This got me thinking as the G20 protest march passed in front of our Mayfair offices. The challenge facing the G20 today is not really the future of Anglo-Saxon capitalism. The really big issue is that in spite of Brown and Obama’s rhetoric - no doubt positioned carefully to stop the French from leaving prematurely - the debate needs to focus on corporate behaviour and values. Robert Peston certainly understands what created the crisis, he has won awards for describing the unfolding drama but what does he think the future will look like?

How did the once great (Scottish) banks with pages of award winning governance jargon collapse so spectacularly, and how do bankers all over the world who have received generous bonuses and pensions find redemption and salvation amidst the failure and chaos.

The answer may be closer to home than we think. Presbyterianism, another Scottish institution, places great importance upon education and life-long learning, generally considering that the point of such learning is to enable one to put one’s faith into practice. Apparently Presbyterians generally exhibit their faith in action as well as words, by generosity, hospitality, and the constant pursuit of social justice and reform according to Wikipedia.

Let’s learn from this crisis. And let’s reject a failed box ticking approach to governance in favour of leadership with strong character and personal values. We can no longer avoid the moral question.

We may even find ourselves back in a spiritual Scotland of the past, the Reformation. Where sound judgment, thrift, prudence and putting one’s faith into action in the interests of a broader agenda for social justice was the norm.

That may be the very place, for the banker, the politician, the hedge fund manager, or even the modern CEO, to find salvation.

Click on Robert Peston’s "million hits a day" blog to get the inside track on the G20 and the financial crisis as it unfolds. www.bbc.co.uk/blogs/thereporters/robertpeston/

“I’m still clinging to my BlackBerry,” Mr. Obama said last Wednesday in an interview with CNBC and The New York Times. “They’re going to pry it out of my hands.”

The Times in London reports extensively on the up and coming Presidential inauguration. Great American presidents have emerged from the great challenges. Rees-Mogg says "The greatest president of the 20th century was Franklin Roosevelt who had to overcome the challenges of the Great Depression and the Second World War. The greatest president of the 19th century was Abraham Lincoln, who had to meet the challenge of the Civil War. The presidency of Barack Obama will also be shaped by the challenges he faces; he has to overcome the depression that began in 2007. He also has to create a foreign policy that will restore international confidence in the United States. Apparently, according to insiders, Obama has taken Roosevelt and Lincoln as his chief role models, and it is the image of Lincoln he has chosen to emphasise as he prepares for his inauguration. The first black president naturally feels kinship with the president who abolished slavery. Mr Obama has formed his Cabinet on Lincoln’s principles, appointing the strongest individuals, whether or not they agree with each other and whether or not they have been his rivals for the presidency. Mr Obama is said to have been reading Team of Rivals, an excellent book on Lincoln’s choice of colleagues written by the Pulitzer prizewinner Doris Kearns Goodwin."

Obama, like Lincoln and Roosevelt, is a natural orator of exceptional gifts, his speeches allow him to persuade the public to support his policies with gifts of eloquence, humor and sympathy. Mr Obama has already said that the recession will be the biggest problem for his new administration and this is likely to prove correct.

President Obama, as he will be tomorrow, has changed everything about America already - not just by being what he is but by being who he is. He is not just the first black president. He is the first Blackberry president. And the first President to mobilise Generation Y in such an impressive way last year. It is said that when George W. Bush hit the campaign trail in 2000, the personal possession he brought with him from home was his feather pillow.

Tina Brown, editor in chief of www.thedailybeast.com says what the pillow was to Mr Bush the Blackberry is to the new President. Mr Obama has been resisting the security agencies’ attempts to pry his fingers from around his beloved electronic device. His fight to keep his Blackberry shows how strongly he doesn’t want to be cut off and how much at home he is with his personal communication and technological devices. Like Generation Y, President Obama will be connected. Wired and online. Of that we can be sure. When he applied his skill to the internet, 12 million volunteers were literally conjured out of the air. Not only could he deploy his web army to distribute his leaflets, raise his funds and sell his policies, he could speak directly to them whenever he hit a snag. When he accepted the Democratic nomination, tens of thousands held up their glowing mobile phones like candles at a rock concert. Like Lance Armstrong’s use of Twitter to control what his fans hear about him from the traditional media, these "rock stars of the people" can set and control their own personal agendas. That’s the real power of the current technology.

But Mr Obama was not just ahead of the curve in the way he understands the web. He understands instinctively that the old structures have to be broken down and reassembled if we are to compete in the new world. The same will prove true of business. The election delivered a seismic shock not just to the political world but to the top of Fortune 500 corporations. Call it the Obama effect - a sudden hunger for creativity and innovation, a recognition that we have to be less "massive" and more nimble. It may have come too late for some, as we watch in unbelief at the bankrupt auto dinosaurs sending their leadership to Washington with begging bowls in corporate jets.

The mantra of the next decade will be more consensual, less top-down, more cellular, less gigantic. By the end of this new presidential era every CEO who boasts that he has no time to use the internet, or cannot understand what the iPhone revolution has done to business, will be gone.

Right now, however all eyes are on Washington. Harvey Nash has sent technical expertise from its Nash Tech research facility in Nuremburg to the inauguration ceremony to support a US based client.

Many people already feel that expectations have risen into the stratosphere, and that the new President will never be able to meet them. There must be a high risk of "expectation deflation" as the global economy deflates in 2009.

But, if anyone can renew the progress of the American people, it will be the Blackberry President.

We covered a range of topics but the speed and severity of job losses associated with the global economic downturn dominated the opening question. In the UK, during the first four days of this week, 8,000 job losses have been announced by major corporations - many still in Financial Services. The actual figure will of course be much higher, if one includes small and mid sized enterprises who don’t tend to announce. Totalling over 10,000 per week or half a million people losing their jobs in the UK alone before the end of the year feels catastrophic, which of course it is. The government’s own estimates are one million will be added to the unemployment benefit list by mid 2010.

Across the Atlantic, a total of half a million Americans were made redundant by US employers in December, and 3 million jobs have been lost during 2008. The mounting toll of job losses drove the unemployment rate in the world’s largest economy up to a 15-year peak of 7.2 per cent last month amid predictions that it will leap to 9.5 per cent or more by the second half of next year. Europe has a built in lag factor, as structurally the labour market is more inflexible therefore the real impact of the credit crunch has yet to bite. Unfortunately, if one looks back historically, that means any expected recovery in employment also lags in a global upturn. No country remains unscathed, and even the previously booming economies in Asia are shedding jobs in what has become a truly global downturn.

So the mood is certainly gloomy, but is it hopeless?

Well, yesterday’s ‘miracle on the Hudson’ - where a US airways commercial jet had to make an emergency landing in the Hudson river in New York - was a wonderfully positive story given the negative newsflow generally. Experts praised the pilot and crew, "who had done everything right." So the potential Hudson air tragedy has become the "Hudson miracle"... an unprecedented story of zero casualties in a full scale commercial air accident.

In a similar way, tremendous skill by business and political leaders will be required to handle the global economy’s hard landing this year. Let’s pray the casualty list will be relatively light, the most pessimistic of pundits proved wrong and the upturn quicker than expected. Miracles can and do happen.

Global rebalancing, lower borrowing, more sensible asset prices, lower inflation, more realistic expectations from all stakeholders are all side-benefits of the downturn. Even geopolitics can benefit as less than friendly governments and hard nosed leaders soften their tone, in the light of lower energy demand and lower oil prices.

Recently, at a dinner hosted by Harvey Nash’s Life Sciences practice, Ian Kent, a seasoned life sciences entrepreneur and founder Director of a number of successful bioscience companies spoke about the need for Government to further incentivise global companies to place high value R & D in the UK. There is tough competition from Massachusetts USA and parts of Europe. This was raised as a topic during our debate. My co-panelist on the show, Sir Andrew Cahn, made a good argument that the UK is still the overall investment destination of choice for many industries from across the globe, including professional services and the creative sectors. Britain leads the world in security and the use of technology to solve potential threats. While admitting that all firms are facing challenges, he sounded an optimistic note by concluding that the UK remains a highly entrepreneurial culture, with a focus on talent at the heart of the UK Trade Investment strategy. He was confident this will not change in the long term and even went so far as to say there would a be a strong Financial Services sector at the end of all this. I agree.

And of course there are other areas of growth. The public sector is going to benefit from greater investment as a result of Government stimulus packages, and both private firms as well as public bodies associated with healthcare, education and public transport are looking to expand and grow.

Take the green agenda. The road to a lower carbon economy means E.on (German Energy) and EDF (French Electricity) are both getting ready for the boom in building Nuclear power stations. It is no secret that President-elect Obama is placing ‘green jobs’ at the centre of his economic recovery, with a pledge to create three million new jobs within environmentally friendly industries. Whether this includes the development of green technology within automobile manufacturing or alternative energy sourcing and security remain to be seen; but investment in new energy technologies has always generated a positive knock-on effect in talent development. There is a lot more to come on this topic as new ideas are explored and Government investment flows. Technology organisations like The Symbian Foundation are hiring as convergence in the wireless sector takes hold.

So there are still pockets sectors and companies that are still hiring. They are simply not releasing announcements and the media aren’t covering it.

It’s certainly gloomy, but hopeless?

No.

To view the clip from CNBC please click here

* "Strictly Money" is a CNBC program that focuses on you and your money. It’s essential viewing for the UK business person, home owner, investor, consumer and anyone who is serious about understanding the current environment for business, the economy and how to build and protect their assets and investments. CNBC understands how the political and economic environment affects you and your business and knows what drives the British economy.