Walter Stevens
From: Three Horizons [info@threehorizons.net]
Sent: 31 August 2009 02:09 PM
To: Three Horizons
Subject: 3H Newsletter - Sep '09
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Dear reader, From Sense-and-Respond to Predict-an
Welcome to our September newsletter. We’ve been IBM announced this week its purchase of SPSS,
producing these for upwards of a year, as part of our software. This follows a host of similar acquisitio
commitment to inspire new thinking and focus firms like SAP, Oracle, and IBM itself. Apart fro
thoughts on performance improvement. All the previously considered a niche into the mainstrea
feedback we receive is constructive, and we hope that spending on such software will buck the downtu
you enjoy receiving this list of tips and tricks every reason is that predictive software is used for be
month. cutting costs and helping focus the business.
spend on improvement will not be on transactio
Three Horizons is approaching the end of its second year, and we’re excited extract value from the existing investment in
about the possibilities that exist, despite the economic crisis. Watch out for companies that may be in play are Accelrys, Ap
announcements as we develop our service offerings, alliances and client base. Genalytics, InforSense, KXEN and ThinkAnalytic
their existing systems, firms like IBM realize that t
We remain committed to promoting the power of better decision-making using play, and will require much high-end man-power to
analytics based on good information, solid risk management, and the ability of for their consulting division.
people to develop strategies and implement them.
Thinking about the implications of this develop
Finally, congratulations to Danie and Inge Rourke, on the birth of their daughter acquisition logic, to the implications for business
in Dohar, Qatar, recently, from all at Three Horizons! the shift to using predictive technology is gaining
will be as amazed at the current lack of reliance
Walter Stevens analytics as we are when we think back to how
world!
Starting in a recession like Apple and Microsoft?
Featured Service
There is currently much debate about the benefits and perils of certain behaviors
during a recession. Our web site poll indicated that most people see this How resilient is your business, and how well are y
downturn as a time to stick to the knitting and avoid mistakes. Another approach risks and opportunities, and allocating resource
is to seek opportunities, like Microsoft an Apple did, but to ensure that you limit answers to these question rapidly, in a cost effecti
your risk and benefit from any mistakes you make.
Yet Another Take on Search: Suggestica
A fundamental problem readers face is how to
Research shows that people generally use one
choosing a book:
• Browsers:
These people go to a bookstore and start b
interest. They buy one or more books based
This newsletter aims to create awareness of some of the subtle yet powerful but not limited to author, endorsements, in
paradigm shifts that are occurring. impressions based on what they pick up.
• Trackers:
These people follow the bestseller lists (av
assume that whatever comes up there ough
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What are the Equator Principles? choice is simple.
• Analyzers:
The Equator Principles (EP) are a set of environmental and social benchmarks These people first borrow the books either f
for managing environmental and social issues in development project finance sample it.
globally. Once adopted by banks and other financial institutions, the Equator • Seekers:
Principles commit the adoptees to refrain from financing projects that fail to These people go to recognized experts (Tru
follow the processes defined by the Principles. their suggestions on what books to read to ta
The Equator Principles were developed by private sector banks and were Research also showed that the seekers are g
launched in June 2003. The banks chose to model the Equator Principles on the Suggestica is based on a “Seekers” model, atte
environmental standards of the World Bank and the social policies of the people looking for books in various cat
International Finance Corporation (IFC). Sixty financial institutions (April 2008) www.suggestica.com.
have adopted the Equator Principles, which have become the de facto standard
for banks and investors on how to assess major development projects around
the world. In July 2006, the Equator Principles were revised, increasing their Gapminder challenges perceptions
scope and strengthening their processes.
The Equator Principles represent a significant industry-wide initiative. While they
have generally been well received, some project sponsors have said they go too
far, while some NGOs say they do not go far enough.
Principle 1: Review and Categorisation The Istanbul Declaration signed at the OECD W
The risk of the project is categorised in accordance with internal guidelines governments to make their statistical data freely
based upon the environmental and social screening criteria of the IFC. Projects good." The declaration also calls for new meas
are classified, relating to social or environmental impacts, in Category A being, going beyond just economic output and G
(significant impacts), Category B (limited impacts) and Category C (minimal or of new tools, which the OECD envisions will be
no impacts). hear more about these initiatives soon, and be aw
shift that this will bring.
Principle 2: Social and Environmental Assessment
For all medium or high risk projects sponsors complete an Environmental Gapminder is a novel tool for interpreting and disp
Assessment, the preparation of which must meet certain requirements and out some of the presentations of its devel
satisfactorily address key environmental and social issues. www.ted.com.
Principle 3: Applicable Social and Environmental Standards Gapminder was recently bought by (who else?) G
The Environmental Assessment report addresses baseline environmental and
social conditions, requirements under host country laws and regulations, Check it out at www.gapminder.org
applicable international treaties and agreements, sustainable development and
use of renewable natural resources, protection of human health, cultural
properties, and biodiversity, including endangered species and sensitive Dinokeng Scenarios
ecosystems, use of dangerous substances, major hazards, occupational health
and safety, fire prevention and life safety, socio-economic impacts, land
acquisition and land use, involuntary resettlement, impacts on indigenous
peoples and communities, cumulative impacts of existing projects, the proposed
project, and anticipated future projects, participation of affected parties in the
design, review and implementation of the project, consideration of feasible
environmentally and socially preferable alternatives, efficient production, delivery
and use of energy, pollution prevention and waste minimization, pollution The "Dinokeng Scenarios" is a comprehensive
controls (liquid effluents and air emissions) and solid and chemical waste where South Africa is right now. It goes on to ske
management. Africa based on the interplay on two continuums
(capacitation) on the one hand and cohesion and
Principle 4: Action Plan and Management System society on the other. An effective solution to
Based on the Environmental Assessment, Equator banks then make spheres to perform. The scenarios do paint a vivid
agreements with their clients on how they mitigate, monitor and manage those play themselves out in the years that lie ahead
risks through an 'Social Environmental Management Plan'. “walk together” scenario.
Principle 5: Consultation and Disclosure Source: www.dinokengscenarios.co.za
For risky projects, the borrower consults with stakeholders (NGOs and project
affected groups) and provides them with information on the risks of the project.
The borrower has to consult the project affected communities in a structured and
There’s no such thing as a mature prod
culturally appropriate manner. The process will ensure free, prior and informed
consultation for affected communities.
Bicycle technology is an example of a product th
in teeny, tiny increments, despite the proliferation
Principle 6: Grievance Mechanism
once-in-ten-years thing when a device comes alon
The borrower will establish a grievance mechanism as part of the management
seconds in just 3km. But that's exactly wha
system.
accomplish--and the invention makes obvious, intu
Principle 7: Independent Review
A bit of background. If you're on a bike and you'r
For the Assessment, Assessment Plan and consultation process.
weight on your inside foot---if you do, the peda
putting you in danger of scraping the ground. W
Principle 8: Covenants
why pro bikers put their weight on the outside
Incorporation of covenants linked to compliance. Compliance with the plan is
(Watch the rider's pedals in this video if you're con
required in the covenant. If the borrower doesn't comply with the agreed terms,
the bank will take corrective action, which if unsuccessful, could ultimately result
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in the bank cancelling the loan and demanding immediate repayment. But by putting your weight on the outside means y
vertical--and, of course, straight. You're not car
Principle 9: Independent Monitoring and Reporting otherwise might. By contrast, motorcycle riders
nearly touch their inside knees to the ground doing
Principle 10: EPFI Reporting
Each EPFI commits to report publicly at least annually about its Equator And now: Cranklock does just what the name sug
Principles implementation processes and experience. it locks the cranks in place, so that you can d
inside and outside pedal any way you want.
Source: Wikipedia corners, and that can be save 20 seconds
descending. Which is truly a massive amount
South African banks that have adopted the Equator Principles: Nedbank, example, the entire race is sometimes won by just
FirstRand, and Standard.
The gadget was initially designed as a safety
wobbles. But it's proven useful in all kinds of s
rotating pedals can cause some big accidents. T
Managing the Right Risks that when you first ride it the first few corners are
you can feel the 'G' force pushing you down onto t
Risk management planning can be such a huge investment for a small to
medium-sized organization. It is crucial to ensure that your risk management
dollars are going to good use by making sure that you are managing the right Don’t avoid risk: Use your Mistakes Pro
risks – those that present the most severe consequences or that hold the
highest likelihood of occurrence. John C. Maxwell in his book Failing Forward w
abilities that allow successful people to fail for
How do we make sure we’re managing the right risks? setback personally. Successful people:
There are a number of ways that organizations can ensure they focus on the
right risks for their operations and industry. 1. Reject rejection. Successful people don’t bla
They take responsibility for each setback, b
1. Explore all Risk Categories: It is important to devote time to identifying personally.
risks in all aspects of the business and its environment. Financial and 2. View failure as temporary. “People who pers
operational risks are often identified, but strategic risk is one category that is as a hole they’re permanently stuck in,” write
often left out from the risk identification process. Its often useful to break any predicament as temporary.”
strategic risk into areas such as Industry, Technology, Brand, Competitor, 3. View each failure as an isolated incident. S
Customer, Project and Stagnation. themselves by individual failures. They reco
2. Invest in Risk Identification: Identifying the right risks isn’t always easy – small part of the whole.
especially for new businesses. More established businesses have an 4. Have realistic expectations. Too many people
advantage in that they have a history to rely on that gives them an idea of businesses with the unrealistic expectation
what can go wrong and how severe the consequences can be. However results. Success takes time. When you purs
that can also be misleading – the risk that realizes next may be one that you are going to be bumps along the way.
haven’t yet identified, even in an established firm. 5. Focus on strengths.
3. Map your Risks: Quantifying and prioritizing the identified risks helps to 6. Vary approaches. “Achievers are willing
make you aware of what risks pose the most significant threat to your problems,” Maxwell writes. “That’s important
business. Risk mapping involves plotting your perceived exposures business.” If one approach doesn’t work for y
depending on expected frequency and potential severity. The higher the risk then try something else.
ranks in both frequency and severity, the higher it should rank on your risk 7. Bounce back. Finally, successful people are
priority list. error keep them down. They learn from their m
Translated into company terms, this approach is
Worth a try: approach to business. “Falling forward” success
risks than an individual or company that doesn’t h
KeePass is a free open source password manager that lets you put all your and learning capability.
passwords in one database, which is locked with one master key or a key file.
So you only have to remember one single master password or select the key file
to unlock the whole database. The databases are encrypted using the best and Value Investing 101
most secure encryption algorithms currently known.
Professor Bruce Greenwald, who teaches v
Dropbox is an application that allows you to synchronize files across multiple University’s Graduate School of Business, d
computers and access them from the web. Dropbox also allows users to share consisting of three things:
files and folders with others. 1. Firstly you have to understand the degree
investing in are efficient. A good example of
This screencast describing the featuers of Dropbox is very appealing. Dropbox oversold. “Ugly, traded-down, chap, boring…
is free for low-volume use (under 2gb of space) and premium accounts are to look at as a value investor”.
available. 2. The second thing required by a value inve
technology. The founder of value investing, B
the most reliable information, asset value
reliable, earnings, and looked at those tw
buying a franchise. Only thereafter did he loo
3. The third thing required is discipline and
confidence and the discipline to stick with it.
$8.00 then it’s a great stock at $4.00.”
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Disclaimer
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information in this document and accepts no liability for any errors, misprints or omission herein Tel: +27 11 275 0327
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whatsoever arising as a result of any person acting or refraining from acting in reliance on any
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