A New Start

FT: Lessons in table manners

Lessons in table manners

By Tom Lester

Published: November 21 2007 19:29 | Last updated: November 21 2007 19:29

You are vice-president of strategy for Ford in North America and part of a taskforce the chief executive has just instructed to devise a radical strategy. The urgent priority is to stop the slow decline in the company’s US market share and lift operations back into the black. And, by the way, you and your eight colleagues have just two hours to finalise your recommendations.

MBA veterans will recognise the conventions of the business school case study. In this instance, though, the aim is not to produce a beautiful strategic solution, but to highlight the participants’ negotiating skills. As representatives of the manufacturing, engineering, finance, marketing and sales arms of a fictional Ford, they must reconcile their conflicting priorities to produce a coherent plan.

Used on executive negotiation courses at Oxford’s Saïd business school, the case illustrates a shift in the way the subject has been taught – and practised – over the past 20 years. In a world of extended supply chains and long-term outsourcing relationships, traditional nose-to-nose price confrontations are becoming less commonplace; co-operation is increasingly more important than the crude terms of a deal.

Yet organisations have been slow to develop the necessary skills. Sherman Roberts, former director of the negotiation programme at Harvard and a teacher on the Saïd programme, says: “Without instruction, people in negotiations do very poorly, especially in terms of the opportunities left on the table.”

A workable settlement demands that both sides – or all sides in multi-party negotiations – come away with something. As the Ford case shows, the principle applies internally as well as externally.

Such skills are vital for public-sector managers as well as corporations. Policymakers aim at “joined-up government” – departments that co-operate closely rather than merely defend their patch – and this often entails interminable discussions and trade-offs.

Yet the principles of good negotiation have not always been clear. In the 1970s economists attempted to aid the negotiation process with sophisticated computer programs that used dynamic game theory and simulations. The aim was to predict moves in multi-party deals based on the mathematical balance of advantage. Unfortunately, human beings usually have many and variable aims, and don’t always react as pure logic suggests they should.

More practical advice came from the legal profession. In the 1970s, Roger Fisher, professor of law at Harvard, saw that in many conflicts participants lacked the experience to find mutually beneficial solutions. He set up the Harvard Negotiation Project in 1979 to study negotiation and conflict resolution, and co-authored Getting to Yes in 1981, which became a classic source of advice. Most business schools, including Harvard, now offer the subject in one form or another and it has become a crowd-puller for executive courses.

Communication is critical because it allows all sides to establish a rapport and assess their opponents’ aims and constraints (see below). Possible concessions may be noted that would cost little, but make valuable bargaining counters.

In traditional negotiation, this is the point at which the tough negotiator, thumping the table with exorbitant demands, loses ground. Deepak Malhotra, an associate professor at Harvard and co-author with Max Bazerman of Negotiation Genius , laments the corrosive belief that people have that “they are either good or bad at negotiation. You shouldn’t define yourself as a bad negotiator, and being quiet and non-aggressive is not necessarily a weakness. You have to find out what your strengths and weaknesses are, and build on the one and mitigate the other.”

Careful preparation is the key, say the experts. Negotiators must work out their objectives, the alternatives to a deal and the point at which they will walk away. It is easy to say yes, but much more difficult to know when to say no.

When it comes to the substance of the negotiation, says Prof Malhotra, it is critical to be aware of your own as well as other people’s biases, many of which are predictable. One is the “fixed pie” bias – the assumption that the negotiation is about one goal only. Score that goal, and the negotiator is satisfied – until he discovers that one or two other goals were there to be scored had he been more perceptive at the communication stage.

Another is the vividness bias – what Northcote Parkinson, the writer and satirist, termed the “bike-shed syndrome”. People will spend more time arguing over what they can see and understand – the bicycle shed – than abstract or complex proposals such as a research project or strategic transformation. In negotiation, this means participants will attach more value to tangible issues than the intangible, even though the latter may be more important.

Knowing these biases – Prof Roberts of Saïd lists 25 – helps the skilled negotiator increase the perceived value of an offer. The aim is not to rush the decision process but to make the final agreement easy. And as a Boeing salesman and former Saïd alumnus remarks, just because it can take 10 years to make the sale, you should never give up.

All that remains is to make the other party appreciate what they have achieved so that the agreement will not fall apart when they get back to the office. In the art of good negotiation, sound training, preparation and skill are likely to win over gut feel and a loud voice.

Unspoken factors that make a difference

Past and present students of negotiation at Saïd business school say a valuable part of the exercise is considering the unspoken aspects of negotiation.

Patrick Cadell, a lawyer for Wolfson Microelectronics, explains that in a traditional contractual negotiation the lawyer on one side will merely put a line through a clause he doesn’t like, and send it back to his opposite number. But one of the principles espoused by Roger Fisher, a Harvard Law School professor and pioneer of negotiation training, is that better communication brings benefits for both parties. Mr Cadell reports that simply adding an explanation for a change “takes longer, but is incredibly persuasive”.

Rutu Dave, whose job with the UN’s Intergovernmental Panel on Climate Change requires her to negotiate with 160 countries to produce consensus-based reports, says: “All countries start by putting their foot down, then they loosen up a bit.” Being a woman gives her an advantage, she says: opponents believe she is more ready to listen to what they are saying, and therefore provide more bargaining opportunities.

Copyright The Financial Times Limited 2007

NY TImes: Goldman Sachs Rakes In Profit in Credit Crisis

Goldman Sachs Rakes In Profit in Credit Crisis

          

November 19, 2007
Copyright 2007 The New York Times Company

                           

 

By JENNY ANDERSON and LANDON THOMAS Jr.

Published: November 19, 2007

 

For more than three months, as turmoil in the credit market has swept wildly through Wall Street, one mighty investment bank after another has been brought to its knees, leveled by multibillion-dollar blows to their bottom lines.

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Michelle V. Agins/The New York Times

Lloyd C. Blankfein, chairman of Goldman Sachs, said the firm would not take any write-downs related to the mortgage crisis.

 

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Getting It Right

   

And then there is Goldman Sachs.

Rarely on Wall Street, where money travels in herds, has one firm gotten it so right when nearly everyone else was getting it so wrong. So far, three banking chief executives have been forced to resign after the debacle, and the pay for nearly all the survivors is expected to be cut deeply.

But for Goldman’s chief executive, Lloyd C. Blankfein, this is turning out to be a very good year. He will surely earn more than the $54.3 million he made last year. If he gets a 20 percent raise — in line with the growth of Goldman’s compensation pool — he will take home at least $65 million. Some expect his pay, which is directly tied to the firm’s performance, to climb as high as $75 million.

Goldman’s good fortune cannot be explained by luck alone. Late last year, as the markets roared along, David A. Viniar, Goldman’s chief financial officer, called a “mortgage risk” meeting in his meticulous 30th-floor office in Lower Manhattan.

At that point, the holdings of Goldman’s mortgage desk were down somewhat, but the notoriously nervous Mr. Viniar was worried about bigger problems. After reviewing the full portfolio with other executives, his message was clear: the bank should reduce its stockpile of mortgages and mortgage-related securities and buy expensive insurance as protection against further losses, a person briefed on the meeting said.

With its mix of swagger and contrary thinking, it was just the kind of bet that has long defined Goldman’s hard-nosed, go-it-alone style.

Most of the firm’s competitors, meanwhile, with the exception of the more specialized Lehman Brothers, appeared to barrel headlong into the mortgage markets. They kept packaging and trading complex securities for high fees without protecting themselves against the positions they were buying.

Even Goldman, which saw the problems coming, continued to package risky mortgages to sell to investors. Some of those investors took losses on those securities, while Goldman’s hedges were profitable.

When the credit markets seized up in late July, Goldman was in the enviable position of having offloaded the toxic products that Merrill Lynch, Citigroup, UBS, Bear Stearns and Morgan Stanley, among others, had kept buying.

“If you look at their profitability through a period of intense credit and mortgage market turmoil,” said Guy Moszkowski, an analyst at Merrill Lynch who covers the investment banks, “you’d have to give them an A-plus.”

This contrast in performance has been hard for competitors to swallow. The bank that seems to have a hand in so many deals and products and regions made more money in the boom and, at least so far, has managed to keep making money through the bust.

In turn, Goldman’s stock has significantly outperformed its peers. At the end of last week it was up about 13 percent for the year, compared with a drop of almost 14 percent for the XBD, the broker-dealer index that includes the leading Wall Street banks. Merrill Lynch, Bear Stearns and Citigroup are down almost 40 percent this year.

Goldman’s secret sauce, say executives, analysts and historians, is high-octane business acumen, tempered with paranoia and institutionally encouraged — though not always observed — humility.

“There is no mystery, or secret handshake,” said Stephen Friedman, a former co-chairman and now a Goldman director. “We did a lot of work to build a culture here in the 1980s, and now people are playing on the balls of their feet. We just have a damn good talent pool.”

That pool has allowed Goldman to extend its reach across Wall Street and beyond.

Last week, John A. Thain, a former Goldman co-president, accepted the top position at Merrill Lynch, while a fellow Goldman alumnus, Duncan L. Niederauer, took Mr. Thain’s job running the New York Stock Exchange. Another fellow veteran trader, Daniel Och, took his $30 billion hedge fund public.

Meanwhile, two Goldman managing directors helped bring Alex Rodriguez back to the Yankees, a deal that could enhance the value of Goldman’s 40 percent stake in the YES cable network — which it is trying to sell — while also pleasing Yankee fans. The symmetry was perfect: like the Yankees, Goldman, more than any other bank on Wall Street, is both hated and revered.

Robert E. Rubin, a former Goldman head, is the new chairman of Citigroup. In Washington, another former chief, Henry M. Paulson Jr., is the Treasury secretary, having been recruited by Joshua B. Bolten, the White House chief of staff and yet another former Goldman executive.

The heads of the Canadian and Italian central banks are Goldman alumni. The World Bank president, Robert B. Zoellick, is another. Jon S. Corzine, once a co-chairman, is the governor of New Jersey. And in academia, Robert S. Kaplan, a former vice chairman, has just been picked as the interim head of Harvard University’s $35 billion endowment.

Since going public in 1999, Goldman has been the No. 1 mergers and acquisitions adviser, globally and in the United States, with two exceptions: in 2005 it came in second in the United States rankings, and in 2000 it lost the top spot globally. In both instances, Morgan Stanley took the lead, according to Dealogic.

Goldman, of course, has made its share of mistakes. It took among the most serious write-downs in the third quarter on loans that were made to private equity firms, totaling $1.5 billion. The firm runs one of the largest hedge fund operations in the world, but its flagship funds — funds whose investors include marquee Goldman clients and employees — have had two years of abysmal performance. Clients are expected to redeem billions of dollars of capital at the end 2007.

But Goldman’s absence from the mortgage debacle and the strong performance of its other businesses made up for the write-down associated with the loans. The firm reported $2.85 billion in profit in the third quarter, up 79 percent. Mr. Moszkowski estimates that investment and commercial banks in the United States have taken $50 billion in write-downs related to mortgages, with more coming; Mr. Blankfein said at a conference last week that he expected to take none.

Goldman’s business is built on taking risks, both for itself and its clients. In recent years, Goldman has established the largest private equity and real estate fund complexes in the world. That has led to natural tensions with private equity clients who sometimes complain, but never publicly, about Goldman’s common insistence to team up with them for a piece of the deal.

“Goldman has done the best job of any firm in the U.S. or world competing with their clients but doing business with them,” said one client who asked not to be named because he does business with the firm. “They’ve managed to get their clients to live with it.”

Still, this bottom-line approach has turned off some Goldman veterans and clients. They see the firm’s desire to advise, finance and invest — a so-called triple play — as antithetical to Goldman’s stated No. 1 business principle of putting clients first.

And there is little question that its success in trading, investment banking and servicing hedge funds — many of the traders come right from Goldman — allows the firm a bird’s-eye view on trends and capital flows in the market.

Numerous Goldman investment bankers, former and current, voice the view that Mr. Blankfein’s approach — using Goldman’s investment banking business to develop principal investment opportunities for the firm — creates a brand intended to feed Goldman’s profits rather than relationships. But this harking back to the firm’s golden days as a pure advisory firm does not find much sympathy at Goldman these days.

“I have little patience for these people who talk of the last days of Camelot,” Mr. Friedman said. “Principal investing has been an important and useful business. If you want to be relevant you have to anticipate where the world is going.”

Mr. Blankfein, at the conference last week, echoed that sentiment. “While the integration of our investment banking operations with our merchant bank was somewhat controversial at the time, we felt these businesses were mutually reinforcing,” he said.

Money soothes a lot of concerns, of course, and Goldman has had plenty to spread around. Through the third quarter, Goldman’s $16.9 billion compensation pool — the money it sets aside to pay its employees — was significantly bigger than the entire $11.4 billion market capitalization of Bear Stearns.

Goldman executives and analysts assign much of their success to smart people and a relatively flat hierarchy that encourages executives to challenge one another. As a result, good ideas can get to the top.

But the differentiator that has become clearest recently is the firm’s ability to manage its risks, a tricky task for any bank. Checks and balances must be in place to turn off a business spigot even as it is still making a lot of money for a lot of people. In a world where power gravitates to the rainmakers, that means only management can empower the party crashers.

At Goldman, the controller’s office — the group responsible for valuing the firm’s huge positions — has 1,100 people, including 20 Ph.D.’s. If there is a dispute, the controller is always deemed right unless the trading desk can make a convincing case for an alternate valuation. The bank says risk managers swap jobs with traders and bankers over a career and can be paid the same multimillion-dollar salaries as investment bankers.

“The risk controllers are taken very seriously,” Mr. Moszkowski said. “They have a level of authority and power that is, on balance, equivalent to the people running the cash registers. It’s not as clear that that happens everywhere.”

For all its success on Wall Street, it is Goldman’s global reach and political heft that inspire a mix of envy and admiration. In the race for president, Goldman Sachs executives are the top contributors to Barack Obama and Mitt Romney, and the second highest contributor to Hillary Rodham Clinton. Mr. Blankfein has held a fund-raiser for Mrs. Clinton in his apartment and has come out publicly in her favor.

Another member of Goldman’s influential diaspora is Philip D. Murphy, a retired executive who is the chief fund-raiser for the Democratic National Committee.

All of which has made Goldman a favorite of conspiracy theorists, columnists and bloggers who see the firm as a Wall Street version of the Trilateral Commission.

One particular obsession is President Bush’s working group on the markets, an informal committee led by Mr. Paulson that includes Ben S. Bernanke, the chairman of the Federal Reserve; Christopher Cox, the chairman of the Securities and Exchange Commission; and Walter Lukken, the acting chairman of the Commodity Futures Trading Commission.

The group meets about once a quarter — privately, with no minutes taken — to ensure that government agencies are briefed on market conditions and issues. The group is currently examining the extent to which the packaging and distribution of mortgage loans contributed to the crisis. It also recently completed a study recommending that hedge funds not be subject to further regulation; the group’s fund committee was led by Eric Mindich, a former Goldman trader who now runs a successful hedge fund.

There is no evidence that the conduct of the group is anything but above board. But to some, the group’s existence adds more color to the view that Goldman is indeed everywhere — much as J. P. Morgan was in the early years of the 20th century.

“Goldman Sachs has as much influence now that the old J. P. Morgan had between 1895 and 1930,” said Charles R. Geisst, a Wall Street historian at Manhattan College. “But, like Morgan, they could be victimized by their own success.”

Mr. Blankfein of Goldman seems aware of all this. When asked at a conference how he hoped to take advantage of his competitors’ weakened position, he said Goldman was focused on making fewer mistakes. But he wryly observed that the firm would surely take it on the chin at some point, too.

“Everybody,” he said, “gets their turn.”

NY Times: Majoring in Mailroom Management

Majoring in Mailroom Management

 

By JONATHAN D. GLATER

Published: November 21, 2007

 

LOS ANGELES — There was the ant farm, the air-conditioner, the barbecue grill. Then there was the chalk, pool cues and pool balls, and the car tires and a bumper.

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Jamie Rector for The New York Times

Margaret Heck, a freshman at the University of Southern California, which expects to receive 67,000 packages this year.

     

These are just some of the items delivered recently to mailrooms at universities across the country, a reflection of students’ tastes and online shopping habits.

David J. Amescua, supervisor for incoming mail at the University of Southern California, said the car tires that came through his mailroom arrived unwrapped, with a sturdy tag indicating the intended recipient and the necessary postage.

“That’s the weirdest thing,” said Mr. Amescua, who has worked at the university for more than 30 years. “Now that they have access to buying online, we have all kinds of stuff coming through here.”

The number of packages delivered to U.S.C. has nearly doubled in four years. By Dec. 31, officials expect they will have received more than 67,000 packages in 2007. Other universities have seen similar increases. To handle the volume, some have expanded their facilities or put in new procedures to track the stream of deliveries.

“Some folks don’t realize the logistical implications,” said Jeff Urdahl, who recently retired as director of housing at U.S.C., which has installed a state-of-the-art mailroom half the size of a volleyball court in a new residential building for about 450 students. “It’s a different world.”

At the University at Albany, part of the State University of New York system, the mailroom has handled a dishwasher, a pool table, a refrigerator and a car muffler. At the University of Florida, a student received a box labeled “Winchester,” and had to explain to the university police that he had ordered the ammunition to go on a hunting trip.

It is difficult to gauge how much online spending is driven by college students. But such sales are soaring. Last year, online retail sales rose to nearly $220 billion, according to Shop.org, a division of the National Retail Federation, and this year sales are expected to reach $259 billion.

Online retail sales are approaching 10 percent of total retail sales, according to Shop.org.

Rebecca Johnson, an 18-year-old first-year student at Southern California, said she might buy something online up to three times a week.

“I’m not really shopping every day online,” Ms. Johnson said. “Most of my time online I spend on Facebook.”

But time spent “Facebooking” is also prime shopping time for multitasking students. Another U.S.C. student, Margaret Heck, 18, said she usually checked a few online retailers’ sites whenever she checked in on Facebook. Favorite clothing and apparel sites she and other women named included Wet Seal, Forever 21, Victoria’s Secret and Hot Topic for shoes.

At U.S.C., Simon Lum, 19, ordered the chalk, pool cues and pool balls because he wanted to play pool after the front desk of his dormitory, which provides pool equipment to students, closed. He said that he ordered something online every two weeks or so, but added that he usually sold items on eBay, too, to offset his costs.

“I don’t buy stuff randomly,” Mr. Lum said, noting that when he bought a new pair of headphones, he sold his old ones for $10 more than he had paid.

Sandra Stanton, 18 and a first-year student at U.S.C., said, “I do buy a lot of things, but it’s O.K. because I buy things that are cheap.”

She added, a little sheepishly, that she might spend up to two hours a day scouring the Web for bargains, especially for shoes. “How can I make a fashion statement if I don’t have shoes that don’t match what I’m wearing?”

Matching shoes, Ms. Stanton continued, would be “so fifth grade.”

Several students interviewed for this article said they paid for their online purchases with their earnings from campus jobs, savings from summer internships and allowances from parents. But others said they just charged purchases to their credit cards.

There are not many comprehensive studies of students’ credit card debt, but the loan company Nellie Mae, a unit of Sallie Mae, reported that in 2004, 76 percent of undergraduate students had cards, and that they carried an average balance of $2,169. Other estimates are significantly greater.

Dealing with the increased mailroom activity is also costing colleges money. Pomona College — whose mailroom handled the ant farm, air-conditioner and barbecue grill — spent thousands on a system to scan bar codes, which sends students e-mail messages notifying them when they have packages in the mailroom. Pomona has also expanded its mailroom, making room for more packages.

At SUNY Binghamton, where the number of packages received increased to 57,000 last year, from 33,000 in 2002, officials invested about $25,000 in a bar code scanning system to track packages from the moment of arrival to the time students sign for them.

“We’re hoping that we’ve seen the worst of it,” said Larry Roma, associate vice president for facilities management at the university.

SUNY’s Purchase College has also invested in such a system, at a cost of $37,000. Meanwhile, Arizona State University decided it could not even handle students’ deliveries itself, and handed over mailroom operations to UPS.

Managing a mailroom also raises security concerns for colleges. “Anything you can buy online, they can clearly have delivered though the mail service, and they do,” said Norbert Dunkel, incoming associate president of the Association of College and University Housing Officers International and director of housing at the University of Florida, which intercepted the student’s Winchester package.

In that case, he said, the student was asked to open the package in front of campus police officers; ammunition was inside, which the student intended to take hunting. The police held on to both gun and ammunition, releasing them when the student went hunting and repossessing them when he returned.

There are Web businesses that cater specifically to college students, said Neil B. Gerard, associate dean of students and director of the Smith Campus Center, which contains the mailroom at Pomona. He recalled how a student arriving from Ghana had known all about how to equip her room through her computer, ordering twin extra-long sheets for her bed online.

“She had ordered it from Ghana, and it was delivered to my mailroom the second day she was here,” said Mr. Gerard, whose family initially played host to the student. “She was way ahead of me.”

The ease of ordering items online may be just one more way that the gap between the college experience and the rest of the world has closed, said Fred Turner, an assistant professor in the communication department at Stanford University.

“Universities used to be thought of as isolated places, places that you would go away from the world” to learn and contemplate, Professor Turner said. Today, he continued, “College doesn’t actually work that way for most students.”

FT: Goldman and M Stanley show the way in Gulf

Goldman and M Stanley show the way in Gulf

By Lina Saigol

Published: November 18 2007 23:27 | Last updated: November 18 2007 23:27

Goldman Sachs has been ranked the top adviser for mergers and acquisitions in the Gulf, while Morgan Stanley leads the investment banking revenue league tables. What a coup.

Both firms only set up shop in Dubai a few months ago, yet they have overtaken rivals such as HSBC and Credit Suisse which, through their private banking franchises, have been in the region for decades.

As the oil price surged to record highs, Goldman and Morgan were just two of several international banks desperate to harness the wealth of the six-nation Gulf Co-operation Council.

Until a year ago, a western banker’s eyes would bug out at the mere mention of the money they could make in the region and before you knew it, they had bought space in Dubai’s futuristic financial exchange and parachuted in their best talent.

“We don’t do suitcase banking” became the mantra of the day as firm after firm boarded planes, their bags stuffed with products and services to peddle to a new client base.

The aim was to teach “unsophisticated” Arab investors how to do deals the international way and hope that they didn’t balk at the fees they would charge for the privilege.

But the reality is that most of the big deals which involve GCC companies acquiring international companies, are being carried out by bankers in the UK.

The HSBC banker who advised Dubai International Capital on its £700m acquisition of the British engineering firm Doncasters was London-based, as was the Citi banker who advised Sabic, the Saudi chemical group on its $11bn acquisition of GE Plastics.

Likewise, the Dresdner Kleinwort team helping Qatar on its attempted takeover of J Sainsbury spent most of their time in their City offices.

So what is Goldman and Morgan’s secret to success in the region? The answer must be that unlike HSBC or Credit Suisse, which according to Dealogic rank sixth and seventh respectively, in spite of long and strong links to the region, both Goldman and Morgan are offering clients the real McCoy: a full-service bank with all the usual products, rather than an add-on to its private bank.

As the GCC continues to seek the expertise of the West, Goldman and Morgan Stanley’s rivals may want to consider the old Arab proverb: never give advice in a crowd.

Copyright The Financial Times Limited 2007

FT: All to play for

All to play for

By Joshua Chaffin

Published: November 19 2007 18:34 | Last updated: November 19 2007 18:34

As vice-president of games at ESPN, Raphael Poplock not only manages the company’s fantasy sports websites, he is also a fantasy player – and a committed one.

During quiet moments on his wedding day three years ago, Mr Poplock found himself sneaking out and logging on to the internet to trade players for his fantasy football team. His honeymoon, it seems, was less a romantic getaway than an exercise in fantasy sports withdrawal. “We went to Greece, and I had an itch the whole time,” Mr Poplock confesses.

The object of his obsession is a game in which ordinary fans have the opportunity to indulge their desire to play manager. Each week, they choose a roster of real world players for their ideal, fantasy team – be it in football, baseball or basketball – and then compete against other fantasy teams based on the real-world statistical performance of those players.

With the help of the internet, fantasy sports has grown from a niche hobby to a widespread phenomenon in recent years, and its growing audience and addictive qualities have drawn the attention of big media and internet companies.

Along with ESPN, the sports division owned by Disney, Yahoo, CBS, Fox, NBC and the major US sports leagues are competing for business from the millions of men in their 20s and 30s who may have turned away from primetime television but happily spend hours each week on fantasy websites, organising their teams and gorging on sports content.

“Fantasy is a big business,” says Quincy Smith, president of CBS Interactive, whose CBS Sportsline operates one of the most popular fantasy football leagues.

The Fantasy Sports Trade Association has estimated the industry’s value at $1bn (€683m, £490m), with roughly 20m players in the US and Canada. One research firm, Challenger, Gray & Christmas, claims that fantasy sports cost US companies as much as $435m a week in lost productivity.

A better measure of fantasy’s value, though, may be its ability to glue sports fans to particular websites for extended periods of time.

This September, for example, as the American football season kicked off, CBSSports.com at-tracted more than 100m visits – an all-time high. Each visitor spent an average of 96 minutes on the site for the month, which was nearly triple the industry average, and something that the company attributes almost entirely to fantasy. “What fantasy does is promote more time spent on the site,” Mr Smith says.

Mr Poplock has witnessed a similar phenomenon at ESPN, where fantasy customers devour more of the company’s content – from its televised sports coverage to its radio broadcasts, magazine articles, mobile phone updates and online features – than other consumers. “Our fantasy fans are the best community of fans we have,” he says.

People played fantasy sports, or a variety of them, long before the internet era. In 1980, Dan Okrent, a sportswriter and editor, created a fantasy baseball league with a group of friends in New York. They called it “Rotisserie Baseball”, naming it after the French restaurant where they gathered.

Rotisserie gained popularity after newspapers such as USA Today began to publish expanded sports statistics and sponsored fantasy leagues. But it truly took off – not unlike day-trading – in the late 1990s, when the internet did away with the paper trail and made it possible to crunch and sort enormous amounts of data in real time. “It just exploded,” says Jeffrey Thomas, president of the Fantasy Sports Trade Association.

The web also allowed players to talk to one another through e-mail and message boards, creating an early example of an internet community. It led Bill Simmons, the ESPN sports columnist, to declare recently: “The internet had a greater impact on fantasy sports than on porn over the past 11 years.”

As it turns out, fantasy may have common ground with another vice: gambling. Many fantasy players wager among themselves, creating pots that run into the tens of thousands of dollars, and several internet companies have sprung up to promote fantasy league gambling.

For big media companies, though, money is made by selling advertising to companies attracted by high traffic. The multi-platform Holy Grail for ESPN, CBS and other media giants is the fan who watches a broadcast of a game on TV while also tracking sports news and fantasy statistics on a laptop opened to their web page, and messaging friends and competitors via their mobile phone or instant-messaging services.

In pursuing these core fans, US media and internet companies have expanded fantasy from its baseball roots to just about any sport that includes data and a passionate fan base, including basketball, hockey and Nascar. They even tried fantasy bass fishing – although that proved short-lived.

They are also pushing into Europe, where the UK has a tradition of fantasy football leagues. The two largest Premiership fantasy leagues – Premiereleague.com and Fantasyleague.com – attracted nearly 2.3m unique users in August, according to ComScore, the internet research company.

“The proportion of time being spent on these sites during office hours is significant,” says Bob Ivins, executive vice-president at ComScore. “On the Friday before the start of the Premiership season alone, over 230,000 office hours were spent on the fantasy football sites.”

Meanwhile, Myfootballclub.co.uk, a website with 20,000 paying subscribers, last week bought Ebbsfleet, a lower division English team. In a fantasy-inspired move, subscribers will vote on transfers, team selection and other matters.

The fantasy king, though, remains American football, which is ideal for the medium because it is laden with player statistics. The biggest operator is Yahoo Sports, with more than 4.3m customers. The internet company built a large audience by offering its product free, although it now charges $124.99 for a premium version. Yahoo also sells sponsorships to companies and brands such as Toyota, Heineken and Viagra.

“It’s a very profitable business for us,” says James Pitaro, vice-president of Yahoo Sports. “These are fans who consume an incredible number of pages on our site. They also consume a lot of video.”

ESPN has been trying to catch up. After dropping the subscription fee for its fantasy football game three years ago, it saw a 10-fold increase in traffic, and has added numerous bells and whistles to draw more users. It hopes to steal a march on competitors by using its cable television network, radio station and other assets to promote its fantasy products. Each Sunday morning, for example, the network airs a one-hour fantasy pre-game show on ESPN News.

A pack of smaller competitors is likely to enter the fray after a US court ruled last month that sports leagues could no longer charge tens of millions of dollars in licensing fees for data about their players – removing a barrier to entry.

But for some media executives, fantasy’s future lies beyond football – or any other sport. At CBS, Mr Smith wants to take the medium and all its interactive possibilities and apply it to a range of subjects that inspire a passionate following. One idea he is considering is a weekly Hollywood-themed contest in which participants would draft celebrities and score points based on how they perform at the box office, whether they become pregnant, enter rehab, or are arrested for driving under the influence. The BBC’s website has run a similar game, Celebdaq, for years.

“What we’ve been asking internally for several months,” Mr Smith says, “is, what is the fantasy for other categories?”

Copyright The Financial Times Limited 2007

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FT: Young Vietnamese lead shift in credit attitudes

Young Vietnamese lead shift in credit attitudes

By Amy Kazmin in Singapore

Published: November 18 2007 23:18 | Last updated: November 18 2007 23:18

Young Vietnamese have far more faith in commercial banks and are far more likely to have bank accounts or be willing to borrow than their older compatriots, according to a new study of consumer attitudes published today.

The findings, by McKinsey, suggest that foreign banks moving into Communist-ruled Vietnam’s liberalising banking market would be best off targeting the youth market, which will be more receptive to new products and services.

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Although attitudes towards banking and borrowing vary from generation to generation in all Asian markets, Kit Wong, an associate partner with McKinsey, said, “age differences among Vietnam’s consumers seem especially sharp”.

Vietnam’s banking market is dominated by a handful of large, inefficient state-owned commercial banks, which traditionally focused on lending to state enterprises or foreign companies, but paid little heed to consumer banking.

But with Vietnam’s growing economic openness and accession to the World Trade Organisation, the banking sector is now growing rapidly, with deposits increasing by 25 to 30 per cent a year, helped by the establishment of Vietnamese-owned private commercial banks, and the entry of new foreign players into the market. Still, the sector remains tiny, with total deposits below $50m, and less than 10 per cent of Vietnamese served by formal financial institutions.

Just 5 per cent of urban Vietnamese consumers have any form of credit product, while 60 per cent of urban consumers have savings accounts.

Many older Vietnamese – scarred by experiences in the 1990s, when a flurry of then newly established private Vietnamese commercial banks went bust – remain wary of financial institutions. But McKinsey found that affluent Vietnamese young people are more willing to use banking services and are more open to new methods, such as internet banking, and to credit.

Copyright The Financial Times Limited 2007

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FT: Selling to survive

Selling to survive

By Anna Fifield

Published: November 19 2007 20:07 | Last updated: November 19 2007 20:07

Pak Hyun-yong was, by North Korean standards, an entrepreneur. Too much of an entrepreneur. During the famine that ravaged the country in the late 1990s, Mr Pak watched his family die of starvation – first his younger brother, then his older sister’s children. Then, eventually, his sister too.

Somehow he pulled through this period, dubbed by the regime as “the arduous march”, and was spurred into taking some very non-communist, almost subversive action. He began selling noodles.

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Every day he would take 10kg of “corn rice” – a poor North Korean imitation in which dried kernels are fashioned into grains – and turn it into noodles. Then he would get on his bicycle and pedal around his home town of Hamhung on the east coast, bartering the noodles for 12kg of corn rice: 10kg for tomorrow’s noodles and 2kg for his remaining family.

“The police would come by and try to persuade me not to sell the noodles, saying that I should not succumb to capitalism and that the Dear Leader would resolve our food shortages,” says Mr Pak, who escaped from North Korea a year ago and is upbeat and energetic considering the hardships he has endured.

Now 32, he is in hiding in a bleak, remote village in northern China not far from the North Korean border, together with his wife, with whom he escaped, and their new baby. They live in a one-room house with no bathroom – protected by locals who are helping them settle.

“The [North Korean] police even threatened to imprison me if I didn’t stop selling. Suddenly I realised that North Korea was a country where they would stop people’s efforts to survive,” he says, sitting on the warm floor of his house, still dressed in the apron he wears to work in a nearby butchery.

“I heard that China was a rich and modern country – that they had tractors and that people could eat rice every day, even in rural areas,” he says, shaking his head. “Chinese dogs wouldn’t eat our rice – they would ask for better.”

In almost 20 interviews along the border with China, ethnic Koreans born in China and North Korean escapees, some of whom had been in the isolated state as recently as two months ago, describe a country where change is taking place from the ground up rather than under the direction of its leader, Kim Jong-il.

North Korea remains the most tightly controlled state in the world. But recent escapees tell of the changes that are being driven by necessity in areas near China, especially in the cities of Rajin and Hoeryong in the north and Sinuiju at the southern end of the border.

While it would be an overstatement to say that this represents the type of nascent transition to free-market reforms that has occurred in countries such as Russia and China, the worsening state of the North Korean economy is leading to widespread trading and the emergence of a fledgling merchant class crossing into China, the escapees say.

Some agricultural markets – rather than just state markets – were permitted during the “economic improvements” of 2002, but ad-hoc markets have since sprung up around the country with the tacit approval, if not the encouragement, of the regime. These markets are now the backbone of North Korea’s creaking economy as the regime provides almost nothing by way of rations any more.

The parlous state of the economy is probably the driving factor behind Mr Kim’s decision to roll back his nuclear programme. The six-party denuclearisation talks are making surprisingly good progress, analysts say, as his regime seeks heavy fuel oil for its rusting industries and an end to economic sanctions.

Certainly, recent escapees from North Korea describe a desperate situation inside the country. Somewhere between 10,000 and 30,000 North Koreans are thought to be living in hiding in the north-eastern provinces of China, especially in Jilin and Heilongjiang, areas considered backward by Chinese standards.

The Financial Times travelled throughout this region to meet North Koreans while seeking to avoid endangering their lives. (North Koreans who are repatriated from China face detention in labour camps or worse, and even those who are not caught put the lives of family members at risk by talking to journalists. For that reason, names have been changed.)

“In Rajin, all the factories have stopped,” says Oh Man-bok, a 22-year-old who escaped in September from the city near the borders with Russia and China, considered relatively prosperous because it is one of the North’s main trading channels. “The men still have to go to work and have their name checked off but there is nothing to do. Sometimes they sit around and sometimes they go home. They don’t get paid but sometimes, in a good month, they get 15 days’ worth of corn in rations,” he says.

That means women are increasingly becoming the breadwinners, going to the mountains to collect edible plants or to the market to sell home-made snacks. “People survive by selling. They do whatever they can to earn money – selling fried dough sticks or repairing shoes and clothes,” Mr Oh says. “But it’s very difficult to earn enough to survive and even in Rajin, many people have to eat porridge made from the whey left over from making tofu.”

Rajin and Sinuiju, as the main thoroughfares for trade with China, have been more open than the rest of North Korea for some time, but the experiment with capitalism that has been taking place in these two cities now appears to be expanding to Hoeryong.

The city of Hoeryong can be clearly seen from the Chinese side of the border, which is marked by a shallow river only 20 metres wide in places. On the bridge between the two countries, the Financial Times watched North Korean trucks trundle into China and dozens of Chinese – and a few North Koreans wearing badges stamped with the image of Kim Il-sung, Mr Kim’s late father and founder of the state – lug bags across.

A Chinese border official says that about 100 a day cross the bridge from the Chinese side, mainly going to visit family members, although in summer as many as 300 go on tour packages to the beach on North Korea’s east coast. About 10 North Koreans a day cross into China for trading or to see their relatives. “With Rmb1,000 [$135, £65, €92] they can come to China even if they don’t have family here. So they often borrow money to come here and buy things for trading in the market in Hoeryong,” the official says.

Bribery appears to be becoming more widespread as trade and travel increases – from a few cigarettes needed to pass through internal checkpoints to the few hundred renminbi expected at border crossings. “Everyone wants to be a border guard these days,” says one Chinese-Korean trader. “They don’t explicitly say, ‘Give me money’ – they just keep going through your paperwork and asking you questions until you offer them money.”

Again, Pyongyang seems to be aware that this is happening and allows it as a way to keep people happy – rotating border guards every six months to give officials from around the country a chance to earn extra money, according to escapees.

In Hoeryong, the market used to be beside the bridge on the outskirts but this year it was moved to a school building right in the centre of town. Its 180,000 residents enjoy a relatively privileged existence because Kim Jong-il’s late mother was born there.

The market has become central to the city and to people’s lives, driven by grassroots demand, says Song Mi-ok, an ethnic Korean living in China who has made several trips to the city recently. She has gained access by visiting fake relatives, a family to whom she pays Rmb1,000 every time she pretends to visit them.

“You can find everything there,” she says of the market, which opens at 7.30am and closes at dusk. “People usually start by selling food that they have grown or made, using the profits to move into goods trading.”

North Koreans say one can buy everything in the markets “except cat horns”, as their expression has it. Rice given as aid from South Korea is on sale and people even display the bag – even though they risk having it confiscated by the authorities – because people know that South Korean rice is of high quality, Ms Song says.

One kilogram of rice in Hoer­yong market costs 900 North Korean won – a huge amount in a country where the average wage for a government employee is about between 3,000 and 4,000 won a month, or slightly more than one US dollar.

“There are a lot of people buying and it’s all money trade; there’s no bartering now,” Ms Song says. “North Koreans are poor, so it’s quite surprising to see people with a lot of money. They don’t receive money from the state – it’s all money they have made themselves.”

One Korean-Chinese man who visited relatives in Hoeryong last year also describes an increasingly active drug trade. It is not uncommon, he says, to be approached by people in their twenties or thirties selling a white narcotic called “ice” – probably a form of crystal methamphetamine. The drug fetches 20 times the North Korean price in China, making smuggling a lucrative business, but the punishment for drug trafficking in China is so severe that Hoeryong dealers try to sell it to visiting Chinese.

The markets are thriving thanks to new border regulations. While the number crossing illegally has dropped because of tighter restrictions in both countries, the number of North Koreans who are allowed to cross into China legally has steadily increased, according to several Korean-Chinese who help those who make it across the border.

North Koreans with relatives in China but not in South Korea are allowed to apply for passports to cross the border. This is creating a new group of migrant workers – those who are legal but working for themselves and their families rather than for the state. “Young people come here to work for one or two months and earn some money – they’re coming from Pyongyang as well as the regions,” says Ri In-chol, an ethnic Korean missionary from China who supports border crossers, legal or otherwise.

“They pay Rmb300-Rmb400 to get a passport and then they can cross. There is now a much freer flow because Kim Jong-il realises that this is the only way to keep the people alive. They take back money, used sewing machines and used clothes from their relatives that they can sell in the markets,” Mr Ri says.

Although Chinese clothes are most prevalent, North Koreans prefer South Korean products for their higher quality. “The labels have to be cut out of South Korean clothes, so if they don’t have a label then people assume that they’re South Korean and they like them more,” says another Chinese-Korean who has recently visited Rajin.

Indeed, Mr Ri says that North Korean officials are picky about what they will let through. “When North Koreans come to China they are allowed to take used clothes back. But when Korean-Chinese people want to give clothes to their relatives in North Korea, they have to be new because otherwise the officials think they are being looked down on,” he says. (Jeans and short skirts, seen as representative of American immorality, are still not allowed.)

The economic changes – particularly the lessening dependence on the state – are potentially destabilising for Mr Kim’s regime because they weaken the tools of control. That means that there is a fine line between what is permissible and what is not. “Kim Jong-il is tolerating t*his much openness because people need to survive, but if he wakes up one morning and sees capitalism is spreading too far, he will order it all to be stopped,” says Gao Jing­zhu, professor of Korean studies at China’s Yanbian University, near the border.

“North Korea is small, so if there is too much change it will threaten the sustainability of the regime and it will collapse,” Prof Gao says. “North Korea is in a dilemma.”

Good Friends, a Seoul-based civic group that monitors life inside North Korea, this month said Pyongyang was cracking down on women working in street markets. “The authorities have judged that female merchants have reached a point that threatens the country’s government,” Good Friends quoted a North Korean official in China as saying.

“The men are tied to their workplaces but they don’t receive proper rations,” the official reportedly said. “This has shifted the men’s burden of supporting their families on to the women. With trade directly linked to the people’s survival, the crackdown isn’t going well.”

Indeed, it may already be too late. The increased economic interaction with China means that the flow of information to North Koreans is steadily increasing. “People’s awareness and illusions have changed,” says one Chinese-Korean who drives trucks into North Korea.

This is just the kind of contact that threatens Mr Kim’s regime, which has kept the 23m-strong population under control by cutting off access to the outside world and telling them they live in a socialist paradise. Mr Ri, the missionary, says: “People living in open areas like Rajin and Hoeryong are more exposed to the outside world but that is not the case when you go further into North Korea. So even if it is becoming more open, you never know when that is going to change. They will still come after you if you are involved in political activities.”

But recent escapees from North Korea say that people are increasingly discussing – in private – one topic that they say would have been unimaginable until very recently: the eventual death of the Dear Leader. “State control is still as strong as before but now, when people gather together as families, they say that the system is really wrong. That never used to happen before,” says Mr Pak, the man who left Hamhung last year.

“Kim Jong-il always says he will feed the people and make them happy, but that has not happened. There are many people who hope that Kim Jong-il will die soon,” he says, shrugging his shoulders. “I have to admit it: the state is already kind of breaking down.”

Copyright The Financial Times Limited 2007

BT: Bigger but unequal pay gains seen for '08

Published November 19, 2007

Bigger but unequal pay gains seen for '08         Email this article Print article Feedback (SINGAPORE) With the economy still hot and workers harder to come by, bigger pay hikes are expected in the coming year. But not everyone will get an equal share of the bounty, according to a recent poll of 126 companies by human resource services firm Hewitt Associates.       The survey showed that salaries will rise by an average 5 per cent in 2008, up from 4.7 per cent this year. But it is the professionals, supervisors and managers who are likely to see their pay rise by 5 per cent or more next year. The wages of manual workers and general employees are projected to increase by less than 5 per cent. Senior and junior managers as well as supervisors and professionals are expected to get a raise of 5.1 per cent on average in 2008, up from 4.8 and 4.9 per cent in their respective categories this year. By comparison, manual workers' salaries are tipped to go up 4.2 per cent. They were given a raise of 3.7 per cent this year. Employees higher up the corporate ladder are also likely to be rewarded with higher merit increases, which are projected to average 4.6 per cent for all workers, against 4 per cent in 2007, according to the Hewitt poll. Top executives are expected to take home merit increases averaging 4.8 per cent, marginally higher than this year's 4.7 per cent. Manual workers, again at the bottom of the payout scale, are likely to get a merit raise of 3.7 per cent in 2008, compared to 3 per cent in 2007. Those in the manufacturing sector will be better off again in the pay hikes next year, with most expected to receive a raise of 5 per cent, up slightly from 4.9 per cent in 2007. According to the poll, employees in the electronic and electrical industries will enjoy the highest pay increase in 2008 - 6.7 per cent, up from 6.2 per cent this year. But those in the consumer products-non durable goods sector are likely to see their pay rise slip a little, from 6.3 per cent in 2007 to 6.2 per cent. But their counterparts in the industrial machinery and equipment sector are likely to see increments of barely 4 per cent. The telecommunications industry is likely to be among the least generous again. It has budgeted for a pay increase of 4 per cent, still an improvement over 2007, when salaries rose only 3.4 per cent.

BT: Services workers most willing to jump ship amid tight labour market: poll

   

Top Print Edition Stories

Published November 19, 2007

Services workers most willing to jump ship amid tight labour market: poll In manufacturing, managers are the least loyal group     By CHUANG PECK MING            Email this article Print article Feedback (SINGAPORE) Job-hopping is more rampant in the services sector than among manufacturing employees, a survey has found.       Moving on: According to the poll, higher pay offered by other companies was the most cited (71 per cent) reason offered for job-hopping. Limited growth opportunities (32 per cent), relationship issues with manager (39 per cent), role stagnation and work life balance (32 per cent) were other major reasons listed for staff resignations But while it is manual and general staff in the services sector who are more ready to jump ship in Singapore's current tight labour market, in the manufacturing sector, it is employees up the corporate ladder - junior and middle managers - who are the least loyal. A poll by human resources firm Hewitt Associates between July and September shows that manual workers in services have the highest attrition rate (16.2 per cent) in the sector, followed by general staff (15.8 per cent). The dubious distinction of being the most frequent job-hoppers in the manufacturing sector belongs to junior managers, supervisors and professionals, who have a turnover rate of 9.9 per cent. Those in middle management positions are not far behind with an attrition rate of 9.6 per cent. But in both the services and manufacturing sectors, the people at the top are the most loyal to the company - their turnover rate is just under 2 per cent, according to the poll. Overall, the services sector is losing staff faster than the manufacturing sector in the full employment situation. The attrition rate in the services sector is 8.2 per cent, against 7.4 per cent in manufacturing. Across the board, junior managers, supervisors and professionals have the highest turnover rate - 11.6 per cent. Top executives, in contrast, have an attrition rate of 1.7 per cent, the lowest. According to the poll, higher pay offered by other companies was the most cited reason (71 per cent) offered for job-hopping. Limited growth opportunities (32 per cent), relationship issues with manager (39 per cent), role stagnation and work-life balance (32 per cent) were other major reasons listed for staff resignations. The most common measure (56.5 per cent) taken to stem the outflow of employees is 'accelerated career development opportunities'. Other commonly cited steps taken were short- term incentives (45 per cent), pay above market rates (43.5 per cent), timely and meaningful feedback from managers (45 per cent) and improved work- life balance (40 per cent). While about two-thirds of the companies polled felt their reward programmes were 'partially' successful in attracting and keeping talent, less than 29 per cent thought they had 'fully achieved' the goal. The majority of them (69 per cent) said 'budgetary constraints' were the problem. Some (almost 31 per cent) also pointed to the 'lack of adequate communication' and 'administration of the programme' (23.6 per cent).

FT: Studied approach to a better world

Studied approach to a better world

By Rebecca Knight

Published: November 19 2007 10:13 | Last updated: November 19 2007 10:13

Before this summer, Karin Bjerde never thought of herself as a “future global leader”. She is, after all, a college student and just 22 years old.

Then again Ms Bjerde, who is in her second year at the Stockholm School of Economics, is not your average college student. She is fluent in three languages and learning a fourth (Chinese), she has work experience at several major companies including Volvo and Morgan Stanley, has represented her country, Sweden, at the Model United Nations three years running, has built houses in Chaing Mai, Thailand, and worked at an orphanage in Shanghai, China.

In July, Ms Bjerde was selected to spend a week in New York City at the Goldman Sachs Global Leadership Institute. During that week, she and 74 other similarly ambitious college students, attended intensive tutorials, seminars and speeches by heads of business, high-ranking politicians and respected philanthropic leaders.

“It was such a smart, driven group,” she recalls. “It was exciting to meet people who are so inspired. Every single person there had an issue that they’re passionate about – whether it’s ending world hunger, or dealing with climate change.”

While she is still modest about the “future global leader” monicker – “We’re just a bunch of kids who want to help solve some big problems,” she says – she has come around to the notion that: “Maybe some of us do have the potential to be global leaders.”

That revelation is music to the ears of Stephanie Bell-Rose, president of the Goldman Sachs Foundation, the philanthropic arm of the investment bank that sponsors the programme. “Our aspiration is to empower young people to go forth and lead global society,” she says. “We hope [the week-long programme] inspires kids, and encourages them to view their lives in broader terms by placing themselves in a global context.”

The Goldman Sachs Global Leaders Program was created to identify and reward 150 of the most accomplished second-year university students from all over the world, according to Ms Bell-Rose. She says this age group was chosen specifically because “they’re at a formative stage in development – they have a sufficient base of experiences to draw upon, but they’re also open to new ideas and open to modifying”.

Winners receive a prize of $3,000 (€2,055, £1,470). And, based on several rounds of interviews, 75 of the students are selected to attend the Leadership Institute in New York City.

At the institute, students take part in management training and seminars on current events. They also hear from leaders in the public, civic and private sectors. This year’s speakers included: Jeanette Kagame, First Lady of Rwanda, Lloyd Blankfein, CEO of Goldman Sachs, Richard Parsons, CEO of Time Warner, and Vishakha Desai, president of The Asia Society.

Faculty from The Leadership Center at Morehouse College and The Wharton School of the University of Pennsylvania lead seminars and foster discussion. These seminars and speaking events are meant to “cultivate the leadership instincts” of the students, according to Ms Bell-Rose.

Confidence

“The idea is to draw together a diverse set of leadership styles and experiences, and inspire students to be bold innovators, leaders in the first degree.”

Allan Goodman, president and CEO of the Institute of International Education, the group that runs the competition, believes the primary benefits of the programme for the students are “the confidence they get” and “the notion they could affect the world”.

Mr Goodman says that he, along with other programme administrators, tries to impress on the students that “we’re counting on them to make it a better world. We’re planting the seeds that they have the responsibility”.

The programme has built an extensive and active alumni network. Alums are encouraged to team up to apply for modest seed money from the programme’s Social Entrepreneurship Fund to fund their ideas. In recent years, students have launched dozens of social ventures, including a school in rural India, a technology education programme in China and a micro-enterprise initiative for women entrepreneurs in Macedonia.

Ms Bjerde plans to apply for seed funding to do relief work in Rwanda with two other students. She says that the programme has made her reconsider her career plans. “Going to the school that I do, I tend to think about a career in investment banking because it’s such an intense focus for other students. But this programme has made me think more idealistically about how I can help people,” she says.

“The major thing this programme has done is to help me build a network. No matter where in the world I want to work on something, I now have a contact there I can turn to, and they will help me.”

Shaping leaders for global change

The Goldman Sachs Global Leaders Program was established in 2001. It identifies second-year college students who demonstrate academic excellence and leadership potential and provides them with unique opportunities for leadership development.

In order to identify these students, the GSGLP runs an annual international competition at more than 90 universities in 19 countries. Students must be nominated by their schools and submit a lengthy application. There is no specific quota; rather, the programme seeks to gather a well-rounded group of students studying science, economics, humanities and business.

The programme provides young leaders with a unique international network through which they can share ideas, learn from established leaders, work collaboratively and address global challenges. By exposing participants to the complex issues and opportunities arising from an increasingly interdependent global economy, the programme hopes to expand perspectives and enhance skills critical for leadership in a changing world.

www.ft.com/businesseducation

Copyright The Financial Times Limited 2007