Lessons in forced democracy

A key tenet of current U.S. foreign policy is to export democracy to other countries. So, how well does that really work? What are the critical success factors for one nation imposing democracy on another?

The Washington Post (17 September 2007) reports on new research by political scientists Andrew Enterline and J. Michael Greig that sheds light on this. Enterline & Greig studied 41 cases over the past 200 years and came up with four critical success factors (ingredients) for imposing democracy:

  • large occupation forces early on to stamp out nascent insurgencies;
  • a clear message that occupation forces were willing to spend many years to make democracy work;
  • an ethnically homogeneous population, where politics was less likely to splinter along sectarian lines; and,
  • the good fortune to have neighboring countries that were also democratic, or least didn’t interfere.

The two most successful “forced democracies” — West Germany and Japan — had all four ingredients. They’re in the category of “strong democracies,” which tend to survive at least 15 years and perhaps indefinitely.

Then there are the “weak democracies,” such as The Philippines, which tend to fail within the first 10 years.

Iraq, unfortunately, has none of the four ingredients.

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Intelligence Briefs

Craigslist meets YouTube: Realpeoplerealstuff.com lets individuals post homemade video commercials to sell goods & services. — Springwise.com

Tree-Nation is an ecological project with a focused objective: to plant 8 million trees in the Sahara to fight desertification. — Marcus P. Zillman

Tipping point: U.S. corporate spending on wireless voice & mobile data services will exceed business spending on all wireline voice & data services by 2010. — In-Stat / Computerworld.com

India is one of the fastest-growing markets for the pharmaceutical industry, with huge potential. Several factors, including the acceptance of intellectual property rights, a robust economy and the country’s burgeoning health care needs, have contributed to accelerated growth in that country. — IMS Health

Competitive intelligence for law firms: A new version of the atVantage software has features intended to help law firms analyze growth opportunities, identify trends and evaluate competing firms. The “Firm Trends” feature gives users the ability to assess and track their market share of litigation for a particular client, market or industry. — LexisNexis

Bain: Unlocking ‘hidden assets’ is key to avoiding business extinction

A 10-year study by Bain & Co. finds that 75% of Fortune 500 companies “face the threat of extinction within a decade” unless they tap their “hidden assets … to redefine themselves.” What sort of hidden assets? Bain’s “Unstoppable Growth Study” study says:

  • hidden customer assets: customer segments and data that can prompt new products and businesses
  • hidden growth platforms: platforms that can be expanded or created for new product lines and business units
  • hidden capabilities: technologies, processes and expertise that can lead to a breakthrough product or service

“These hidden assets were central to 90% of the cases where companies successfully redefined their core businesses and their growth formulas. The assets were not themselves hidden, but their full potential had not been recognized by management,” Bain says.

Typical strategies that usually don’t work:

  • leaping to new hot markets
  • pursuing “big bang” transforming mergers
  • launching broad-based innovation programs

So where does the dreaded threat of “extinction” come from? The following megatrends:

  • Faster movement of information
  • Speed of capital formation
  • Emergence of China and India, and their disruptive impact
  • Reduced capital intensity among the most profitable new industries
  • Increasingly rapid movement of executives among companies
  • The rise and impact of private equity firms
  • Speed of overall technology cycles

Success stories — companies that stepped back from the brink by unlocking their hidden assets — include Apple (think: iPod) and Marvel Entertainment (think: “Spiderman” blockbuster movies). “Companies that seek growth solutions based on hidden assets are four to six times more likely to survive,” the study says.

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About the study:
Tracked the 500 largest U.S. public companies from 1995 through 2004 and assessed their financial performance and rate of change. More extensive 10-year before-and-after profiles were then developed for 50% of the remaining companies that didn’t go bankrupt or get acquired during that period. Also surveyed 240 global executives and developed case studies on 25 successful business redefinitions.

Related:
The book: Unstoppable: Finding Hidden Assets to Renew the Core and Fuel Profitable Growth, by Chris Zook (Harvard Business School Press, 2007).