Bo And Luke Make Glass, Wine

The Dukes of Hazzard was a TV show in the late 70s and early 80s. The plot, at least the way I remember it, always involved Bo and Luke, two brothers, getting tangled up unexpectedly in some nefarious scheme cooked up by the local Mayor, Boss Hogg. A sub-plot always involved Daisy Duke, their sister, wearing shorts and running around in a jeep, but hey, I was a teenager back then. At some point, the boys would end up crossing the state line and so be free of arrest by Boss Hogg. That “crossing the state line” has featured in many hundreds of American TV shows and movies.

It always seemed to me that governments are not unlike the Dukes of Hazzard. Not so much the smuggling of moonshine and driving fast cars, although I guess that happened in some places too, but in the idea that there’s a “state line” and when you cross it, your problem becomes someone else’s or, at the very least, there’s a whole new set of law makers involved. Cross the post code/zip code barrier and whether it’s healthcare, drug availability, housing taxes, bin collection, dog poo removal or whatever, it’s different. In most countries that I’ve visited, the consequences of this are near identical business processes supported by [deliberately] entirely incompatible IT systems across many dozens or hundreds of operations. Needless to say, almost every process lacks the scale to operate effectively and efficiently. The drivers are maintaining local control (or the illusion of it) and ensuring local people take local jobs for local citizens.

I’m always interested in people or businesses that break out of the mould of “we’re different, we need our own process/system/operation/call centre/sales and marketing operation” etc. Working in banking a decade ago, every country-centred business had its own operation and own IT – its own FX books, own securities settlement system, own cash reconcilement process and so on. Those were gradually simplified, rationalised and operated at scale. Sub-prime loans notwithstanding, banks operate pretty efficiently now, at least in their transactional operations.

Two examples of breaking the mould that I’ve come across whilst out and about (@large?) in the last few months:

1) Glassmakers in Murano, under pressure from competing (and they’ll say inferior) products from elsewhere in the world (notably, but not limited to, China), have started to merge to gain scale. Visiting one factory on a recent trip to Venice, I saw that they made only one type of product – very modern. I asked about their other products. The manager told me that they had recently merged with 14 other glass makers, with each one deciding to specialise in just one product area. They had figured out who of their masters was best at each product and then given them the job of producing the very best of that product at a volume that the market can support. With the process from novice to master taking 15 years or more, and young people increasing leaving Venice to work on the mainland, there’s also a shortage of talent – and so no longer the ability to support every glass maker producing every type of product. Together, they put their money to work to build a single showroom that displays all of their products. Each one bears a seal of quality and the signature of the master who produced the piece. Prices are clearly displayed – well, clearly until you hesitate whereupon the calculator comes out and an “off-season” discount is proposed.

2) Winemakers in Australia, under pressure from the effects of climate change, their appreciating currency, the massive competition in the wine industry at the price mid-point (despite Australia beating out France in volumes, the bulk of the sales continue to be at the low end of the market – and the French are now starting to re-work their marketing and pricing and will, if they aren’t already, gain ground), and keen to show their products in the best light, have started to form alliances. One such alliance, Artisans of Barossa, brings together a dozen individual producers, all of whom make unique and special wines, and who now market their wines as an ensemble. Tastings are arranged head to head – so you can try out, for instance, an out and out Shiraz against a more varied Grenache, Shiraz, Mourvedre combination. None of these wineries particularly needed to come together – their wines are good enough to sell by themselves (and often have the awards to show for it), yet they recognised that together they are stronger: they have scale, can reach wider markets, can pitch each other’s products, can learn from one another, can reduce their costs of marketing, shipping and representation and so on. Taste their wines if you get a chance – and if you don’t, contact me and I’ll tell you where you can buy them.

I know that governments at various levels have tried this – whether it is local, regional and sometimes even national departments – but there doesn’t seem to be, from where I’ve stood and looked, the same willingness and engagement. Sure, the pressures are different, but the thinking should be the same.

If a local government is recognised as having the fastest, most efficient housing benefit process, why wouldn’t councils in the area (hey, even the country) say, “I’m not that good at HB, but I am good at business rates – why don’t I give them my HB and I’ll take their BR”. I understand that charters would have to change, I understand that system modifications would have to be made – but surely those are not beyond the wit of man if it simplifies and rationalises the processes. Not every process is unique and special – or, in fact, not every process is necessarily unique and special – I see that they often end up that way.

We could take this to a national level – and I’ve rambled about this before. The department of give, and the department of take, for instance. Payment scale and receipts scale. Could it work?