RobertoLofaro.com - Knowledge Portal - human-generated content
Change, with and without technology
for updates on publications, follow @robertolofaro on Instagram or @changerulebook on Twitter, you can also support on Patreon or subscribe on YouTube


You are here: Home > Diritto di Voto / EU, Italy, Turin > Developing a crisis into an innovation opportunity #Turin #NextGenerationEU #PNRR #Stellantis

Viewed 6934 times | words: 4808
Published on 2023-02-28 17:20:00 | words: 4808

This short article actually is linked to quite a few news items and commentary that shared across the month of February 2023 on both Facebook and Linkedin, with some minor commentary on my largest personal community, on the Baltics (yes, you read well- it is for historical reasons).

A not surprising news item this morning in Italy significantly (at least emotionally) affects Turin, my birthplace, where I had projects since 2012 (when I was made to return as resident from Brussels to Italy).

Not surprising, as I wrote about such potential developments long ago on this website and all the above social media profiles: reading the terms initially shared on mainstream media years ago about FCA and Groupe PSA merger into Stellantis, sounded like an M&A operation, but, as those few I worked on or was involved on since the 1990s, started or was announced as a merger, ended up as an acquisition.

Hence, the organizational and business development dynamics is a function of the motivation of the key stakeholders: that locals in Turin still considered a different model was a sign of the cognitive dissonance that I and others routinely wrote and talked about.

Not because such cognitive dissonance is a manifest destiny, but because it is a form of "cocooning".

A "cocooning" that avoids leveraging on structural strenghts to reposition and extract value collectively, as a socio-economic environnment.

Instead, this "cocooning" tries to perpetuate a status quo ante that the M&A operation, in and by itself, showed to be not anymore sustainable.

Turin was called the "Detroit of Europe"- with a key difference: here, there was just a single company acting as the pulling train engine on the tracks of local development.

Do not worry, I will not repeat what I shared in a fairly large number of articles since at least 2018: you can read by yourself (well, I should ChatGPT my website to generate abstracts).

What is the focus of this article, expanded and redirected as per the above preamble?
_ contextualizing development and policy
_ collecting and processing signals, not dreams
_ connecting dots to turn crises into opportunities
_ moving forward

Contextualizing development and policy

I apologize if I will start with a personal/professional digression.

In the 1970s, was able to see in sequence cultural perspectives from the North, from the South, and again from the North- starting in Turin, moving to Calabria, returning to Turin- as a kid attending the first year of elementary school in Calabria, then the second in Turin.

Actually, I had already / developed fast reading skills, courtesy of my parent's open shelves library, so much that I was reading fairly complex material before I was 7, and Plato's Republic (along with other politic philosophy bits) at 9: it was funny, and re-read Plato few times across decades.

From 1972, I was used to hear locals in Turin say "this book is not for your age" since elementary school- except my teacher, who gave me as a gift books from the school library that she said were too complex for an elementary school, but not for my skills level.

Now, if you live across cultures, and try to mix-and-match with what history, archeology, cultural anthropology, science readings give you, you end up understanding that nothing exists in a vacuum, and that context defines what makes sense.

So, when I was 14-15, started getting a keen interest in comparing the Italian Constitution with those from other countries, and probably my classmates remind some lectures derived from reading laws and decrees that were then "hot".

Actually, "dissecting" those laws was a useful exercise that then enabled to write offers, draft contracts, and revise offers and contracts in my business activities.

While in most cases what is formally called a "complete" contract is not possible (there will both be always imponderables, and the cost of attempting to develop such a contract would be prohibitive), a contract that is "applicable" implies considering the context represented by all the parties involved explicitly, and what the socio-economic (including technological) environment could influence.

Jump forward few decades, and my CV shows how walked across multiple industries, countries, cultures- each time "contextualizing".

And, frankly, since I first started working in UK for my Italian (actually originally American) employer in the late 1980s, I understood that you have to continuously take care of avoiding the "culture-tinted lenses" trap.

Or: avoid to re-interpret whatever you interact with in terms of what you would consider "normal" in your own culture.

Half-jokingly, recently often when I met foreigners in various language meetup in Turin said that my first presentation meeting in 2015 for a portfolio-level PMO, with worldwide (remote) attendance, somebody asked if they had hired a British- do not worry, I first switched to an American accent, and then surrendered and picked up the local accent: so, now, in any language, I have a pristine Italian accent.

And an American friend met at LSE in 1995 confirmed so after watching videos I had to prepare last summer for a certification in AI Product and Project Management, and post on YouTube (if you want to share a good laugh, have a look at my YouTube channel on change, where I posted them).

There is an element that, if you are used to deliver training and presentation on non-technical items, you quickly learn: do not take yourself too seriously, and listen/look for signals.

If you take yourself too seriously, you end up doing what many experts unfortunately do: whatever they propose ends up being not just an application of their expertise under the information that they received, but perceived as part of who they are- hence, some would be unwilling to accept revisions or even (if not relevant anymore) setting aside a proposal they made.

Development and policy should, in my view, follow the same approach: i.e. does not matter how "competent" you are in whatever, developement and policy should be approached systemically, and therefore require a cross-disciplinary syncretism where you have to avoid experts (or self-styled experts) taking the lead and silencing dissent, to actually push what they consider the best option.

The "Lord of the Flies" attitude unfortunately transpires from many Italian (and also European, recently) laws and regulations created by an "expert consensus" that actually included only what experts at the table could contribute and converge on.

It is the old joke that I found true often: a camel is an horse designed by a committee of experts.

But if you like movies, my "procurement" favorite movie is "The Pentagon Wars" (you can find it online)- hilarious.

Development should think about the future, just not partitioning budgets across those sitting at the (virtual) table.

Hence, policy, in my view, should not be just about "closing loopholes" or "sharing the pie", but generating socio-economic environmental conditions to generate development that is, eventually, self-sustainable, and might even, of course, diverge from your expectations.

But more about that in the next section, just after this closing remark: if any development initiative, no matter how large, small, self-contained or systemic, is a function of the context, I still believe that some "policy" and "political" skills should be part of any managerial resources involved in choices that are, by definition, not just merely focused on delivering temporary fixes.

Collecting and processing signals, not dreams

Not just in Italy, "temporary fixes" often turn into structural elements.

In the early 1990s, my German then-girlfriend told me that she had just received an announce for a potential new temporary tax for those who earned more than 50,000 DEM.

Purpose? To support integration of the former DDR, as somebody had overestimated its economic development, and underestimated its infrastructural and socio-economic needs.

Well, as in many "temporary fixes" also in private corporations, once started, it outlives its welcome- hence, years later, started complaints and actions to revoke it- until, few years ago, the German Constitutional Court in Karlsruhe confirmed it.

So much for being just the Italians those who turn anything temporary into permanent.

If you turn policy development into a social game based on keeping tribes happy, as often happens in Italy, it is just second nature to generate, as a side-effect, "future-oriented policies" that are actually trying to do a kind of "future washing" of what is acceptable to the current balance between tribes.

The first element of this "future washing" is to collect signals only from those that you want to listen to, a kind of "filtering" that speeds-up consensus building.

The second element is, also after applying that filter, convert analysis into a negotiating element: the level of fuzziness of many "analyses" from public sources, local as well as national, is really a function of their political role and... "occupational hedging".

The third element is of course to then come out with prescriptions derived from those those "filtering" actions.

And, to pay lip service to what our EU partners are asking, we do define also Key Performance Indicators that are consistent with the overall approach.

What is left behind, often, as would not be possible to achieve the same level of "consensus" control, is transparency, along with real independent impact(s) assessement.

I shared in the past how puzzled was to see, considering my experiences elsewhere, how an annual report on the situation and trends of the socio-economic environment of a city that used to be the automotive (and also manufacturing) centre of Italy was processed locally, here in Turin.

Sounded like a ritual: first, announces; then, presentation; then, political and socio-economic leaders agreeing that something needed to be done; then... wait for the next report.

Which, being delivered by an organization that had to be seen as an external observer, did not hide or muzzle the truth: so, no sweeping under the carpet.

Just... repeat the ritual.

The only issue was... how to describe, year after year, a decline without melodrama- the titles I saw were quite creative and polite, but still straight to the point.

I shared online how, since 2012 (but also before), in Turin routinely heard noises as if each step into decline or loss of the "head" of anything (e.g. also major local banks have their leaders really elsewhere)... was due to an external crisis.

So, as I shared on social media, 9/11, 2008, COVID, invasion of Ukraine... make your pick, all are good to go to avoid local accountability for a dispersion of resources and lack of "common good" focus when allocating resources.

Even the NextGenerationEU local proposals, as I shared in the past, were quite puzzling: the request was from each EU Member States to focus on a limited number of projects, building the future, increasing resilience, etc.

Locally, to contribute to the national PNRR part of the NextGenerationEU / Recovery and Resilience Facility, we kept increasing the number of projects and assessed investment need at each round: at one point, over a thousand proposed projects for more than a couple of dozen of billion EUR (consider that the whole of Italy was over 200bln).

Due to the past inability over the last two years to start or even assign some projects, the current Government is discussing with Bruxelles options, which include shelving projects that would not be feasible by 2026, and postponing for some up to 2029.

Over the last decade, I attended few events locally that each talked about development, and announced something new.

Routinely, the approach was to create containers so that then content will follow.

Which, actually, is a tongue-in-cheek, as in the early 2000s, when I supported few local startups on business and marketing planning, a local incubator physically started in what looked like containers turned into offices.

The bonanza of new funding from the EU following COVID, covering up to 2026, is generating a continuous stream of new ideas for new "containers" for this or that.

It reminds me when, while working part-time on a project in Rome, was given a copy of the request for proposal for a couple of Italian Government projects, one about securitization of assets, and the other about the new tourism web portal for Italy.

I turned down the "tremendous opportunity" to work on the tender for the former- as I was asked to do that as an investment, and maybe could be later involved somehow into the project: 100% of the risk of <.0001% of return and not even a success fee is not really an investment, in my book, as my assessment, based upon prior cases, was that doing a preparation with the level of detail requested could cost in order of 40k EUR (a project to do a project).

For the latter, advised against working on it, as, for a portal to deliver content from over 8,000 towns in Italy, just basicaly 1% of the budget for each of the following ten years would go to content, 90% of the budget was for the container...

...and, eventually, it was a well-studied débâcle.

What does takes to shift from dreams to signals?

Connecting dots to turn crises into opportunities

First, separate analysis from negotiation: in Italy, in any complex decision-making activity, there is going to be an already long list of biases that will be visible to any independent auditor ex-post, no need to add more ex-ante.

Second, the first step of any analysis should be identifying who should be involved, or at least listened at, as otherwise also the best choice and best solution would risk not being put in use.

Third, decouple analysis from decision-making from interest in the mere interim: if you blend the three, you are opening the door to budget consumption, not for benefits to be then realized.

And then? Well, it depends on the specific case, as often the negotiation and political side, also in corporations, could bring within the context other considerations that transcend the specific decision being discussed.

Actually, just to share a bit of personal professional experience, as I saw it first-hand since the 1990s.

I worked elsewhere in Italy and abroad, and routinely from the early 1990s was asked by contacts in Turin to qualify projects for partners' customers, help prepare proposals, or, by those who had switched to the customer side, to present proposals.

I started in business after a short stint in political events organization and "bartering"/advocacy, followed by further negotiation/bartering/"bureaucratic chess playing" in the Army.

So, as in the late 1980s often had more than one project to think about each week, I ended up "walking the talk", i.e. following all the steps (and more) that I listed above.

Therefore, sometimes on scrap paper while already travelling to the customer for my employer (1980s), or working few hours / one day on new customers for my own company, I was used to first understand a bit, explore the context, and deliver proposals that some described as "feasibility studies"- which included budget, schedule, what was going to be delivered, etc- be it software or just meetings/ideas/concepts.

Ending up by delivering what I could now call following my PMI formal training a "souped up project charter+scope+preliminary budget+preliminary milestones" as a proposal- 5-7 pages long.

What happened eventually was funny: some called me to have a proposal, or have my support in developing proposals, as could give a "neutral assessement", i.e. unbiased review of the opportunity and deliver or help deliver something structured and that could be used to "frame" the relationship on the project.

But, then, I was not called up for the ensuing project.

So, eventually, shifted to the standard 1-2 pages: and some complained that they liked more my previous ones, and then... stopped asking for new proposals.

When you present a proposal, verbal "sniping" should be accepted as a cost of defining something- and was often (sometimes paid, sometimes not) asked to do just that: acting as "Devil's Advocate", i.e helping spot weaknesses before the potential customer (or competitors) could have that chance.

These two elements, assessing feasibility and being the Devil's Advocate, are unfortunately missing in most initiatives in Italy, and often, when new initiatives are launched, what is expected from experts is to lead the choir praising the magnificent leadership.

Well, did not work for the economic development of North Korea, why should be in EU Member States?

Unfortunately, we are not collectively measured in our performance against the performance of North Korea, but as a G7 Member State- and this extends downstream also to regions and towns.

I am referring to Turin because it is my birthplace and had a chance to study it for a decade: actually, I spent more time in or around Turin (Piedmont) since 2012 that I did at any time since I started serving in the Army, 1985.

So, I will let to others "adapt before adopt" my commentary the the specifics of their own location (in Italy as well as abroad).

Here, locally, I did hope that NextGenerationEU / Recovery Resiliency Facility / PNRR funding would be focused on solving weaknesses, to generate a more sustainable future, and extend beyond that.

There is a mailing list that I routinely read, about family-owned companies, called "family&trends" (which, in Italy, applied to a large chunk of companies, small and large).

The latest issue was about how, within ESG (Environmental, Social, Governance), the latter (governance) is what really matter.

As I disagree often with various points, but in this case I do agree: governance, in any initiative, is what matters- and while NextGenerationEU is, along with RepowerEU, within the framework of ESG, governance is what will make it either a successful first major case of mutualization of debt at the EU level, or a waste of resources to subsidize zombie businesses and petty projects or electoral fiefdoms, a waste of resources that those who are in kindergarten now and teenagers will have to pay back.

Instead, the announces in January and February about new "containers" did not alter the usual picture: NextGenerationEU funds (and others) have been apparently "earmarked" (yes, an american political loaded word) to sort out a long list of "left over" from past failures or attempts at development, resulting mainly in "building" or "rebuilding" existing boxes: fine for the building industry, but is that a sensible, sustainable allocation of resources?

Would not have been better to focus on "content", not on "containers"?

But it is not just business: politicians too, in Italy, in workshop and conferences routinely, while talking about NextGenerationEU and related funding, do not say "to invest" but "to spend".

There might be a silver lining in a not-so-unexpected crisis, a bit that was announced today, that could generate positive forces for the new activities- including those and existing "containers".

Stellantis announced that it will be releasing 2,000 people in Italy, and out of that a little bit less than half will be from former headquarters in Turin.

Not unexpected, unless you were delusional.

As I said to somebody I knew when another company in the group many years ago transferred the HQ in The Netherlands (yes, Holland)...

...if he was on administrative backoffice activities that could not be automated, he should have no fear.

The complexity of Italian relationships and bureaucracies, and lower personnel cost, would still justify keeping backoffices in Turin or Italy, not moving them abroad.

As for the higher levels: I would have expected what I expected (and was delivered) when, while in Rome attending a meeting, the screen of the host of the meeting showed that Sergio Marchionne had been selected to head FIAT- de-layering management, and shifting roles to where the brain would be.

After Chrysler was purchased, many in Turin told me that they expected this or that- my reaction was that, in M&A, in my experience, also if you acquire a company, if the "new kid" is more structured, the less structured party might lose some strings of power.

And, a while later, some complained that in FCA (the merger of FIAT and Chrysler), you had to go in the USA to develop your career.

Hence, when the deal with Groupe PSA was announced, I looked at structural details in the published information about the deal.

And, as an American friend said to me in London years ago before a meeting, "you will not be disappointed": it is not crystal ball, jinxing (an Italian penchant to claim so), it is just a matter of "flow dynamics" and reading the signs for what they are, not what you would like them to be.

But, again, at this time, when we have "empty boxes" in place or forthcoming, today's announce might actually have a pivotal value to overcome a typical Italian organizational culture constraint.

Moving forward

Let's be frank: as I shared often in the past, Italian companies often are too tiny to develop the reflexes and instincts to both think long-term and develop an organizational culture that makes them able to interact successfully and peer-to-peer with larger companies.

In Turin, two new major "containers" have been announced, which eventually will result in renovating existing buildings, e.g. the former Italia 61 exhibition area from the expo 1961 celebrating the 100th anniversary of Italy's unification, and the former stock exchange of Turin- and both, in one way or another, aim to "contain" innovative companies.

And this beside the already significant existing array of incubators, accelerators, coworkings, and whatever else is trendy to support startups.

Over the last few decades, there have been attempts to recover other areas formerly included within productive or service areas supporting automotive manufacturing, including by creating other "containers", e.g. TNE (Torino Nuova Economia).

Moreover, also the academic (and financial) institutions in Turin were used to deal first with FIAT, then FCA, and their operational approaches.

Finally, consider that, not too many years ago, in a conference, a company such as Leonardo said that was going to support smaller companies to be able to interact within the supply chain of larger companies, as they lacked what was needed.

The article linked above outlines also the mix of measures tailored for different age ranges.

So, there will be soon on the market in Turin an influx of people sharing the same organizational mindset, who could actually start adding "content" to help develop a different ecosystem, if properly organized.

No, I am not applying as a candidate- from what I observed since 2012, I am quite confident that for such a role (or other related) there is a list of people ready to be appointed.

Nonetheless, building an organizational structure and support processes is something that, in my view, is even more important that the local obsessions for creating new "containers".

Reason? If you accelerate innovation, and lower often the entrance cost, you will probably get a number of potential new initiatives that will get up to no more than few dozen people before delivering also the most complex "prototype" of a physical product that could be of interest to larger companies, e.g. in digital and green transformations within the mobility industry.

But creating in large companies such new entities is often not feasible, as the bureaucracy is e.g. tailored to volumes and efficiency, not to one-unit-is-all-we-will-do-before-moving-on and efficacy: it would simply drain the air from that new unit.

Better to keep it separate- but, having available e.g. as staff for those "containers" a dozen or so of those used to work within a large company, might help "buffer"

Already many larger companies worked with tiny companies without burying them under bureaucracy, but it was a selective approach.

Instead, having those "containers" staffed with people able to "buffer" using the same approach 5, 10, 20 startups toward large customers might leverage, generating potentially more "one-unit-is-all-we-will-do" that could then "dance with elefants"- or even scale up and turn into elephants.

Meaning: if you build organizational capabilities, with or without physical new shiny "containers", you can generate sustainable demand that would then justify "containers", and actually create knowledge-exchange ecosystems that would attract other startups or companies focused on creating new products and services.

Therefore, if just one hundred of those released in central offices from Stellantis were a blend of the skills lacking in any of those "containers", might act as catalysts for spawning an array of companies.

Some will fail, some will deliver something useful to many or to just one company: but, being all within the same ecosystem, also failures could foster future successes and generate knowledge to help other prevent failure; and, having all the same "imprinting" from their original employer, it could be at, at least initially, until each "container" evolves its own variant, knowledge communication and "knowledge transfer" could be easier.

As, if you worked for, say, ten or twenty or more year for the same company having that kind of organizational complexity, it changes the way you think, act, react, and, while this could be a liability if you were to move as an employee in a smaller entity (I saw many cases since the 1990s of people "scaling down"- the risk is of introducing "administrative overkill": efficient with 1,000 employees, a waste of resources with 10-100), it could be useful in contexts such as the one described.

And not just in automotive or mobility.

Actually, it could eventually turn into a revolving door, with some being on secondment or returning (not necessarily from/to Stellantis), also to help bring home new ideas- I think that it was again Leonardo that said that, if their smaller specialized suppliers, thanks to their organizational culture development support, ended up working also for their competitors, this could generate innovation going both ways.

As a tunnel vision can develop both in small, family owned, and multinational companies: and only creating a culture that allow challenges in a way that is consistent with the structure and degrees of freedom / weaknesses of each organization allows to really have a continuous improvement environment, and stay competitive.

The plan that I have in mind is more akin to a roadmap for a town-wide programme to help kickstart the activities of those containers (existing, new, revamped) using my observations of the last decade, at least in this seeding phase.

Though, would require a team and turn into a book, and I think that already spent ten years too much in Turin: if nothing happened until now, nothing will ever happen, considering that when the locals want something to happen... it takes sometimes weeks or months, not decades, to join forces.

Of course, as wrote repeatedly, while in Italy, my experience and interactions locally since the 1990s told me that it is better to focus on activities such as those formally or informally received since 2012 (PM, PMO, change manager), reserving the "management consulting and analysis side" to my publications.

Stay tuned!