The second one about aspirations
And tariffs too
Friends,
I hope that all is well with you and yours, and that this e-mail finds you on a boat with shoddy connection, in the tropics, three months after I sent it.
In today’s newsletter, we break down the strategic implications of Trump’s tariffs, should they ever materialize as threatened. For premium subscribers, we also continue on our journey into the ABCDE framework and discuss the dos and don’ts of aspiration statements - including how to avoid the snowflake fallacy.
Now accepting keynotes for 25Q2-25Q4
Every year for the last decade or so, I have created three main presentation decks. For 2025, however, I have (for the first time) added a fourth due to popular demand. They are:
What to Do When You Don’t Know What to Do: How to turn change into a competitive advantage. (Based on the new book by the same name.)
Leadership in a Time of Change: How to steer an organization through a sea of uncertainty.
Resilient Retail: How to build a profitable retail business in the modern marketplace. (Based on the 2025 follow-up to the highly praised 2022 white paper The Gravity of e-Commerce.)
Artificial Intelligence in Practice: How to establish the real-world relevance of a new technology.
If you want to book me for your event, corporate speaking slot, or workshop, merely send me an email. To make sure I am available, please do so at your earliest convenience; my availability is limited and the schedule tends to fill up fast. More information may be found here.
A couple of updates before we go-go
Horrible events in Sweden this week as we experienced the worst mass shooting in the country’s history. A lone gunman - no connections to gangs or terrorism as far as anyone knows at the moment - went into a school used for municipal adult education and, well, there is no need to go into details. At the time of writing, eleven people have died.
A tragedy beyond words. My thoughts go to the families and friends of the victims.
As previously mentioned, a rather intense period of international traveling will begin for yours truly in March. First up, The Richmond Digital Marketing & AI Forum (at The Grove Hotel just outside of London) on the 6th. I will be flying in on the 5th and back out on the 7th. If you are attending, let me know.
I recently came across a video in which a tech bro was talking about his morning routine. We all know how it goes; one should wake up five minutes before one goes to sleep, suck the moisture out of some algae, do 5,000 pushups while listening to the latest crypto podcast, and then CRUSH IT (using capital letters both in spelling and intent).
In this instance, the man (and I use the term loosely) also argued that one should never drink coffee in the morning because the body cannot absorb caffeine so early in the day. Potential scientific iffiness aside, it reminded me of the Silicon Valley tendency to only see one side of everything.
Rory calls it the doorman fallacy. By reducing a doorman to the simple act of opening a door, he may be replaced by an automatic door opener. And so he has been. But a doorman may provide much more than that: signaling effects, safety, directions, parcel collection, and more, all of which is lost in the reduction.
Similarly, a cup of coffee in the morning provides much more than merely a shot of caffeine. If all you are looking for is the latter, there are far more efficient ways to obtain it.
And to think that teenage boys look up to these avatars of morondom. It is no wonder that they end up finding it difficult to navigate life.
Moving on to markets.
The market vitals
Although the past week saw some interesting news (Alphabet doing poorly; Spotify doing well; Amazon doing pretty well but expecting headwinds; same with Apple; same with Meta; Microsoft beating estimates but still being pulled down by DeepSeek), there was one story that ruled them all: Trump’s tariffs. For anyone who missed it, here is the TL;DR:
The Orange One announced 25% tariffs on a number of goods from Canada and Mexico, plus 10% on imports from China. Predictably, the countries in question threatened to respond in kind. After actual conversations were had with the leaders of the two North American countries, their tariffs were paused for an initial month. The rules concerning the Chinese, however, became real.
Beijing swiftly announced import taxes of 15% on US crude oil, machinery, and some cars, in addition to a 10% increase on coal and liquefied natural gas. It also announced export limitations on scarce materials critical for making electronics.
The EU appears to be next.
Let me be clear: if you are a strategist or responsible for strategic decision-making at a firm that is active on the US market (whether through exports or local manufacturing), you need to keep track of future developments. The potential implications are significant. In particular, there are three dimensions that you will want to consider.
The first dimension is the most obvious. If you export goods to the US, understanding the price changes is imperative. A 25% tariff effectively means a 25% price increase. There are different ways to carry it; either the customer does (which opens up questions about price elasticity, competitor pricing, substitution goods, etc.), the importer does (which opens up questions about how long it will take them to source goods from elsewhere), or you do (which opens up questions about the effects on the bottom line, previous and future investments, international market choices, etc.).
If you manufacture goods in the US, the tariffs will be more or less of a pain depending on where you source your raw materials. If they all come from the local (domestic) market, you can check one box. The next will be where your suppliers source their materials, machinery, etc. from.
If you source materials from outside of the US, you had better sit down and begin to crunch the numbers. Short-term, the cost base will increase. Long-term, you will want to ensure you have sufficient supply chain resilience and adaptability.
The second dimension is the competitive landscape. The questions that you will have to answer apply to your competitors too. Where do they manufacture? Where do they source materials from? What do their previous investments look like? Can they change? At what pace? How does that compare to you?
The third dimension is the broader effects on the US economy, especially as it pertains to inflation and, by extension, demand.
You are going to hear that the tariffs increase inflation. This is not necessarily true. Inflation, in a technical sense, is a drop in the purchasing power of money. Although it can come out of raised prices and a subsequent disparity between the supply and demand for it (money, to be clear), inflation and price increases are two different things. A price increase on a number of specific goods is just that, a price increase. It is not a monetary phenomenon. A price increase on a general level, on the other hand, means you get less for your money. When demands for more money (i.e., in the form of higher wages) follow, you get inflation.
Due to various lag effects, tariffs that do take effect are going to lead to a price-level shift in the short-term. It takes time for importers to find new sources, the Canadian oil is imported via a pipeline that obviously is not going anywhere, and so forth. Once the shift occurs, the key thing to look for will be whether Americans demand higher pay to continue to consume the goods in question, and whether companies accede to their demands. If this turns out to be the case, inflation will go up (along with interest rates). If not, the pendulum may swing back.
Understanding the difference between price increases and inflation is thus going to be important in the near-term. The media will overreact; they always do. If you are a strategist, you should not. The 30 days should give you an opportunity to start looking into the questions now, so that you are better prepared regardless of whether they are extended or not.
Moving on.
The second one about aspirations
Two weeks ago, before DeepSeek decided to turn the world of AI upside down, we began to look into aspirations - the A in the ABCDE framework. We highlighted where the term came from as well as its manifestations throughout history (particularly in relation to military strategy), but also what it meant for everyday corporate practice.
Today, we will continue our discussion with pragmatics, including both good and bad examples, common pitfalls, and means of tracking.