As Christmas approaches Dick Skellington heralds the first panto season since the banking crisis.

I say, I say, I say. Latest news, the Isle of Dogs Building Society has collapsed. They've called in the retrievers. Have you heard this one? A masked man holds a bank cashier up with a gun. He says: 'I don't want any money - I just want you to start lending to each other’.

Boo-boom!

Sorry, it’s the way I tell ‘em. Let’s start again.

Les Dennis in pantomime.
[image © copyright BBC]

What have Captain Hook, the Wicked Fairy, Cinderella’s stepmother, the Evil Baron, King Rat, the Evil Wizard, the Giant, the Sheriff of Nottingham, and the Wicked Queen got in common? This Christmas, whatever your panto and wherever it is in the land, the villain is more likely to be portrayed as a banker. Let’s hear it for the Lehman Brothers as the Ugly Sisters. Just think of poor little Goldilocks lost in the Bear Market being pursued by three nasty brokers! And think of poor Puss trying to pay those prices in Boots! Don’t forget to boo and hiss!

This Christmas it will be the banker who will be lurking menacingly behind the principal boy who will be played by a vulnerable single parent recently evicted for falling behind with her mortgage.

So when Dick Whittington pops onto stage left with Tommy the Cat at his feet, Dick is more likely to ask the audience:

What’s the difference between a merchant banker and a pigeon?
A pigeon can still make a deposit on a BMW.

And then, not to be outdone, up purrs Tommy with this one to the Gods:

What’s the difference between an investment banker and a large pizza?
A large pizza can feed a family of four.

Boo-boom!

How we’ll all cheer when master villain King Rat gets utterly custard pied by Tommy the cat and Dick gets a tracker mortgage with a Bank of England interest rate and returns home to marry Alice and live happily ever after in a nice semi in Sidcup.

For this year it’s the bankers who will be getting the slap and stick. So let’s hear the cheering throughout the land. Rejoice. Whatever the panto you can cajole your kids into heckling: ‘come on you bankers pass the interest rate cuts on to me mum and dad!’. This year’s panto season promises to be a hoot. I mean who would want to trade places with the head banker at the Royal Bank of Scotland (RBS)? I can just imagine the chorus singing ‘I’m a Banker, Get Me Out of Here!’.

No really. There is nothing more likely to get us chuckling in the Gods than the bankers getting their comeuppance. The suffering proletariat have had it so bad. We need a little bit of festive humour to roll back the impact of the credit crunch with its rising mortgage debt, repossessions soaring 70 per cent compared to the same quarter last year, the lowest pound since 1992, and with unemployment expected to top 3 million before the next panto season.

To the nation this parsimony sums up the public image of an already discredited menagerie of fat cats. Since the bail-outs the banks have done little to improve their stock by helping those whose money – what’s left of it – keeps them in offshore accounts and Christmas parties.

Politicians too can expect a panto drubbing after allowing banks to profit enormously in a deregulated culture for so many years, and lending poor Red Riding Hood a 130 per cent mortgage. It is not for nothing the phrase 'Houses of Parliament' is an anagram of 'shameful operations'!

At the King’s Head in London, Dick Whittington’s nemesis King Rat is a banker and property developer intent on bringing the economy of the paradise island of Gran Canaria to its knees. The audience will wince as the shameless speculator greedily buys up property, lends money to local businesses and causes havoc when he calls in the loans and buys the island’s central bank. On the way he evicts the show’s Dame from her bar and sells off the premises as luxury flats. Now where have we heard that one before?

It is hardly surprising this festive season will witness pantomimes all over the country revising their storylines and casting the evil villain as a banker, updating daily as the credit crunch unfolds. Since ancient Greek and Roman times panto script writers have had a keen eye for contemporary events. Pantomimes have always told morality tales. And who can blame the script writers with the banks so reluctant to pass on any good news as they use Government bail outs to restructure their own finances with little thought for the rest of us. Never has A Christmas Carol been more relevant. Scrooge is so 2008.

Here’s Dick again:

Talked to my bank manager the other day and he said he was going to concentrate on the big issues from now on.
He sold me one outside KFC yesterday.

The Gods groan in disapproval.

But Tommy the Cat soon wins them over with a real Christmas cracker!

What’s the capital of Iceland?

Shouts Tommy!

About £3.50.

But should your panto fail to cheer this Christmas remember the old saying.

What’s the definition of optimism?
A banker who irons 5 shirts on a Sunday.

About the author

Richard Skellington edits Society Matters for the Faculty of Social Sciences at the Open University. He’s an administrator who manages the Environment, Development and International Studies programme.

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It has been hard, in the blizzard of financial crisis news, to see anything positive in the business pages. But beneath the storm of bankruptcies and bank rescues, some companies have been quietly making careful acquisitions. Typically, these haven’t been the “buy a rival” sort of purchases that firms make in order to simply get bigger and realise “economies of scale”. The more recent examples have usually quoted the fashionable term “synergy”. The question is what is synergy and how do firms make it?

Of course the simple definition of synergy is 2+2 =5, so the reason for a merger or acquisition is that the combined firm is more effective than the two separate partners. But synergy is cited as a reason to merge or acquire only slightly more often than “failure to realise synergies” is cited as the reason for a merger failure. It’s important therefore to understand what synergy really is and how, in practice, firms realise it.

A true, realised, synergy means that something must happen in the combined firm that either didn’t happen or happened less well in the two individual firms. In practice, there are two types of synergy a firm can create:

• Internal synergies: these are created when the combined firm can do something more efficiently internally than could the two separate firms. This might simply be by combining two departments (and cutting costs) or it might by rationalising product, like the car companies do when they share parts for different models.
• External synergies: these are created when the customers of the two firms somehow interact in a positive way to allow a kind of cross selling. In the past, financial service firms did this, buying mortgage businesses to help sell insurance and other products.

The trick in making synergy happen, therefore, is to know in advance how the mechanism of synergy is suppose to work. Some recent examples make the point.

As I write, the consumer electronics giant Panasonic is considering buying Sanyo. At first sight, this doesn’t make much sense as Sanyo’s business is mostly struggling and Panasonic have lots of other investment opportunities. But look more closely and you will see that Sanyo have some great battery and solar panel technology coming out of their labs. Panasonic reason that those technologies would make lots more money if they were built into to their own green technology strategies, an example of external synergy.

Similar ideas motivated Bank of America when it recently bought Merrill Lynch. The global banking business is complicated and made up of several complementary businesses, like retail banking and investment banking. Banks tend to be more efficient if they have significant presence in more than one area so the combined business of Merrill Lynch/Bank of America is much more effective than the two separate entities. Or at least it will be in time.

A more problematic situation faces Ian Smith, the new boss of Reed Elsevier. One of his major challenges is to repay $2bn dollar that his predecessor borrowed to acquire ChoicePoint. Given the tricky situation facing media markets (Reed Elsevier’s main business), paying back the loan means realising promised internal synergies from the ChoicePoint acquisition. These, it seems, are proving more elusive that was hoped for at the time of the acquisition.

The moral of the story is to not be mislead by the mirage of synergy. Instead, think carefully about what kind of synergy you are trying to realise and how exactly that is going to happen. And that, of course, is exactly what the leaders of these huge firms, and their consultants, are paid for.

About the author

Dr Brian D Smith is a Visiting Research Fellow in The Open University’s Marketing and Strategy Research Unit. He is the author of over 100 books and articles and runs PragMedic, a specialist strategy consultancy.

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Frikirkjan and National Gallery, Reykjavik.

Christmas celebrations in Iceland, a nation that can never be accused of partying half-heartedly, extend over twenty-six days. During a period of just over three weeks, not one Father Christmas but a succession of thirteen Jólasveinar or Yule/Christmas Lads arrive in, and leave, town one-by-one. This piece of folklore is variously commemorated on cards and postage stamps, and is accompanied by songs, dances and stories, much of which is captured on national television. Small, well-behaved children hope to receive a gift from each of these visitors, culminating in a more significant present from the final Lad, Kertasníkir (Candle-beggar), on Christmas Eve itself.

In origin the Lads are somewhat sinister figures, who have only recently been recast to resemble Father Christmas/Santa Claus, swapping farmer’s dress for bright red clothes and white beards. According to old legends, they were sent to town in the winter to search for fresh meat for their mother, Grýla, a troll who feasts on raw human flesh. The family cat, Jólaköttur, also likes to eat poor children.

The Lads’ names, including Bjúgnakrækir (Sausage-thief), Askasleikir (Bowl-licker), and Skyrgámur (Skyr [Curd]-glutton) evoke the fears of a not-too-distant past, when most Icelanders lived at or around subsistence level and a cold winter meant that starvation of livestock and, sometimes, the people, was a real possibility.

Reykjavik’s bars and coffee shops remain full this December, but particularly in the suburbs an increasing number of 4x4s are left at home in favour of cheaper-to-run vehicles, and the queues for Red Cross food parcels are also growing as the economic crisis takes its toll.

Iceland’s financial markets, and with them, its currency, have fallen into the proverbial abyss. Cheap geothermal power and other modern technologies mean that a return to the darkest days of the past is unlikely, but nonetheless I suspect that the bleak connotations of their Christmas traditions have a new-found resonance for many Icelanders this year.

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Pubs are closing at a rate of knots (apparently 36 per week at the last count), under pressure, originally, from a pincer movement between social change and competitive forces, and with little sign of redemption. Is it finally the end of this great British cultural institution?

For too long, government intervention has tampered with the trade under the pretence of defending consumers who were being ripped-off by greedy brewers (who both brewed and retailed the beer they produced). For example The Beer Orders fundamentally changed the industry structure separating the brewer from the pub owner/operator in an attempt to put pressure on the industry to reduce the wholesale price of beer (and hence, theoretically, drive a reduction in price in the pubs to retail customers).

Pints of beer.
[Image © copyright Photos.com]

Over time, though, more government intervention has negatively impacted on the pub. For example, non-smoking regulations drove a core customer group out of the pub and back to their homes; the so-called (by government and the media, at least) binge drinking youth, became a symbol of social evil which needed to be controlled. This led to licensees/pub companies being pressurised into dropping any competitive activity which appeared to promote bingeing.

Meanwhile the supermarkets snuck up on the rails, offering cheaper alcohol. This dovetailed neatly with our unwillingness to venture out, as we hid behind our PCs, video games, DVDs and other assorted home amusements which we could enjoy with a cheap Chardonnay at our side. So, given all this, is it any surprise that the pub has been, and still is, coming under increasing pressure as a viable business.

Well, perhaps, the real surprise is that the pub, as an institution, continues to not only survive, but thrive in some instances.  J D Wetherspoon continues to open pubs and has reported solid figures. Smaller companies (such as Tynemill in the Midlands) seem to have little problem selling mash-tun loads of real ale; and I can bet that, even now, you can all think of a successful country pub which you might recommend.

What is it about these successful pub operators, that keeps them going in such tough times? Well, Wetherspoon acts as a true pub retailer. They employ high street retail tactics, for example extremely professional point of sale material, positioned carefully in each pub. (Just visit a Wetherspoon on any Thursday for their Curry Night and you’ll see what I mean). Tynemill specialises in real ale where beery aficionados go to ‘sample’ rather than sup.

The staff offer a no-quibbles ‘try-before-you-buy policy on all their real ales recognising that consumers are unlikely to invest their £2.50 in a pint of something which they’ve never tried before. Cleverly, though, this drives custom and footfall as customers now go into these pubs to see what’s the latest available real ale offering. The best country pub has great food, quaint surroundings and great service which serves our need for convenience and value whilst spoiling us a little, too.

Whilst the pressure of social change (spurred on by government regulation) and competition (principally from the supermarkets) has forced a vast number of pubs to close, the smart guys have evolved to play to their strengths and develop other areas of competitive advantage.

The real skill is that the successful pub operator has had to adapt to the changing environment

The real skill is that the successful pub operator has had to adapt to the changing environment. Business academics use a number of models to identify and analyse these factors. Applying Porter’s Five-Forces model (which can be a useful tool to analyse the attractiveness and competitiveness of an industry) to the pub retail market, reveals that in terms of providing ‘drink’ the pubs were always going to lose out to the newer market entrants: the supermarkets.

Where the successful pub operators got savvy was that they offered something the supermarkets couldn’t. For example, quality real ales, attractive surroundings to drink them in, with, in the best pubs, fantastic personal service. Whilst the mal-contents in the trade might hark back to ‘the good old days,’ the forward-thinking have just got on and created a ‘new’ pub: one that has adapted to these changed times and is responsive to market demands.

The pub trade has been around for centuries and has creatively adapted to meet whatever challenges it has faced. I predict that the day of the pub is not over, but that it will change. It may be true that only the great and the good will survive, but reports of the death of the pub are somewhat premature.

With all this talking I could do with a pint – what are you having...?

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Recently, in brave defiance of the credit crunch and the horrible economic times that everyone insists we’re under, I decided to take a bit of money from my savings account and buy myself a new digital camera as a birthday gift. I’ve wanted one for a while, and a springtime holiday (also planned well before the current troubles) will offer some amazing scenery.

I’ve shopped online for well over a decade now, and it’s the first place I go to find out the best deals. So like millions of people every day, I’ll do something that was unthinkable fifteen years ago: I’ll go online to shop.

But in the last few years, the refinement of price comparison sites has added a new dimension to going online. In a few clicks, and in one easy-to-read tabular view, we can easily find out the best price for almost any product or service that’s offered for sale on the net. Want to find the cheapest price for that camera? Or what about that holiday? Shopping for a new power company? Which one will be the cheapest… just click and see. Even that one-stop favourite Google has a built-in price comparison engine now.

Online shopping trolley.
[Image © copyright, Photos.com]

Price comparison sites tap into one of our most basic human instincts: the thrill of the hunt. The feelings generated when shopping tap into these primal human urges. After all, it’s an intellectual and emotional challenge to chase out the prey, even if that prey is only a camera or a juice machine.

Maybe it’s just me, or maybe I’m too close to my primal urges, but sometimes I wonder if price comparison sites just make the whole thing a bit too easy. As my family from the American south might say, it’s like shooting fish in a barrel. Or is it?

The seemingly infinite amounts of information available on the net means that there’s no way we could work through all of the data needed to make sense of it and make the right decision. So the reason it seems so easy is that computers are taking over something our brain is used to doing.

Information processing theory is one way that cognitive psychologists have developed to explain how people make sense of the world around them. Our brains are roughly analogous to a computer, this perspective goes, and the computer takes in data from all of our senses and does the things computers do to data: puts like things in categories, analyses relationships between data points, chunks it into pieces, and discards what it can’t make sense of.

If you’ve ever gotten a bit of sensory overload when confronted with a somewhat crazy scene, you’ll have experienced one aspect that these psychologists are talking about.

price comparison sites have tried to replicate some of the social aspects of buying

And of course, though price is usually what people think of when they start shopping, there are other things to consider when buying. A lot of price comparison sites have tried to replicate some of the social aspects of buying by allowing users to rate the merchants in the transaction. That way, you can learn from other people’s experiences without having to replicate them yourself.

On the high street, you wouldn’t walk into a shop that looked derelict; but on the net, anyone can put up a nice looking website. With ratings easily visible on the price comparison rankings, you can see whether a good price also represents a good value purchase—as there’s no doubt you’d want to avoid a place that charges exorbitant shipping fees, takes ages to fulfill your order, or is difficult to work with.

So all told, price comparison sites can give you the best of the net by processing tremendous amounts of information for you. Perhaps most importantly, though, they allow you to use your superior human intelligence to focus on the things that really matter. Things like what the difference is between an “Online Only” and a “Web Plus” tariff from your power company. Unfortunately, even the best computers can’t figure that one out.

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Gabriel Reedy is a lecturer in learning and teaching innovation in The Open University Business School. His research focuses on the social and cultural impacts of teaching and learning technologies, and he studies how technology can support professional learning.

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