Friday, 13 February 2009

My 25 things

 

   I thought I'd avoided it, but I've been tagged by Tara on Facebook, and asked by Jo in one of her recent comments and on her blog, to share 25 random things.  So here they are (the first 22 anyway):

1. I met my wife, Sandra at a Christmas party in 1994, we were engaged on Valentines Day in 1995 and we married that Summer.

2. We live in what used to be a village but is now really just part of Bracknell, and will soon be part of Greater Reading. But my local train stop is Martins Heron – famous for being the home of the Dursleys in the Harry Potter films.

3. I’ve read the first six of the books, but then gave up. In fact, I don’t read anything like as much fiction as I used to do. Although now and again, I get gripped by something and finish it off in a couple of days (like just a couple of weeks ago, Elizabeth Kostova ‘s ‘The Historian’).

4. I also used to be very active, going ice climbing, kayaking etc, but these days I find my kids (two girls, 6 and 3,) take up pretty much all of my non-work time, and I’m very happy with the trade-off. Although I am a regular visitor to be local gym – The Royal Berks Health & Fitness Club.

5. I also spend a lot of time on the internet, particularly with social media. A couple of years ago, while writing a case study for my book, I was embarrassed by my lack of understanding of web 2.0, and committed to catching up. I’m not there yet, but I’m a lot happier with my level of understanding than I was.

6. Although I’m still not very active on Facebook. So for example, I'm actually not sure how I would post this there!  Another thing I need to do is to get some informal pictures taken and replace my professional photo shot that I’ve currently got up here (February 2009), and on some of my other social media places. But when I’m out with my family, I am the one who takes the pictures – so I don’t have many of me.

7. Most of my Facebook contacts seem to date back to the mid 1990s when I was employed at West London TEC. In some ways, this was the best job I’ve ever had – certainly the most fun. I can’t remember the name of the pub over the road (not The Moon, the other one) but I can see myself in it very clearly.

8. The most intellectually challenging job I’ve ever had was at Ernst & Young in the UK. But as yet, I’ve got no Facebook contacts at all from my time there (I guess there’s a link between these points).

9. The most horrid job I’ve ever had was at E&Y in Russia – it was just a really, really badly led firm. But Sandra and I loved our time out there. We lived 5 minutes from the Bolshoi and often went a couple of times a week. Absolutely great.

10. And I loved visiting the other countries in Central & Eastern Europe and the CIS. My favourite memory in many ways is the Spring meadows just outside Almaty, Kazakstan (being such a change from the Russian city landscapes).

11. Our final night in Russia, after having packed up all our boxes, we had to throw some things out. Sandra and I stood on the balcony, watching some tramps sifting out the stuff they liked, and drinking champanskoe (us not the tramps).

12. Sorry to go on about Russia, but it was a fairly key point in our lives. Our two daughters were born there and still have joint Russian citizenship (they keep their Russian passports until they’re 18).

13. I think my overall favourite job was with Penna – the early days, while based at the Manor House in Stoke Poges (by Stoke Park golf club). Just a truly wonderful place to go to work.

14. Sitting here watching the snow, I’m slightly depressed that apart from a few short projects, including a few months in Italy and the couple of years in Russia, I’ve spent all the rest of my working life in the UK – there’s been some good reasons for this – but I’m determined not to stay here till I retire.

15. I still need to convince Sandra of this.

16. We do at least own a flat on the Med near Perpignan, and we go there very frequently (one of the benefits of self-employment)

17. And I do get to travel a fair bit with my work – I’ve got trips coming up to Dubai, Phoenix - Arizona, Bulva - Montenegro, Bucharest…

18. However, I sometimes get rather frustrated that it seems so easy for people from other countries to come and work here, but these countries make it very hard to work there. I don’t personally feel there’s any special relationship between the UK and US while we can’t even apply for the green card lottery.

19. OK, it doesn’t help that I’ve never been very good with languages, although I have at various times spoken passable French, German, Italian and Russian. I plan to start learning some Arabic too.

20. And actually, I love England in the Summer. And although I refuse to stand during the National Anthem, I particularly enjoy waving my Union Flag around during the Summer Last Night of the Proms (the outdoor events, not the Albert Hall)

21. In the Winter I tend to retreat indoors, and watch more TV than I should. News, documentaries and science fiction. My favourite show of all time is Buffy and the best things on recently have been Survivors and Battlestar Galactica.  My favourite more serious programmes are the Andrew Marr Show and This Week.

22. I’m struggling now, and will have to come back to this later on…

 

I'm not tagging anyone else because I don't really like the chain mail side of this, and I think everybody's probably already been done anyway.  But if you're reading this, you're interested in reading it, and haven't been asked so far, then TAG...

 

 

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Wednesday, 11 February 2009

Ctrl - Alt - Del: Your Comments

 

   Thank you for everyone who has responded to my poll, and commented on my recent series of posts on HR's role, City risk taking and the recession:

 

Most people seem to believe that change is coming. I think this was well articulated by Gireesh Sharma who wrote:

"A big change is needed, the way Business treats its secrets, especially financial books, the way captains are chosen to helm the business (because of recent CEO failures), the way employees manage their finance (because of foreclosures), and the way salaries and profits are distributed. The change is needed."

 

However, P Milton worries about whether the people who got us into this situation will be able to steer us out of it:

"My lack of trust in these 'banksters,' runs deep, and it is difficult at this point to listen to the ones who drove us into the ditch suggesting fundamental change. The sheep is suspicious when it's the wolf doing the suggesting."

 

Both Jo and Hayli M think the internet is going to play a key role in the change.  Hayli notes:

"This period will go down as the "Golden Age of the Internet" for many reasons, including the way it revolutionized the workplace."

  

And, discussing apps like Zumbox, Jo suggests we are on the cusp of commercial change as fundamental as the introduction of the penny post and the limited liability company.

Anne Marie McEwan and Derek Irvine both agreed that HR will be involved in the change.  Derek noted:

"The extent of that involvement is reliant on how HR is perceived in the organization. HR must have a respected seat at the executive table to, in your words, 'have the capability to lead this change.' This is certainly not the case in many organizations today."

 

Anne Marie put it more simply...

"Does HR have the capability to lead this change? No, it doesn't."

 

... and provides some great references, see her comments to my HR in the spotlight post.

However, Jo very appropriately challenges me that my questions are to general and I need to be clearer about what changes I think are coming, what are the first steps we have to take, and how can we assist each other to take those first tottering steps?

I'm going to try to answer some of these concerns in my next post (and yes, Jo, I know I need to do my 25 things for you).

In the meantime, keep your comments coming...

 

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Tuesday, 10 February 2009

Sexism in the City

 

   In my last post, I noted that changes in bank bonus structures need to be supported by broader changes in their HR practices and greater diversity in their staffing - particularly in terms of people with different engagement drivers, but also with different perspectives in general.

Debate on this, in the UK at least, has concentrated on equality for women, particularly at the most senior levels in City firms, which government minister Harriet Harman believes is "top of the list for treating women employees unfairly".  She has therefore asked the Equality and Human Rights Commission to investigate the City's male-dominated culture.

Management Today reports:

"Salary was the most egregious difference between the sexes, according to Harman. Female bankers apparently earn on average 40% less than their male counterparts, which is almost twice as big as the overall pay gap in the UK. It’s partly because there are so few women in the upper echelons of the industry: just one in 20 managing directors is female, despite the fact that the industry actually employs more women than men. But even those who make it to MD level usually get paid less – and they’re few and far between anyway. ‘City boards are still mostly a no-go area for women,’ Harman insisted today."

 

The Equality Bill

What's behind this situation?  One recent suggestion is that it's because "women are judged to be less visionary than men in 360-degree feedback. It may be a matter of perception, but it stops women from getting to the top."

However, there are a range of other systemic issues involved as well and I think the government is probably wise to avoid solving these and simply aiming to find ways around them. 

The main response will come through the Equality Bill (see my previous post on this).  Although this bill has been criticised for detracting from women's existing, undiscriminated ability to reach senior levels in organisations (see here for example), I personally believe it strikes an appropriate balance between doing nothing and imposing more drastic measures on businesses (see for example Thomas Otter's comment on my previous post).

The key question is, if City firms had included more women in their senior teams, would we have actually avoided the present difficulties?  Referring to this, Sylvia Ann Hewlett notes: "Finance has always been dominated by men and driven by a testosterone-enhanced culture."  She quotes research which suggests that men can tend to be aggressive - and sometime irresponsible - risk takers, and goes on to ask: "if women had been running our banks, might we have avoided the sub-prime mess and the resulting economic meltdown?"

 

Superwoman Returns

Responding to a similar question, 'superwoman' Nicola Horlick commented last year that

‘‘Women have a totally different approach to life.  They are less concerned about grabbing as much as they can for themselves and have a greater desire to build firm foundations that will endure.  I have absolutely no doubt that the world would have looked totally different if women had been in charge."

 

Niall Fitz-Gerald, deputy chairman of Thomson Reuters adds:

"There is a feminine approach to leadership, which is not, of course, confined to women. It is about being intuitive as well as rational. It is about multi-tasking and being sensitive to people's needs and emotions, as well as relationship-building and generous listening."

 

My initial reaction to Hewlett's question was similar to Nick Jefferson's in his post:

"The idea that men and male behavioural patterns are to blame for the global economic meltdown smacks of some terribly outdated stereoptypes that should have been left behind in the 70s and 80s.

My problem is not that this is offensive (although just try replacing the word "men" at every point in this article with your choice of "women"/ "comprehensive school-educated people"/"gays"/"ethnic minorities" if you think it isn't) but rather that it is so sweepingly generalistic as to be ridiculous.

I have met as many risk-averse men in the City as I have risk-prone men, possibly more. Equally I have met many women who thrive on risk and excitement. To characterise these very human issues as a matter of gender does a disservice to us all."

 

While these are all good points, Nick (and sorry it took me so long to reply), I still feel there's something in it too.  If City boards had been proportionally staffed by women, I think things might well have turned out a bit differently to the way they have.

It's a bit like the Equality Bill itself - on the surface it looks wrong, but there's a good chance it might just lead to the right results...

 

 

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Monday, 9 February 2009

HR in the spotlight: banking bonuses

 

   I suggested last September that HR, or at least HR practices, are in many ways behind the current crisis.  It was a relatively rare viewpoint at the time and the Bank of England was criticised for 'sticking its nose in where it doesn't belong', when it dared suggest bank's compensation schemes might be partly behind the situation.

No longer.  Compensation in financial services firms is now headline news.

Following Barack Obama's lead in capping bonus payments for banks receiving US government support, the UK government is also now seeking to impose pay restraints across large parts of the banking industry.

This isn't something that any of the UK's main political parties would have contemplated last September, but the public's revulsion of rewards for failure is so acute, it's no longer an issue that can be ignored.

Of course, the perception that the gap between rich and poor is too wide has been growing for some time.  But it's also clear now that the gap isn't just wide, it's also unjustified - and has been one of the major contributors to our current problems.  And it's not helped by John Thain spending $1.2m on his office renovations, including the famous $1,400 waste basket, as Merrill Lynch went to the wall.

Barclays, which is to pay bonuses of about £600m has been relatively unscathed, but then it has earned profits of close to £6bn and is cutting bonuses by 50-60% and has announced its own top-level review of its bonus structure.

RBS is going to have a much tougher week.  The UK's prime minister, Gordon Brown, has already said that he is “angry” that the part-nationalised bank, which has made a £28bn annual loss, is preparing to pay out £1bn in bonuses.

The bank argues that it needs to make these discretionary payments to retain its best staff.  In the main, this is a red herring - few other banks are recruiting, although there will always be a demand to talent, and Josef Ackermann at Deutsche Bank has noted, for example, that "talent will be happy to work for us".

The bank also has contractual obligations to pay some bonuses. However, it is possible to argue that the bank basically went out of business when it was taken over, and that without state funding employees wouldn't even have a job, never mind a bonus (see for example, former deputy prime minister, John Prescott's Facebook campaign).

Of course, most people still understand that an average bank teller has had little to do do with financial malpractices, and that therefore, they should still receive a bonus.  But bearing in mind the above points, these should probably be reduced.

We'll have to wait and see what happens... legal issues may yet stop the government from making any changes, although they may find a way to override these obligations.

But the bigger issue is how we ensure bonus schemes are better designed.  It's been announced that both Citigroup and UBS are writing clawback provisions into staff contracts so they can recoup large bonus payments if business performance suffers.  What? - how on earth weren't these provisions included before now?

HR should never have let this situation develop.  And it's not just an issue of compensation design.  Some banks have refused to see their people as purely money motivated, but most have simply accepted their people are only engaged by high rewards, have offered these rewards, and have continued to recruit people who are motivated in this way.

A few recent comments in the news help to show how accepting and reinforcing this link has led to a situation in which bankers see high reward as a right, regardless of their business' contribution:

  • On the BBC news: "I deserve my bonus - I've worked hard for it - after all, I only earn £95,000."
  • In the Sunday Times: a Morgan Stanley banker who last year was "paid a bonus of only £2m" now "feels unfairly treated as the bank makes across-the-board cuts, no matter how individual have performed... 'The contract has been broken,' he said".

 

I think these comments show how far bankers' perspectives have become divorced from the public's. 

John Hollon at Workforce Management sums the problem up well, discussing Wells Fargo CEO John Stumpf's full-page ads in The New York Times, The Washington Post and The Wall Street Journal:

"Regular Americans believe that Wall Street bankers are largely responsible for the financial mess the country is in right now. Whether that perception is right or wrong, Stumpf and his CEO friends need to buck up, shut up and be more sensitive to how their business practices might be perceived by the folks on Main Street. This is hardly the time to defend business as usual, no matter how legitimate it might ultimately be."

 

But it hasn't had to be like this - there is no real reason why bankers need to be paid more that other sectors of the economy.  Not all talented people are money motivated and it's a shame that none of the banks ever looked outside this one stream of employees (leaving aside for a minute the question of whether they really needed talented people anyway ie whether less talented people may have taken more acceptable risks?).

The key for me, as I've posted before, is the banks' cultures.  Financial services firms need to offer their people a broad and balanced (financial and non-financial) EVP based on a compelling purpose (mojo) which is supported through HR practices including leadership development and succession planning etc.

So, it's going to be another interesting week.  Tomorrow, former CEO of RBS, Fred Goodwin (who left the bank with a £8.4m pension pot) will be grilled by MPs on how he led the bank to the edge of collapse.

But given that these are HR issues in the spotlight, where is the HR response on this (from the CIPD, SHRM etc)?

 

 

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Friday, 6 February 2009

Innovating in the downturn

 

   A great article in this week's FT report, Managing in a Downturn: The time is ripe for fresh ideas, by Lynda Gratton.  Linked to my previous post, Gratton suggests that the recession may provide the ideal time for the sort of major readjustments that businesses may now need to make:

"Historically a downturn has been a time when business models, organisational structures, labour markets and employee contracts come under immense strain. Accepted wisdoms are challenged and this break in thinking can result in the adoption of new practices and the adoption of new habits and skills. These pressures and fissures – while difficult at the time – can yield fresh ideas, engaging experiments and interesting adaptations in the long run.

This is important because while many managers are adept at innovating products and services, few have been adept at innovating the practice of management itself. As a consequence, businesses are often cluttered with increasingly outdated ways of managing: performance management processes that were invented in the 1950s; notions of leadership that go back to the command control of the second world war; and meeting protocols that have not changed for decades. At the same time, potential innovations such as virtual team technology are left unheeded."

 

Gratton suggests that two of the changes which might be needed are wider distribution of leadership and creating flexible virtual teams.  I think Gary Hamel's 25 priorities fit with this too (I'm very shortly going to be reviewing this on my Social business blog).

What do you think - are businesses going to fundamentally change in the global reset? - please comment or respond to my poll - top right of this blog.  Thanks!

 

 

Photo credit: Florian Prischl

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Thursday, 5 February 2009

HR's main priority?

 

   HR's main priority? - It's dealing with the recession, stupid!

Well actually, no, I don't think it is.  To me, HR's biggest challenge, and opportunity, is to facilitate conversations within their businesses about if and how the way these organisations run needs to look different from now on.

My last post on the global reset suggested that businesses are now going to have to change.  As Cary Cooper, writing in Human Resources magazine explains: "The last two decades have been about the acquisition of material goods, about excess, about a ‘me-oriented' as opposed to a ‘we-oriented' society."  We're now moving rapidly towards a more 'we' focused environment.

It's not going to be easy.  HR still needs to deal reactively with the negative consequences of the recession - which is already taking up a lot of extra time.  But it needs to plan for the upturn and to take account of sweeping societal changes too - or as Ulrich phrased it last night, "In the current climate, HR is faced with a series of paradoxes and may, as a result, become confused as to whether to do nothing or everything; or to take a short-term view or a long-term view".

HR teams need to do both, but in my view, it's the long-term piece which will have the biggest overall impact (longer-term).

An example of the opportunity provide by thinking longer-term is described in the Economist this week.  Explaining the need for banking bonuses to be based on average performance over several years, the magazine notes:

"Impossible, the banks might say: our star employees will never tolerate such restrictions. But if there is ever going to be a time to reorganise the incentive structure now must be it. A threat to quit will be pretty hollow, given the state of investment banking. And few traders will have the clout to set up their own hedge funds in today’s market conditions. In any case, the greediest employees may be the ones most likely to usher in the next banking crisis. Better to wave them goodbye and wish good luck to their next employer."

 

The general opportunity is also expressed well by Cooper:

"This recession could be the making of HR. During this period HR will be challenged like never before...  The challenge for HR is potentially more meaningful, to ensure that we create the right organisational climates where people can flourish, where we retain and truly develop our human talent, where we humanely deal with people when the times get tough, that we don't avoid confronting senior management when we need to, on the important ‘people issues ‘of the time, rather meekly accepting top management diktat that we know to be wrong. HR should be at the forefront of our recovery, not just a compliant functional support system.  It is now time to put into practice action the often-heard HR rhetoric: ‘The most valuable resource is our human resource'."

 

What do you think?  Are businesses going to have to fundamentally change (say, within the next fivce years)?  Should this change be HR's main priority?  Does HR have the capability to lead this change?

I'd value your comments below, and / or I've also set up a poll on my sidebar (top right corner of my blog) for the first of these questions.  It would be great to hear your views.

 

 

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Corporate social responsibility and the global reset

 

 

On Monday's Talking HR show, I spoke about how businesses need to prepare for the longer, as well as just the short-, term.  And I mentioned the World Economic Forum leaders' call in Davos for a 'fundamental reboot' of the economy.  This reboot will be partly structural, led by the 'global redesign initiative' to reform banking, regulation and corporate governance; and supported by other initiatives, such as Obama's curbs on executive pay.  But I think it needs to be largely cultural as well; it needs to be about a new way of doing business.

This point is coming through strongly from many different areas, including many / most? of the leaders at Davos.  But I still wonder how much things are really going to change.  There's almost as much push back as there is momentum forward.

Take this article on CSR by Stefan Stern at the FT.  Stern suggests that "now the recession’s here we can forget all that nonsense about corporate social responsibility (CSR) and get back to trying to make some money".

He describes my uncertainty about momentum and push-back as a "mismatch" between "politically correct rhetoric" and "the reality of what managers have to do every day of the week".  And he concludes: "we need to cut through the well-meaning waffle".

So in Stern's view at least, nothing's going to change.  We're just going to carry on with reducing levels of trust, happiness and engagement, and assume that organisations designed for the 20th century still do the job today.

I don't believe we're going to let that happen.  And I hope that there are enough CEOs and business leaders in the world who for their own sakes, and the sakes of their companies, as well as any progressive or humanistic principles they may have, will ensure that we don't.

Stern provides a couple of examples of the 20th century leader.  One is Terry Leahy, CEO at Tesco:

"In an article for the Daily Telegraph last week, Sir Terry let off steam about what he sees as the growing risk of over-reaction by governments and regulators in the current crisis. We risk losing sight of a few fundamentals: 'free trade in competitive markets, enabling individuals to pursue their own interests, and all within a clear framework of law,' he wrote. Do-gooders, whether they mean to or not, are likely to do bad.

Yes, he went on to say, the role of something called 'green consumption' could also play a powerful role for good, in cutting the use of carbon.

But it is obvious where Sir Terry’s priorities lie. In a lecture in the same week he told suppliers that they would be coming under increasing pressure to cut the prices they charge Tesco this year. How worried is Sir Terry by the thought that his suppliers may be forced into finding cheaper and potentially less environmentally friendly ways of producing their goods? Not very, would be my guess."

 

I do believe that CSR and more generally, the rebooted economy, need to be supported by more government regulation.  Tesco does need to be constrained before the whole of the UK is covered over in concrete and fake clock towers.  But both CSR and the rebooted economy also need to be supported by a real desire to engage.

Compare Stern's and Leahy's comments to those of Jeffrey Immelt, GE's CEO, speaking at the BSR CSR conference last year (on the video).  Echoing the Davos leaders' call for a 'fundamental reboot', Immelt notes that the current economic crisis represents a 'reset' - not just a part of the standard business cycle:

"The era of transparency; accountability for corporations; responsibility - is profoundly different today versus where it was even six months ago...  You've got the run the company with trust - compliance, governance and transparency...  a long-term dedication to people.  Companies need to stand for something - they need to be accountable for something more that just the money they earn..."

 

Immelt also suggests that "people who understand this will prosper in the future, people who don't understand that will be left behind".  I tend to agree - GE's going in my HCM fund, and Tesco's staying out.

 

 

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Wednesday, 4 February 2009

HR Carnival 4 February 2009

 

   The carnival is in town again - this time with Wally Bock at his Three Star Leadership Blog.  Loads of excellent contributions - go take a look!

 

And hurrah, hurrah, later this month the carnival will be coming right here.  That's right - the HR Carnival will be hosted by yours truly on 18th February.  HR bloggers: contributions by end of Monday 16th (Monday Pacific Time) please.

 

* Regular readers of this blog will know that I usually support my HR Carnival posts with pictures from the UK’s Notting Hill Carnival, with this being the major carnival over here – but maybe not for much longer!  Kensington & Chelsea Council are threatening to cancel this year’s carnival, or at least ensure that it poses ‘less of a noise problem’. So the picture on this post is a simple white space, in sympathy with the delicate hearing and sensibilities of K&C residents.

And I might pick another focus for my pictures supporting future carnivals - I don't think photos of revelers wearing earplugs will carry the message of collaborative enjoyment in quite the same way some how.

 

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Monday, 2 February 2009

Talking HR Show #010 (Navigating your way out of the recession)

 

Listen to the show

Show notes:

1:20 mins Krishna / Jon: Introduction (show days, news from the UK re Woolworths and Ireland re Diageo, elsewhere: unemployment in China, social unrest and wildcat strikes
10:00 Caller from Detroit
12:30 Jon: Discussions at the World Economic, Davos
15:35 Krishna: Re depressing news
16:55 Jon: Link back to show #009: Aligning your HR plan and with the business strategy
20:20 Jon: Link back to show #004: Employee engagement and business performance
21:45 Krishna: Acknowledgement - being a real leader who cares in order to inspire trust (this will be the topic for our next show, #011)
26:00 Krishna: Taking account of employee reactions and communications
27:30 Jon: The need to be open and honest (unlike Gordon Brown?)
30:50 Krishna: The need to be creative
34:00 Jon: Some good news - companies are being more progressive this time around
36:10 Krishna / Jon: the potential extent of change (eg in Woolworths)
40:30 Jon: Cultural change supporting a "fundamental reboot" of the economy
41:15 Krishna: Using examples for HR planning / to take into the Boardroom to provide a different mindset
43:20 Jon: Organisations have got to change (recent management 2.0 conference)
48:10 End

 

Check out the resources we referred to on the show:

 

Get involved with the show:

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Sunday, 1 February 2009

Strategic HR in the Middle East

 

    I'll be presenting on Strategic HR at the annual Middle East Human Resources (HR) Conference and Expo running at the Jumeirah Emirates Towers in Dubai on February 25th – 26th 2009.

I'll actually be travelling around Dubai, Abu Dhabi and Al Khaima from Sunday 22nd, so let me know if you're there and you want to meet.

 

Photo credit: Imre Solt

 

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