Thursday 28 July 2011

Summer shorts…….

There was news last week of the latest organisation to embrace the paperless office. Step forward our very own Her Majesty’s Revenue and Customs. They have apparently decided not to send out paper reminders to a large number of taxpayers who have payments due at the end of July. However this is not being done as a display of environmentally conscious zeal or as part of the ongoing government cuts programme. They have simply run out of paper. 

Actually before we shake our heads at the supposed incompetence of it all, we should take a moment think about how we do use paper. I am sure most of us pay lip service to those entreaties at the bottom of e-mails imploring us not to print out this e-mail unless you really really need to. Indeed certain e-mails will often get printed out a number of times. Sometimes it takes an event such as running out of paper, or not being able to print, to make people realise that they don’t actually need a hard copy. Memo to purchasing – cut down on paper purchases next time. An electronic memo of course…….  

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I have just come across a new variation of the holiday stress chart courtesy of PHD Comics and The Poke website  which shows in comic fashion how stress levels rise and fall before, during and after a summer vacation from work. Not really the complete break the doctor orders is it?

Oh what the hell, come on people get real! It is a 24/7 world out there. Nothing stops for anything anymore. The annual two week break has become as anachronistic as ..er.. HMRC sending out paper reminders for half yearly tax payments. Holidays now vary from trips of a lifetime to a smattering of short breaks during a year, during which nearly everybody keeps in touch with what is happening back home.

They say a change is as good as a rest. If you are checking your e-mails and managing your business from a remote corner of the globe rather than in and around your normal place of work then I guess it is a holiday of sorts.

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Americanisms. Don’t you just love them? Apparently not according to the BBC News website, which has just listed 50 that generated varying degrees of irritability among the UK population. 

Looking down the list I think the blame for many of them lies with MBA courses. Leverage is a prime example. Once used by US financiers to describe the ratio of debt to equity, its use has now been widened to cover any activity which involves producing a lot with a little.

Going forward (another phrase on the list) should we take the French approach and resist their use or should we accept it as the price of globalisation? Have a look and decide for yourself. Mind you if the USA is your holiday destination of choice this year then at least you will be able to speak the language…..

Wednesday 20 July 2011

The Nero Tendency….

Hackgate rules. The chattering and twittering classes are highly active, providing their followers with instant updates on the situation. By the time you read this perhaps more heads will have rolled. Forget Jeremy Kyle. The parliamentary select committee is now essential daytime TV viewing.

I have no sympathy with Murdoch et al (those who live by the sword etc.). Clearly there was a culture of anything goes in pursuit of a story, even if it wasn’t officially approved. However the sound of scores being settled often by people who in the past have been (and possibly still are) content to take the Murdoch shilling is equally unedifying.

Meanwhile, as these modern day Neros fiddle around with events that happened some time ago, Rome is burning. The euro debt crises has reached Italy a lot quicker than anybody thought it would.  The collapse of the Euro in its current form is once again a serious possibility. The fragile UK economic recovery is even more under threat.

One would like to think that the minds of our politicians and media would be focused on the serious risks to the UK global economy, working up scenarios, and devising various contingency plans to cope with whatever happens. Perhaps they are, although I suspect not. If there is fire fighting taking place at the moment you can bet that the hoses are trained on Wapping rather than Rome.

I came across many examples of what I would call the Nero tendency in corporate life. It invariably involved career and company obsessed individuals, for whom their own little world was all that mattered.  Some internal irrelevancy of theirs would occupy hours of management time to the exclusion of everything else. Meanwhile important external facing issues would be neglected.

One of the benefits of working with smaller businesses is that although the individuals involved are obsessive and focussed in their own way, they never forget that it is the outside world that makes them their living. They can’t afford to be distracted by internal issues. Indeed one of the challenges is to get them to realise that that their back office needs to keep pace with what they are doing to grow their business.

However for me that is a nice problem to have. Equally when I work for larger clients I can observe the Nero tendency when I come across it with a detached air, knowing that I no longer have to worry about such things as I can disappear into the real world whenever I choose. It is a good feeling, believe me.

Thursday 14 July 2011

Communication – it’s as simple as ABC! Or 1-2-3….

Spelling mistakes apparently cost millions. According to online entrepreneur Charles Duncombe, a single spelling mistake can cut website sales in half. Obviously another reason to bash our poor beleagured education system then.

Ah but not so fast. Our poor grasp of the “3 Rs” could actually be down to the media’s failure to inform us properly.In a recent poll carried out by ComRes for the Institute of Economic Affairs, only 9% of those questioned realise that if you only reduce the deficit, rather than eliminate it, the overall debt of the UK will still increase. Apparently most people did not understand the difference between debt and deficit because the media had failed to tell them.  Well it is blame the media week isn’t it?

Interesting as the two items above undoubtedly are, I think there is a point being missed here. It is not that basic education skills appear to be missing. It is the lack of the understanding necessary to use those skills to communicate properly. Spelling and numeracy are tools to be used to explain things rather than ends in themselves.

For example, in my chosen profession of accountancy, there is a vast difference between those who are able to prepare numbers and those who are able to present them to other people and use them to drive a business forward. Mathematically most businesses are simple. You sell a certain number of items for more than it costs you to make them and run your business. Or if you sell time it is about hours worked times at the rate that somebody is willing to pay. However the ability to relate these numbers to the bigger picture of where a business is going is what makes the difference between a competent accounts person and, say, a finance director.

Good communication skills, both oral and written, are essential in financial management as in other activities. A good understanding of English and Maths will help you be effective, but only if you know how and why you are using them. It’s as easy as ABC. Or 1-2-3……..   

Thursday 7 July 2011

One day this could all be yours……

Nick Clegg’s recent suggestion that voters should be given shares when the almost nationalised banks are returned to full private ownership has received mixed reviews.  For many it is a throwback to the eighties and the swathe of privatisations initiated by Mrs Thatcher’s government in her attempt to transform the UK into a property owning share owning democracy. The iconic “Tell Sid” campaign to sell shares in British Gas was perhaps the most memorable privatisation, and the one evoked by many commentators on hearing Clegg’s proposals.

Arguably though, it was the “free” shares which followed the demutualisation of a number of building societies from 1989 onwards that dramatically expanded the shareholder base in the UK, rather than the privatisations of the eighties, and these are probably a better comparison for what the deputy PM is trying to achieve. Therefore Nick may be onto something after all.

Widening share ownership has long been seen as a way of cementing the primacy of capitalism and giving people a real stake in the future wealth generation of their own, and the country’s, businesses. Whilst privatisations and demutualisations have hogged the headlines, the spread of employee share schemes, many of them tax efficient, have also played a key role. Whether through Save As You Earn share schemes, Enterprise Management Incentive schemes or bog standard share option arrangements, the carrot of participating in the future value of the business has become a key component of many employee packages.

“Ownership” of course is an interesting concept in itself. The contrasting styles of the “absentee landlord” institutions and the more “hands on” style of entrepreneurial businesses large and small are clear to see. Dealing with ownership by targets versus ownership by gut feel is a challenge for managers and employees looking to make their own contribution to the success of a business.

The move from employee to owner is an interesting one. MBOs are still a very popular exit route for many owner/managed businesses. However the difference between receiving a regular salary one day and suddenly being responsible for everybody else’s the next is quite a psychological leap, and one that many owners and employees need to think very carefully about when considering this option.

Business ownership theory is often focused on the financial side, hence the bias towards shares. And yet for it to be really effective as a tool for engagement and incentive surely it needs to be mental state as well. People need to feel like owners. Whether it is Nick Clegg giving away free shares in nationalised banks or an owner managed business selling to an MBO team, the head needs to be right if the wallet is to follow. Real ownership I would argue is all in the mind.