Watching the outside world go by?

There was an interesting article in the weekend papers asking how many private investors had heard from their financial advisors during the stock market turmoil of the past week or so. Not many I would wager. Indeed it would be interesting to know how many advisors of any kind had been systematically reviewing the impact on their clients’ businesses of the recent economic and social developments.

One of the benefits of working with an external advisor, such as a part time FD, should be that they are able to bring information and perspectives that those who are working on or in their business full time don’t get. I frequently get asked by clients about what is happening in the world outside their business, and what changes they may need to make as a result.

Having said all of that, how do you manage a situation where the FTSE can go from 2% down on the day to 3% in a couple of hours? The big temptation is to sit tight, hope that it will all blow over, and that everything will turn out well in the end. Nonetheless it is difficult to balance wondering about the impact of current events with maintaining focus on the medium to long term goals of the business.

Based on recent events I have advised clients trading overseas that managing their currency exposure has become even more important, that the riots are a timely reminder to check insurance policies and cover levels, and that a thorough review of all clients and suppliers, including credit checking, would help to minimise any negative impact.

With the constant talk of deficits, cuts, debts and global imbalances, it is easy to become despondent and tread water waiting for better news to begin to come through. It is worth noting that many large corporates remain in a strong financial position.

However should financial Armageddon ultimately occur I suspect there is little anybody will be able to do about it. For advisors and managers alike it all comes down to managing what you can, being as good as you can, and keeping focussed on the bigger picture of what you are trying to do, whilst always of course looking for opportunities or dealing with the risks that present themselves in the short term.

Education! Education? Who is it that really needs Education……?

Last week I attended meetings at two of my local schools. One was a briefing session for sixth formers considering their future options, the other a business breakfast designed to showcase credentials as a business and enterprise college. Both schools created really positive impressions, leaving me to ponder as to why the UK education system and their products get such a bad press.

It is a frequent moan of employers large and small that the quality of new entrants into the workplace is not high. The CBI reports that companies are being forced to stage remedial lessons to deal with new recruits lacking basic employment skills. No lesser businessman than Sir Terry Leahy, who is no slouch when it comes to management, has bemoaned the fact that businesses have to pick up the pieces of "woefully low education standards.

And yet are we being fair to the young people who are being tarred with this very broad brush. As anybody involved in education will tell you, today’s children do not have an easy ride. They are set regular targets based on identified potential. They put up with a level and frequency of testing and assessment that puts workplace performance evaluations to shame. And they do work extremely hard to deliver the grades that are all too often dismissed.

OK if it is not down to the students then it must be down to the schools. Well, not on the evidence of last week’s meetings where stories of engagement with local businesses, and public/private initiatives in the face of some daunting fund raising challenges showed a real determination and resourcefulness to deliver improvements and results.

All right so there is clearly a general attitude problem. Really? Apparent lack of enthusiasm for basic tasks, cynicism, unreal expectations – are these traits only seen in school or college leavers? Indeed are over embellished CVs that don’t cut the mustard any different to so called inflated exam grades? Maybe it is just that the older generation have had years of practise in disguising this….

It is not enough for businesses to moan about the system (and voting clearly won’t change things either). What is needed is direct engagement between businesses and schools, a two way process that goes beyond telling schools what business thinks it wants. I think most schools would welcome this.

This is not to say that all in education is right. There are probably too many universities and too many poor quality and failing schools. There are definitely too many bureaucrats and directives. But on the ground, thousands of schools, students and teachers are working extremely hard to deliver results and rounded human beings. This needs to be remembered too.

Trust Me - I'm An Accountant

A number of surveys over the past few years have indicated that accountants remain many business’ most trusted advisors.

This is something that we as finance directors take pride in of course, although it does not make us complacent.However the reaction to the recent survey by the Institute of Chartered Accountants, which suggests that confidence among business professionals has moved into positive territory for the first time in two years, thus indicating that the UK economy may well be showing signs of recovery, seems to have taken this trust to new levels, with the stock market rising to new year on year highs last week.

It seems that politicians, bankers and economists can chunter on as much as they like about future economic prospects, but it is humble beancounters rather than these masters of the universe that are most effective in moving markets.

So does this mean that the recession is over?

Well to misappropriate a well worn phrase, this may not be the beginning of end or even the end of beginning (there are still some nasty macro issues out there, such as the banks willingness and ability to lend, the need to rein in government spending and increase taxes to reduce the ballooning public sector deficit and the lagging indicator that is unemployment), but if there is a chance that some confidence is returning to the economy, it might just provide the encouragement needed by those business owners and managers who have been frustrated by their relative inaction since the start of the year, and who want to start moving things forward again in the last third of the year.

Now that would be an achievement for us beancounters to be proud of.