Possibly the most complicated part of doing business is dealing with people simply because each one is unique and generally speaking, we d...
Attending the Vistage Speakers Reception at Ashdown Park this week, reminded me of the many tips and ideas which we take away from our speak...
There seems to have been a proliferation of rather high flown new titles in business for people who are doing jobs which have been done fo...
Sunday, 29 November 2015
This is a different blog from usual but a piece of news this week really struck home. It was that Jim Slater had died at the age of 86.
I would wager that very few people under the age of 50 will have heard of him even though he was a major player and influence in industry and commerce in the 1970s.
Jim Slater was an chartered accountant having qualified at the early age of 24. He went into business in an automotive company that was acquired by the then growing British Leyland and worked closely with Lord (Donald) Stokes.
During am illness Jim Slater took an interest in stock market investment and he devised a simple system which he called the Zulu Principle. In essence this involves searching out small undervalued companies sitting on underexploited assets. This became known in the media as asset stripping.
With a friend, Peter Walker, later to become a Conservative government minister, they acquired a company called H Lottery (how appropriate is that) which they renamed Slater Walker Securities, a group that eventually grew to be a £200n conglomerate.
This became the vehicle for a rash of acquisitions and I was involved in the group of businesses in the rubber and plastics industry in what was then Slater Walker Industrial Group (SWIG).
We put together three companies all of which were reasonably successful but remained in a somnolent mood with unadventurous leadership.
These companies, Greengate and Irwell Rubber, the wonderfully named Frankenstein Group and P B Cow all had significant advantages in their markets.
Greengate were major suppliers of conveyor belting to the National Coal Board, Frankenstein through a subsidiary Beaufort, supplied air/sea rescue equipment to the UK Government and P B Cow which manufactured coated fabrics, supplied a wide range of companies in the UK. I was appointed a director of a very famous and iconic P B Cow subsidiary, Li-Lo Limited, a genuinely generic name for an inflatable air bed.
This group was launched on the London Stock Market in 1974 as the Allied Polymer Group and SW retained a stake in the business. The experience of thus launch will remain with me as a truly fascinating learning experience for me - another world indeed.
SW was now divesting itself of the industrial investments and branching out into investment banking at a time when regulation was, to put it mildly, somewhat lax.
Quite suddenly or so it seemed, the wheels started to come off. A disastrous investment in Singapore and severe problems in the UK led to (unsuccessful) law suits against SW and Jim Slater who resigned as Chairman in 1975 describing himself at the time as being a "negative millionaire".
He wrote books including some for children, reinvigorated his investment portfolio, joined the boards of several industrial and property companies and repaid his personal creditors with interest in a very few years.
A role model? Not really because he operated in a world that I didn't comprehend. However I remember things about him that marked him out as an inspirational leader.
He appointed very talented people around him, he trusted them and was comfortable in delegating to them, and he was manifestly the deal maker in the business.
Perhaps that trust was misplaced when people without his commercial acumen went into deals that went sour.
I remember his saying that he "had no time for patient trading. I prefer to make money than to earn it". In board meetings he insisted that discussion of the accounts was limited to no more than 20 minutes because what was going to happen was more important than what had happened.
He was a big influence in my life at that time bringing excitement and energy that I recall warmly. Jim Slater exemplified the maxim that when you are knocked down, get up, dust yourself off and start again.
He was a shooting star that never really fizzled out and it was a privilege to have known him.
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Sunday, 22 November 2015
There was an interesting debate on the BBC World Service this week about the difference between a charity and a nit for profit company and the morality or otherwise of large businesses supporting them.
Corporate Social Responsibility should mean just that. While businesses employ people in addition it is good to feel a responsibility for the local community in some tangible way.
Several of the members of my Vistage CEO peer group are actively involved in their local communities and that is admirable.
For example, The Casey Group of Companies, a major construction company in Rochdale helped on a BBC TV programme which was renovating a whole street for disabled service personnel by allocating specialist construction workers to help on the project.
In another instance HCSS Education in Macclesfield have instituted a charity, The School Bus Foundation devoted to assisting disadvantaged children and they raise funds through events and donations.
The Casey Group example is typical of businesses offering resources to assist in a community project while HCSS have gone directly to the charity sector and both are equally laudable.
In both cases, by the way, these are symptomatic and represent a wide range of activities by both companies.
My interest was sparked by the radio programme which discussed the relationship between a not for profit company, Marathon Kids in Austin, Texas and sports goods manufacturer Nike.
Marathon Kids was set up to encourage young children to take up running for good health, to bring sport into their lives and above all for fun.
There was some dis quiet in the programme at the thought of Nike "moving in" to what seemed to be a perfect opportunity for some heavy marketing which was looked on a of dubious morality. However nothing could be further from the truth.
The only mention of Nike on the Marathon Kids website is that Nike rewards are given to competitors who achieve distance milestones.
In fact Nike do not give money to Marathon Kids and they do not give away shoes at will.
What they do is offer resources that Marathon Kids manifestly do not have such as branding and marketing especially when a club is being started in a new location.
The question in at what point does large company involvement in "good works" become self seeking, if at all?
There are after all many wealthy individuals who are extremely philanthropic and they do it because they consider it the right thing to do rather than looking for any gain.
When a company does it and perhaps makes a fuss about it there can be a suspicion that there may just be an ulterior motive.
Let’s get the question of morality out of the way. If an individual or company wishes to donate to good causes in either cash or resource then they are to be congratulated not derided. If it does some good to the organisation and makes the donor feel good then so what? It is a win-win situation.
I am both Jewish and a Freemason and both have charity at the heart of what they are.
For example a core prayer at the Jewish New Year mentions Penitence, Prayer and Charity as being central to the whole ethos of the religion.
The very basis of Freemasonry lists Brotherly Love, Relief and Truth where relief is a synonym for charity. It should be mentioned, by the way, that Freemasonry is the second largest donor to charity in the UK after the National Lottery.
The giving of charity either in cash or kind is essential to keep many social organisations in business and if it does good then that is wonderful. For example, the Air Ambulance Service could not exist without donations from many individuals and organisations.
However, Jewish mysticism, Kabbalah, says that the only real way to give charity is anonymously so that nobody knows what you have done and the only personal gain is your own feeling of satisfaction.
That is quite a thought.
You can download my book "Leading to Success" from Amazon
Sunday, 15 November 2015
One of the many issues raised by leaders in business is the possible or even actual loss or reductions in demand from their established markets.
Typical are those markets that have been attacked by the incoming cut-price retailers and the dramatic changes in reproduction of music from vinyl discs through CDs, DVDs and now downloading or streaming directly from the web.
The good times can’t go on forever and leaders need to look carefully at both the markets and the products serving them.
There is no doubt that we generally don’t obtain the maximum from our existing customers never mind from prospects.
In a very well organised sales force in which I was involved some years ago the rules were very simple.
Of the total positive calls achieved the sales force was expected to visit existing customers:prospects in the ratio of 4:1 so that while the existing customer base was well looked after, the level of prospecting was about right for the market share that the company had achieved.
It should be understood that the company’s products were standard and universally used in engineering with little direct competition and virtually none in terms of product substitution.
This made the ratio meaningful but as soon as competition emerged to attack our market share, a strategy had to be evolved to counter it. In fact it is far better to assume that it will happen and be prepared.
It’s not a new or uncommon phenomenon. The competition will always be with us and it is essential to keep ahead of the game at all times.
I have found that the use of a marketing strategy tool called the Ansoff Matrix proved invaluable. Designed by a mathematician, Igor Ansoff, it helps businesses to develop their marketing strategy taking into account all the various changes in the markets and the products being supplied.
The Ansoff Matrix is, of course, one of those quadrant matrices so beloved of consultants and it looks like this in its simplest form:
A more advanced version looks like this:
Considering market penetration the assumption is that there is always potential for some expansion of the business through a marketing strategy encompassing the existing products into existing markets. In other words, do what you are currently doing but more of it.
Product development implies that we change the products or bring in new products and then market them to the existing markets.
Market development means that the existing products are marketed to new markets and diversification implies a complete move from exiting products and markets into new and thus challenging fields of activity.
Conventional wisdom suggests that a strategy of new products into existing markets requires 4X the effort, existing products into new markets requires 8x and new products into new markets or diversification requires an e above 12x the effort.
This is not say don’t do it; it merely makes clear that any significant change in the marketing strategy will need more and dedicated effort to make it succeed and that might mean new people and new skills.
Surprisingly for a mathematician, Igor Ansoff deprecated the use of too much analysis in using the matrix. In fact he is said to have coined the term “Paralysis by analysis”.
The key is to use it wisely and apply commercial sense to it. Examine all the current activity, look to discard products and markets (and customers) that do not contribute, use good market research techniques to expand knowledge of what is feasible and make sure that there is a real ethos of constant innovation throughout the business.
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Sunday, 8 November 2015
At a recent Vistage Open Day, US speaker Jaynie Smith examined the way that businesses promote themselves to prospects and exiting customers and she came to the conclusion that most of it was blah, blah, blah.
A depressing thought but when we look carefully at what we inaccurately consider to be out USP (Unique Selling Proposition) we rapidly come to the conclusion that not only does it not sell but it certainly isn't unique.
Unique means precisely that; there are no shades of uniqueness, things cannot be very unique.
Consequently very few businesses can offer something that is truly unique; at best it may be unusual.
Jaynie calls it the competitive advantage; what is it that you offer that genuinely is different and makes you stand out from the others?
Think of those businesses that are (or were before the copyists arrived) truly different like Google through brilliant search software design, Apple through constant product innovation and Amazon who has revolutionised retailing.
Ask yourself the question: what do we offer in terms of out product, our quality, our service, our people that makes us stand out from the crowd and encourages us to seek a premium from the markets we serve?
In my youth, my (pre-girls) passion was cricket and particularly Lancashire League cricket. As a very ordinary off spin bowler, my role model was an extraordinary leg spin bowler called Tom.
Tom managed to deliver sumptuous leg breaks and gigantic googlies while bowling like a demented octopus, arms and legs flailing in all directions. To say that the batsmen had difficulty in picking his googly is an understatement. In fact they seemed to have just as much difficulty in deciding which of his wildly gyrating extremities would be delivering the ball.
The consequence was, of course, that he gained a reputation of invincibility in the League and he eventually went on to bigger and better things in his career. Sadly it was cut short by physical problems but the memory remains.
So what is the point of this tale? The point is that even though he had talent, enthusiasm, drive and commitment in abundance, his greatest attribute was that he was different.
I don't mean different just for the sake of it or to make an impression. I mean rather be different so as to impact on people's thinking, to help them to change in a positive sense and to stand out from that crowd which seems to be growing ever bigger.
Our education system in the UK from GCSE through A-levels, to University and then on to Post Graduate studies can lead to a standardisation of the eventual outcomes with an emphasis on conventionality.
Will and Kenneth Hopper in their wonderful book, The Puritan Gift, quote the late Professor Russell L Ackhoff, formerly of the Wharton Business School in the USA, as saying that there are three principal achievements of a business school education which are
"To equip students with a vocabulary that enables them to talk about subjects that they don't understand, to give students principles that would demonstrate their ability to withstand any amount of disconfirming evidence, and finally, the give students a ticket of admission to a job where they could learn something about management".
It is not a surprise to me that seemingly a significant proportion of Managing Directors and CEO members of Vistage CEO peer groups, at least in the UK, did not go to University but found their success through a burning desire to succeed, through humility, a voracious appetite for learning and above all, through being different.
It is that difference that ensures that competitive advantage in the market place, that encourages the market to buy and to stave off the attacks of the competition.
Never be in the position of worrying about competitors; make sure that your success makes them worry about you.
Download my book "Leading to Success" from Amazon