Last week was remarkable for a number of reasons. Terry Henry (does he deserve to have his name correctly spelt?) showed us how to be a cheat and a coward at the same time. Ireland realised it did have a football team with quality and character. And as a Nation I felt we were slowly redeeming ourselves, re-finding our identity and winning back some grace - revisiting what it means to be Irish in a world of cultural homogenisation and double speaking FIFA types.
Having closed the office door last Friday evening I set off in my car toward Dawson Street to pick up a jacket from a menswear shop, aiming to drop into the Tom Draper lecture in Trinity thereafter (more on this later). Jimmy is a good operator who has been a long time in the game and was as chirpy as ever when we met repeating his thanks for the business I had brought his way. As he served me, we exchanged some views on the budget, and the stupidity of the VAT hike last year, what might be in store next week, should we care. Before parting I remarked how I felt that the city centre seemed more like it used to be in the old days. In particular, the availability of street parking to casual shoppers like me – he laughed at me and told me I had always doubled parked anyway! I felt good having supported a small independent retailer.
Later, walking down Dawson Street, toward Trinity College, I was stopped by a couple visiting from the US. They were heading for O'Connell Street but needed some direction. I obliged and made an extra effort to reassure them and wish them well. While offering directions to my Americans a middle aged lady was watching us. She too was lost - but was heading for Christ Church, I obliged again. However, the clincher in this story was the Dublin Bus bus driver I observed last week. He had pulled up to let some passengers off and as usual most alighting passengers thanked him for his service, nice. But just as he was to close his doors a man of Arab decent popped his head in for directions. He needed to get to the Airlink bus stop. To be honest I thought he was asking for a short two syllable reply, no such thing. The driver told him to hop on and politely explained that he would drop him at an Airlink stop on his route. A good deed indeed. It felt good to be Irish.
Maybe it’s the circumstances we are all facing maybe it’s something else, but I firmly believe that many of us are reaching back the Irishness of before. A decent people who are giving and warm. Despite all the tax hikes, the lack of credit, leadership and all that. Despite the nay sayers and the newspapers, we have something to shout about and it’s not just that we were hard done by in the past. We have charm and warmth. We have creativity and civility and most of all we care about each other.
Reading one of my favoured magazines I stumbled across an interesting piece about Scotland. Not written by a Scot but by an journalist from London. What struck me was how much competition we have in the global market and we don't have to go very far to find some of our strongest competitors. Some stats on Scotland: 1% of th world's published research is produced there, The average house price is 23% lower than the UK mean, Scotland is home to the second larges life sciences cluster in the UK and Lonely Planet has Glasgow are rated in the top 10 by Lonely Planet. With 14 Universities (some highly rated) Scotland is a force to be reckoned with.
Or on the other hand Scotland could be a force to ally with. Check out http://www.scottish-enterprise.com/et-partners and think of the opportunities to access the UK market through partnerships and alliances. It's on my to do the 2010 already.
Note: Choosing to form an alliance or partnership with a local company is another way to enter a new market. Partnering with a foreign company can provide the expertise, technology, capital or market access that you might not be able to afford on your own. Allying yourself with a local company whose products or services complement your own can reduce costs through joint marketing efforts or the sharing of distribution channels etc. Also consider other mechanisms, such as investments, joint ventures and licensing agreements. What are you waitin for?
Thank God the DETE through FAS has relaxed the eligibility criteria of the Work Placement Programme, aimed at providing 9 months work experience to 2,000 unemployed individuals, while they continue to maintain their social welfare entitlements. The key changes relate to the eligibility criteria. For unemployed participants the following criteria have been amended so that recipients of most social welfare payments, including Job Seekers' Allowance and Job Seekers' Benefit, will now be eligible to apply. Unemployed graduates who are not receiving a social welfare payment will also now be eligible to apply.
The key changes relating to the eligibility criteria of firms providing placements are that will be open to all sectors of the economy including, the private, public, and now the community and voluntary sectors. In addition the previous requirement for a firm to have at least 10 employees has been removed. More to follow in the coming weeks from FAS and DETE. Now all you need to do is find a good graduate that can add value to your business. A win win!
I was working with a client recently (let’s call her Mary) who had a sales problem. No big deal, not uncommon in business people operating in the SME space. Recently, we were dealing with a set of issues ranging from prospecting, to pipeline management, to customer management. But Mary kept veering back to an issue she had with the occasional attitude of her office manager. In order to progress the sales issues I had to delve deeper into the office manager issue, as it was breaking Mary's concentration.
Mary had started her business from the ground up and was very hands-on - down to the very last detail. As the business grew she found it difficult to check everything herself and eventually employed a really great person as office manager. However, trouble surfaced about three months later when my client was checking that things were being done to her satisfaction. On these occasions the manager would get a little abrasive in reply or not reply at all. What should she do?
Well for starters I reminded Mary of the company history, her own core values and what might be important. Her core values were not that things were done as she prescribed - the company was bigger than that. He core values were about professionalism, customer care and ethical trading. My thoughts to her were that; as long as the office manager followed these guiding values then the actual detailed physical process was not really a worthwhile issue to stress about. I took time to mention what I could remember about Douglas McGregor's Theory X and Theory Y on human motivation (noted below) and told her that whilst she had previously looked at some of her early employees as X types. She now had a manager who was and wanted to be treated as a Y type. Lucky Mary!
I went on to ask Mary which trait would she prefer in her employees X or Y? She replied with another question. 'In the current market is there room for any type of employee other than Y?'
Notes: Theory X, which has been proven counter-effective in most modern practice, management assumes employees are inherently lazy and will avoid work if they can and that they inherently dislike work. As a result of this, management believes that workers need to be closely supervised and comprehensive systems of controls developed.
Theory Y, management assumes employees may be ambitious and self-motivated and exercise self-control. It is believed that employees enjoy their mental and physical work duties. Accordingly, to them work is as natural as play. They possess the ability for creative problem solving, but their talents are underused in most organisations.
With the aid of a great accountant I just completed my tax return yesterday, right on the deadline. What's the big deal? Well the big deal is during the review of figures I missed a sneaky move by our Minister for Finance and his mandarins. What sneaky move? Simple really, the income levy applies to your rental income too. No sympathy? Here's a Government with troubled citizens all over the place (including yours truly) and they are taking blood from the proverbial stone. As in the income levy applies to your property rental income before deductions.
To be honest I don't particularly mind that, what's troubling me really is the amount of effort made by our civil servants in extracting more out of business compared to the amount of effort being made to help business. A case in point is the recent Employment Subsidy scheme http://www.employmentsubsidy.ie/. Not only was it a tough application process - they (EI) did not engage nor did they encourage applicants. What was the result? Under subscription. In a troubled employment market we had under subscription for a €9,000 grant for each endangered employee. Bizarre!
Now the Department of Enterprise, Trade and Employment (DETE) is looking for a second call with a broader scope. So the first round of applicants (likely to be the most desperate) will IMHO be disadvantaged and hard done by.
From the DETE site:
The Tánaiste said that she was surprised that applications under the Employment Subsidy Scheme had been less than anticipated and she confirmed that, as a result, she now intended to proceed with a second round with broader criteria.
“Details of a second broader call for applications with extended eligibility criteria open to both exporting and non-exporting firms will be announced next week. This Second Call takes into account some of the issues raised by businesses and representative bodies concerning the original call. The Second Call will therefore be open to many companies that were not eligible to apply for the First Call. This Second Call will be limited to value of the First Call and will once again be managed by Enterprise Ireland.
An article in the current issue of Management Today magazine www.managementtoday.com caught my attention recently, at issue was the excessive aggressive and rude behaviour broadcast in the TV programme 'The Apprentice'. Having spent a considerable amount of my management time trying to engage employees and customers, I was tickled to read that others, like me, felt uncomfortable with Michael O'Leary, Alan Sugar, Bill Cullen and Co.
The traditional stereotype of the aggressive manager is one driven by power and success. Some of the current TV peacocks have built reputations on being unforgiving, demanding exacting standards from staff. IMHO people like Bill Cullen, Alan Sugar, Gordon Ramsey and Michael O'Leary are simply glorifying bullying - they are uncivilised and the ugly face of capitalism in a world full of TV wannabees.
If civility is now dispensable in our business lives - how will we be able to live two lives? Will we be able to switch off the tough uncompromising business persona and tuck our kids in without complaining about the toys scattered on the floor?
Here’s a note in favour of civility and fairness – with a hard edge. All in favour say aye!
You probably don't like the word failure. I certainly don't. It makes me cringe and shiver. Possibly because I have had my fair share of them and the flashbacks are painful. However, I was driving to the office this morning and half listening to our Minister for Finance explain his plan to rescue 'us' without worrying about politics and the next general election. 'Failure was not an option' seems to paraphrase the hapless interviewer'. Unfortunately for him this listener was having none of it. All I could think of was the sequence of failures. Failure to sort out corruption in his own ranks, failure to provide a vaccine for young Irish women, failure to regulate the banks, failure to control public spending, deal firmly but fairly with Irish unions, failure work on behalf of small business and lastly failure to know when your time is up!
Tom Peters the author of the Peter Principle said to us that, eventually, every job tends to be occupied by an employee who is incompetent to carry out its duties. Real work is accomplished by those employees who have not yet reached their level of incompetence. Generally people make a good-faith effort to perform their jobs well, but in reality this is not enough. Whether you are in business, government, education, or anything else we can all take comfort from the highest ranking exponents of the Peter Principle!
Businesses are facing the most challenging times ever. Some believe that there are green shoots but others are not so sure. Some will not survive in the short-term others will go on to fail after this recession ends, remarkably having survived in tough times. Mark Egan, Non-executive Chairman of SureSkills and Principal at XL Management, reflects the issues and plots a chart for those keen to position themselves for the inevitable upturn pointing out that survival may not be enough.
Survive, Survive, Survive!
In the first half of last year1, the Hay Group of business consultants predicted the severe level and scale of turmoil to be exacted on UK businesses. In hindsight Irish CEOs could only have wished we would get off so lightly now. Few of us expected the cataclysmic set of events that followed here in Ireland.
Instinctively we as business managers have looked for ways to reduce costs and importantly improve productivity. Most of us have been successful in doing this, save for the Government derived cost increases, this has resulted in:
· a decrease in marketing spend and a suspension of training and development budgets
· a reduced headcount – the more experienced/expensive employees ‘let go’
· the remaining employees working harder and smarter, foregoing pay rises in the short term to remain in employment
The name of the game is to ‘survive the recession’; however, as many companies have found to their cost in previous recessions, the opposite is often the case with companies managing through a downturn, only to find themselves unable to take advantage of the up-turn when it comes – as it will. The two main causes of this are:
· a ‘talent crunch’
· the ‘survivor syndrome’
The Talent Crunch
A survey of nearly 5,000 managers and executives by the U.S-based Boston Consulting Group2 and the World Federation of Personnel Management Associations is in the US has identified managing and retaining talent as the critical challenge uniting HR professionals and managers around the world. Having to let senior experienced workers ‘go’ sends their experience, skills and market knowledge to work for competitors, severely jeopardising our ability to remain competitive through ‘corporate amnesia’ - a failure to capture the tacit knowledge of their former employees.
As a result, when the economy starts to recover companies that have jettisoned talent and experience in order to make a spreadsheet work will not be positioned to take full advantage of market opportunities, or to fully meet customer’s expectations of products and services. In addition, the competitive threat we will be faced with in the upturn will be stronger as many of our former employees will now worked for other companies (some now self employed).
The still-employed, who by all rights should be grateful for having jobs, end up losing their identification with, and even resenting, their bosses. A big reason: Fewer hands on deck means more work for those still around, which can lead to stress, anger and betrayal, especially if the survivors don't feel the company is committed to their future – the ‘survivor syndrome’3. As a result of which:
· morale falls, and with it productivity and overall performance – one of the key objectives of the down-sizing
· loyalty is compromised – when the up-turn comes, many of the survivors will look to jump ship and seek employment elsewhere
So we as employers are left with a situation where we have met our objectives in relation to costs, but we are also reducing their own capacity to ‘survive in the long term’.
Out of necessity, we are already addressing the ‘credit crunch’ – this will enable us to survive in the short term. For the longer term, we need to deal with the ‘talent crunch’ (to ensure product/service quality and customers relationships), and the ‘survivor syndrome’ (to ensure continuity and growth of operations).
Investment in training has some of the answers
Yes this means spending money – but it is investment in human capital which will have the following outcomes:
· Training increases the skills base of the organisation – addressing the talent crunch
o performance and productivity improve, not just in the immediate term but also into the future
o reduces dependency on out-sourcing and develops opportunities for diversification
o increases creativity, retains corporate intellectual property
o offers a competitive edge
o increases sales and customer satisfaction
· Training motivates – overcoming survivor syndrome
o employees feel they are valued and their efforts are recognised when companies invest in them
o employees are more likely to embrace change, providing a more flexible/competitive workforce
o retention rates improve/churn decreases
The aim of the training is to increase the revenue generating capacity of the organisation. In the medium term, training can be cost neutral. Companies can take advantage of the ‘down time’ provided by slower trading conditions to look at their skills base, identify training needs and support employees through their development. Government incentives are still in place and for example Skillnets are still operating in a number of categories.
In real terms, sponsoring an employee on a training course may cost only a fraction of a pay rise in more buoyant times, but have considerably higher intrinsic value to the individual. The CIPD Journal put it very clearly recently; ‘employers should hold their nerve and focus on retaining talent and investing in the skills of their people. It is these people, with their commitment, productivity and ability to add value, who will ultimately keep individual businesses … competitive, and put us all in a strong position to recover from the downturn quickly’4.
For my part, I’ve worked with over thirty companies this year alone reducing non-revenue generating activity, increasing sales and marketing activities, down-sizing and changing redundant working practises. What I don’t want is to see these companies survive the worst recession we have ever known, only to go bust in the recovery. What I refer to as ‘death by a thousand cuts’ which was previously a form of torture and execution common in Imperial China, now a very popular and dangerous business game.
1 Hay Group – London, 22nd June 2008
2Boston Consulting Group – Boston, June 2009
3 Journal of Managerial Psychology, Surviving redundancy: the perceptions of UK managers - Les Worrall, Fiona Campbell, Cary Cooper January 2000.
4 John Philpott – CIPD – 2nd January 2009