The long haul…..?

“Markets up on hopes of EU deal” screamed the headline on the BBC business news webpage earlier this week. Er no, not from what I could see. It seemed to be 3% down at present. Mind you that headline had probably been written an hour or so before and as we know at present an hour is an awfully long time in the stock market world.

Of course short termism has been a major criticism of Anglo Saxon capitalism. The focus on quarterly or half year earnings apparently meant that anything with a longer term benefit but immediate negative impact was often shelved. As a result we were seemingly left with a world dominating financial industry but not a lot else.

Back in the last century (oh how easily that trips off of the keyboard) we were constantly exhorted to follow the long term view taken by the Japanese and the Germans. Their industrial policies were based around such things as partnerships, local bank support and family businesses. As a result they made a lot of things and sold them around the world.

We have been hearing a lot recently above the drive to create Britain’s own “mittelstand” class, our equivalent of those primarily family owned SMEs that take a long term view of their business and have been the backbone of German economic development for decades.  I suspect that this has met with hollow laughter among Britain’s existing family owned businesses who have been ploughing their own furrow regardless, forgotten and unloved, some for many hundreds of years. (Indeed as one of my fellow Enterprise Britain bloggers has this week pointed out Britain’s oldest family businesses started in 1535 - we do read each other’s contributions, honest!)

Most businesses that I am involved with manage to work with a variety of short, medium and long term goals. Contrary to popular opinion these goals are not mutually exclusive. The short term focus on cash and liquidity through profitable trading, the drive to find competitive advantage to move the business forward in the coming year, and the desire to exit for a considerable sum of money or hand over the business to their offspring are the core principles that underpin their business planning.

Of course long termism requires a supportive infrastructure and I suspect this is where the government will have most of its problems in its attempts to create the kinds of businesses that they see as the future. Planning, transport and finance, in particular our banks, will all need to be with the programme.

So what should you be trying to create with your business? A company that is targeted on quarterly earnings? An exit in three to five years’ time? A legacy that will last for generations? All of the above I would think. Let’s hope that a business climate develops which allows you to do so…..

Equal opportunity ambition…..

My professional accounting body recently sent me an e-mail which included a section dedicated to somebody who was “young and ambitious”.

Excuse me?

Since when has being young been a requirement to be ambitious? I don’t recall any such newsletter highlighting someone who is old and ambitious.

It is interesting to note that Lord Sugar’s sidekick on “The Apprentice”, Nick Hewer, is suggesting a new variation on the reality business show. Following on from “Young Apprentice” and “Junior Apprentice” he believes that the time is ripe for “OAP Apprentice”. It would be interesting to see how the participants of this show would handle the challenges compared to what we have become used to since the programme first hit our screens.

Ambition comes in many forms. Maybe once it was a career of achievement in a salaried role that was sustainable for thirty or forty years. Nowadays it can be the establishment of a successful small or medium sized business or even a series of them. It can be the creation of a social enterprise. It can be the development of a life changing product or service.   

Enterprise Britain certainly relies upon those who see ambition as something more than climbing the greasy career pole. The desire to create, grow, develop and innovate is more likely to provide the jobs and wealth than any push to gain the keys to the executive washroom.

The fact is that for most of us a comfortable retirement at around 60 is no longer an option. There seems to be a state sponsored push for retirement at 70 and beyond. Comfortable salaried life for many people is ending in their forties if indeed it is starting at all. The current economic climate is accelerating the process. There is simply no excuse for anybody not finding new ambitions to drive them forward and keep active for as long as they are able to be.

So professional accounting body there is no “young” in ambitious. Being ambitious is a statement of mind not of age. Anybody and everybody should be thinking of their next goal and how to achieve it. Equal opportunity ambition for all!

Let’s do lunch…..

Last week I had lunch at the Bank of England. I’ll just let that one sink in a moment. Actually it was the day that the Monetary Policy Committee decided on a second round of quantitative easing, although I can’t claim to have influenced the decision even though I visited the room in which they made it. The committee of course were long gone by then, and all efforts to get an inside line on their discussion by looking for indentations on the notepaper left behind were in vain…..

OK, a moment to show off perhaps, but like most things I do it was an opportunity to share knowledge and find out what is really happening in the world of Enterprise Britain. The reason for my lunch was a meeting with Peter Andrews, Greater London Agent for the Bank of England, alongside other members of the London Local Chambers Forum. The Bank uses agents like Peter throughout the UK to gather anecdotal evidence to add to the swathe of numerical and statistical data used to monitor the economy.

As you can imagine, when a dozen or so businessmen committed to success get together in a room strong views and opinions fly out at a rate of knots. Regulation, planning, support for construction, infrastructure and education all came under the spotlight. Unsurprisingly the banks got a bashing for their continuing reluctance to provide the finance required by SMEs in the current climate. There was some concern about inflation and its potential impact on pay settlements which to date have been subdued as employees focused on keeping their jobs.     

One of our number asserted that what was happening was more of a restructuring rather than a recession based on a shifting of the economic balance of power from west to east, and that solutions needed to be in place to address this fundamental issue above all else.

As the penultimate contributor I noted that little attention was paid to the level of underemployment in the labour market, particularly amongst older professionals who have become freelancers as a result of being made redundant, which was a tremendous waste of talent. I also made the point that it would be nice if the large corporates who are apparently hoarding £60billion in cash at present could use some of this to pay their smaller suppliers on time. The impact of this on SME working capital would be significant, more I would venture to suggest that any increase in the availability of bank finance.

Throughout all this, the man from the Bank of England took copious notes, smiled, empathised, made fleeting comments, sought clarifications and picked up on points that were consistent with what he was hearing from other sources.

Hopefully what he heard from us will make it back to those with the power to deal with the macro economic issues that appear to be putting recovery at risk. For many people 2011 was shaping up to be a good year until the economic situation started to deteriorate during the summer.

In spite of all the gloom it is clear that companies large and small are getting on with life and trying to grow their businesses. It would be a shame if all these efforts went to waste because the policymakers were unable to do their job. We are playing our part. One hopes they realise this in London, Washington, Brussels, Frankfurt…….

Flaunt the imperfection….

Last weekend I took part in a race to the summit of the Jungfrau, one of the highest mountains in the Swiss Alps. In the weeks before I had to field numerous questions such as how my training was going, what sort of equipment would I be using and would I be attempting Everest next?

Of course most people who know me would have immediately spotted the flaw in all of this. I have enough problems climbing a ladder let alone a mountain. The race was actually organised by Skywork Airlines and the British Swiss Chamber of Commerce to publicise Skywork’s new daily service between London City Airport and the Swiss capital, Berne. Reaching the top was achieved by using public transport, the Jungfraujoch station being the highest railway station in Europe. Simple when you know how.

But it is easy to see how people could gain the impression that I was seasoned adventurer just from the words “race” and “summit” and just as easy to understand why I might have been tempted not to disabuse people of the notion. We all like to create an impression of being something that we are not quite.

I am often reminded of this desire when I speak with entrepreneurs and small business owners. When preparing business plans, marketing copy and websites, there is a tendency to overegg the product or service, creating the impression of a bigger organisation than actually exists.

The problem with this approach is often that it creates a risk of over promising and under delivering, a cardinal sin for anybody trying to make the right impression with a new customer. It is the business equivalent of "slightly embellishing" career achievements on a CV.

Of course a lot of this is driven by the perceived need to be perfect and the fear that we won’t measure up to somebody’s ideal. In a world of multiple ‘A’ stars anything less is seen as unacceptable. The world now demands perfection more and more, even though it is seldom, if ever, possible to achieve it. The reality that most things are imperfect and none the worse for it is hard to sell.

I must emphasise that this is not about accepting second best. We all have a responsibility to our customers and our clients to be as good as we can possibly be. It is about realising that it is only through being honest with ourselves and understanding what we are not that we can really start to work on what we would like to be. As those 80s whimsical pop rockers China Crisis might have said perhaps it is time to “flaunt the imperfection”.

I am more than happy to admit that I never have been and am highly unlikely to be a mountaineer. Having said that I am of course open to future invitations to race to the summit of Everest. They’ll have to ensure there is a train to take me to the top though……