An autumn statement of the obvious….

I don’t know if George Osborne is on the right track. I am sure that there are things that he could and should be doing that he is not. However I don’t have access to all the information that he has, or have to deal with his pressures and responsibilities, so maybe I am not best placed to criticise.

Taking decisions based on available information and resources. The stark reality of management. The true test of mettle. The real definition of loneliness. A situation that the 4.8 million business owners and managers making up Enterprise Britain find themselves in time after time.

Not so our friends in the fourth estate. As I was following the statement online I was struck by the constant carping, criticising and point scoring that accompanied each announcement. No contemplation, no reflection, just instant negativity.

If ever the phrase “power without authority” had any meaning this would be a prime example of how it works. The media chatterers and twitterers have the power to mock, to criticise, to nit-pick. What we never hear is what would they do if they were in a position to change things. I suspect that put in that position most would run away from such a prospect.

Yes they say but we have a duty to report the news and to question and hold those in power to account. True, but in business it is drilled into us that criticism should be considered and constructive. And the line between reporting news and creating it is growing ever thinner.

Sympathy for George is somewhat tempered by the fact that he himself is guilty of the sin of soundbite criticism. However for those of us at the coal face attempting to create the wealth necessary to get the economy moving, the constant self-aggrandising negativity of financial and business commentators is annoying. We are under no illusions as regards how tough it is out there. We don’t need it shoved down our throat day after day.

Having said that what was there for businesses in yesterday’s Autumn statement? Probably not a lot, but let’s face it, whoever stood up in parliament this week was going to struggle. Easier finance for SMEs and incentives to start up entrepreneurs are helpful. The challenge for all involved will be to direct it where it is needed most and where it can be productive. The announcements on fuel duty, infrastructure projects and red tape seem to be moves in the right direction.  

The stark truth though is that the one thing business needs at present is confidence. The confidence to invest in the future. The confidence to lend. The confidence to spend. And that is clearly something that the Chancellor cannot deliver on his own….   

One rule for them….

For everyone’s information the 2nd world war ended 66 years ago. Angela Merkel was born in 1954 which by my calculations is 57 years ago. I only say that because I sense that some of the hysterical comments concerning Germany’s recent EU pronouncements owe more to events that happened in the last century than those that are taking place in the current one. 

If your father/mother/aunt/uncle or whoever were to help you to sort out your finances I suspect they would not then allow you to continue to live the lifestyle that led you to seek out their help in the first place. They would probably want to place a few restrictions on how you lived your life to ensure that the same problems did not recur in a few years’ time, even if you did not particularly like the idea. The German reluctance to write a blank cheque without conditions does not seem unreasonable in this context.   

Modern populaces want all the good things but believe that other people, better known as “the rich”, should pay for them. Politicians know this. Equally they know that “the rich” are much harder to tax than the not so rich. Therefore when borrowing was cheap and plentiful surprise, surprise that is what they did. Now it is all coming back to haunt the future generations that will have to suffer for it. 

Or maybe all along it was an elaborate new way to redistribute wealth. Fleecing “the rich” through loans that would never get paid back. Except of course it wasn’t just “the rich” that wouldn’t get their cash back. It would be all of us, via our pension funds or withdrawn essential public services that we reasonably believed we had paid for through our taxes.

We can of course once again blame the bankers. Given that there still seems to be little holding to account of those who’s reckless gambling and connivance in concocting the financial packages for both the public and private sectors that have subsequently unravelled that is an understandable reaction. However we all know that there was more to all this than the “greed is good” brigade.

The sad accountant in me is still trying to get my head around how the various debtor countries will ever pay back what they owe. All are still running annual deficits, and will be doing so for some years to come, which to my mind implies that they need more cash to fund these as well as refinance all the borrowings that need to be refinanced. Simple mathematics dictates that unless something drastic happens, sovereign debt crises will persist for the foreseeable future.

In our world of course businesses in this position would simply go bust, and given such a spectacular insolvency, those involved would find themselves at the very least banned from being company directors for a considerably long time if not facing more serious consequences. Maybe it is not possible for countries to manage their finances like Enterprise Britain has to, but hey we can dream can’t we?

Jobs for the boys and girls…..

Another day, another set of statistics to pour over. This time it’s the unemployment ones, including the worrying fact that around one million 16-24 years olds are looking for work.

Interestingly enough on the same day that these statistics were issued another article was published which suggests that an increasing number of graduates are shunning the traditional job route and are going it alone by setting up their own businesses. Self employment in general has also reached a record high, a further sign of the changing nature of the employment that has clearly been given impetus by the current economic situation we are in.

However it is the unemployment story which dominates the headlines. No doubt the usual complaints are already being trotted out such as the educational system and how it fails to prepare young people for the world of work, and the unrealistic expectations of young job seekers.

However I rather think that the system is also failing to educate employers as to how new entrants into the workforce need to be treated, and their understandable limitations when they enter the workplace. It seems that too many employers seem to expect new entrants to be the finished article, conveniently forgetting that we all need to start somewhere.

“Yes but we don’t have time to do this” comes the response. Aside from being false economy it would be genuinely scary if today’s fast moving world simply did not allow organisations the time to induct, train and develop their workforce.

It is also said that today’s school leavers and graduates don’t have the right work ethic. This is rubbish. Leaving aside the question as to whether they ever did (go on be honest think back 30 years or so), school students today are assessed and monitored more frequently and intensely that they were in the past.

Grade inflation is another issue. There may be more As and A*s being awarded but it does not reduce the pressure and effort required to get them. A majority of Bs and Cs might have been acceptable years ago. Seemingly they are not any longer. Changes to exam modules are frequent and it is arguable as to whether there is a level playing field between students of the same generation let alone those of different generations.

The increasing desire of young people to start and manage their own businesses is one of the real positives of the current situation. Older people don’t have the monopoly on the skills necessary to be successful business people. Financial and business education is one area that the school system has yet to fully address and it would be good to see this becoming a core element of what passes for the national curriculum.

You may have gathered from the above that I have children which are at the exam stage of their schooling and that there is an element of self interest in all of the above. Perhaps that is the case but I do genuinely believe that we as members of Enterprise Britain should look at what we can do to improve this situation. This is something we are genuinely “all in together”.

A shot into the dark……

The gun in my trembling hands felt cold and threatening. Not having indulged in country pursuits or auditioned for a Guy Ritchie movie it was a totally unfamiliar sensation. In short I was terrified.

No this is not the first line of a bad novel about a staid accountant turned underworld hitman. It is in fact the story of my recent corporate day out at the home of British shooting, Bisley in Surrey. Kindly invited by Menzies accountants, I, along with 40 or so other business people spent a morning attempting to shoot down clay pigeons propelled into the air at varying speeds and directions. Once the initial fears were overcome a great deal of fun was had by all and some useful connections made.

Hang on. Corporate entertaining? Hasn’t that just been outlawed by this new Bribery Act? Thanks to an excellent and imaginative presentation by Claus Anderson ,a partner at Royds LLP solicitors, which used actors to play out various scenarios which may or may not have fallen foul of the act, I am pleased to confirm that this is not the case. As long as it is proportionate and reasonable, activities such as jollies to Wimbledon, Lords and the Open, remain available to those lucky enough to be invited.

Sadly real bribery remains a serious business, if you’ll forgive the comparison. According to a recent article in Management Today a trillion dollars a year is paid out in bribes. The business and social impact of bribery on poorer countries is significant and is a cause of real economic deprivation and hardship.  

Much of the awareness campaign as regards the Bribery Act has focussed on the compliance aspect and how you can protect yourself and your business. This is fine, but it should not be forgotten that this is as much an ethical and moral issue as a legal one.

Critics of the act have said that bribery is a way of life in some countries and that it is often impossible to get essential tasks done without some sort of facilitation payment. British business will be a loser as a result of the new act. That may be true in the short term but surely the long term winner will be the global economy. The only way that we will be able to change “the way business has always been done” is to stop doing it that way.

The one concern that I do have is that it is invariably the little guys that will get caught while bigger organisations will find more subtle ways to achieve their objectives.

Meanwhile I am proud to say that my honesty and integrity remain intact. As do most of the clay pigeons that I was shooting at unfortunately…

So who are the real twits….?

Last Friday I had a friendly spat on Twitter with Management Today magazine. Well that’s what Friday afternoons are for aren’t they? The issue that sparked our exchange was a gloomy forecast from advertising giant WPP and MT’s assertion that if WPP was having problems then what hope was there for the rest of us.

I admit I took exception to this. Perhaps the tone grated after another week of working with successful businesses. Perhaps it was the frustration of seeing yet another botched attempt by policymakers to resolve the Eurozone crises. Anyway I wasn’t very happy and I let MT know about it.

Of course it all ended amicably with MT retweeting my tongue in cheek reasons to be cheerful comment about the sun shining, the prospect of an extra hour in bed as a result of the clocks going back and last week’s news of an increased level of investment in the US. And I do understand that in today’s 24 hour online world, media organisations need regular news and angles to hook readers before this morning’s news becomes this afternoon’s web browsing history. But there is a real danger of a double dip recession becoming a self-fulfilling prophecy.

When asking people at networking events as to how things are going I invariably get a response of “It’s tough out there” coupled with “but we seem to be doing OK”, the latter being seen as a cause for embarrassment rather than a reason for celebration.

The daily flow of conflicting statistics does not help. This week GDP was up 0.5% although some commentators said that this was not actually good news and that the figure will be revised in due course anyway. Within this GDP number construction output fell. Bad news then? Well no, Caterpillar have announced that they are on track for a record year. JCB orders are apparently booming. Somebody out there clearly does think that construction in general is moving in the right direction and are investing accordingly.

It would be naïve of me not to recognise the threat to global economic recovery posed by the problems in the Eurozone. But there are many good things happening too which need to be recognised and highlighted. The majority of businesses in the UK and beyond are getting on with their lives and continuing to do their best to create wealth and jobs.  

So there you have it. Two points of view for you to consider. False optimism versus unreasonable pessimism. Not facing up to the facts versus accentuating the negative. Who are the real twits in all of this? It is probably too close to call at present.