Firefighting – it’s not the new black!

Are we getting out of the recession? Will it be a double dip recession? Will we end up like Greece? Will the Germans offer to buy the Isle of Wight and would we care? How will we survive? And what’s this got to do with firefighting??

Answers in order:

No (or maybe very slowly)

Very likely (supplementary question: Will Government cut backs make it worse? Yes, but no cuts will make it worse for longer)

Probably not!

The Greeks didn’t care what the Germans thought..perhaps they misheard that quote about the technological revolution. The Geeks shall inherit the earth. Oops.

By not firefighting! I’m getting there eventually.

What is firefighting? The (in)ability to manage what the day brings so you end up running around like your bum is on fire dealing with emergencies that you didn’t foresee or didn’t plan to avoid. Which in its turn leads to a poor performance all round, lost resources, lost profits and a generally weakened business if it happens too often. In fairness, we all have a day like this sometimes. It’s when it’s the norm because you don’t control your business, you will end up failing. The business will control you. And then stop.

Yet so many businesses are still doing it. And wondering why they don’t make any money, have to argue about which bill they will pay this week, have regular discussions with their bank...Is it so fashionable? Is it the new black?

Of course not, but so so hard to stop, once you’ve started on this path, apparently.

It’s no good saying I’d change, I’d plan, I’d write down what we do so I don’t have to repeatedly tell people how to do simple things...BUT...I’ve got all this stuff to shovel, so there’s no time, there’s no resources, I’m tired. You don’t understand. (Sorry – yes I do!)

Some people have plenty of time to moan about it, or even to do it again when it goes wrong, but no time to think about it so it doesn’t go wrong in the first place...rework is after all, the most expensive work you can do...

The good news is that it’s generally simple enough to fix. You don’t have to throw the baby out with the bathwater; you don’t have to stop doing all the things that are just about keeping you afloat whilst you sort it out. It doesn’t take enormous manuals and huge amounts of creative juices, with multiple business degrees. Or lots of money. Any more excuses? No, on we go then.

It just takes you to write down in note form what you do, see the holes (they will be obvious) plug them with another note, and tell people this is how it is. Or a diagram, or spreadsheet. Whatever is easiest for you.

Most businesses just need a few little tweaks, which together can have a cumulative big effect. Then, with your business running slightly better, you can afford a bit of time to look at a few more tweaks, which you will (I hope you have already identified), and implement them. It’s very energising, and gives you the encouragement to do more. It gives you back control and choice in your life.

I’ve just spent a day with a business who know exactly what they are doing (and not doing), exactly what results they need to survive, and even what the gap is. They have stuff written down, but they don’t tell people about it. People like their customers. They just needed a method and process to do it.

We are doing it all the time with our clients, (and often getting Government funding to do it) which is why they will survive and even prosper. Single dip, double dip, inflation, deflation – whatever. A well run business will find a way to survive. We know how. Your competitors know how. Hadn’t you better find out? Black may not suit you!

PS See Duct tape – the reason small businesses exist?

Shower gel – design and time management

I suppose this is my Peter Kaye moment – shower gel is my garlic bread!

In my household there is a need to produced detailed specifications of some things which are not important to me, but that’s my problem.

Shower gel being one. Which I don’t understand. I struggle with the rules, which I clearly don’t know. Or perhaps want to. I have design issues...

We must have shower gel which:

Is of a colour (or range of colours – more difficult) which matches the bathroom;

Has a smell of some sort, which will complement the other unguents applied (deodorant, perfume etc) and not overpower or conflict (non smelling shower gel fits that criteria, but no smell is a no no!)

Be female oriented (I wash too by the way)

Be appropriately priced (I can do that – have you seen the cost of this stuff?)

By the way, we cannot use the various hotels’ products we assiduously collect on our travels, nor can we use them at the hotel; we have to bring our own.

And all for something, which by design and definition is poured down the plug!

So time is taken, over something which, in utility terms, can be obtained quickly and cheaply.

It’s about design you see. Not function at all.

In these days of abundance, we can choose from many different shower gels (or washing powders, toasters, kettles, and innumerable other essentials of modern living). But how do we choose, and what is their real function?

Obviously shower gel is for washing. That’s its function? Right?

Well, it’s one of its functions, and maybe not the most important. The amount of time you spend showering is 10 minutes a day? Times how many people in your household? Not long then, out of all the waking hours available. You may (or in my case, may not) appreciate exactly what you are using to shower with. In which case smell, texture etc may be more important to you. For what is, after all, a fleeting experience, this is of little interest to me.

All the rest of the time the shower gel is fulfilling its other function. Looking pretty in your bathroom – adding to the bathroom experience, and general ambience of your house. Telling visitors, (and reinforcing to you too) what sort of people live here. What their style and ethos is. Which is why so many shower gels are on the market (or toasters, kettles etc). The only way one manufacturer can differentiate its product in ages of abundance is through its design!

Design is increasingly the predominant purchasing driver – we assume that all shower gels get you clean, toasters toast bread, kettles boil water. Sometimes, after reading the technical bits, we still buy the one that looks good over the one that tells us it performs best. Just through better design. Look around your home – why is that product that colour, material etc? Because you decided it fitted best for you. Now look around your work. The same rules apply.

Now look around your products and services – are they designed to fit your customers’ needs and wants? Should they be...?

For someone who prefers minimalism (me), just go for the one which is quick and easy to find and buy. Time management is my driver. I’ll tell you why one day soon. Here’s a hint – it’s the only resource you can’t replace or extend.

And just don’t start me on fabric conditioner...!

Duct tape - the reason small businesses exist?

So much to do, such little time...the constant lament of the small business person. Some other problem to rush to, some fire to put out, so many idiots who don’t understand...so organised!

Do most of us feel in control of our business lives? Or do we feel like the boy with his finger in the dyke, eyeing up a trickle of water just out of reach and dreading the next crack appearing? Will we cope? How can we take on more? Is this what we signed up for?

Where’s the duct tape? Slap it on everywhere and hope it holds. Cobble it together until there’s time to do it properly. Except - there’s never time – something else has cropped up.

So may people I speak to are in such a rush. No time for any thinking about their business, as they are too busy doing it. Doing what exactly though? Keeping themselves in some sort of job maybe – certainly not building a future for them and their families. So many people buy a job; they don’t buy a business. And it shows. It shows in results that mean you work more than the average number of hours (a lot more) for less than the average pay. It shows in more stress, less time with the family, less fun!

Less fun – what am I saying? This is no fun for anyone. None for the business person, the staff in the firm, the family who gets a tired stressed, snappy parent and partner...probably not even for the customers who have a less than perfect experience as everyone is too busy to do the job properly.

And those customers tell their friends...on average a good customer experience is reported to 7 people. A poor one to 19! It’s all (and more) in my free eBook – on www.hixsons.co.uk. How to get the customers you deserve? Just don’t be very nice to them. Those customers who remain will be less likely to pay premium prices for better products, because they don’t believe the firm sells that sort of product as their experience of the firm tells them differently. A bit of a downward spiral, if the business person isn’t careful.

This has got to change, if you value your sanity, your relationships, and your family (and your business). And please don’t tell me that you are doing it all for them. Have you asked them what they would like? You might be surprised. They might like the old you back, even if that means a worse standard of living. As my father would say, “The road to hell is paved with good intentions”. If you are doing this for your family, your relationship, your ego – whoever! Do it right!

Take some time to reflect. And if you haven’t got time (I can hear you now!) – reflect on what it’s going to be like if you don’t. And if some other issue came along, you’d find the time for that, wouldn’t you?

So – reflect on what you want instead of what you don’t want. You can change this – much more easily than you think, and in simple small ways that are easy to think up and implement and manage, yes, at the same time as you are slapping duct tape onto some other problem. I know how; I’ve seen it done many times.

Just ask.

Why are lawyers so miserable?

I think it’s because they are driven by the clock. Every 6 minutes they have to record what they’ve done, and bill it to someone. Very little latitude or autonomy – they have to produce, produce, produce.

Accounts historically have done the same. Your bill is the sum of the time that has been taken. Never mind if some of that time wasn’t effective, or was wasted. The client (you) still pay for it. How fair is that to the poor client?

Of course it isn’t. I don’t expect to go into one of my client’s businesses and pay more if he dithers or muck it up!

And yet it is the way that most accountants and lawyers still work. The way their clients frankly distrust. And these are your closest professional advisers – the people you entrust with your hopes, dreams and every details of your business life?

Bizarre!

Still – lawyers (and accountants) are miserable. Why do they stay in this misery then? What makes them persist? Partly the management structure of their business I suggest. Most management thinking (everywhere – not just lawyers!) is carrot and stick approach (or stick and carrot!) with a top down control based style. And in any type of work which is right brain dominated – that is, creative, where people have discretion over what they do – it simply stifles creativity and diminishes performance. Not what you want from your accountant or lawyer?

It’s the place where science and business diverge. Business simply hasn’t caught up with the science of what makes people tick and want to do well. There was a study of 320 small businesses, half of which granted workers autonomy, the other half relying on top down direction. The businesses that offered autonomy grew at 4 times the rate of the controlled ones and had 1/3 the turnover of staff. That’s impressive, and we know how, and we are telling our clients!

It doesn’t work in all cases, and certainly not in routine tasks, but it does for more creative ones, like accountants and lawyers.

So – happy accountants and lawyers, which means that there are happy clients. But only if the time sheet is binned. That makes for happiness all round.

We binned them some time ago. Our clients hated time sheets, so we did it simply because if that. We keep timesheets solely as a budget tool – so we can quote prices for future work based on past experience. Clients know they can ring up whenever they like, get the help they need, and know they won’t be getting a bill. We are happier knowing we can do the best job we can, as we are not driven by the clock too. Win – win. That’s rare!

Mergers & Acquisitions - do they work? Ever?

You can grow organically, or you can buy another firm. You look for synergy, and economies of scale. In umpteen years of advising clients on buying out others, I’ve never seen them. You might think you can cut costs in the merged firm, but don’t underestimate the costs of integrating two different ways of working. You may be getting access to a bigger customer base, or new markets. You may be a megalomaniac.

The Economist says that three quarters of mergers fail to increase shareholder value, and half destroy it. Look at the RBS ABN Amro debacle, which we are paying for. Don’t think it’s just big companies that muck up like this – anything they can do, so can small companies!

A lot of mergers or acquisitions are the result of management boredom, ego, and are encouraged by the advisers. The only ones guaranteed to profit from this exercise. Personally I spend my clients’ money like it’s my own. See the moths!

Some find out well into the buying process that it’s not what they thought but they feel that they are committed, so go through with it anyway, hoping it will work out. It won’t – they know that deep down, so smile sweetly, pay the bills, and walk away. It’s cheaper.

A lot of my clients have preserved wealth and gone on to grow through knowing what deals to leave on the table. Just about every deal I’ve seen has been underestimated in terms of cost and effort, and overestimated in terms of benefits. So if it’s looking marginal, it isn’t. Walk away. Another deal will come along – you won’t miss out.

Kraft and Cadbury will be interesting – looks like Kraft paid too much and Cadbury got too little. So many cultural differences will take an awful lot of effort to overcome. But with deals like this the ordinary man can make money too. Here’s maybe how.

Generally, owners of predators worry about overpaying, which sends their share price down. Whilst investors get excited about the target and that sends the target’s share price up.

So if you expect a bid (and Kraft’s was telegraphed a long way off), you buy the target and sell the predator. You can do this with a long spread bid on the target and a short spread bid on the predator. If the deal is announced and predator price falls and the target’s rises, you should make money on both positions. You need to commit the same amount to of money to each part so your strategy is market neutral, so if you’re right about the deal you should make money if the market rises or falls.

Of course if you thought the Cadbury deal would benefit Kraft shareholders, you would have simply bought Kraft shares. But you didn’t, did you?

PS This is not investment advice! Speak to your professional advisers if you are contemplating doing any of this. Each deal is different.

It's a farc-ade!!

Just over 300 years ago the Bank of England was founded in what was the old Mercers Hall in London, and then moved to its present building in Threadneedle Street.

Current public debt stands at about £840bn. In the first 300 years of the Bank of England’s existence public debt rose to £300bn; in the last 10 years it has more than doubled. That is largely because of printing more money. By a government it’s called quantitative easing; by an individual it’s called counterfeiting. Henry VIII debased the currency by adding more base metal to the silver coins, such that when they wore down, it gave him a new name – Old Copper Nose. So it’s nothing new. Governments have been doing it for time out of mind. That doesn’t make it right, except that might is right.

John Mowlem rebuilt large parts of London, and carted the reclaimed bits back to his home town of Swanage; so much so that Swanage was known as Little London. There’s the clock tower (no clock now) that stands at Peveril Point; that used to stand at the end of London Bridge, commemorating the Duke of Wellington.

And then there’s the facade of Mercers Hall, (you know, the original Bank of England) which was reclaimed and now adorns the facade of Swanage Town Hall, surely the most impressive small town hall facade in the land. But that’s all it is: a facade.

So is printing money. It brings to mind that old definition of corporate advertising: its bit like peeing in your pants. You get a nice warm feeling but no one notices any difference. Except in Iceland, where everyone has been asked to pay about 40% of their salaries to us and the Dutch for their banks’ mistakes. No warmth at all, and they have noticed the difference. The temperature has dropped here too, and soon we will notice the difference when we have to pay all this back.

Behind the impressive Swanage Town Hall, down a short narrow lane, is the town jail. No hint of facade here; its four stone walls, and a thick wooden door. Trouble is, it only houses one, and there’s such a list of candidates!

7 out of 10 cats prefer....

It’s one of those blind taste tests – Costa Coffee did it, Pepsi did it. And everyone finds that 7 out of ten prefer the promoting brand...

So why does Coke still outsell Pepsi? Were Pepsi skewing the results? Or is it more about how people make decisions? Do they make them blindly?

Of course not. It’s not just about the product. Pepsi had to find out the hard way that it’s about the image that comes up in the customer’s mind - the idea, the concept – not just the product. Granted, you do need to have a good product, but that’s not everything. People in America were buying Coke because it represented an idea to them – Coke was baseball games and apple pie and a flag waving on the front porch and families sitting down together for a meal and having a laugh with friends and Christmas gifts and leaving out cookies for Santa. When they looked at the two cans at the grocery store, the colours and images and feelings that came when they looked at the Coke can were why they chose that one – not first the flavour when they opened it later.

Completing technically accurate accounts and tax returns is important to me and my clients, but it’s not the image my clients have of me. It should be about how they feel when we meet, or ring up, email, letter – communicate. And it’s the same whatever you do. It’s about the customer journey – how they feel. Do they feel happy, relaxed, at ease, confident in you? Because they should – at every part of the customer journey – from initial contact right through the experience. You can have produced the best, more accurately machined, shiniest widget – you could be so proud (rightly) of your technical ability, so you think your clients should be too – but if they see untidy, late, uncommunicative – they get a different impression. And they won’t buy. The difference between good technician and good business person is a whole new subject!

Here’s another story – Scandinavian Airline Systems were awful at customer service (I’ve flown them) and were losing money hand over fist in the 70s and 80s. The new CEO instigated what is now called a Coffee Stain Survey. They found that if the passengers, when they flipped the tray in the seat back in front of them found a coffee stain, they assumed that the engines hadn’t been serviced properly. They reasoned that if the airline couldn’t even be bothered to clean the trays, they may not look too hard at more important things.

Do your own Coffee Stain Survey. Walk the customer journey. And have a free eBook – Customer Care – Why Bother? It’s on the website – www.hixsons.co.uk. It’s your lifeblood.